I had the pleasure of interviewing Jay Cheng. As founder and CEO of Gemstra — a blockchain-integrated ecosystem that powers the future of social selling or “direct selling”. Jay is a serial entrepreneur who grew a family manufacturing business from 5 to over 250 employees after graduating UCLA in 2003. He has successively launched and exited two consumer internet companies that reached 8-figure scale in a year’s time. His latest conquest with Gemstra is to redistribute consumer profit back to people through the model of social selling.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
The last two companies we launched, BaubleBox and JewelScent, were both direct-to-consumer ecommerce businesses. They grew very quickly as we were fortunate to build an amazing team, especially the marketing and product teams. From 2010 to 2015, there was tremendous scale to be had on Facebook and paid media — especially in social. But we noticed that consumer profits were either going to just a few giant advertising companies or being eaten away by Amazon’s pricing paradigm. Traditional consumer value chains usurped from local economies. I’ve always loved direct selling for the opportunity it affords people wanting to earn supplemental and in some cases replacement income for their households. I also like that consumer profit is being distributed to people instead of public companies. Most direct selling models pay an upward of 50% of commissions into a compensation plan. There are millions of households in the world that benefit from Amway, Avon, or Mary Kay. This model allows consumer profits to trickle down to peoples’ pocketbooks. The problem is that industry is walled off, centralized, and leveraged by monoliths — an oligarchy insulted by high barriers to entry. That’s why we’re in this space, decentralizing and democratizing the social selling industry.
Can you share the most interesting story that happened to you since you started your career?
The most interesting story… that’s a tough one. I think the one that stands out is when a lawyer friend of mine, who I won’t name, who graduated magna cum laude from Wharton and on track to make partner at likely the most prestigious law firm in the US was working on the sale of one of our companies… We were four months and back and forth with a buyer in purchase terms and my lawyer friend was the lead. It was a decent size deal for him that could propel his career… He disappears after a random weekend, not to be found for months… No one could find him. He didn’t bother resigning. His family couldn’t find him. Four months later, he resurfaces in Europe enrolled in culinary school with zero apology — pure pride and jubilation that he was pursuing his passion. Lesson learned from him — don’t be miserable doing what you should be doing and find a way to do what you love.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
One day many years ago, I learned there was a new hire named Melissa. Melissa was going to be our new accounting clerk. I was traveling for a few weeks and happened to return to the office on Melissa’s first day. I walked in, greeted the new girl in lobby, and said, “You must be Melissa — the new accounting clerk. You’re early. It’s good to show up early. I’m impressed already. Let me take you to where you’ll be sitting.” I introduced her to everyone as “Melissa from accounting”. She took on the shorter name of “Mel” in her first weeks at work and became friendly with most of office. 6 months later, Mel receives the Employee of the Month award and part of ceremony is that the winner has to tell a funny story.
Mel proceeds to say, “On the first day of my job here, Jay was kind enough to greet me by Melissa. I haven’t had the courage to tell you guys this but my name is actually Vanessa.”
Everyone burst out laughing. I learned to ask people their names and listen to their stories.
What do you think makes your company stand out? Can you share a story?
What makes gemstra stand out is that it’s amongst a handful of companies looking at the social selling or direct selling industry to say — “Something is wrong here. These silos. The exclusivity requirements. The overpricing of goods. The lack of retail competitiveness. The arbitrary decisions by companies for a voluntary sales force.” I remember selling jewelry to some of the biggest direct selling jewelry companies back in 2006 / 2007.. One company was a $600 million dollar jewelry company selling products we produced for.. Something we made and shipped to them for $3, their landed cost was maybe $3.50/$4.00 — they were selling for $40 retail and I thought — wow this isn’t going to keep working. Sure enough, that same $600 million company was bankrupt by 2012. Gemstra is the first to have built a social selling marketplace, and certainly the only social selling company disrupting via blockchain.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Sleep, love, eat, and exercise. I don’t do any of those well or consistently by the way… so do what I say, not as I do.
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?
My dad. He built a small business that started in 1985, this little jewelry company that he grew with relentless focus and pursuit of excellence. My parents came to the US from Taiwan in 1983 with $5000. They started their business at a swap meet and saved little by little, enough to open a showroom, and then warehouse. We’d then go on to open up multiple factories. That small business is the platform that gave us the opportunity to work on what we’re working on today.
Are you working on any exciting projects now?
Gemstra is exciting. It’s blockchain and it’s crypto. There’s a ton of hype about the technology of blockchain and future uses. We’re leveraging blockchain technology to build an infrastructure for an industry and putting actual cryptocurrency to use — to pay commissions to the millions of independent sales reps in the space.
How have you used your success to bring goodness to the world?
I haven’t done enough and hoping to do better at this always. Most days are head down and focused on task/project/initiative at hand. Generally, it’s the job of every company to create a culture that goes beyond the walls of its offices. That culture is defined by core values. Ours at Gemstra is GIFTR — “Growth, Integrity, Family, Trust, and Respect”. By exercising that in business, all of us have spent significant hours of the day flexing those value muscles. It gets easier to live them out at home and amongst our communities.
Can you share 5 examples of how retail companies will be adjusting over the next five years to the new ways that consumers like to shop?
Digital retail will explode with emerging tech. Augmented reality is close to being unleashed and will have a dramatic effect on retail. All of a sudden, you can see the product you’re about to buy in real life — not a picture on your phone. There will be nascent direct to consumer brands that are born in AR. The ones that help prove the technology use-case will will. In fact, some of these companies (if they aren’t bought outright and quickly), might become the next Amazon in 20 years.
There will be more brands with unique offerings. More personalization, customization. Small batch manufacturing is growing. The speed of technology growth is pushing equipment makers to update their technology quicker than before. We’re still seeing pockets of growth in 3D manufacturing, and though it’s quieter, there are practical applications coming to market. Manufacturers are also tiring of leverage and receivables exposure. Retail has burned them too many times. It’s safer to sell to a lot of smaller customers than risk having one very large single customer go down.
Delivery exponentiates as driverless automation, which has been ready for market, finally gets early adoption. There have been some bad cases and danger signs yes, but the technology as well as information grid and infrastructure improve daily. Couple that with the speed of AI learning and delivery routes can be predicted based on order volume. Not only do you not need drivers, you don’t need as many cars. Some order input system can tell couriers how much volume will last mile in what city. Waymo likely has a huge head start out of the gate. I can see them either being bought by Amazon or becoming the commercial distribution master of the future. Bottom line — humans shouldn’t be delivering packages. Moreover, before Waymo drives people around, it should first prove itself delivering consumer packages.
Social commerce explodes. Social relevance has become the norm. Brands have to work with influencers today as traditional media wanes in relevance comparatively. We’re betting that brands will get closer and closer to people, to their social networks. Gemstra has proven that people today are more likely to engage in gig selling via social networks than previously. Compare this to conventional retail. Amazon reviews are powerful, but more and more people know how skewed they can be. We want not only social relevance but social proof. We’re going to want to get our product validations from people who we know have actually used it, have experienced it, and really know what they’re talking about.
More brands will avoid Amazon. More and more brands are realizing how dangerous it can be to depend on Amazon to generate sales. Some (and probably the better ones) have experienced Amazon copying their products or inviting another provider to offer same products on the marketplace.
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. 🙂
Education. The movement would gather the greatest minds to solve the problem of educating the poor, the unbanked. I believe everyone should have access to a good education — what they do with it is their choice — but minimally have access.
How can our readers follow you on social media?
I’m not a big social media fan but do get involved from time to time. My handle across most platforms is @ossums.
This was very inspiring. Thank you so much for joining us!
Originally published at medium.com