A weekly podcast with the latest e-commerce news and events. Episode 300 is an interview with Matt Kaness, CEO of GoodwillFinds.com a new e-commerce initiative launched by Goodwill.
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Episode 300 is an interview with Matt Kaness, CEO of Goodwillfinds.com. Matt was formerly on episode 79, when he was CEO of Modcloth, which later sold to Walmart.
In this interview, we cover the sale of ModCloth to Walmart, Matts’s subsequent work at Lucky Brand and Afterpay, and his new role as CEO at Goodwillfinds.
Goodwillfinds.com is an e-commerce site, which sells previously owned merchandise, which has been donated to Goodwill. We cover many of the tactical challenges (onboarding SKUs, product content, fulfillment, and curation), as well as the opportunities of this new “CircularCommerce” space. We also get some of Matt’s predictions about what’s coming next in digital commerce.
Episode 300 of the Jason & Scot show was recorded on Wednesday January 4th, 2023.
Transcript
Jason:
[0:23] Welcome to the Jason and Scot show this is the much-anticipated episode number 300 being recorded on Wednesday January 4th,
20:23 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
Scot:
[0:41] Hey Jason and welcome back Jason and Scot show listeners
Jason not only is this the first show of 20:23 it’s a big milestone for us with episode
what better way to celebrate than having one of our oldest friends for both you and I personally but also to the show back for an update Matt
kaness he was last on the show back in episode 79 I think many listeners will remember that one and certainly your mom who’s one of our biggest fans and back then he was CEO of ModCloth,
a lot has changed since then so we’re looking forward to getting an update some of the highlights Matt help sell ModCloth to Walmart he was exact chair and interim CEO at Lucky Brand he’s on several boards
yeah I’ve been advisory to several companies and since September of 2022 he has been CEO of goodwillfinds.com Matt welcome back to the show.
Matt:
[1:35] Great to be here guys thanks for having me.
Jason:
[1:38] Oh my gosh Matt we are really excited to catch up it seems like if you factor in the pandemic your last episode was about 15 years ago
if I’m
and so happy I’m happy to report we’ve added a bunch of listeners since then so before we jump into it can you kind of remind the listeners about your background and how you got in e-commerce.
Matt:
[2:02] Yeah have you too I like to think about my career or having two careers to date the first one was,
very foundational for what I’m doing now but very quantitative,
process-oriented mechanical engineering patent law Manufacturing,
Ops Consulting things that had nothing to do with retail or fashion or e-commerce and then I.
[2:32] Fell into the category when I was a full-time consultant at Burton Snowboards about 16 17 years ago,
and fell in love with lifestyle Brands and have,
try to stay in that lane for the majority of that time period since,
from Burton Snowboards I went onto Urban Outfitters was there for close to eight years up sensibly and I had a growth roll my last title there was Chief strategy officer and then from there I went to ModCloth,
where I was the CEO for three years and was running the company when we sold it to Walmart I will say that,
I’ve been in hindsight found myself attracted to these amazing consumer lifestyle brands,
that are experiencing inflection points either in their business or in the industry when I was at Burton snowboarding was really for the first time finding a mass audience crossing over into,
the Olympics the next games and,
when I was at Urban it was the rise of Web 2.0 and I got to ride that wave my entire time there and really,
I’ll be on the Forefront of pioneering you know what everybody know of calls omni-channel.
[3:59] ModCloth the founder of their Susan Koger was one of the pioneers of inclusive fashion and so I felt personally accountable to try to scale that and I think we,
if once the industry specifically plus size women’s fashion and you know today you look around and it’s become pretty normative,
for Brands to design into extra extra small to 4X and I’m really proud of the work we did at ModCloth being on the front end of that and then.
I do some Consulting work at after pay where buy now pay later was really just becoming a thing,
we’re younger consumers were focused more on debit versus credit products so with really fortunate to get connected with that team and enjoyed,
partnering with them and being an advisor and then you know what I’m doing now at Goodwill where secondhand is really having a moment,
in the culture and getting a chance to come in and lead a ground-up startup for the Goodwill Network and helping them to.
It’s a digitized so to speak and you bring this new Marketplace into the world,
it’s just for me it’s like the next chapter in that really fortunate career second career that I’ve had.
Jason:
[5:23] Very cool and I know some of those roles were Bay Area based but you are a Philly guy correct.
Matt:
[5:29] Philly guy born and raised I’m probably on the short list of people who have moved back to Philly twice.
I was in Boston the first time when my wife became.
Preggers with our oldest and we wanted to be closer to family and then the second time was when we were in the Bay Area after I left Walmart,
we had a break in the action and our oldest was about to start high school and we decide we want to be back here.
For the high school years but we’ve lived all around and I’d obviously travel a lot for work so I have an affinity for the bay area as well as some other places around the country but but Phillies the hometown.
Jason:
[6:14] Yeah but I’m assuming it’s Philly sports teams most importantly.
Matt:
[6:18] I have been an eagle season ticket holders 2000 yes.
Jason:
[6:23] Awesome and for people that don’t know Philadelphia and Pennsylvania as a whole is a is is a weird e-commerce concentration Point like there’s a lot of e-commerce kind of
was born or gravitated in the area so I think of like Mark Rubin and Dick’s Sporting Good and in Pittsburgh and urban obviously was a huge player there
was Urban your first like hardcore e-commerce experience or were you doing a lot of e-commerce at Burton.
Matt:
[6:56] I was not at Burton Urban is really where I started to cut my teeth on e-commerce.
Direct to Consumer more than e-commerce it was really about this when I got there this billion dollar Consolidated Enterprise across there are three main brands,
Urban Outfitters anthropology and Free People and the business had started as a catalog,
division of what was you know let’s call it 95 percent of the sales came through their store Channel.
For retail versus direct to Consumer and so when I got there or there was a there was a.
[7:43] 100 million Consolidated direct-to-consumer business which was split between catalog and e-commerce,
but it was nascent it was not a strategic focus and then you know the founder of their dick ain’t really had.
This put a natural understanding of consumer behavior and where the industry was going and he had a vision for how to scale the business multi-channel and so we were all,
trying to make that that future reality every day for the eight years I was there and we had a lot of success going back to your point about Pennsylvania and Philly first round capital,
one of their there I believe their original headquarters and then one of their major offices,
is in Philly and so I think I think a lot of it stems from their presence as well not just decaying and Reuben and some others,
but also Philly from a talent perspective is kind of like a six suburb or borough of New York,
where you get a lot of folks in New York and then they realize that.
It’s just the standard of living the cost of living is so much better in Philadelphia and so you get a lot of transplants to come down to Philly as well working in e-commerce.
Jason:
[9:11] Yeah and I want to say I met you I think we all met on the shop dot-org board when you were at Urban later in your your tenure Urban and some of my Fondest Memories
another good friend of the show Billy met who at the time was at Abercrombie is the two of you like heckling each other about like your two brands.
Matt:
[9:34] Yeah like that was that was really fun for me because you know Urban.
Um was pretty insular you meaning that we were so obsessively focused on the customer,
and on the fashion trends and on what we were doing internally,
that we never really thought about competition so we didn’t spend a ton of time looking around the industry,
so for me that was that was kind of a an introduction to what else was happening across the industry and then Billy occasionally would call me and say.
Hey you guys make me look bad because you just had another great quarter ecomp rowing and you know your your results are now The Benchmark that I have to deliver against.
But you know what I what I found in that shop or Community which is now part of NRF,
is that it was not very competitive it was very collaborative I couldn’t believe.
[10:46] How much everybody support each other and wanted to share strategies and ideas and Etc and I think that’s one of the things that really drew me into this career path on the digital Commerce side,
versus pursuing merchandising or.
We’re kind of the brick-and-mortar offline space is it’s just how,
how great that the digital Community has been in the US that I’ve experienced so that’s one of the one of the things that I try to do now is to make sure that.
Making myself available I’m kind of giving back and spending time with folks and helping them along and sharing ideas because I know that you guys and others certainly do that for me way back in the day.
Jason:
[11:32] Yeah I feel like we all have done that for each other and I feel like we’ve all obviously benefited greatly from that community,
and so then you leave the Eagles behind and you go join what at the time was a Founder led a venture back pure-d to see is that,
a fair characterization for Vermont cough if when you.
Matt:
[11:58] Yes my father my father is a pure pointy Taylor yeah.
Like 10,000 uniques on the site all third party.
The company was vertically integrated so homegrown Ruby on Rails codebase e-commerce.
Order management system warehouse management system all the way down to the call center and the warehouse it was,
um pretty pioneering on the web services side as far as.
[12:35] Look it was an early social commerce player as far as leveraging Pinterest and things that you could do with.
Facebook and some of the other platforms Tumblr to engage customers and get them to participate in the shopping experience we were one of the first to integrate,
ugc from customers into the shopping experience into the carousels on the website,
um we had personalization that was driven by customer reviews that were captured in the website versus outsourced to a bizarre Voice or the like so it was the technology is pretty pioneering,
the business was was very underdeveloped and the brand I felt was.
Had a lot of opportunity to broaden its appeal when I got there so it was a little bit of a turnaround,
financially what I’m joined which having now done this a few times there’s always a reason they bring in an outside CEO.
Jason:
[13:44] It’s not because things are just going awesome and they just want to share the awesomeness.
Matt:
[13:47] Yeah I can’t I can’t think of a single time that CEO in a business that’s humming and doing great he says you know what let’s bring in somebody else to do this so I.
Jason:
[13:57] I think Andy jassy is saying that about Amazon right now by the way.
Matt:
[14:02] Yeah yeah yeah what I mean there’s there’s a there’s a lot of chatter about looking at.
It was on the Facebook and Tesla and what those Founders were doing the last couple years selling stock so I think they kind of all knew what was about to happen.
But you know just quickly on ModCloth I’ll say that you know we were able to quickly come in.
[14:32] Turn around the business financially but more importantly we pivoted it to what then was called a DM BB model,
a digitally native vertical brand model which was just meant that the vertical piece that you were procuring designing selling your own product or exclusive product versus,
third party which you know in the world of Amazon it’s really hard to scale a business that you know what you’re selling you can find on Amazon or other larger marketplaces,
so we build out a design studio and sourcing operation weary platform the entire Tech stack we developed,
a showroom concept similar to what we’re being bonobos had developed and tested that and rolled that out and had a really aggressive growth plan against that we went out to raise money and her wound up,
getting an offer from the team at jet.com that 6-month previous had,
I’ve been sold to Walmart and they came in and made an offer and the board accepted it and so we sold it.
And and I stayed on at Walmart for a year and oversaw our integration into that that ecosystem.
Scot:
[15:51] Cool the that was kind of a chain reaction right where you guys several companies they Acquired and did you play a role in kind of that roll up.
Matt:
[16:01] We were like the third or fourth of six or seven Acquisitions and they did within a year and a half two year period.
And then as part of my year there I did get involved in some of their business development MMA,
conversations and and I did spend a little bit of time helping them,
on one of the further Acquisitions but you know they what I learned about Walmart when I was there is.
They have such a strong culture they have a real clear view of who their customer is and why they’re serving them and you know I would tell you that.
The Acquisitions that spray that they went on those two years was really a catalyst for.
Something that W Mellon said at a meeting that I attended where he talked about convenience.
[17:03] Being valued as much as low-cost in the kind of the online or multi-channel retail environment versus pre-internet,
and so they had to find a catalyst under Mark Lori to accelerate their the cultural change,
to understand how customers writ large were valuing convenience as much as low-cost when their Heritage had been,
Yoda Point technology to make improvements in supply chain and sourcing and Merchandising so that they could always win on price now they had a win on price and convenience,
and so though the individual Acquisitions You could argue whether there was an Roi on them or not against the purchase price.
I would say that.
Internally it was a massive success in creating that kind of cultural change that Doug.
Mandated from.
Mark and and then you know I was only there a year and I left but just watching what progressed and if you look at the moldable on Walmart stock I think it’s hard to argue that it wasn’t a success.
Scot:
[18:18] Yes tricky with Acquisitions you can’t just look at the you know the interior ModCloth business you have to look at the whole halo effect and the stock price yeah there’s a multi-faceted way to look at these things that’s kind of complicated.
Matt:
[18:32] Yeah I think any business that they could grow if you could grow organically in definitely I think most businesses would do that there’s a reason why companies you know use MMA to your point.
Scot:
[18:46] Did some point I think I saw a ModCloth working to the stores where you there for that.
Matt:
[18:53] No no that I left before any of those kind of process integration initiatives occurred.
Scot:
[19:03] Yeah and then didn’t they do they sell it back out do they spin it.
Matt:
[19:08] Yeah they sold it back out there were some after I left there were some further leadership changes that occurred and and they wound up the best thing it and selling it to I want to say it was a fermented New York.
Scot:
[19:23] Like a private Equity Firm or another.
Matt:
[19:24] Yeah I think so yeah.
Scot:
[19:28] Did you didn’t want to jump in there and take it over again usually they call the previous CEO I bet there’s an 80% chance you got a call.
Matt:
[19:37] No comment.
Scot:
[19:41] All right we found something you don’t want to talk about good it’s part of my goal on this show is to see if we can we can find that you have any family safe Mark Lori stories I’ve spent a fair amount of time with him he’s a he’s a pretty wacky dude.
Matt:
[19:56] I mean I didn’t spend that much time working for him but I mean man like talk about somebody who just has total belief in himself and the team and what’s possible,
and so much energy for.
For Commerce for startups for Innovation so I mean it’s it was contagious working for him,
um working for his team’s I wanted to takeaways I had for my time at Walmart and my time working with.
[20:32] With Mark and his jet team is I just didn’t have that kind of passion for the mass-market the way that,
you had to have to be successful working at a Walmart or working at a jet before the acquisition,
yeah I love the specialty space I love you know the Branded premium space I love,
Yoda kind of the Middle Market where it’s not based on price and it’s not luxury it’s somewhere in between.
I just find that that it’s super creative there’s lots of opportunities for differentiation.
There’s always new things that you get to learn but you know Walmart I got there was a camera don’t quote me on the exact number but.
[21:27] Like there was a conversation about like how many millions of American flags are they going to sell between Memorial Day and and.
And Fourth of July.
[21:38] On one of their promos and I was just like I couldn’t even fathom the scale of having to move that many units and so,
yep so for me it was kind of a validation of the lane that I’ve been in and and enjoyed being in and so when I left.
Eventually wind up going to Lucky that was kind of part of the calculus on my part was to get back into the into that that category that Wayne of specialty.
Scot:
[22:07] My one of my first Mark Laurie experiences I was at Jet and he was telling us how the Company motto was billions or body bags and I was like that’s kind of a weird way to motivate,
and then I talked to several employees I was like how do you like it here and there like billions of body bags that like they were just like it was a mantra like you know that they were just so focused on it was either going to be 0 or this huge outcome and sure enough it was billions.
Matt:
[22:31] Yeah there’s there’s definitely I mean I think think he was a successful High School athlete so there’s definitely a lot of rah-rah with with him in the team it’s that’s not my personality I.
ModCloth one of the investors accused me of being two column in the boardroom.
They said you know Matt if you had slammed on the table a little bit more you know and I’m sitting there like like.
That’s the that never crossed my mind trying to make an argument to do something required me slamming my hand on the table.
Scot:
[23:14] A tantrum yeah.
Matt:
[23:15] My voice yeah but maybe that’s Versa tween you know a founder and yeah an operator.
Jason:
[23:23] Scot was definitely a table Slammer.
Matt:
[23:25] I don’t believe you.
Scot:
[23:26] Like man I have an engineering background and they drummed that out of us in those four years.
Matt:
[23:33] Totally yeah I think you’re right I think the scientific method does not allow for that that level of emotion that come into into the argument.
Jason:
[23:44] Yeah but I will say a lot of mechanical things can be fixed by hitting them with a hammer I will,
the so I’m super grateful that you guys didn’t throw Mark Glory under the table because I at the moment have to totally pandor to him because his new business he has
Starbucks trucks that will drive to your house and deliver coffee to your house,
so I like I feel like I need to stay in his good graces,
but so so the sale happens you transition out of ModCloth you’ve you’ve got kids in college and or in school and no source of free clothing so I’m guessing that’s what drove the,
you’re interesting lucky brands.
Matt:
[24:28] Yeah well I got to say.
When I worked at Urban my wife definitely took advantage of the anthropology discount.
[24:43] And I act funny funny and true story,
when I was considering the opportunity at ModCloth I was having a couple other conversations in the in the fashion space.
And I showed my daughter who at the time was probably about seven or eight I showed her the apps for the shopping apps for,
the three businesses that I was talking to and I won’t say who but there was one in particular based in La that she was like Dad no way she was like you cannot work selling that fashion.
But she approved of ModCloth and so so I got her endorsement so yeah when I went to Lucky it’s really I wasn’t necessarily looking.
You’re back into fashion as much as I really thought that there was this route there’s a unique opportunity with lucky they were.
Over a billion in gmv which is to say the direct to Consumer wholesale and the value of their licensing business in the market was over a billion dollars.
So brand revenues and net revenue is like call it 650 million and it was independent.
[26:08] And there were not a lot of businesses at that scale.
In the u.s. that still were independent versus part of a conglomerate.
[26:21] And we’re had already gone public and so I had been friendly with one of the partners at Wintergreen.
Who called me about the opportunity and after spending some time with them talking about it I said.
You really need somebody in LA full time in the arts district where they were headquartered and I’m not moving to LA and moving actually back east and they said.
Hey would you come in and manage the company to get us through holiday while we won for somebody.
And also give us a strategy like a like a financial model a business case three-year strategy.
And so that’s how I initially got involved there was more as like a board advisor interim manager and then.
By January of twenty I’d really seen this amazing Lane.
For an older Millennial younger Gen-X.
That we could reposition Lucky Brand to be a cause marketer the company did a tremendous amount of good work in Downtown LA taking.
Old Denim and.
[27:50] Giving it.
Nonprofits that work with the homeless population there for clothing to for installation.
And then other other efforts to help that population,
and so I felt like we could reposition lucky to not mean like going to the casino getting lucky but meaning gratitude.
Like I feel lucky I made it I have the ability to spend a hundred dollars in a pair of jeans and I want to support.
[28:27] This this amazing company that does all this good work and so.
That I had this vision for how you could reposition the brand the business was running like it was 2005 as far as.
Go to market so there was a lot of heavy lifting that had to be done around digital transformation around merchandising around.
Rationalizing the stores there was way too much discount so there’s a lot of work to do,
but I got really excited about the opportunity and wound up agreeing to stay on as exact chair in January 2020.
And part of my remit would have been to hire a CEO and partner with that individual and I had to kill people in my network that I thought would be great for it who be willing to move to LA.
But two months later the covid walk down start.
And then it turned into something you know completely different than we were just trying to survive we lost ninety percent of our revenue and that April.
And we wound up.
[29:43] Making it through to July August that summer but at that point yeah the damage had been done and the private Equity Firm decided to.
Sell it to a party that had been interested in the business for a number of years which was authentic Brands group out of New York so I stayed on to oversee that process and then once the deal is done I.
Said that was a lot of work I’m exhausted and wound up turning down the opportunity to stay on with a b g and left but,
I got to say I’m really grateful thankful for the team that I had there because they were amazing,
to work with during such a difficult period that that Q2.
And early summer of 2020 it was it was really really challenging to be in the market and I learned a lot about myself as a leader from it.
Jason:
[30:46] Oh my gosh I I am sure you did
I’m laughing though because you think about all the work involved there and so you decided to do something easier in your next gig like
oh I don’t know like starting from scratch business in the middle of a really old non-profit.
Matt:
[31:08] Well I gotta say you know after after the lucky experience.
Um I really felt drained I didn’t have.
The passion for retail for e-commerce digital for.
Brands for fashion like I had for the previous you know well 15 years and.
I was fortunate that I have the ability to do this but I basically gave myself 2021 off.
I’ve been sitting on a few boards I did some Consulting work I had been Angel Investing for a few years so I had a number of startup Founders and CEOs that I was mentoring and Advising,
and I just said to myself I really need to get re-inspired I need to like,
get back out in the market broadly see what’s happening see where the Innovation is occurring and and,
get excited but also get lucky because a lot of these things from a career perspective is based on timing I was really fortunate that.
[32:27] I went to Urban when I did I was really fortunate to be part of,
ModCloth the journey during the years that was there the year that I was at Walmart was a really critical year in the Amazon the Walmart Battle.
Um amazing timing too.
Be available to do Consulting work with the after pay the exact summer that the founder moved from Australia to San Francisco.
So you know I’m acutely aware that you can’t control timing and,
and yet the kind of put yourself out there so that was my plan last year and in doing so what I realized was I’m like I get the most energy and I do my best work when,
back in the phase of a company where it’s.
[33:22] Focused on growth and Innovation and so no more turnarounds the end of Lucky business was a turnaround.
ModCloth was a pseudo turn around,
so I just said you know I want to get back to you know that stage where it’s really about solving for customer needs and Market positioning and Prague service Innovation and deploying technology,
and then a couple that with also wanted to get in a part of retail where I can learn.
And you know secondhand what’s happening right now the this whole cultural phenomenon around thrifting,
and you’re the pioneering work of a thread up and a real real Poshmark deep op-ed see ya the last decade,
that was the that was the heavy lifting you know those Founders you know basically creating the category,
but now there’s a critical mass now there’s a consumer acceptance so I don’t see it as it as a,
as hard as maybe it looks like from the outside it’s I think it’s the timing is great for the Goodwill Network to Rally around this new platform for us.
As a separate entity to stand up this new company to launch this new Marketplace.
[34:48] There’s definitely engineering challenges to figuring out how do you successfully profitably scale.
Um second-hand and vintage when you know every item is unique and we have a distributed model where our sellers are.
Various.
Goodwill members across the u.s. so we’re not centralized so there’s definitely some some challenges but to me that’s part of the fun that’s part of the learning.
Jason:
[35:18] I can imagine I want to take just half a step backwards to make sure the listeners are tracking with exactly what you’re doing now because I think it’s super interesting so,
formal title is CEO of goodwillfinds and goodwillfinds is a new offering from Goodwill that is
selling Goodwill Merchant previously owned Goodwill merchandise via a website is that the in my clothes.
Matt:
[35:44] Yeah yeah so I think it’s worth kind of spelling out the context a little bit because it took me a little bit honestly to fully understand it and grasp it.
Goodwill has been around for over 100 Years everybody knows Goodwill it’s an amazing nonprofit franchise.
There is a I call it a holding company I don’t know that that’s the right.
Firm but there is a parent company that owns the Goodwill Master license in Metro DC and they have.
License out the brand to I believe the numbers 155,
individual territories across the u.s. and each of those territories have,
Goodwill organization with their own leadership team their own operations around treasury their own board of directors obviously they vary in.
Size and location and specification and you know mix the revenue and all those things but they all share the same Mission and the mission a Goodwill is.
[36:57] To enhance lives for the Dignity of work,
and it’s my older brother was born with a disability and I’ve watched him go on and off disability a few times in his life and I tell you,
that he’s his best self when he’s working.
So when I first got connected with the folks at Goodwill earlier last year it really touched my heart like I really.
I wanted this to be successful for them because I know how important their mission is but as I got to learn more about the network.
[37:37] Of 155 Goodwill’s and more about the opportunity and there are six founding.
Good we’ll see EOS that came together to organize this new separate entity called goodwillfinds where a virtual Delaware company.
And those six are the ones that are the board that I report to and they’ve been working on this for years they were,
ready to watch this last year and decided that they needed to hire a CEO,
to come in build a team set up the company oversee the launch so I joined pre-revenue and we’re now in our fourth month of selling,
the consumer response has been.
Unbelievable sales are more than doubling month-over-month it’s it’s really.
A unique opportunity to build something that is not only.
[38:39] In a part of retail that is innovating and growing and scaling rapidly but it’s also doing it for this amazing Mission and you know really trying to redefine what does.
Nonprofit in the circular economy look like to deliver social impact at scale so I feel like that’s the Mandate that I signed up for and the team that I’m building.
And the business model that we’re designing right now to go with the marketplace are the is the execution of that but the bigger Vision here is to create this platform that not only.
[39:24] Overtime all 155 Goodwill members will have access to be on as sellers but that.
For the first time we’ll have decentralized marketing funnel brands.
Strategy content messaging 1p data and then.
[39:48] But technical roadmap that were able to deploy that will integrate with the store operations and the back of house operations that will allow for scared investments in technology that all the good wolf can take advantage of.
On the consumer side I think all the players and secondhand have the same goal which is to make the.
[40:10] The option to buy second-hand versus new so compelling and so convenient and so exciting and cool.
That more and more consumption dollars go towards second hand and move away from New and by,
doing that,
it has this incredibly measurable impact on the environment in creating sustainable.
Impact and then in our case you add to it.
The fact that every net dollar that we collect from our sales go back to the location where the Goodwill was the item was donated to fund the Goodwill programs I mean it’s I feel like we’re pioneering,
this new this new kind of business model for circularity and so all that to me is like super compelling super interesting,
and I’m really fortunate that this opportunity found me.
Scot:
[41:19] Cool hearing you talk about it I can tell you like to build stuff the channel visor we had a lot of customers that were kind of in this General space
the challenge with this use Consignment World Is You Gotta you know I’m sure these Goodwills are getting,
they’re only going to sell online a fraction of what comes in so you got to figure out what
what things do you want to sell in the store versus online you gotta create digital assets which are the descriptions and the pictures and then you gotta you know imagine you’re not going to send them to a central location so then you’ve got to
create a shipping method that works down at the store level how are you guys solving all those problems at scale.
Matt:
[42:00] Yeah well I’ll tell you a couple of things and you’re exactly right there’s a ton of operational challenges we have a couple things going for us one.
These Goodwills already have the physical infrastructure they already have,
donation centers they already have Micro warehouses that are already selling online as a three-piece seller through Amazon and eBay and some other Regional marketplaces,
so they have a lot of these physical operations setup,
so we’re leveraging that and we’re not having to deploy Capital to do it.
That’s 12 there’s a there’s a maturity in the technology vendor Market you’d be surprised at how many.
Providers are in the space to automate.
We have a partner that we work with that leverages Google Lens technology and Leverage is the Einstein a I was Salesforce that allows us to,
take a lot of the heavy lifting out of item creation we have vendors that we work with that.
[43:15] Take images of items three-dimensional scans that send it to and Outsource in India where descriptions are being written for these items you know so there’s,
and I’m learning this right but you’d be shocked at how much software deployment automation deployment already exists.
[43:38] So we’re managing that to deploy in a way that integrates into these existing operations at and.
The other thing that we have an advantage of is because we are nonprofit.
[43:53] We’re selling primarily me exclusively right now but overtime will be primarily selling donated items which have.
Is this not a zero cost of goods but it’s a near zero cost of goods.
So we have room in the margin line to play with value-added services on each item,
if we feel like there’s a lift that we can justify with that you know with respect to photography with respect to.
Metadata on each of the items with respect to Howard thinking about tagging,
there’s a lot there’s a lot of players out there that we’re evaluating right now and we watched with.
[44:42] Over 100,000 unique items back in the first week of October.
Mid-December we were at nearly 200,000 items.
And our roadmap is to have a million unique items in our active.
Catalog by October of this year so this entire endeavor.
Has been from the start designed for scale.
So we feel like that’s giving us an advantage because we’re able to do some things that,
other startups that are venture-backed that are having to start from scratch with a lot of that infrastructure that have a cost of sourcing and and Supply acquisition that we don’t,
it would be financially prohibitive for them to make some of the Investments that we’re making right now.
Scot:
[45:43] Yeah it’s interesting to hear you say you’re using some of the AI Jason’s not a believer in AI but I’m a big proponent.
Jason:
[45:50] Haha I haven’t said a word on this whole podcast I’ve just been using my AI Avatar.
Scot:
[45:57] Ugh.
Matt:
[45:58] For the record this isn’t Matt talking this is Matt’s chat TPT talking.
Jason:
[46:04] Yeah we tested both in the shed she’d Beatty was much more Salient so we went with that.
[46:17] Yeah so it’s interesting to me mad because,
you mentioned a lot of the early Pioneers in our e-commerce and by the way just from buzzword Bingo like are you re Commerce person or you like do you have a favorite label for what you’re doing now.
Matt:
[46:34] Yeah I’m.
I’m back in the the interview circuit right now trying to get the word out about what we’re doing and promoting the Goodwill Mission so I’m still trying some phrases on I mean yeah RI Commerce is definitely.
[46:50] What.
The buzzword but I think what we’re doing at goodwillfinds and and in partnership with the Goodwill network is really about circularity you know in my mind’s eye.
Getting a Marketplace standing up a new Marketplace from the zero.
You know it’s the old Beezus flywheel the back of the napkin that I think about every day and in my version of it their supply demand admission and without the mission we don’t get supply.
And the better job we do partnering with our members sellers in acquiring the right Supply and and listing it.
In a high-quality way,
you know then that allows us to be able to meet demand in the market which the proceeds from those sales go right back to the Goodwill where we got the donation and there’s the kind of the flywheels complete,
and one of the stories around that and this is what we have to do a better job.
[47:52] This year versus last year’s to get these stories these amazing stories about the Goodwill Network out into the world,
the more successful we are Google finds meaning the more that we’re able to sell and scale demand.
The more people each of the Goodwill sellers have to hire in their e-commerce operations.
Because they’re doing the listings they’re doing the pick pack and ship on the on the outbound but those jobs are higher skill and they and they pay better.
And so it actually accelerates the local mission.
[48:27] The more successful we are because they have to hire more people and bring more people and train them into these higher value jobs that then they go get placed somewhere else they can go work within.
The digital economy you know the digital retail industry and so we really I really think about what we’re doing as pioneering circularity.
We also are talking to some retailers and Brands you want to partner with us on they’re both on the demand and supply side and part of it is because we’re a nonprofit that there’s a tax,
right up Advantage for them but it’s there’s also this,
PSG component to the large corporates that they have to think about especially in,
in apparel where they had to think about you know what is their end to end environmental impact and.
[49:27] It’s it’s really I can’t believe the timing of this but it’s really a moment right now not just with consumers but in the industry and so that’s another aspect of circularity where you have.
Yeah it’s not Nike so but I’ll just use them as an example to speak of Austria of Lee imagine Nike telling their full price customers.
That they can buy second-hand Nike at goodwillfinds.com.
Or imagine a Chanel it’s not Chanel so I’ll just use them electrically but imagine them.
[50:04] Wanting to use us as their authentication partner so that when you find second-hand should now at goodwillfinds.com versus a real real or somewhere else,
you can you can you know that you have this objective third-party authenticator that you can partner with to control,
the the brand experience in the second hand market so it’s,
I’m really excited about the possibilities and and we have a really big vision for what we’re doing I don’t I think we Commerce to me feels,
like a term that soap a little bit Limited.
Jason:
[50:41] Totally fair so maybe circular Commerce its,
it’s interesting to me though like so we’ve had a bunch of those Founders from the circular Commerce.
Brands on and like their fundamental problem is not your fundamental like their biggest problem is sourcing,
the goods by getting people to send them stuff and then when they curate it they’re mostly interested in,
luxury designer so they end up with a relatively poor yield and they don’t have.
[51:13] Any monetization or you know frankly like a ecologically redeeming way to deal with,
all the goods they get that aren’t they don’t meet their criteria so it’s like you you seem like they’re like through the Goodwill Network you’ve got all these stores to put Goods in
you’ve got a bunch of you do have luxury consumers that are searching for
vintage and value but you also have more pure value consumers you it just seems like it’s a really interesting fit because you saw some of the,
problems that are endemic to the re Commerce guys you’ve got the first gen,
Val you guys like the you know the fast fashion guys who are you know of course making stuff cheap but it’s a psychological disaster and they only sell like half of it and the other half ends up in a landfill and all that and then you’ve got the,
discount guys who I think is the funniest of all I don’t know if you follow this but Burlington Coat Factory,
right before the pandemic shut down their e-commerce and they shut it down because they fundamentally couldn’t solve what you’re doing like they couldn’t figure out how to cost effectively make,
product detail pages for all the super thin inventory that they had and so it just interesting like,
because you built this business on top of the Google Network it feels like you got a nice sort of Head Start in the in all three corners of that problem if you will.
Matt:
[52:36] Yeah Jason so first off I know a lot of the players the founders execs at those other places and,
again I want them all to be successful because the more successful the category is it’s a tide that will lift all boats and I think we’re all being led by the consumer who is voting yes yes yes,
I also think that the consumer,
um is not just the the deal Seeker the value Seeker but it really is a trend ribbon,
style driven younger consumer who if you think about you know the.
[53:19] Tick Tock and Instagram and this this viral social world that we live in where you nobody wants to look the same,
wearing the same things that shopping vintage and second-hand is actually a way to differentiate yourself and show your,
your individual style so it’s there’s a really interesting marriage there between second hand and kind of social morality,
and what’s happening there and then there’s also a tell you a more affluent customer or aspirational customer who could Shop full price and does Shop full price but they really care about,
about the impact in the narrative and they want to talk about the story,
where they bought it not just what they bought and so there’s it feels like there’s this really.
[54:15] Great timing of all three customer segments and then the last thing I tell you is compared to the Discounters.
Do I have read about some of them struggling,
with figuring out e-commerce and I think I’ve read the rational rationalization was that it’s hard to do Discovery online versus in the store.
What I would tell you is that what we’re doing augments the in-store thrifting experience at goodwillfinds,
now if you’re shopping Goodwill at your local store.
The assortment is very limited it’s what just showed up that week or that month as far as donations go but,
you can do that because there are certain categories of people like to touch and feel or try on because fit matters or Texture and finish and,
and material matter you know how home goods and furniture and the like one of those big bulky items that you know are easier to buy and store but to be able to couple that with.
[55:29] Now shopping you know I don’t want to say the best but the that e-commerce.
Assortment of other Goodwills across the country.
We’re now you’re getting access to donations from New York to LA Seattle to Miami,
Chicago to Austin and I mean wow like what a treasure Trove to be able to shop your Goodwill store and go online and get access to all these thrift stores in one place,
in our case I think it’s a massive value add and.
Given the fact that the Goodwill brand has been around for 100 years and already has tens of millions of customers shopping their stores you know our primary focus to start is how do we,
how do we complement the in-store shopping experience to those tens of millions of customers to convert them to be multi-channel customers with the brand,
and at the same time how do we compete in the market too.
[56:38] Solicit this this these other two audiences that I mentioned the style and Trend driven younger consumer that’s looking for vintage that’s looking for.
For differentiated as well as this this aspirational and more affluent customer who loves the loves the purpose loves the mission loves the story of circularity and wants to participate.
Scot:
[57:03] Cool sounds like your
you’re fired up and it’s going to be exciting to watch the progress we’re running up against time but while we have you you’ve been that this over 15 years the whole e-commerce retail thing what are some of the other Trends you’re watching other than this circular kind of recycling element anything
anything interesting on your radar for example do you think the digitally native vertical brand thing has played out or is that still got legs any other trends that are interesting to you.
Matt:
[57:36] Yeah well on DM BB which just a an iteration of DTC.
Did you see to me was always a go to market strategy was never a business model.
Scot:
[57:47] Yeah.
Matt:
[57:49] The the early players the first movers in that space who did the,
you know go to the source and sell an item at the wholesale price versus the retail price because you’re cutting out the middleman Zappos is kind of one of the one of the pioneers of that,
um
That was a momentum thing I’ve always viewed and again kind of sticking to my knitting here in this specialty premium you know Market space.
I’ve always viewed,
yeah the brand equity which is what we’re all striving to create and grow and maintain.
It gets generated by picking an attractive customer,
that you want to obsess about and I don’t and attractive I mean somebody that you think is a viable there’s enough of them and they’re viable to have a long-term relationship with.
[58:56] And obsessing about them to the point where you understand their needs better than they and you can create differentiated product and service,
where,
they fall in love with your Solutions with your customer experience and they want to tell their friends and then you couple that with the right distribution,
so that you can find more people like them which allows you to scale in an efficient manner and direct-to-consumer now going back 15 years,
was just the new go to market to find more like-minded customers to ones that you already had so urban urban already had amazingly strong brands with a lot of brand equity,
so what we did writing the Web 2.0 wave was really just figuring out you know how do we,
how do we reach the same or similar customers and give them a better experience a different experience online than what they experience in store,
and then Mark what was the opposite I got there and we had no physical experience and so the exercise was how do we take this brand love that exists.
[1:00:07] At this website and and translate it into a three-dimensional experience that,
the existing customers would love but would allow us to expand our market and introduce the brand and more people so I yeah so I don’t I never saw DM BB by itself as a sustainable business model.
[1:00:27] As far as other Trends in the market today I when I left Walmart I did a talk.
[1:00:37] Where I said I felt like it was an amazing time,
to start a brand and I really meant it and I really believe that the market was was so like there’s so much sameness in the market that.
That there’s a huge opportunity for four new brands coming to the market Leverage The technologies that have matured and and really differentiate against the incumbents I tell you sitting here right now after.
I feel like consumers.
[1:01:12] Have now accepted the fact that their multi-line store is where they shop for everything.
The whole idea of this retailers essential and that one’s not and those shutdowns for a year plus I think really changed consumer.
Perception of where’s viable to shop the where it’s not and I and so I think the bigger players,
have a massive advantage in this market especially this year with inflation continuing going into a recession I think it’s I think this year is going to be really hard,
for smaller players to differentiate and survive so that’s more from a consumer lens.
From a technology lens I’m sorry to say Jason but I’m a big believer in AI,
and I think it’s early days and what I counseled a lot of folks who are earlier in their career is find a mega technology trend,
in the market that you can get passionate about learning that you think is early Innings and ride it.
[1:02:17] I certainly did that with e-commerce I was.
They’re early with the that whole Social Mobile Local,
moment you know that was existing after the iPhone and Facebook launched,
I’m I feel like marketplaces are like halfway up the s-curve I feel like there’s still a lot more room to grow and so I’m working on that technology curve right now with goodwillfinds.
But I would say that I don’t I’m not a Believer it in web 3.0 today it feels like,
the.com in the late 90s where it was five years too early,
there just weren’t enough participants to make it viable I think web 3.0 in whatever form it takes is five years out before becomes something that you could commercially work on.
And then you know I’d say I think the subscription in.
In a lot of categories is having a lot of success right now which is less about technology and more about,
business model but that’s that’s that’s an area as well that I think is worth exploring for a lot of businesses that are trying to figure out ways to monetize Their audience.
Jason:
[1:03:40] Matt that is awesome,
basically we’re mostly aligned I’m 100% with you on a I I’m also with you on web 3 / metaverse
being too early the one thing I’m gonna just for the record disagree on is I I can’t public admit that marketplaces are thing because that’ll
that’ll go to Scott said too much if we admit that.
But,
it’s going to surprise no one mat that has happened again we’ve used slightly more than our allotted time so we’re gonna leave it with those words of wisdom from you as always if listeners found value from this show we sure would love it if you’d
jump on iTunes and leave us that five star review but Matt,
so awesome to reconnecting and congrats on everything you’re doing it’s it’s fun to watch and and put your point like it’s also adding a heck of a lot of value to the world.
Matt:
[1:04:33] Guys I really appreciate the time always great to reconnect congrats on the pot I’m a huge fan and let’s do it again at number five hundred.
Scot:
[1:04:44] Sounds good Matt if folks want to find you online or you on the on MySpace where do you hang out.
Matt:
[1:04:52] Yeah have you heard of Tumblr no.
Um yeah I would just say if anybody needs to get ahold of me reach out through Linkedin and my contact information is there.
Scot:
[1:05:06] Sounds good we really appreciate taking time and good luck with the new Venture sounds really exciting.
Matt:
[1:05:11] Thanks guys.
Jason:
[1:05:12] And until next time happy commercing.
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