#123. Derris is a communications and brand consultancy that has been at the forefront of the direct-to-consumer revolution. We talk with founder and CEO Jesse Derris about how the fashion and tech press has changed the ways in which people discover and shop brands across the consumer landscape. Pressed Juice, a podcast by Loose Threads, talks with the journalists and PR leaders navigating this fast-changing industry about what warrants coverage today, how the media goes about covering it, and how both journalists and PR professionals define their relationship with brands throughout the process.

Check out the full transcript below. 

Jesse: [00:00:01] PR’s not going anywhere. Not for the foreseeable future. I think, if anything, it’s more important now than it’s almost ever been. And so I think it will continue to grow, just as a core business. But I also think the better we get at the full mix, the more of a value we’ll be to the people we work with.

Richie: [00:00:17] That’s Jesse Derris, founder of Derris, a communications and brand consultancy that’s been at the forefront of the direct-to-consumer revolution. After a career in political communications, Jesse worked closely with Warby Parker’s founders to launch the company and usher in a new way for brands to communicate with the press. From there, he’s worked with the slate of other blue chip brands, both new and old, helping them tell their stories in the modern era.

Richie: [00:00:39] I’m Richie Siegel, the founder of Loose Threads, which analyzes and advises next-generation consumer companies, and FaceLift by Loose Threads, a retail incubator and accelerator for leading brands and retailers. For our latest analysis and insights, check out our free weekly newsletter and LooseThreads.com. We also announced Loose Threads Live, our invite-only and entirely off-the-record gathering for founders, executives and investors on October 3rd in New York City. Learn more at Loose Threads.com/Live.

Richie: [00:01:09] This is the third episode of Pressed Juice, a podcast by Loose Threads where we talk with the journalists, editors and PR leaders navigating the consumer economy. As the space rapidly evolves, so has the role of the press, going from a brand’s gatekeeper to now one among many channels a brand can rely on to grow. Even so, the press still plays an important role, and I was excited to talk with Jesse about how the fashion and tech press has changed the way people discover and shop brands across the consumer landscape. Welcome to the world of modern communications.

Jesse: [00:01:43] I got a very random phone call in the fall of 2008 from Neil Blumenthal. I know Neil through a really close mutual friend of ours for, you know, since we were teenagers, and he basically just wanted to pick my brain about tech press, because he was gaming out, launching, you know, a brand that sold glasses online. And they worked on that business for the better part of 18 months and launched it in early 2010. And Neil convinced me—I actually was hard to convince at the time—to jump on as an agency partner and help them with tech press, and they had another agency helping them with fashion press. And the idea for this business basically came from sitting at a table watching Neil and Dave be brilliant for two years.

Jesse: [00:02:21] Warby was gonna be successful, to some extent, at some point it looked like.

Richie: [00:02:25] How early did you know that?

Jesse: [00:02:27] I could pretend that I knew it right away. But, I mean, they were very confident, I think. I don’t know. You know, it felt great from just about the first day, but I didn’t really know anything about those businesses at all. I mean, Warby was literally the first, for me, consumer products brand I had ever worked on. And so I didn’t know what was successful or not. I knew that they had a tremendous amount of buzz and had been doing a really amazing job building their brand, and I had gotten to play this small part in that. And what I saw was they’re gonna be successful. They had really kind of built this new model for communicating with people, that started out with a really organic story and told kick-ass product stories. And told very rich, kind of emotionally-driven brand stories that connected with people.

Jesse: [00:03:10] And there was another PR firm sitting at the table, which didn’t make that much sense. And, at the time, if you were going to start one of those brands you needed somebody who understood your consumer segment regardless of what you were selling. And somebody who understood kind of tech and business and broader brand storytelling. And so the idea basically came to me to launch a business that would do both of those things. That was the first thought.

Jesse: [00:03:31] I started this business, technically, in the fall of 2012, but didn’t really start to have paying customers until the first quarter of 2013. My partner Lisa joined me basically the first day, and we had a succession of wins really early on, that were just quite lucky. I mean, you know, not many firms get to start with Warby as their first client. We launched Harry’s about four months into our business, and then Jeff Raider introduced me to Michael Preysman of Everlane who’s since become a super close friend. And Michael hired us, which surprises me now that I know him, and we built a really deep partnership that still exists to this day. And then Michael introduced me to Yael at Reformation. And so we started working with them as they were getting ecommerce off the ground, and it just sort of went from there.

Jesse: [00:04:17] We launched Oscar that first year, we started working on Glossier. My wife, I think in our second year, launched Lola, and it kind of went from there. You know, now I look up and what started out as me and one or two other people in like a coworking space is now about 90 people. Mostly in New York, although we have a small office in London now, and a handful of employees that work in different cities around the country. And we’ve expanded what we do pretty broadly. We do a lot of positioning work now, helping brands kind of figure out how to articulate what it is they are in short positive repeatable messages. We do a lot of brand marketing, for lack of a better way of describing it, it’s how does a brand take that positioning and communicate it over and over and over again effectively through the channels that they can own and influence—everything from social to out-of-home to copy-writing. We get hired a lot to do strategy work for very big companies and very small companies. And then the core business is still communications, on the consumer side, on the tech and business side, and then having a seat at the table to help plan strategy so that the things that we are asked to do have input from us from the beginning.

Richie: [00:05:24] So, I guess, when it’s just you in a WeWork, like, were you pitching in—like, if you take yourself all the way back…

Jesse: [00:05:31] Yeah I was pitching. We were all pitching, there were three of us. And so, yeah, I pitched the Harry’s launch as like, an account executive. As a person starting a business there was a whole separate piece of this. So I think the first thing was, I was a terrible manager early in my career. I mean really bad at it. And there’s a really fundamental difference between being good at a job and being good at managing people who are good at a job, and I was a very bad manager. And so, I started to set about kind of sending myself to management school by reading as much as I could. That was the first thing. The second thing was, how do you functionally run a business? So I downloaded QuickBooks that first day and I kind of learned how to send invoices, because I figured we should get paid, and try to set up payroll and things like that.

Jesse: [00:06:12] And then the third thing was hiring, because every time you hire a person really early on you’re basically taking all of the money that you thought you had made and giving it away, which is incredibly scary, and you almost have to hire despite your own nervousness. And so all of that stuff was going on at the same time that, you know, we were winning clients, sometimes we were losing clients. And I was still working in some—in a lot of ways as an account manager. I won’t pretend to be the one who was doing all the day-to-day stuff, but I was still sitting in all those weekly meetings, I was still pitching, I was doing all of that stuff too.

Jesse: [00:06:48] That first year I didn’t sleep very much. I assumed we would fail.

Richie: [00:06:52] What was the PR landscape like back then? You talked with Warby about straddling the tech and the fashion side.

Jesse: [00:06:58] Yeah.

Richie: [00:06:58] You were probably one of the first brands to really execute, call it that dual strategy. But, I mean, there were one hundredth of the amount of brands back then. Like, what was it like being front lines in—with seemingly a lot of room to run?

Jesse: [00:07:11] Well, nobody believed us at first, that we could actually do both things. And so we would get into these situations where they would hire us and assume we were a tech firm, and we had people who were much more consumer-driven and had come from much more fashion and accessory and those types of backgrounds, and broader consumer backgrounds. And so it took awhile to convince people that we could actually do what we said we were gonna do. The good news was there was nobody else even trying to say that they did it, and the other good news is that the competitive set we were going up against—and I’ll say it, I don’t care, they’re just not that strong. I think one of the things traditionally about PR as an industry is that it attracts a lot of idiots.

Richie: [00:07:49] Why?

Jesse: [00:07:51] On the broader-based consumer side, it’s always been this sort of wicked, bastard stepchild of the marketing mix, right? It’s set so far below the leadership and decision structure that it attracted people who were fine being just told what to do and then, you know, running off the cliff after the next lemming. What’s odd, and I’ve now come to understand is sort of a quirk of politics, is in politics when you grow up paying attention to politics, the communications and brand people are the ones sitting at the table with the candidate. And in consumer brands, for some reason, it was like the CMO would be sitting at the table with the candidate and the PR people would be at the kids table, off at the side being told what to do. And I think that is a self-fulfilling prophecy after a while. If you don’t ask people to flex their brains you’re not going to attract great people.

Jesse: [00:08:37] It doesn’t mean, by the way—there’s a ton of smart people who work in the industry. But it does mean that it is a lot harder to hire in the industry because I do think it’s still self-selects to a certain extent.

Richie: [00:08:46] Do you think part of that was the separation of operations and strategy, in a sense? Like, the actual operation of PR, it’s incredibly grunt-work-based, it seems, and that attracts someone versus, the strategy is removed, and maybe in politics they’re much more intertwined?

Jesse: [00:09:03] No. I think every entry-level job is grunty. My entry-level jobs in politics were terrible. No work-life balance, doing everything nobody else wanted to do. It’s all the same, everything flows down, that’s not what changes. And I think for a lot of people the industry is actually extraordinarily attractive from the outside, it’s just probably attractive for the wrong reasons.

Richie: [00:09:23] Right. And that’s kind of their fault, in a way. That they created that attraction.

Jesse: [00:09:26] Yeah. The biggest issue is that the world started to change pretty fundamentally around when we started the agency, in that we could demand a seat at the adults’ table. We had had it almost by default with the early stage businesses we had worked on, because they couldn’t afford to spend tons of money on advertising and so there was no CMO running around telling me what to do. And so we sat at the table and helped inform strategy and inform the things that we were gonna work on, and then really play a role in decision-making at the highest levels. And so once we got a taste of that we were not going back. And so, that was sort of the seat we demanded each time. But, if you’re gonna demand that seat, you actually have to have insight.

Jesse: [00:10:04] I’m not scalable as a human, and so unless we hired really, really strong people early on, gave them really good opportunities to learn and grow, and then kept them there because of the institutional knowledge base, like, we were gonna fail. And I do think in looking at other agencies, and I never comp’d to PR agencies, actually I comp’d to very different types of agencies.

Richie: [00:10:24] Such as what?

Jesse: [00:10:25] I always found the talent agencies more interesting, both in terms of how they show up in the world, which is very little, they don’t talk about themselves all that much, they don’t feel compelled to list all their clients on their website, those types of things.

Richie: [00:10:37] Or if they have a website.

Jesse: [00:10:37] Yeah. And then also how they were treated. They’re treated as equity partners, right? And when you’re treated as an equity partner, when you have skin in the game, when you’re treated as an equal, people will listen to what you have to say, even if they disagree with it from time to time. And I didn’t want to be treated in the way a PR firm was traditionally treated. I mean, we stopped calling ourselves that a few years ago—maybe three or four years ago, now—but we tried to act into it by being valuable. I mean, our initial thought was, if we can do consumer press and we can do tech press then we will add more value than any single firm. And then by doing those two things, well, we have the ability to ask for and inform strategy, basically.

Richie: [00:11:16] What was it like at that time, in the beginning, on the outbound side? In terms of, was the tech press and the fashion press, were they hungry for these things? Was there convincing to do? Like, what was the appetite?

Jesse: [00:11:29] Pitching is pitching. The reason we found it so important to be able to shape the stories is ’cause we had to pitch it in the first place. I don’t want to make it out like the world hasn’t fundamentally changed in the last six years, ’cause it has. It has become harder over the last six years, but especially at the beginning when the notion of a direct-to-consumer brand was still novel, just in itself, and you could get away with like, just telling a founding story and having it be interesting. That was easier. I mean, we don’t pretend to be able to launch 15 brands a year now, the way we used to in the first couple of years.

Richie: [00:11:58] And that was riding on, kind of that preliminary…

Jesse: [00:12:02] There was a wave. It was still super-novel, so people still found them new, and the categories were still being created to some extent. And I don’t think people fully understood the notion of direct-to-consumer. I still don’t think most people do. And so, yeah there was a lot of novelty to it, and so, definitely easier to launch brands in 2012 and 2013 than it is in 2019.

Richie: [00:12:22] Yeah. I mean, there was a story every day arguably, every two or three days about Warby and so forth. Was it like, unbelievable to you at a certain point, that they were eating it up to the degree that they did?

Jesse: [00:12:31] It was the easiest thing I had ever pitched in my whole life. I’d love to take credit for it but, honestly, it was—you know, Neil and Dave are pretty transformational. I mean, they were the ones—I don’t even know if they did it consciously, but the story was so organic, but it was certainly their idea to kind of include their personal narratives in the story. And I don’t think that’s any different than stuff that’s happened forever. I mean, when you’re talking literally about Men’s Wearhouse or Apple, founder stories have been around since the history of time, they just did a really compelling job talking about the value proposition and how they found it, and it was super-easy.

Richie: [00:13:06] There was also a very clear elephant to position against, too, which seemed very instrumental.

Jesse: [00:13:13] I mean, that’s a political tactic right. You know, if you look at the way politics works and campaigns work, the candidate who wins is the candidate who has the clearest message, defines themselves at the same time that they’re defining their opponent. That’s just straight campaign politics. You know, Luxottica is a very large company that the vast majority of consumers, certainly in 2012 and 2013, had never even heard of, and they certainly did not know the extent to which they owned the various levers in the industry, from manufacturing and brand and retail to insurance. Once you told people that, even kind of baseline consumer reporters who cover the various brands that Luxoticca owns and/or licenses, they were surprised by it and it’s compelling.

Richie: [00:13:55] Right. And you’re the one educating.

Jesse: [00:13:57] So much of it was publicly available, and so much of it was like there at the mall you grew up with. I mean, all of us saw Sunglass Hut.

Richie: [00:14:06] Right. But you were able to help people make that connection.

Jesse: [00:14:09] We certainly explained to them how the industry worked and why it made sense, contextually, for Warby to exist. There was no and there still is no specific reason why a piece of acetate—even if it’s really well engineered, with lenses and things to connect everything—why that should cost six hundred bucks if you’re just buying a pair of sunglasses. Pretty simple.

Richie: [00:14:28] Yeah. Totally. Did you find, as you were going through this early period, that your work on the politics side was overlapping significantly? Did you find a lot of unique differences to the consumer side? What’s that interplay?

Jesse: [00:14:41] I don’t pretend to know anything about consumer brands, still. My entire training was in politics.

Richie: [00:14:46] So you were applying that playbook.

Jesse: [00:14:48] It was all I knew I had to do. And, to a certain extent, there’s a tremendous amount of overlap. But, you know, in politics you’re selling a core brand with a set of principles, and a story underneath it, and a hierarchical set of issues. It’s really no different than with a brand. Even when you see kind of traditional, old school, kind of trained-out brand architecture, it’s not that different from the way you would approach a candidate. I don’t think as many people were approaching their foils in the same way we approached the companies that we were trying to disrupt, but I just think that was a miss.

Jesse: [00:15:21] But that was pure politics. That’s something when you’re 22 years old and they hire you to a campaign the first time, they send you to like, boot camp, off in Maryland somewhere where they have a bunch of people who have established themselves in politics and on campaigns teach you how to do stuff. And opposition research is like the first thing they teach you about, basically. So applying that sort of mentality—to me, at least, in the consumer landscape—allowed people to have context into the decisions they were making when they were purchasing. Or at least to understand that when they were walking into a store they actually weren’t making a decision. You know, their ability to make that decision had been stolen from them way further up the supply chain.

Richie: [00:15:58] Right. The fact that they’re already in the store.

Jesse: [00:16:00] Yeah. You know, ’cause I always found it really interesting that you could be in a sunglass store, for instance, and basically have no distinction between where your money was going. You were gonna give your money to the sunglass store, and whichever brand you bought in the sunglass store, just about all of them, you were gonna be giving your money to the same company. It’s the illusion of competition, which I found so fascinating.

Richie: [00:16:19] So, as you said, you launched ten, 15 more brands in the first year or two. Did you find any of those like, call them “Warby dynamics,” in the others, to that degree? Or were they somehow just this perfect encapsulation of having every piece of the puzzle in the room.

Jesse: [00:16:38] So Warby is special forever in a lot of ways. Yeah, I do think that a lot of these brands have core concepts in common. The first thing I always try to talk about is the idea that I don’t actually think direct-to-consumer is the right category name. It’s wrong. Direct is a channel that’s existed forever. I mean people bought out of the Sears catalog. And when I was growing up we would go to the mall, and the mall operator decided what brands were in there. And the brands would sign leases and they’d put a bunch of stuff in the windows, and their job was to make the window nice enough for me to walk in the store, fold the stuff nice enough for me to pick it up, have it be the right color in the right shape so that it was in style. And then almost the fourth thing was when I put it on—like, it should also be good. And that, to me, was just a pure encapsulation of the fact that brands that had distribution and distribution advantages were gonna win. And that was the playbook that’s been run out of the giant mall-operated brands for the history of time.

Jesse: [00:17:34] What the internet did was take what had been the mall, which had been geographically confined, and it made it the entirety of the world. What happened then was that there were no store windows to walk past—I mean, there were, but since they’re infinite it’s kind of hard. And so the idea of telling stories and attracting people in the first place to you, like, that became front and center. And with brands that don’t have tremendous amounts of money to spend on marketing, that storytelling was even more important. It had to be organic. It had to speak to people, either through social channels, through the press or other ways that you could organically touch folks.

Jesse: [00:18:07] And so, for me when you do look at the brands that we’ve had that have succeeded they all have sort of five characteristics. So one, they have a real purpose, it exists, it’s organic, it’s real. It’s not fake, they haven’t made it up after the product was designed. Two: they design product only that reflects that purpose. Number three, they tell those product stories and those brand stories in iterative cycles. They sort of build a machine. And so, it doesn’t really matter how often the iteration is, some brands will tell four types of stories year, others will tell 30 or 40. The point is that they have a cadence to them. The fourth thing is that that cadence happens through all of their channels all at once. Some of those channels are digital, whether it’s earned media on the consumer side or the technology side, whether it’s your organic social channels, or the emails you send to customers or your website, etc. Or whether it’s offline, out-of-home, radio ads, podcasts ads, all sorts of different stuff, but it all happens in concert in a thing that looks like a wave and the waves happen at the speed of the cadence of your storytelling.

Richie: [00:19:18] Right. The Fyre Festival orange squares situation.

Jesse: [00:19:21] And then the fifth thing is pretty simple: all of this stuff has to happen both online and offline. Your brand must exist in the digital world and the physical world. It can exist in a multitude of ways, you can own your own retail stores, you can have a wholesale relationship with a giant retailer. You can do pop-ups from time to time. If it’s a medical business it can be in the form of locations. It doesn’t really matter what it is, but the idea is that people expect you to show up in the physical and the digital world. You know, and it took us a while to figure this out, it took me years to figure this out, but all of the brands that we had that succeeded, especially early on, in hindsight, had those kind of five characteristics.

Jesse: [00:19:56] And the last one, which goes totally unspoken but which is honestly the most important thing, is they had a really kick-ass founder, or founders. The notion that you invest in people as opposed to brands, it’s not entirely true, but great founders are just great founders.

Richie: [00:20:11] Of the ones that you didn’t see work, I assume they all failed one of those things, if not more.

Jesse: [00:20:17] Yes. You know, they mistook launch for everything they needed to do. As much as you tell them, “This is a marathon. What we are working up to is day one. Day two is like, infinitesimally harder. And you should be prepping for it and thinking about it every single day up until now, because the easiest thing you’re gonna do is launch.” The second is they misjudged or guessed wrong about product/market fit. I mean, with a lot of these businesses, especially as cash became easier for consumer businesses to raise, they were coming to market without any notion of having built an MVP. They mistook the fact that they were using a supplier that manufactures that same product over and over and over again for having fit with the market. So they either misjudged price, or it was a category in which the customer experience was, they couldn’t build a better customer experience and it became worse for the customer. And then they didn’t give themselves—and this is the last one—a lot of them just didn’t give themselves enough runway to screw up. And so they raised the amount of money, or they spent the amount of money that they raised in the period of time that it would take them to get to launch without giving themselves any room to kind of change direction.

Richie: [00:21:27] So at that time, I feel that there’s always this, call it a fallacy that press is going to correlate into sales, and people look at press solely from the sales perspective. How at that time are you quantifying the value of the results, how are you aligning expectations? ‘Cause it seems, always, you’re working backwards from that perception of, “If I’m in Vogue I’m gonna sell out, and then I’m gonna do it again and again and again…”

Jesse: [00:21:50] So the first thing we did was try to disavow people of the traditional metrics that existed in PR. And the traditional metrics that exists in PR—you know, things like impressions—were and are totally useless. I mean, the vast majority of people in our industry still use them. They’re literally useless. And I think those metrics are one of the reasons why people on the paid side were able to convince marketing leads and CEOs that PR was so dumb, because the metrics were terrible. What direct did—especially before it moved into kind of wholesale—but what direct did was you could literally tell what worked. And so, for each brand we could see what click-through was, we could understand conversion, and at the beginning that was really clean. It was super easy. Affiliate didn’t exist, nothing existed, really, yet.

Richie: [00:22:34] Right. So Fast Company writes something, you can see everyone coming from Fast Company.

Jesse: [00:22:38] As long as they put a link in the story we could see exactly what it would do, and how it would perform. And so for us, a lot of the early people that we hired came out of more traditional backgrounds, where they had worked as agency partners for very big companies. And what’s amazing when you work at one of these big agencies for one of these big companies, I would split up your time, if you thought about it, into thirds. You spend a third of your time doing work, right? You spend a third of your time showing the client the work you’ve done in the form of impressions. And then you spend a third of your time tracking the hours you’ve spent doing the work. It’s just insane. But a lot of them had come out of these places where they lived and breathed on impressions and message pull-through and sentiment, and all of these things that at the end of the day are mostly cover-your-ass metrics for people in high up positions in these companies, to show how great they were when they hired the firm they hired.

Jesse: [00:23:31] Really, the first thing we did was try to disavow people that they should be using these, both on our team and then with our clients, especially. And then we were able to look at the direct performance of a bunch of the things that we do. But the most important thing I think to remember, especially over time, is that earned is a channel that has a lot of different values. For certain brands it definitely drives direct conversion, for other brands it’s mostly an enterprise value, or it’s in brand value in some other way. In that you’re building a name for yourself and building into this echo chamber, where a story gets written and a reporter sees the story, thinks it’s interesting, wants to iterate it slightly. Calls you, gets another story written, and over time it grows the footprint of the brand. And we were always extraordinarily proud of the fact that our brands—from very early days and still, now—often feel much bigger than they actually are. And that helped them do things that maybe they weren’t quite ready to do, in terms of the types of partners they could take on, or the types of retail opportunities that they would get. Even the ability to open their own stores before traditionally a brand would be able to do that, and so there’s a lot of other kind of intrinsic value we think.

Richie: [00:24:38] And you mentioned before the idea of the marathon. In terms of time horizon, again, a lot of PR firms would go month-to-month or something. Talking about a talent agent, hopefully around for a career. What was it like articulating that and so forth, early on?

Jesse: [00:24:51] To this day we—if people come up and say we have a project, we generally just don’t do it. We’ll do it for like media training or for crisis, ’cause we still do a lot of that stuff. But if somebody comes up and says, “We need you to launch us,” like, that’s just an “auto no.” We have almost no guarantees in our contracts, I think it’s important to know. We tend to sign 12-month contracts but they have 30 days no-cause outs for both sides, ’cause I don’t want them to be in business with us if they’re not happy and I don’t want to keep our team in business with them if we’re not happy. The only caveat is that for pre-launch brands—I mean, we learned really early on that people might say one thing and do another. And so for pre-launch brands, mostly to make sure that they have the funding they have told us they have, and to make sure that they’re committed, we put a six-month guarantee in. But other than that, nah. I mean, they’re basically month-to-month.

Jesse: [00:25:40] Our relationships, I think we’re super-lucky, we have at least five or six relationships that are over six years old, even though we’re only six-and-a-half years old, which I think is highly unusual. I was joking around with Neil and Dave a couple of weeks ago, the first time I spoke to Neil about what became Warby was 11 years ago, which is wild. But a lot of our businesses we’ve been with for an extremely long time.

Richie: [00:26:03] So coming out of this first year or two of just brand-launch chaos, when did you start to feel the launch environment changing, and how so?

Jesse: [00:26:11] Probably not really until the last 24 months.

Richie: [00:26:14] Really?

Jesse: [00:26:15] It just tightened up. I mean, two things happened at once: Instagram exploded from an advertising perspective and Facebook started to get more expensive at the same time. And you started to see just a ton of brands around. Not a ton of them operating at a very high level. I like to say that it’s never been easier to start a company and never been harder to scale one, right at this point. But that was really about two years ago. And then, obviously, there’s a macro trend in media where there’s more PR people and less reporters, and that’s gonna continue. I think I read a stat that it was like, two-to-one when I started my career in 2002, flax to reporters, and it’s something like five- or six-to-one now.

Richie: [00:26:54] Across all industries?

Jesse: [00:26:55] Across everything. Yeah. And so, you know, there’s less and less people to pitch, there are more and more hurdles in order for people to care enough to write. Some of the dynamics that existed five six years ago where a group of people would cover the same story at the same time, they just don’t exist anymore.

Richie: [00:27:12] Is that good or bad for you?

Jesse: [00:27:13] It’s funny. It’s bad for the industry, we tend to think it’s pretty good for us.

Richie: [00:27:16] If you can cut through.

Jesse: [00:27:18] No, it’s not even that. We just don’t really consider ourselves a PR firm. Like, it’s part of what we do, but it’s one part of the marketing mix. You know, we think what’s important is being able to tell a very consistent story through all of your channels, and we think a lot of brands need help doing that, and that’s really where our bread and butter has been. And we’ll keep attacking that, you know, the various channels, with comms being one of them. And that’s one piece. And then, yes, the second piece is, we try to pick great clients, and we try to have good people, and in an industry where a lot of folks don’t do either, you know, you can stand out a little bit more.

Richie: [00:27:53] How did your priority or focus start to shift as the business grew, in terms of where you were personally spending your time?

Jesse: [00:27:59] Well, I had the insight that I’m not scalable. Lisa’s not scalable. Our managing directors aren’t scalable. And so over time, you know, we had to train people to do their jobs really well so that clients would be happy talking to them and not need the person above them. I took a lot of advice from a lot of friends who had scaled a lot of the businesses that grow much faster with venture than ours do, and that was a real benefit, to be able to go talk to entrepreneurs and say, “What are your inflection points?” And so at 25 people we brought on our first HR person, which is really early in the agency world. We wanted to start to pay attention to institutionalizing culture really early on since it was gonna be the most important thing and start to bring hiring to a more formal level. And so I started to spend more time on that.

Jesse: [00:28:43] I’ve always spent time talking to entrepreneurs and potential entrepreneurs because I find it super-interesting. It’s also a common thread in all sorts of people who’ve remained relevant for decades. I mean. I’m 39 years old, but I feel really old. And so, meeting with entrepreneurs. Thinking about where our business and where the world is headed is something I spend a lot of time doing and trying to free time up to think deeply and to get into some state of flow. And then obviously dealing with finance and and the other types of things, whether it’s planning or literally signing checks or stuff like that. I also am involved in client stuff. I mean if something bad happens or there’s a crisis it’s probably gonna bubble up to me at some point. If a client is just starting, whether or not they know it, I’m probably looking at a lot of the positioning work our team is doing still, ’cause I enjoy that stuff. I really love doing it.

Richie: [00:29:34] In terms of the crisis side, the fact that you were the long term partner meant you’re dealing with the good and the bad, right?

Jesse: [00:29:40] Always. I mean, but crisis is a specific thing. Like it was always a value-add. You know, I had a nominal tech background and Lisa had a really strong consumer background, and our team had a really strong consumer background. But like, a lot of my career had been spent in crisis. So when stuff actually did get bad, I had an actual training in it, we didn’t have to go hire a crisis firm. And so, in situations where speed is key, and then having somebody around who you deeply trust who will tell you the truth is probably the second most important thing. Like, that was a huge value-add. People look at our business and they, a lot of people think of the direct brands, but we’ve always had a crisis business, where people retained us just to keep us around to help them fix things. We’ve always had people around who sort of grew up in that world and do a lot of that stuff for us. You know, it’s always been sort of core to the business.

Richie: [00:30:27] How did your criteria change for who you take on, over time?

Jesse: [00:30:32] I’m not involved in it now and neither is Lisa. We passed the actual responsibility down to Lisa’s directs, our managing directors. And they along with our directors are the ones who actually choose the accounts we work on. And so I’m happy to take any meeting, and I love meeting with people, but I’m extraordinarily clear that like, I’m not the decision maker. But at least with the senior people, we need them not just to have buy-in, we need them to actually want to work on the things that they’re committing themselves to, ’cause they’re spending a lot of their actual life doing it. And so, again, it seems like a very basic thing, but the idea that we let them do that is pretty novel.

Jesse: [00:31:07] It started in fits and starts pretty early, but I would say that I meddled quite a bit. You know, there were definitely things where we maybe made a mistake early on ’cause I let us say no to something that I had a pretty high conviction on, where later on I would have pushed to do it, and then seeing sort of the human ramifications on our team, and then maybe pulled back. It was like dating, sort of. You know, you keep over-correcting for the thing you just did.

Richie: [00:31:33] I mean, it’s a little bit, as you said, with the equity partnership you’re kind of like a venture firm, in a sense.

Jesse: [00:31:37] Yeah. We were making decisions in our minds to invest in and be partners with the companies that we were working on. Yeah. A hundred percent.

Richie: [00:31:46] Right. And the losses to you, where someone goes out and makes it big, they can be painful.

Jesse: [00:31:50] Yes. I mean, it’s funny, people look and they say, “Oh, you guys pick so well.” And then I bring up every company that we missed in the first year or two, and it becomes pretty apparent that it wasn’t us that picked well it was just the timing of the thing that was really helpful. And the companies that we missed would have been a pretty awesome roster for anybody to have on their own. Then the stuff we missed pre-launch is like, dramatically terrible, looking back. But no, we’ve always tried to give freedom, I think it was a little bit of lip service for a while because I would also meddle from the outside, but now, like truly and freely, those folks make decisions. I weigh in, and the things that we invest in generally are the things that they are interested in working on with very few exceptions, but we try to stay out of it.

Richie: [00:32:35] So, again, that you attribute to luck in a serious way, that, call it first roster or first cohort class, was extraordinary by many measures. Is that like, repeatable?

Jesse: [00:32:46] I sure hope so!

Richie: [00:32:46] Or like, with the brands you’re looking at today, do you feel like you have some of that? Again, like it seems such lightning in a bottle, that that doesn’t happen all the time.

Jesse: [00:32:58] I mean you’ve gotta pick great partners.

Richie: [00:33:00] Yeah. And you think there are still great ones coming up every year?

Jesse: [00:33:05] Yeah. Also I think we’re very cognizant of not repeating the things we’ve already done. And so we launched Hims and then Hers successively a little less than two years ago, and they sort of started to herald in this switching to telemedicine. And for us we kind of looked up when that happened and started to think of a lot of different things. I mean, I think a lot of people looked at Hims and said, oh wow, telemedicine. We looked at Hims and said, “Oh man. We did all this stuff in these categories that were tiny.” And, you know, some people had started to pay attention to cleaning products, for instance, but nobody had really started to truly look at like, Home Depot and Lowe’s and those types of businesses and say, what are the things they are selling there that would be better experiences. I think people had started to like see the trends in veterinary, for instance, and started to apply it to certain types of food, and then started to apply it to medical and the vet clinic started to get cobbled up by PE firms. But, you know, when you looked at human medical, it was like One Medical and like nobody else, almost. And so you start to look at those types of things.

Jesse: [00:34:11] You start to look at audiences that are still relatively reasonable on the social platforms, and boomers come to mind right away. You know, my mom is the most active person in my family on Facebook, and she’s probably also the cheapest person in our family to acquire as a customer. And she has plenty of discretionary income and a lot of time, and she buys online. A buddy at a venture firm told me about a company that they were thinking about investing in. I like, put it in my inbox to kind of look through a deck and my mother-in-law brought it up to me that night at dinner, ’cause she’d seen it on Instagram and she had gone and bought something.

Jesse: [00:34:43] And then really starting to kind of pay attention to, in a really specific way, Gen Z and younger folks, and the way their behaviors are affecting their buying and their purchases.

Richie: [00:34:55] There is no second eyeglass company to do, so-to-speak.

Jesse: [00:34:59] Well we would never do another eyeglass company, as a specific example. But my point being, if one of the things that we think about all the time is you can’t do the thing you did last again because nobody will care, that’s on the one hand. And then on the other that there are these categories that are so massive—we launched a lawn care business earlier this year, it’s a $70 billion industry. $70 billion. The lead brand in the category is banned in Canada and does four billion [dollars] of top-line revenue. That’s a crazy category. And it’s exactly the type of category where it’s a heavy bag of stuff or spray or whatever it is. You know, it would be really nice to have great customer service ’cause we, you know, a lot of people worry about the color of their lawn and the health of their lawn. And it would be super, super nice if your kids could eat the grass right after you poured the stuff on the lawn and not die. Like, that would be terrific. And so, you know, that’s an example of a category, and there are a hundred others like it that, I think if you look forward as opposed to back, there are a lot of categories that are swamped at the moment and the idea of differentiation in them is extraordinarily difficult. But there are many more categories that haven’t even been touched.

Richie: [00:36:09] The other question from a bit earlier is, a lot of these brands started with a single product, and have since expanded SKU assortment quite widely. Has your advice, I guess, watching that, changed? Or how do you think about that trend?

Jesse: [00:36:24] I mean, I’ve been wrong a lot.

Richie: [00:36:25] In what way?

Jesse: [00:36:27] I mean, I remember trying to convince Neil to like, make backpacks in 2013, and I was wrong. There’s two mindsets, I think. I think the first is [from] an incredibly smart investor, I once heard him say, “Don’t pick up all the silver on the way to the pot of gold.” Like, stay focused on the core objective. But I think it honestly depends on the category. If there are adjacent SKUs in a category that make logical sense based on the emotional trigger that you’re asking to pull in people, then that makes sense. If what you’re saying is we think this industry is broken and the industry is quite large and you’ve offered one version of that industry then, yes there’s plenty of room to grow.

Jesse: [00:37:03] We always tell companies that you don’t sell mission you sell products, right? And so where companies for instance will think their mission and forget that they actually have to design and sell really great products. Or misunderstand why they exist, which is to be a product marketing company. As long as, again, you follow these first three principles—which is have a purpose, design true to that purpose and figure out novel ways to tell stories about the thing you’ve just designed—you should be fine.

Richie: [00:37:30] And in that scenario does telling that story, can it get easier as it expands? But also seems like it could get harder as well, ’cause it can potentially dilute the repetitive…

Jesse: [00:37:39] Yeah. It depends. I mean, a lot of the purposes that our brands have delineated sort of expand over time. It gives them room for the companies to grow, right? If I’m remembering correctly, if you think about like, Tesla’s not our client, but if you think about Tesla, I think they started out as a solar car company and then they became a battery company, admission-wise. And now they’re about kind of changing the way energy is stored in the world. Successively bigger missions over time. And I think every brand has the opportunity to do that, either to like, literally change its mission to broaden it out or to just re-imagine the mission but leave all the wording the same.

Richie: [00:38:15] In that, in the best case scenario that happens in tandem with the product.

Jesse: [00:38:20] It happens in tandem with something specific about the brand, either whether it’s a market change, so it’s about scale, or whether it’s a specific product or SKU change. Whether it’s a supply chain change, it doesn’t really matter what it is, as long as it’s actually honest and is real.

Richie: [00:38:37] There’s an article in Ink about Warby kind of stepping back from a lot of the social piece behind it. It fits really well with the previous question of re-articulating a bit of their mission, what they put forward etc. How do you think about that piece? Arguably it makes a lot of sense, the existing setup had been going for six-plus years at this point.

Jesse: [00:38:56] Yeah, I just don’t think it ever changed. It’s never been the first thing that customers heard about it. I think if you dig down deep into the customers there’s a large segment of customers that don’t even know about Buy a Pair, Give a Pair, and it’s always been incredibly central to the brand, because it’s their DNA. I mean, I don’t even know how many folks even at this point know that Neil, for instance, started his career in nonprofit, right? And this is what he did. I mean, this is what all of us who knew him before then thought he would do for his whole life. And I always think it’s been sort of specific. It’s, we’re going to make a great product we’re going to sell that product at a very fair price. We’re gonna give customers the best experience possible, we’re gonna surprise and delight them at every turn and we’re gonna be nice to them, and it’s gonna be a great experience every time you interact. And then the fourth thing has always been, we’re good people. And when you buy from us you can feel good about the fact that a portion of those proceeds are gonna go to do something good. And first it was international, and now they’re building this incredible program domestically.

Jesse: [00:39:54] The messaging and the hierarchy of the message has actually never changed. So, with respect to Ink and the article and all those things, they haven’t deemphasized anything. It’s been basically exactly the same since the first day.

Richie: [00:40:07] Do you think people pick up on different things, potentially, as time changes?

Jesse: [00:40:11] I don’t know. I think people are also looking just to write stuff. So I don’t really know. I mean, it might be subtle changes, but it’s nothing that I think they set out to do specifically. Like, it’s always been done in a specific way. You know, people love the mission and they feel incredible about the brand and the affinity that people have with the brand is really remarkable. But people buy the product ’cause the product is great. They buy the product because it’s sold at a great price. They buy the product because there’s very little friction in the process and everybody’s great to them when they interact with them. And if they ever have a problem they know that Warby is gonna stand behind its product. Like, that’s why they buy the product. It’s a great thing that it’s also, they happen to be good, but that’s always been the order in which they think about it.

Richie: [00:40:54] Talk a bit about the fund and how that came about and so forth.

Jesse: [00:40:58] You know, from very early on we had started to ask for the option to invest in the companies that we were working on as part of our willingness to work with them. It actually wasn’t my idea, it was Mike Preysman’s idea. He had come to me very, very early into our relationship with Everlane, and he had been happy with the partnership and he wanted it to last a long time and he wanted to align our incentives. And I didn’t know the first thing about equity. I mean, I don’t think I learned about leverage until I was like 33, 34 years old. And so he taught me a bit, and I did a bunch of reading and tried to learn up on it, and we made it part of our structure from a business perspective. And I looked up about two and a half years ago and we had invested in three or four dozen companies. And the performance on paper was really good. And so, you know, came up with this idea, basically to see if the model could be taken a step further, that if we could keep the model that we were already running but add more equity to it and to proactively write larger checks into the companies that we were gonna launch or earlier stage companies that we were going to work with, how that would work as a model.

Jesse: [00:41:57] So, let’s call it Applied Angel, or I don’t even know what the category would be, but the opposite of just giving a check and running away.

Richie: [00:42:04] Right. It’s a little PE-like, without debt.

Jesse: [00:42:06] I think, yes. But really kind!

Richie: [00:42:09] PE charity.

Jesse: [00:42:09] Yeah. And so that was the reason. And so, you know, lucky enough to have been able to raise all the money from one LP. Our investment process is extraordinarily simple and very fast, because I’m the investment committee along with one of my LP members, and we tend to invest only in stuff that also has other institutional buy-in, just because I’m not pretending to run an actual fund.

Richie: [00:42:32] Right. You’re not the lead.

Jesse: [00:42:33] No. And I’m not doing any of the proper due diligence or any of that stuff; even though, for really early-stage businesses I almost don’t believe in it. So we tend to invest in stuff, I mean, with very very few exceptions we tend to invest in the stuff that our team wants to work on, because they think they can actually add value to it.

Richie: [00:42:49] Right. It seems like so much of the challenge is not having any control as an investor, but being at the table makes a huge difference.

Jesse [00:42:56] Yeah. And trying to be a helpful partner and having them know that like, we’re aligned. Like, we’re fully aligned. And the way we’ve structured the investments that come out of Derris, we’re so fully aligned that our senior staff has equitized into them, because they’re the ones who helped create those outcomes.

Richie: [00:43:13] In terms of like, landscape today, going forward, the business is fundamentally different than it was six and a half years ago. Do you expect the specific PR piece to be a smaller piece of what you do overall? Would it stay flat?

Jesse: [00:43:27] No, it continues to grow. I mean PR’s not going anywhere. It’s gonna change pretty fundamentally. I think our challenge is to focus on strategic growth as opposed to commoditized growth. You know, we try to stay away from areas that we think are commodities and we try to focus on the things that we actually think are gonna move the needle. I don’t think PR is gonna contract as an industry. Not for the foreseeable future. I think if anything it’s more important now that it’s almost ever been, at least in the last 50, 75 years. And so I think it will continue to grow just as a core business, but I also think the better we get at the full mix, the more of a value we’ll be to the people we work with.

Jesse: [00:44:03] And so for us, you know, we focus on two things. So one is how do we get closer and closer and closer to the creation of a brand so that we can impact it more and more and more, and be bigger partners in it. And two, you know, we’ve built this sort of virtuous loop in our heads that starts with funding and incubation and moves all the way through the cycle of services that companies need in order to get to a place where they can start to scale independently. And we want to build something in each of those categories, whether they sit in our company, whether they’re JVs, whether they’re other businesses we invest in, etc.

Jesse: [00:44:37] And then, in terms of geography, the way we viewed it is opportunistically; as our clients need to enter new markets, we learn new markets. We build partnerships, we acquire companies where we need to in order to grow into those international markets.

Richie: [00:44:51] Yeah. The downstream piece is really interesting ’cause—to your point, which I agree with on launch day, of like, launch is the easiest thing you’ll do—how do you like distributing, how much work is done at inception, pre-inception, versus once you’re out there, how much will actually change?

Jesse: [00:45:06] There’s two answers. So there’s a ton of work done in both is the actual answer, but there’s a lot of work done pre-launch to make sure that a brand is ready for post-launch. Now, a lot of that work just might be in prep, in telling the founders like, here the things we’re gonna need after you launch in order to stay relevant through the first quarter, the second quarter, the fifth quarter, whatever it is. And really showing them a playbook for how to iterate and to continue to tell stories. And then over time helping do more and more of those channels for them. A lot of time is spent thinking about day two. And the best founders are oriented towards launch but thinking far ahead of it. It’s a hard behavior, because so many of them have put so much blood, sweat, and tears and money just getting to the spot to be able to launch the business. You almost feel bad looking them in the eye and being like, “You know, by the way, I know you’ve been sprinting for a year and a half, but slow down and run. Like, take a jog, ’cause it’s gonna go on forever.” So the more people can internalize that, the better.

Jesse: [00:46:03] We have other brands that we have to slow down. Where, you know, they have a hero item or a hero kind of set of products, and we help them kind of carve out why they exist, but they want to move so fast that it’s dilutive, and we tend to slow them down so that the impact can be felt for each thing. And some of those conversations are a little bit more difficult, ’cause we’re asking them to slow down additional revenue in order to make more impact for each thing.

Richie: [00:46:27] Right. But as an equity holder, again, there is a little bit of like, “We’re with you on that.”.

Jesse: [00:46:31] And we’ve seen it before. Like, we’ve done it. We know the way this world works, we know the way the cadence works. We’ve seen customer behavior before. Like, this will give you a better long term chance of success.

Richie: [00:46:40] What about on the celebrity side? In terms of, there is an immense amount happening. Is that an area of interest, is it something you stay away from?

Jesse: [00:46:48] No. I mean, I grew up doing celebrity PR, somewhat. You know, and when we first started the company we had celebrities on our roster, and we still do to some extent, but there’s so much more substance to it now. We’ve worked with Karlie Kloss for five and a half, almost six years, but Karlie was always so clear about wanting to make an impact in a lot of different worlds. I’ve never looked at her as a celebrity, although she clearly is famous. You know, she’s just somebody who wants to learn and grow and continue to do really cool things and that’s always been interesting. And we work with Maria Sharapova who is building her own companies and is very entrepreneurial, and that’s always kind of where we’ve stayed. We’ve met with a lot of celebrities about businesses.

Richie: [00:47:29] Is that picking up recently?

Jesse: [00:47:31] In the last two years, yeah. And I know there’s a bunch of stuff coming that isn’t even out yet. I would say two things. I think number one, it’s very interesting to see if a celebrity is organically involved in the thing they’re doing or if it’s something their agent has done and done a deal alongside. There’s a very clear difference. And then the second is, is there professionalized leadership and or an appetite for professionalized leadership around the group, right? In the case of a lot of the ones that are succeeding, there is real infrastructure around it. And they have real product infrastructure and manufacturing infrastructure and marketing, and there are actually executives who are day-to-day running those companies in very real ways. And I think a lot of the others are gonna fail.

Richie: [00:48:12] It’s also interesting too, now, to see with, Lady Gaga’s and Kimona, that they’re taking external capital now, too, when they don’t actually need it, but probably to the strategic point of needing the infrastructure and the skill-set, and the relationships and the lessons.

Jesse: [00:48:25] Also a ton of risk. If you’re a celebrity, I can’t imagine, and you’re going into something you’ve never done before the idea of dropping five or six million dollars. You know, we think of that as like, “Oh they should just, yeah, instead of buying a ninth house…” But I’m sure that’s scary. You know, and in the case of both of those, they’re in infrastructure. I mean, I know that. And they’ve worked with branding partners that we know and they’re set up to succeed. I mean, they’ve done them both in the right way. It’s really impressive.

Richie: [00:48:50] What are you excited about on the horizon next six months to a year, for you all?

Jesse: [00:48:54] We’re gonna continue to grow, so I’m excited about that. In terms of companies, we have a couple on the horizon that I’m super-psyched about that I can’t even really talk about all that much.

Richie: [00:49:04] Of course.

Jesse: [00:49:04] One in skin care. We’re about to kind of kick off work on a social business that I’m super excited about, and there’s a few other things in the hopper. We just launched the first gay men’s sexual health CPG business called Future Method which I’m super pumped about, and I think it’s gonna be pretty incredible. In terms of the bigger picture, you know, this is the first year I think, for us, personally, that there have started to be some outcomes, and we’ll have, it looks like at least…

Richie: [00:49:30] Have a very good year?

Jesse: [00:49:31] We’ll have at least three on our roster this year, and I know there’s been a bunch of activity around a couple of others. And so that feels good, because I think for a long time a lot of people poo-poo’d the category, and I think it’s becoming pretty clear that it’s not going anywhere at this point. Which will mean more people willing to invest in it in the first place, which I think is a good thing. I think building challengers and holding brands to account, and being able to as consumers expect more from the experiences that we pay money for. I think that’s like, generally speaking, a pretty great thing.

Richie: [00:49:59] So your wife started Lola.

Jesse: [00:50:01] Yeah.

Richie: [00:50:01] That’s arguably the closest relationship equity partners, etc., you have along this journey. What has that taught you, or what have you seen from that that has maybe been applied to work and so forth?

Jesse: [00:50:12] I mean, I try to stay out of her way is a good lesson. I offer advice when asked. I think offering advice when not asked is not a real good marriage tactic. I take time to be really proud of her. I mean, I’m extraordinarily proud of what she’s built. And then when I see things sometimes I try to speak up, very occasionally. But it’s been kind of wonderful I think for us, specifically, I will never pretend that we both leave work at work, ’cause I think that would be extraordinarily difficult. But we definitely minimize the amount that we’re sitting talking about work when we’re at home. And we have a six-month-old daughter. And so, especially since Rose has been born, just trying to separate the two. Like my most creative moments come in moments when I’m not doing anything related to work. When I’m reading a book or when I’m playing with Rose or when I’m taking a hike or whatever it is, and trying to create more of that space I think is really important. But no, it’s been pretty remarkable to watch her. The luck of having been there the night she came up with the idea, and get to watch the entire process. I mean, you know, I can’t say that for any other thing that we ever worked on.

Richie: [00:51:18] Yeah. Does it make you want to start something?

Jesse: [00:51:19] No. I mean, I did! No, I think there’s a lot of power in seeing the field. You know, and I’ve never felt like, the draw to do any one thing because I enjoy so much the learning aspect of doing all sorts of different things. And I think so much of our value as partners, and my value and all of the value of the people who work with us, is their ability to do lots of different things, and read about different things and apply them. Especially in moments when you weren’t even thinking of applying. Like, that’s the power.

Richie: [00:51:48] Yeah, when it comes back.

Jesse: [00:51:49] Yeah. And so, no, I’ve never had like, the push to wanna start an actual brand. I’ve started to join some boards and do other stuff like that, but nah. I haven’t felt the urge.

Richie: [00:51:58] Time will tell.

Jesse: [00:52:00] Who knows.

Richie: [00:52:01] Thanks so much for talking.

Jesse: [00:52:02] Yeah. Thanks for having me.

Richie: [00:52:05] Thanks for listening to the Loose Threads Podcast. You can read a full transcript of the podcast and join the newsletter at LooseThreads.com. Feel free to leave a review on iTunes, we always appreciate it, and thanks to George Drake, Jr. for editing this episode. We have a great roster of upcoming guests and we hope that you tune in next week.