A-Frame Brands CEO Ari Bloom on launching startups with celebrities like John Legend and Naomi Osaka

0:02Hello, everyone. Welcome to the Modern Retail Podcast.

0:30these diverse founded brands, specifically from celebrities. I'm also really interested just in the general movement of brands founded by people with big followings. It's a really big thing that a lot of people have been talking about of late. And I think Ari probably has some really interesting insight into this. And we're going to talk about a lot more. But Ari, how are you doing? Thanks for joining. I'm doing fantastic. Thank you so much for having me. Very nice to be here. Yeah, it's great for you to be here, too. I'm excited to chat. First, tell me about yourself. What were you doing before A-Frame started?

0:58How did you get into this space? Yeah, I came up actually in retail merchandising. So I'm the son of a physician and a musician. And I think that's a good way to kind of start the story of how I ended up in my original half of my career, we'll call the first half of my career, and how it ended up here, which really is a confluence of many years of work and experiences personally and professionally to get here. But I definitely am a person who is stuck between the right brain and the left brain. There's a lot of creativity in me, but there's a lot of analytical rigor in my thinking as well. And so I came out of university, actually.

1:37I was studying to be a hospital administrator, if that gives you any sense of where things took a turn. But I think the thesis of why I was trying to do that work is very much evident in what I do today, which is I really wanted to, I believe very strongly that business and commerce has an opportunity to make positive change. And I think my intention as a 17 or 18 year old to run a hospital was, I'm a business person. I think I know that about myself now. And I want to do something positive where I'm helping people on a day to day basis. My dad was a family doc, he, you know, he had patients, he had my friends, he delivered, you know, when they were babies, he saw them all through their lives, he saw their parents, their grandparents, now he's seeing their kids.

2:17And I think that that that really had an impact on me. But I didn't feel like I could, that was my path. I wasn't going to be a physician or a dentist. But I think that really what I wanted to do was do good things for people and do good things for society. And I think I ended up actually realizing that being a hospital administrator was not a job that people really looked kindly on or were you somebody who helps people on a day to day basis, you actually did the opposite in some cases, and the doctor sure as hell didn't like you. So I switched paths after spending a summer shadowing a CEO. It was a wonderful guy who took really good care of me, but it was very clear to me that this was not what I wanted to do.

2:53And I went into retail merchandising, kind of luckily. I graduated college in the late 90s, and Gap was at its, I would say, its peak, and was aggressively recruiting college grads to come into a training program. And I think if you look at the, I think a lot of industries have some great companies who do these training programs for kids straight out of school and happens in finance. It happens in consulting and retail. I think there's a really rich history of Macy's and Bloomingdale's and all of these different programs at that time, late nineties, early 2000s gap was really the best program in the industry.

3:27And I was lucky because I got in, um, it was thousands of applicants. Um, I actually, it's a good story. I had to hack into hack. There were no passwords on the career centers at Harvard and Yale and Stanford. I was not at any of those schools. And I started snooping around their career centers to see what was interesting because I didn't have anything interesting on my career center. And so I ended up applying because I found it on the other websites and they just had not realized you had the password to protect those things at this point because it was early days of the internet. And so I applied and I made it through the process and I got the job and it was great.

4:01Retail merchandising was a really good fit for me. It was very analytical, very creative. And I think starting at the Gap in the late 90s, it was not only from a consumer perspective, was it a great company? It was as a company, professionally, it was an amazing place to work. Mickey Drexler was the CEO at the time. It was a very progressive company. The Fisher family had done a really good job of being very intentional about making sure that they had a diverse team. They offered things like same-sex benefits at that point, which was way ahead of its time. and we had diversity training when we were straight out of, you know, right out of college in the late nineties.

4:36And that was something we just still to this day, you don't hear about that in the late nineties at all. That's right. So it was something that I think was, was very influential for me. And I spent seven years there and I really, it was kind of like the garden of Eden for me. I never really found any way back to that. I got an MBA about eight years into my career. And the great experience I got into Harvard, I got in one, I applied to one school and I got in, which was Harvard. I was very lucky that that worked out. My life is kind of a series of fortunate events, I feel like. And I took that MBA.

5:07I took that experience. I ate every single second of that. I was in my 30s. I think I was one of the older people in the class. And I knew that I was lucky to be there. And I took advantage of everything that I had. And I started consulting after that myself. I was doing that in school. A lot of small retail companies who knew me from my days in retail were calling saying, hey, can you help me with the business plan? Hey, I need to raise capital. The economy had just blown up. And I graduated in 2009 when everybody was looking for money. Everybody was looking for help and nobody could afford anything.

5:34And I could come in and do a lot of great work and work at five or ten different companies at once. And I made a job out of that. I made a company out of that. And I did that for six years. Moved out to the West Coast when we had kids, actually. I kind of had a little bit of a freak out moment when I became a father. I got to get a job. I can't do this. And so I went into tech. And really, the reason was, it was very intentional, is that tech for me was impacting everything I was doing and everything I was seeing in every business I was touching. And that was across retail, hospitality, media, beauty, everything I was a part of.

6:08I was one of the early, I actually worked on Refinery29 very, very, very early days when it was five people in a basement in Tribeca. And that was a company that I felt like was a really good indication of where things were headed. And I started with them like right out of business school. And so I moved out to the Bay Area. I was in tech. I was a CMO at a startup. And then I got recruited to be a CEO for a Coastal Ventures-backed retail software company. And it was great. I had a great experience there. Very stressful being a CEO. But I raised capital, sold the company, went through the whole process.

6:42And really, at that point in my life, I'd done so many things, I think, that had come to me. And I really said, listen, where do I want to live and what do I want to do? I had two kids. I was in my 40s and I said, I want to build a company going back to my roots of something that's going to be positive for people. It's going to make an impact for them. I was heavily influenced by my experience early days at Gap. How do I do it in a way that's going to be socially responsible, both inside and outside? And, you know, my co-founder, Hill Harper, and I are dear friends. We were fathers of young kids and we were talking a lot about our experience as parents and what the disconnect was between the communities we lived in and operated in and thrived in and how diverse and rich and wonderful those communities were, but that we didn't really see that in our corporate life, that the boardrooms and the investors, it just didn't match.

7:31And so aside from knowing that as parents, there were opportunities to create products and brands for more diverse families, which is where we started, we also knew that our company had to reflect the communities we wanted to serve. And that was something for us was like, if two people on earth have the ability to do this, it's us. So what are we waiting for? If not us, who? And if not now, when? And that was really why we started A-Frame together. We knew that we had the access to capital, retail, press, people. We could get everything that we needed. And we had the intentionality and we had the ability to do it.

8:01When you put those two things together, you can actually make things happen. So we started A-Frame as a company that was dedicated to launching brands that specifically identified opportunities because of demographics in this country. And we feel like as long as the market continues to zig in the direction of creating everything for general audience, everything's the same for everybody, there's an opportunity to zag and do things for what is actually either the majority or soon to be majority of customers that are left behind simply because they're not quote unquote general audience. So that is how I got to today.

8:33Got it. Wow. And it does seem like, you know, you started in healthcare, you went to retail, then you went to consulting, and then you went to tech. You've sort of done it all. And it seems like A-Frame is kind of a confluence of that all, where, you know, it is predominantly retail, I imagine. But also, you're doing a lot of other underlying things because you're not the brand itself, right? Yeah. I'd say one of my investors said, you've finally figured out how to institutionalize Ari, which I think is probably an accurate statement. It is definitely a collection of all of the, and Hill, you know, the two of us kind of have some specific advantages and things that we're good at.

9:10And I think we just put it into a company, which was great. So first, when did A-Frame officially launch and what was the first company that you launched? And did you launch with a company in mind or did that come after? Yeah, we started with the first brand and we started putting together. I left, let's see, so I sold Avimetric, which was my last company. It was a 3D and AR company for retail software. We did virtual design and virtual e-commerce plugins. That sold at the end of 2018 to Gerber Technology. And I went to Gerber for a couple of months. Actually, it was great. I mean, I'm going to give Gerber a shout out because they were great, great people that we worked with.

9:48But a good example of like an entrenched retail company that, you know, makes CAD software for everybody, you know, like they've been around for, I think, 75 years at that point. and when they bought Avimetric, it was like, it was, you know, 30 people in San Francisco, all engineers, except for me and Avanta, who's now at A-Frame with me. And we, you know, it was just culturally a very different kind of company. And we, I sat down with, with their CEO shortly after the acquisition. And I feel like it's funny. He like had a glass of wine, you know, he's going to tell me like, it's not going to be a good fit.

10:17And I'm like, Hey, by the way, I just want to let you know, I don't think it's going to be a good fit long-term. And he's like, great. I love that. That's what we think, too. We love you. But like, can you be on our board and stay connected? And it was just such a nice situation. And I think it enabled me to take the time to say, like, here's what I'm going to do next. It's not going to be competitive to what we're doing with you. But let's take all the things that we've learned. And if you guys can be supportive, that's great. And they eventually sold to Electra. And that company is doing great.

10:43So I'm not sure. I actually forgot what your question was, but hopefully that answered. Oh, no. The question was, what was the first brand you had in mind and how did that? Ah, okay. Got it. Okay. So after we sold the company and I was going to move into a board seat with Gerber, which was a great fit for me and a great fit for them, I wanted to take some time to really think about what I was going to do next. And this was the time that I was really talking to Hill Harper about how we were going to start something. But I think the thing that was so personal to us was family-related products and family experience.

11:14And so we really did start with the baby brand. And that became what is now proudly, which is nationwide and target with Gabrielle Union and Dwayne Wade. It was a brand that I think was an obvious one to us because you can we call these we call these ideas head scratchingly obvious. how is it that you can google search and find out that over half the kids in this country have a black brown or asian parent since 2014 and not see more brands and market dedicated to what is the majority of kids that's insane so we were we started with that brand knowing that there would be other opportunities but it was kind of shocking to us even after that how many other opportunities came to us immediately so we had three brands in market within you know it's basically the same year.

11:58So idea phase was 2019, 2020, we started putting partnerships together. And then into 21, we started to actually launch the brands. And 22 was the launch year for kind of everything. And now we're in market with three brands. So we've done a lot in a short period of time. I was the only employee up until about halfway through 2021. And then we all of a sudden went to kind of 30 employees by 2022. So it's been a rapid kind of spike and ramp up, which is typical of a lot of startups. And I think now we're into, into the, into year, we'll call it phase two instead of year two, but phase two where you're actually operating and refining.

12:37And it's a very different time in a business, which, you know, I like it, but it's just not, it's not the same thing as when you're ideating and concepting and launching. That's a very sexy, exciting time. Yeah. That's, you can do that with a glass of wine and, you know, think, you know, right on a board, but this time you probably is a balance sheet, which is a lot less sexy. That's right. It's the whiteboard years versus the balance sheet years. Were celebrities always part of the calculus or having these really well-known names doing it? And was that part since the beginning when you and your co-founder were talking about it, or was that something you came to as just a really necessary fit to hit the ground running?

13:15Yeah, I don't think it was part of the original calculus. I think we just felt like there were brands that needed to be in market. Hill happens to be from Hollywood. And when we brought in our third board member, which was John Howard, John is a good friend of mine and a mentor and somebody who I really love dearly and has been so good to me. And he at that time was in the thick of, I think they were selling aviation gin around that time and they were launching skims. They were working on skims and he was just very influential. He was like, this is my model. This is what I do. He explained the whole thing.

13:45He, you know, as usual, he's just very generous and explain kind of how he had approached it. And this was, you know, this was 2019. So we were, you know, at that point, we didn't know we were about to go into a pandemic when everybody would be sitting at home on their computers. And I think once that happened, it was very clear to us that that was going to be something that was going to help us cut through. And more importantly, what I think people overlook is that it wasn't about Instagram. It wasn't about digital. Like that's a nice channel that can help you. But like the two things that I think, actually three things were having somebody notable is important are not that.

14:20And first, I want to also sidebar to say that we spent a lot of time, once we decided to do that, we spent a lot of time doing research. We actually hired third-party research firms to help us determine who was the best fit once we had a great concept. We wanted to first make sure we had a market need. There was a problem that needed to be solved, that we had retail partners interested. So we were talking to Target and Walmart early days about all of these concepts, but the baby brand in specific. I was telling somebody the other day, like Martin Nakachuka, who is the chief strategy officer, we sat through some early meetings with Walmart and Target where we were pitching essentially a piece of paper.

14:56And they were like, this is amazing. How do we get involved? And that's great. We want that kind of feedback. I think once we determine that we want somebody who's going to be notable from the community, they have to have a high level of trust and engagement in the community that we're trying to serve. It doesn't mean they're necessarily a quote unquote celebrity. They're just somebody with a lot of credibility and trust. In a lot of cases, that happens to be famous people. But brands can be built around a personification of the customer you're serving. I think that's a really good way to show people, hey, this is what we're building.

15:25This is who it's for. It's great when it's somebody they know, love and trust. But I think where they really shine are a couple of things. One is retail. So we talked about that. Just the attention you get at the time, at least. It's definitely changing. And we'll probably talk about that. It's getting a lot more saturated. but just getting the attention of retailers. This is a serious brand with a serious founder. Ultimately having a serious experienced founder is important to people. Second thing is press. Clearly a lot of earned media still. I mean, if you look at John Legend's brand that we just launched, he's getting so much earned media because it's a great story.

15:58It's an authentic product collection that makes sense with who he is and why he did it. He can express that story well, and he's utilizing all of the opportunities that he has to talk about it. And that's very invaluable. You cannot get that as just kind of a non-well-known founder. That is impossible. So that's great. And the last thing is on funding. I think that people still like, there is some star power and some cachet in having somebody who's notable as a founder, just like you would if you were an experienced founder. It's easier to raise money if people know who you are. And so you're essentially just stacking the deck with somebody who's famous or well-known or credible.

16:32And I think that it's not really about the digital marketing channel, which is where I think people get fixated, because that doesn't really make that much of a difference. It's helpful, but not really. Yeah, no, I think the earned media is something that I keep hearing from people and they keep talking about. Usually, sometimes they have a well-known co-founder or a well-known spokesperson, but But often it's just a serendipitous thing that someone, you know, someone who is influential liked the product. And even if it wasn't online, that piece of earned media that it was in a magazine paid dividends in a way that they never saw possible.

17:06Yeah. Agreed. A morning show. Yeah. Let's let's talk about the it's amazing how much exposure and you see it directly. As soon as as soon as that show airs, the spike in sales is it's I mean, it's obvious and it's usually off the charts because it's so much exposure. in a concentrated period of time. And those are things that, you know, if I'm just a founder working out of my garage, which is great, like nothing against people who bootstrap and hustle and grind, that's great. But if you're talking about venture-backed company, like with a, you know, with a big market opportunity, you need to scale quickly.

17:40It just gets you from, you know, we'll call it zero to, not zero to a hundred, but it gets you to zero from zero to 70 pretty quickly. And that's a big advantage. So, you know, most companies, even if they're great ideas, great ideas are cheap. It's about execution. And if you can get essentially off the runway, it's very hard for brands to take off. The fact that you can get in the air, that's a big advantage. So that's one of the reasons why I think it's maybe under discussed, but it is very helpful. But it's not your marketing strategy. It's just a piece of. Yeah. So are you going to the retailers themselves with these names?

18:19Like you said, we were just a piece of paper. Or was that piece of paper Gabrielle Union and Dwayne Wade? Or was it the product itself? It was a combination of here's what our concept is. Here's who we want to do it with. Here are some options. I think we actually like to leave a little bit of opening so that if we're working with a retail partner, the partner that Ulta wants versus who Walmart wants might be different. And I think we also have to be smart about who we're picking to get into business with. So we like to have a range of a few options of people we know who will triangulate. Like that's the key for us.

18:51We'll understand from the talent agencies who are some of the people that are really interested in this space, who will understand a model like ours, you know, that are interested in building equity versus just getting paid because we don't pay people. We give them equity. And then also from a retailer's perspective, like, does this person resonate with your audience? Do you want to work with them? Um, those things are, those bits of information are important because you, you're basically taking a huge set of information and you just kind of fine tuning, fine tuning, fine tuning until you get to the final answer.

19:19And you have to take information. This is what I learned as a merchant, you know, there's a gut piece of it, but that you have to get feedback. You have to get tangible information. And part of that involves going out and having conversations aside from doing, you know, analytical research and interviewing a thousand people, which we do, we need to have that kind of anecdotal feedback as well. And the retailers are great about that. Got it. You mentioned this, but I want to go deeper. So you said that there's the equity part. You don't pay these partners. What does celebrity co-founder mean? Because I feel like it's lost a lot of meaning these days.

19:49So how much interaction do they have? How do you make sure that they're really in it or that they're not in it? How do you think about that entire interaction? Yeah. For us, and this is just our model, we feel like we stand for equity first and foremost. So we feel it's very important that the partner is a partner. So we go 50-50 with them. We set up a new company and we are 50-50 partners. But there's no guarantees. There's no upfronts. It is all about building equity. And we try to explain, if you don't get that, it's actually somewhat of a self-selecting mechanism. Like if you're not interested in working and building something, then you're not the right partner for us.

20:28There might be other opportunities that are good for you and you should go and look at those. But we do have that conversation with them. and it does kind of weed out a lot of folks. For us, I think what we want is somebody who's going to be very involved. And it's interesting because I don't want to come across as saying like our talent didn't have the idea or that it all came from us because the serendipity happens when the talent's already thinking of this and sees this problem too. And that's like the Wades, for example, like the Wades already had this problem in mind. They were dealing with it firsthand.

20:58They had a daughter that was a couple years old at the time and they were dealing with exactly the same thing, trying to solve this problem. We came at them and said, here's what we want to solve. They said, yeah, we do too. And they were a perfect family for us to work with because they are partners. They are passionate about the subject. They want to make this change. They want to work for it. And they're amazing. We've talked to folks in the past who are like, you know, they're basically, can you build something around me? And we say, no, no matter how big you are, I don't want to, I don't need to solve one rich celebrity's problem.

21:30I need to solve millions of people's problems. And I, you know, great brands aren't built because so-and-so is famous and they have a lot of Instagram followers and they're like, I really want to do a high-end fashion brand. It's like, does the world need that? Why, what problem are you solving for people other than you? Yeah. So let's just for, so the listeners know, like the three brands you have, you've proudly, which is with the Wade's, is it loved one with, um, with John legend. Right. And then Kinlo, uh, with Naomi Osaka, right? Kinlo with Naomi Osaka. Exactly. Are these just that you found product needs?

22:02Two of the three are more in the skincare beauty side. Is that where you're leaning towards or sort of how are you thinking about what types of areas you're going to go into? Yeah, I think we starting with problems first. So with the baby company, it was really looking at what is the problem for a kid zero to five, you know, if you have a parent of color and have more melanin in your skin. And, you know, if you do the research, it's really and you've had kids, it's it's very clear that there's a big interaction of products and things generally with skin, right? Because it's your skin is incredibly sensitive at that age.