How innovation succeeds with Kory Marchisotto [Uncensored Renegades]

0:00Kory Marchisotto:Ladies and gentlemen, welcome to the Uncensored Renegades. This is the 20-minute podcast where Kory Marchisotto and myself tackle one big question every week. I hope you enjoy this. Now, if you are enjoying it, I've got one request to make. We're putting this out on the current Uncensored feed for a limited time only. So if you're enjoying it, go over to Uncensored Renegades, hit subscribe and never miss an episode. Anyway, without further ado, let's get into it.

0:26Jon:so john this is supposed to be a 15 minute podcast oh yeah this is the thing we forget every time isn't it and so far we have been a little over 20 and then last episode we were over 30 so we're we're moving in the wrong direction or the right direction i don't know

0:48Kory Marchisotto:yeah to be fair we had the most amazing poetry last time didn't we so i think we'll allow ourselves a one-off but we're going to try and do this in 15 is okay i think i think we're always going to try to get to 15 okay we're trying to think but we are picking i think my favorite

1:07Jon:marketing topic tell me what it is innovation innovation i i am obsessed innovation i i think

1:14Kory Marchisotto:in my career i probably spent more time thinking about new products to launch than anything else it's like the fun bit it's imagining what could be in the world it's also the scary bit right Because like I failed more times than I've succeeded, if I'm honest. And the statistics out there play it out in terms of nine out of ten. You've done some pretty cool innovation. Like what's worked for you and why?

1:36Jon:Yeah, I think the first part of innovation maybe for us to talk about, because I think it's actually critical and not talked about enough, is creating the cultural conditions necessary for innovation to thrive. So you can't put people in a room and say, innovate. Here's a magic wand. Go. You have to create the stimulation, the permission, the energy field, the excitement for people to want to flow ideas. So everything has to start with the ideas. Now, the ideas can come from a multitude of places. They can come from inside the organization. They can come from an aha moment in the shower. They can come from directly from your community.

2:23Jon:And then the work of the innovation teams is to figure out what actually gets on the roadmap. So then you have to pressure test. And the pressure testing is triangulating the data points. Now, there is something I like to talk about, which is there are three things that need to be considered before something gets a go or no go. Art, science, and gut instinct. all too often, the only thing people rely on is data. Data is not enough, right? So data points are important. What do we think the market value is? How much demand and desire is there for that? Is there an equivalent? We can do all the studies in the world, have all the spreadsheets, and we need that.

3:06Jon:That's important. Then you have the art, which is really looking at the insight here. What problem am I solving? Is there a better way to solve it? How am I making your life better? How am I taking all this data and turning it into a narrative or a story? And you have the art form of it. How do I create it in a texture, a color, things? And then you have what I call is gut instinct. And gut instinct is your manual override switch. For whatever reason, and you have a ladder of experiences that allows you to have a manual override switch, even if the data says, don't go, something is telling you, go anyway.

3:46Jon:or the opposite. And that is absolutely critical. So not every idea should go to market. And there are some brilliant ideas that unfortunately don't go to market either because there's fear or the data doesn't say so, or I can't justify it or whatever the case may be. So the first thing you have to do is create the cultural conditions necessary for innovation to thrive.

4:11Kory Marchisotto:Then you have to go get a multitude of ideas.

4:15Jon:Then you have to pressure test set ideas to figure out what's going to hit the roadmap. And then you've got to actually go make it happen. And you have to make it happen with excellence. The measuring stick that I use with the team, especially in the line of work we're in is pride. A product does not go to market until you are personally proud of it, that you will personally stand in front of it, put it on your face, drink it, eat it, whatever business you're in, and be really proud of the work that you've done. Is that from a measuring stick? I mean, you've been in soda, you've been in beverage, like what, what's the measuring stick from the place that you think about innovation?

4:57Kory Marchisotto:I love the pride thing, actually, because it's sort of the intuitive question. Before I answer that question just come back to your gut instinct we tend to think gut instinct is something random right it's like it's it's it's emotional right but your gut instinct is is telling you things that you know it's often very informed your gut your gut is almost telling you something that you can't articulate right and it's sometimes better than you can articulate and yet and yet we don't trust it because we go oh gut instinct is is wrong but actually gut instinct is telling you something you know is true you just can't quite put it into words um and it's you know over time becomes right yardstick is a really good one and what i mean i think i think one of the things i i've learned as well is that the most important thing with innovation is to test it and prove the concept first before you before you go for it and to get the feedback really really quickly because because again you can do all the kind of research in the process and and then you sometimes you've researched it really really well and it fails and sometimes you haven't researched it at all and It's amazing success.

6:00Kory Marchisotto:But the moment of truth is when it's in front of the customer and you get that reaction. And what I've noticed is with every bit of innovation I've done, I can tell you within days if it's working or not. You know what I mean? Like it's very rare that it doesn't work and then it does or it does work and it doesn't. You know what I mean? You just know because that and it's the ability to take the feedback and immediately improve upon it and go again. And I think one of my biggest learnings as well is that we just don't give it time. because if you think if you think about it something that's brand new to the world it's like a little baby that's brand new to the world it needs to be supported you know what i mean and yet we tend to make decisions based on a week or a month or a year and i did this project actually when i was working in beverages where i looked at the 20 most successful soft drink brands of the last decade and i worked out on average it took seven years before you'd consider it to be a success in other words it had a level of rate of sale that you know you'd look at and go that's well established now and yet most companies give maybe a quarter maybe a year max kind of thing and so i think i think there's definitely a case of getting the feedback and responding to it and then it's how much patience have you got to do it but i think what most people get wrong is they go they go mass market straight away and i've seen that so many times is you just go you put all the resources behind it you pick a massive bet whereas you're much better off going right we're going to test this with this audience get the feedback learn and then we're going to go big well the

7:26Jon:other thing in what you said, when you think about innovators and creators, they're sensitive, right? This is their creation. It's like somebody who writes a poem or paints a beautiful painting. This is their soul talking. And if you shoot down their creations too early, then you have to think about the impact that that's going to have on your innovators and creators, because you have to, again, go back to those conditions necessary. They have to one, be okay that things are going to fail. But they always have to try. And they always have to try with head, heart, and soul in the game. And if the business becomes too short-sighted, oh, we need instant gratification, it didn't work in five minutes, you're going to start to deflate your innovation people.

8:09Jon:And when you start to deflate your creators, then you start to have a weak and lackluster pipeline. And when you have a weak and lackluster pipeline, then your brand starts to decay. So all of these things work together in very important ways. And I love what you said about iterating. So I'm going to take you on a journey through Power Grip Primer, which is a franchise that we created, which is now hundreds of millions of dollars in just a couple of years. So first, I'm going to start with what the elf is a primer, because you're a dude and you don't wear makeup and you might not know. Okay. So I'm going to put it in terms that you understand, or at least I hope you understand.

8:47Jon:Have you ever gone to a Lowe's or a Home Depot or like a hardware store?

8:52Kory Marchisotto:I've been to the hardware store.

8:53Jon:Okay.

8:54Kory Marchisotto:Yeah.

8:55Jon:And have you ever bought a primer that you lay down before you paint your wall?

9:00Kory Marchisotto:I've done that.

9:00Jon:So same exact thing. Only what we do is we put primer on our face to create a smooth canvas before we put the makeup on. So same exact concept. So the beauty of primers is a primer can be worn alone. It gives you a beautiful, smooth finish. It may lessen the appearance of pores. It creates a beautiful, smooth canvas. And you can just go out like that for the day if you're someone who doesn't wear makeup, or it's going to grip your makeup to your face and make it last for a very long time. So there was this very premium product on the market that was very expensive. And what Elf does is make the best of beauty accessible.

9:44Jon:The place that we're sitting in is we actually do it better than for a fraction of the price. And this guy called Power Grip Primer was our first at bat with being able to deliver this incredible sticky, grippy formula that was going to get your makeup to stick to your face. And it shot off like a rocket. I mean, just unbelievable, became the number one selling item in America in beauty. That's crazy because primer is actually not the most purchased product in general. mascara is, lipstick, eyeliner, the things you probably know well. Primer is like the 12th biggest category. So the fact that this little green machine became the number one selling cosmetic SKU is absolutely bananas.

10:32Jon:So we don't need any more data points to tell us we're onto something crazy here. So people started to ask us for a pink one. And so you see, we have a pink one here. So where I'm going with this is the spirit of co-creation because they love this guy so much. We wanted to have conversations with them about, well, what else would you want to see from power grip? They loved the sticky grippy texture. They loved how their makeup would wear. They would be amazed 16 hours later, their makeup didn't move all the great things. And we had had this watermelon primer called jelly pop that people clamored for and went nuts for.

11:08Jon:And it was a seasonal one shot that they kept begging us for. This is the same formula. It's the same formula. So we did this because watermelon is not going to appeal to everybody, but it's the same formula. So I get on a TikTok live to have a conversation with the community directly. 15 ,000 people show up and I'm like, help me understand why you want to have this in the pink form. And they're like, oh my God, we want, you know, we want the watermelon. We want the watermelon. We want the watermelon, la, la, la, la, la, la, la, la, la. So, okay, whatever. So what I understand from them is not only do they like the watermelon flavor, which we keep as a seasonal one shot, but they love pink.

11:49Jon:So we created a pink version and this one we put niacinamide in it. So you get this beautiful, same formula, add niacinamide and you get the pink version. This thing flies off like a rocket ship. And now this franchise starts to build into something massive and incredible. then you have people who have oily skin so they came to us and they said well what about us oily skin girls like we don't want to have a dewy finish we don't want to have a shine so we created the matte version so you see this spirit of co-creation happening go to the community what else do you want to see from us and so we listen we act we build this franchise it's absolutely incredible continues to explode.

12:32Jon:And then this crazy moment happened where I go to DragCon. Do you know what DragCon is?

12:37Kory Marchisotto:I discovered this a few minutes ago.

12:39Jon:Okay. So DragCon is this annual event where all the drag queens come and they're celebrities and the people who love the queens will come and line up to meet them and take pictures with them. And it's this incredible, incredible show. I had never been there. This was my first moment. And we were there with one of our favorite queens who is a great, she's part of our Elle fam now. Her name is Heidi in Closet. So we're there supporting Heidi. We set up a beautiful booth for her and we're spending the day with her. And she tells me I have to meet the queen of the queens. I'm like, fantastic. I can't wait.

13:12Jon:So I get taken behind this curtain and I'm behind this curtain with this absolutely spectacularly gorgeous theatrical drag queen. And she's like, we need to talk. And I'm like, great about what and she holds a power grip and i said what's up she goes now mind you her hands are about three times the size of mine and she's like you're not creating for my surface area and i'm thinking man i created a green one a pink one a black one never once never a big one did anyone talk about surface area? So of course I have the open curious mind. So I start asking a lot of questions and she's like, first of all, look at the size of my hand.

13:58Jon:Second of all, I'm using this in one shot. What about here? What about here? We like to have glittery on our arms. Like I need a giant version. So we came out with the three X size, but we didn't want to just come out with a jumbo size the way, you know, it's a great idea. It's a wonderful thing to do, but we wanted the community to be really involved. So if you look at them, they all have different names. The community named these for us. So they have so many fun, clever pet names for this thing that they love. They love Power Grip. They're obsessed with it. So Slime Sticker, Grip Goat, magic worker the big gripper so when we launch the product it's not just about them being a passive member of the audience it's about them being an active participant that's innovation

14:54Kory Marchisotto:i love that i think that's spectacular and it's so true i mean i'm by the way i'm borrowing your phrase now which is one of my favorite phrases ever about you know when you said the distance from the c-suite to the customer and the distance from at the time from insight to action that's a brilliant brilliant example yeah the other thing i'd say uh that is unrecognized in innovation is the importance of a constraint because i think constraints are incredibly powerful in terms of projecting us forward and uh you know forcing us to be innovative and my favorite ever bit of innovation i've ever done came out of a ridiculous constraint so i was working on a um i was working on a juice brand right so a small juice brand zero budget and the government in the uk were about to change the legislation for what you could sell in school right they basically limited the the serve size limited the amount of juice you could put in limited amount of sugar you could put in i mean it was very very draconian so and it was quite funny because um i think we were the 10th biggest uh soft drink company in the uk so we were quite small right we were coke and pepsi all the big ones there but we were just number 10 so we snuck into the government consultation i was kind of like very much the junior party sitting in all the committees and i listened as around the room all the big players going there's no way we can adapt our production lines to make the smaller size there's no way we're going to change our formulations that takes 18 months you see i'm listening going this is brilliant this is amazing they're literally declaring themselves out so i basically said to i remember going to the board and saying right the new legislation comes in in three months i'm going to launch in three months what you'd normally take 18 months to do but if you can sign off as about 100 grand we're going to have to spend if you can sign this off i'm just going to do the right pack the right formula anyway so i got it to market yeah first right and being first we absolutely cleaned up but that wasn't that that's that was the first constraint the second constraint that then happened is i then went to the biggest um uh supplier of drinks to schools in the country the number one is called compass group right they were massive i mean they employ tens of thousands of people anyway i went through the pitch process and i utterly failed but utterly failed and and um they end up saying to me like i was like nowhere near the pricing that i had to be at now the thing that you need to know about compass group is just getting a listing gets you on the list it doesn't get you in the school because every school can choose what they have from this big long list so you then have to send people around to the schools to go oh you know dear school you should have our one not their one yeah yeah there's a there's a whole team right and so i i didn't have the price i i didn't make the list and i didn't have a sales team anyway but anyway i had a bit of luck because i got called up because i'd obviously signed up for this thing and they said oh would you as a supplier will you come and present an annual conference and i'm like i'm not a supplier but so what do i do do i go anyway and just pretend so anyway i i decided to act as if i was a supplier go to the conference and pitch the plan for next year so i pitched this idea and the idea was i was going to create a new entrepreneurs program in schools where basically i was going to train the kids to run their own uh basically drinks business from within the school they had to basically order the stock they had to price it they had to merchandise it they had to manage the you know the you know the stocking and replenishment and that kind of thing and it's going to be an educational thing so basically I was going to get the kids to become the sales team.

18:20Kory Marchisotto:Anyway, they love the idea. They were literally like over the, they thought this was the best thing ever. Anyway, so I then got this, they then contacted and said, right, we're going to do this, this entrepreneur's program with you. We're so excited. We need it in three weeks time. We need every school to have your products available within three weeks so we can kind of launch it. I'm like, but they don't stock me and my price is too high. What do I do? So everyone was on holiday as well. So I remember phoning up logistics people going, can you help me out with something we're not technically listed and you haven't got our pricing agreed and but i managed to work you know work behind the scenes and it ended up becoming

18:57Jon:like the number one drink in schools look at that and there was not a single salesperson involved

19:01Kory Marchisotto:um i think i spent 400 pounds and all i did is i filmed a video of me on the production line oh sorry i should say the incentive was the school that sold the most the following year would come to our factory and design their own bottle label flavor and they'd learn how you make a drink right that was basically all i did i spent 400 pounds on a video camera filming me on the production and i go this could be you next year the winning team okay we're gonna have to see that yes okay i need to see that yeah but i was like the constraint of firstly the new government

19:37Jon:legislation and secondly not having a sales team yeah forced me in both situations think how do i

19:43Kory Marchisotto:go much faster than everybody else and then secondly how do i get a product that i don't have a sales resource to do right i'd never have come up with that idea had i had the sales team i'd use the traditional form of innovating that's that's living in the zone of friction right you

19:58Jon:had all of these opposing forces which allowed you to break through and do something awesome we probably failed again at our 15 minutes but i have to tell you this story and here we go going over. So this halo glow thing. Okay. So I told you, this is like a giant franchise. This is also a giant franchise that we built with, which is also hundreds of millions, right? This is actually like a highlighter. So I wake up one morning, this is the zero distance I talk about between me and my community. My entire TikTok feed is covered in people emptying this bottle out, removing all of its content, cleaning it to like almost factory resetting to factory state and then filling it with lip gloss.

20:48Jon:And I'm like, what in the hell is happening? And it wasn't one TikTok in my feed. It was like hundreds. I just kept scrolling and scrolling and scrolling and I'm like, something is going on. So I get to the office. I talk to the team. They're like, tens of millions of views have happened in like 24 hours. And I was like, do we have anything to do with this? So I know nothing, zero, we had nothing to do with this. This is straight up organic. So I did what any CMO in my shoes would do. I walked down the hallway to our chief commercial officer, Jenny Lar. I call her Jenny Lar Boo Boo because she loves La Boo Boo's.

21:24Jon:And I said, Jenny Lar Boo Boo, what are you doing today at four o 'clock? She said, what do you need me to be doing today at four o 'clock. I said, I need you to jump on a TikTok live with me. The community is going nuts, building these giant halo glow lip glosses. We need to figure out what's going on. Like let's, to understand it, we got to do it. So let's be in the community, doing it with the community. So her and I jump on a TikTok live, 16 ,000 people show up and we ask them to basically direct us through creating our own giant lip gloss so that we could understand the why. Of course I could do it.