An Interview With Jerome Knyszewski
Look for gaps in the market and work to fill the gaps in a unique/useful way.
More and more brands are being born and many are successful. They all focus on an unmet need and they speak more to the language of their audience compared to big brands. Big brands have an obvious advantage. They are established in retail, they can afford big advertising budgets and most of the time they have an advantage on production economies of scale.
The passion that is put behind many digitally-native brands can do an exceptional job at enticing a demographic. If you solve its needs in a better way, or the values of your brand relate more with them, that’s an opportunity for a win!
As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing Luca Gualco.
Born in Genoa, Italy, Luca Gualco is a former professional water polo player. After retiring, he completed a doctorate in economics and started his career in banking, developing financial loan opportunities to help people cope with their financial burdens, but he wanted to take things to the next level…
In 2005, after 2 years of development, Luca started Ferrari Financial Services, developing financial instruments tailored to Ferrari’s client base. Ultimately, Fiat Chrysler acquired Ferrari Financial Services. In 2010, he left Ferrari to get his MBA at Stanford where he also taught economics. After graduating, Luca went on to help lead growth at startups including Uber (there were less than 100 employees when he joined), WeWork (less than 50 employees when he joined) and Acorns.
Eventually Luca, with co-founder Alexi Suvacioglu (a GSB classmate, fellow Italian and also a former professional soccer player), launched Because Market based on a mission that started long ago for them: to help older adults live active and vibrant lives.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I jumped from a professional sports career to the luxury industry in Europe to Silicon Valley. Back when I was in Italy training 8 hours a day, it would have seemed impossible to think I’d end up here. I grew up in the water in Portofino, training and playing water polo till dusk; I was an adventurous kid that loved to be a part of any team. Besides Water Polo, I was also on the soccer, diving, scuba, track and field and horse polo teams.
As my dad taught me, people and friends are everything and we loved to create connections.
I saved all the money I made playing and I applied to Stanford MBA until they accepted me after 3 rejections. My time at Stanford helped me believe I could pursue my dreams of creating meaningful relationships around a common goal.
I was fortunate to be an integral part of the growth of Uber, WeWork and Acorns after which I felt I had enough credibility to win the support of incredible partners at venture capitalists (VCs) and pursue my dream of starting a company to help the ones who gave us our wisdom in the first place, our grandparents. With my co-founder Alexi, we launched Because Market to help older adults live the fullest lives possible and regain independence.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
It all started with our own families — we were helping our grandparents and I remember driving to lots of different stores searching for supplies for them. We often came up short, unable to find all the necessary products at the supermarkets and pharmacies. Alexi and I had a conversation about this and realized we had stumbled upon something untouched. We both did some research and found out that incontinence impacts about 25 million people in the US — and most people go through it alone. That didn’t sit well with us and we thought the world needed to be different. We believe that we should care more about older adults like they cared for us.
Retail products, we noticed, revert to the average — average sizes, average tastes. For most products and services, while a 20 year old doesn’t behave so differently than a 30 year old, a 60 year old may be worlds apart from someone who is 70. Alexi and I decided we wanted to build an authentically curated one-stop-shop where older adults can find the exact products they need. We wanted to put individuality back in the formula.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
In the beginning, we considered giving up every day. We aren’t the kind of people who fool themselves, thinking we have some kind of invincible powers that could make this work. To build a company for older adults, you have to go through a very deep self reflection. You have to become more vulnerable, to think like older adults. We considered vulnerability to be a gift and embraced that failure is a real possibility. Everyday we thought about that risk and how to mitigate it.
We started in a small studio in Palo Alto, with boxes of product surrounding our little office. There were plenty of moments when we looked at each other and said “what are we doing?” It seemed absurd to try and build a company for older adults, when all of Silicon Valley was going after Millennials and Gen Z. The older adult market is difficult and an unpaved path, especially in Silicon Valley. If not for the support from our investors, we would have failed 20 times over. We realized that we were building three companies: one for 60 to 70 year olds, one for 70 to 80 year olds and the last one for 80 to 100 year olds — each with diverse needs and attitudes.
Additionally, this past year has been especially challenging for obvious reasons. COVID-19 has forced us all to work with resilience — remote working, shipping services being overwhelmed and an unexpected surge in demand created potential roadblocks for our company. What keeps our team driving forward stems from the original purpose of Because Market — serving our customers, who are also at a greater risk during this time.
We refused to give up on the people who need us the most. With that determination from our whole team, we doubled our business in the last year.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Before Because, senior personal care products had not seen any innovations in decades. Older adults were left with limited selection, lack of informed advice and poor product design. If e-commerce left anyone behind, it was the senior citizen community!
When we started, very few focused on this market. Now people have come to realize that the senior market has been underserved. We knew at the time that it was going to take longer and it was important to invest in building a team that would push through any failure.
First, everyone in our team had some exposure to the caring of their older parents and grandparents. I think everyone keeps that in mind when they show up everyday, working harder than anyone else out there. It’s why we’re here.
Secondly, Alexi and I were able to channel our experience as tech and e-commerce founders to support a fantastic team of believers with amazing investors who supported us and saw the opportunity in what we’re building.
We knew that success would only come after a lot of research. We invested our own money and conducted years of research with tens of thousands of consumers, resulting in hundreds of product iterations. We were working towards restoring dignity and confidence to the millions of people living with incontinence. We eventually built a gigantic focus group that could tell us first-hand what was needed — this became our members’ community.
When we felt comfortable that we could do it for the long run (and do so profitably), we added a layer of awesome tech to enhance our ability to listen to feedback and extract even more insight from a simple buyer-seller transaction.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
I recall one situation, back when we had a small customer service team in charge of taking care of every single call and request. We accidentally sent 300 bags of a product to a consumer instead of the three ordered.
All the products arrived at the customer’s door in sequence for a few days. First a few bags, then a few more and so on. I believe the customers called us after the 30th bag. We could not stop the shipments from arriving! He even got a call from the local post office, telling him that he had a couple hundred waiting to be delivered. Thankfully, our products ship in boxes that conceal the content, so the customer didn’t feel embarrassed. Of course, the customer wasn’t charged for any of this. He took it well and he wound up giving the excess products to charity.
What do you think makes your company stand out? Can you share a story?
Human connection. We couldn’t have built Because with the mindset of a younger audience. We had to immerse ourselves in another demographic. We realized that this was the context in which everyone in our team had to operate. Even the machine-learning engineers could not operate looking at the data in a vacuum. Our scientists had to focus on the human side of the data. The fact that most of our teammates knew what it takes to care for an older adult was a big accelerant in our learning.
We also deeply understand the changing needs of older adults, thanks to the connections we’ve developed with our customers. This urge to create a relationship with our customers likely goes back to the days when we used to go from store to store to shop for personal care items for our aging relatives. It was frustrating to know that their needs aren’t being met, and we knew that if they were having these experiences, it was likely a much broader issue. We decided there had to be a better way and that we were going to create it.
Fast forward to today. We base how we meet the needs of older adults on the thousands of weekly customer conversations, emails, texts and chats that our team members have with our customer base. Our executives regularly do field calls, respond to emails and reach out to customers with questions. We use the customer feedback to make changes to our products and introduce new ones. They are our greatest focus group and their first-hand feedback helps us develop products with their personal needs in mind.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Alexi, my co-founder, and I both played professional sports. Growing up in Italy, there is no such thing as burnout. Either you play and play hard, or you probably don’t have the right mindset to be on that team. Being two co-founders with that mindset helped a lot. The “why” we do what we do is what pushes both of us.
So, my advice: don’t forget your “why.” We make sure that we are meeting the needs of our customers daily and seeing them happy is the impetus to never giving up and to keep striving for more solutions. We can’t sit here and say the journey to get off the ground isn’t tough, but we know that the destination is well worth it. Reaching our goals and making our customers happy is the fuel that keeps us going. In fact, since launching our adult incontinence products, we’ve also added cleansers, barrier creams and other skincare items, oral care, supplements and a line of CBD products.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
We have heard many times that VCs mostly give you money but they don’t really help you. We are humbled by how much all of our investors are committed and connected to our cause with genuine belief in our mission. From Mike Volpi at Index to David Weiden at Khosla, we have been supported by partners that helped light the path to what we have become.
I think it’s safe to say we are forever grateful for our personal family and experiences who brought this need to our attention. If we weren’t introduced to the issues that existed within the adult care industry, we would not have been able to find a solution for their needs or the many other people in the world who are facing the same problems. Everything we do at Because is with older adults in mind. One of our guiding principles is to be ‘customer obsessed’ and we mean it.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?
By nature, e-commerce was tailor-made for a time such as now, with the COVID-19 pandemic impacting our day-to-day lives. Our customers, older adults, are one of the most vulnerable groups to the dangers of COVID-19. We’re able to offer them incredibly useful necessities for their incontinence needs, for every part of their day, all without having to go out and risk their health. With the addition of CBD products to treat their pain and anxiety, both of which could be exasperated by the times we’re living in, Because is able to help them even more.
Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
Because Market is so personal to its customers. Before Because, incontinence products had not been innovated in decades. Now, there is a one-stop shop with products developed with feedback directly from our customers. The personal attention to individuals and their needs is what these larger e-commerce sites and brands can’t touch on, and an area Because excels at.
What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business? What can be done to avoid those errors?
When starting any business, e-commerce or otherwise, it’s important to define and know your target audience. This obviously includes what they’re interested in, but it is just as important to identify what makes them tick, what annoys them and how they want to be communicated with. When you have a general idea of what your e-commerce business is selling, the next step would be to find market research (or conduct your own if you can’t find specific enough data) on your target audience and you can build your marketing strategy from there.
In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?
Many e-commerce startups have a hard time estimating their scalability, especially when they might receive an influx of demand they weren’t ready for. While shipment delays and out of stock products are bound to happen to any e-commerce company, customers only have so much patience, especially in a world where two-day free shipping is practically the norm.
We believe that beyond satisfying customers with quick service and quality products, customers actually want something more. They want to know they are being heard.
In the beginning, we found ourselves with some frustrated customers and we didn’t understand exactly why. We soon learned that older adults often don’t understand e-commerce technology. We had one such customer who was upset she was being charged on a subscription basis — she started off wanting to cancel and being completely unwilling to think differently. We had an agent handle the call with her who was kind, sweet and very attentive. The agent explained very simply how you could adjust your subscription to your needs, walked her through how to do that on the online portal and helped the customer understand that the choices were hers to make. The customer ended up adoring the agent, admitting she loved the product and wouldn’t get off the phone! We learned that older adults just want to be listened to and heard. That personal experience is often lost in today’s modern world.
Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?
A great library of products will only get you so far in e-commerce. Without accessible and quick customer service, your brand can quickly fall to the wayside and a few bad customer experiences can tarnish your reputation rapidly. At Because, we pride ourselves on great customer service and have many options for our customers including chatbots (powered by Chatra), emails and traditional phone support with a live customer support representative to answer any questions.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?
There are numerous tools to help e-commerce companies increase their conversion rate, but here are a few that I’ve found the most useful for Because:
• Google Analytics — allows you to see what parts of the website are driving the most traffic and what types of keywords they’re searching for, allowing you to optimize your pages and make it easier for customers to find the right products quicker.
• High Quality Product Images — Of course you want your customers to see the best side of the products you’re selling, so take the time to produce high quality images for your e-commerce site.
• Free Shipping and Coupon Codes — Customers are sensitive to shipping costs to the point where it will greatly influence where they end up making their purchase. Prioritize offering free shipping, especially for customers making large purchases.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?
Speaking to your customers, hearing them and engaging with them is a great way to build your reputation. Specifically, with our customers’ age group, they still want and need the human connection of picking up the phone and talking to customer service, sharing their gripes and likes — and we genuinely listen, hear them and take their feedback to heart and put it into action.
One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?
While we can’t always control what’s on the internet, it’s always good to maintain a professional demeanor. Some brands can lash out at their customers for leaving poor reviews but we see it as an opportunity to grow! We listen to our audience and adapt to their feedback. For example, we have received comments about how customers prefer more color options in their incontinence products. We quickly listened to what they had to say and we’re planning to release a new underwear product with various colors this year. It’s all about adapting to the consumer, not forcing the consumer to adapt to us.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful e-commerce business? Please share a story or an example for each.
Anticipate your customers’ needs (and be able to pivot to accommodate)
- From the beginning, we realized that we could only build a company for older adults by creating a brand that resonated with their experiences and reflected their values. We started to take calls as customer service agents. Listening to a few calls per week was not enough. I started out working in the customer service room and wound up being either on the phone with customers all day or listening live to calls.
- Most of the time, customer service is seen as a cost center, something that you need to have but you try to keep the cost as low as you can. We believe that talking and listening to our customers is a worthwhile investment. In fact, many of the features of the products we launch are derived directly from customer feedback. The most active members are offered to become part of an always-increasing group that test products before launch.
Look for gaps in the market and work to fill the gaps in a unique/useful way
- More and more brands are being born and many are successful. They all focus on an unmet need and they speak more to the language of their audience compared to big brands. Big brands have an obvious advantage. They are established in retail, they can afford big advertising budgets and most of the time they have an advantage on production economies of scale.
- The passion that is put behind many digitally-native brands can do an exceptional job at enticing a demographic. If you solve its needs in a better way, or the values of your brand relate more with them, that’s an opportunity for a win!
- We have been able to constantly carve out more margins out of the “non-core” part of the business. Being able to execute on that is sometimes as important as having a wonderful brand or the right price.
Look people in the eye
- This can be taken literally but also more figuratively, as in taking a problem head on! Look directly at the problem and immediately face uncomfortable situations. Don’t find the solution before you talk about the problem, look people in the eye and find a solution together.
Sing in the shower
- For us, it means to always be ready to find the funny side in any situation. A way to demystify demons is to laugh at them. If when you wake up and take a shower and you are not able to sing (even in your mind), we believe you are set for a very hard day.
- For how much everyone tells you that you have to be humble, don’t forget to also dream big. We started a brand rooted in incontinence! Everyone made jokes about us in the beginning but we had a secret ambition. We knew we were building a brand that resonated with our customers.
- Investors didn’t see an incontinence company. they saw two bold entrepreneurs that dared to venture where nobody wanted to. Because Market is becoming the leading digitally-native brand for older adults today. We thank our team and their ambition to be part of our mission.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
The idea behind our company is that we want to bring awareness to the struggles that older adults go through, especially during a time like this. We would like it to be more widely known that the older adult should be taken care of and supported, and we hope that our products and our business help emphasize that message.
How can our readers further follow you online?
This was very inspiring. Thank you so much for the time you spent with this!