On this podcast we talk to David Friedrichs who co-founded Cerqular, which was borne out of their passion for sustainable living. In this episode, David shares their moment of inspiration to launch, their transition from corporate to startup life, their vision for Cerqular and why most of their investors are female!
On this podcast we talk to David Friedrichs who co-founded Cerqular, which was borne out of their passion for sustainable living. In this episode, David shares their moment of inspiration to launch, their transition from corporate to startup life, their vision for Cerqular and why most of their investors are female!
So hello, and welcome to another episode of raise the bar, the podcast from next chapter ventures. We have a simple mission here to get female founders funded faster. You can learn more at NEXT CHAPTER raise.com. Get the tailored resources and coaching you need to find negotiate with and close the right investors for your business. Hi, everyone, welcome to raise the bar Podcast. I'm Nicole Denholder, your host, and also the founder of next chapter raise where we focus on talking to different companies about their growth journey, their commercialization, their fundraising, and we really want to hear practical stories so that we can help and share this with everyone who's listening. And today we are talking to David Friedrichs from circular and going to hear all about circular and their growth story, their goals, what they're building into their DNA as an impact business or sustainable business, and how you know, they're really engaging with female investors, which I love hearing about. So welcome, David.
David Friedrichs:Thank you very much for having me, Nicole.
Nicole Denholder:Yeah, it's fantastic to have you on. So I would like to just dive in straight away. And I mean, please, can you tell us what is circular? What was the lightbulb moment that kind of, you know, made you go out and build circular with your co founder.
David Friedrichs:Sounds great. So as a co founder, I founded circular with someone very close to me, my my wife, and it was founded in in Hong Kong, a place that's will always be very close to us. And it was born out of frustration that's turned into a complete lack of, you know, sustainability people, and also really solving problems, but it was born out of frustration. So the light bulb moment happened progressively over a number of years, because in addition to having careers in Hong Kong, we've also hobby brand owners in the consumer space. And we realized that anything innovative was just so much harder to sell, you know, you have to find different retailers, you have to find different packaging suppliers, different manufacturers. But we're also the target consumer. And Hong Kong is so easy on so many fronts. Yet, it is also so complex to try and find all the things you want conveniently. And so we found ourselves shopping from overseas from regionally and we just thought there must be a better option than the likes of they, for example, some competitive platforms in Hong Kong without mentioning that names. And we found that it just wasn't available. And we reverted back to shopping on Amazon and all the alternatives, but we didn't feel good about it. And so the lightbulb moment was why don't we actually create the ecosystem that we would shop from? And so we did a survey, we asked about 100 of our friends in Hong Kong, and said, Would you shop on a place like this? And they said, Absolutely, you know, and so circular was born with the premise that we would fix all the supply side problems that we had encountered. So not competing fair rates, a tech platform that was so easy to work with, that didn't require additional staff members to really work with. And that was pre integrated with all the E commerce platform. So something that was built for the next generation. And then on the consumer side, something that we knew that we could, number one, trust the brands and the platform, so there would be no fakes. Number two, they gave credible, reliable information about the products and the sellers. And number three, one that actually gave us the products that we wanted, that were hard to find, but with the same convenience that we loved, you know, that we enjoyed shopping and all the big life platforms. So essentially, we created, you know, you know, pure bliss when it comes to online shopping, something that we always call, you know, a guilt free experience. And circular was conceived with a named circular not just because it's a spin on the circular economy, but much more so because we wanted it intentionally to have a positive impact on every part of the ecosystem. And every part of an economy, from manufacturing to supply chains to you know, the way it's sold the way its products are interacted with its consumer base shipping. So everyone who you would come, you know, commonly come across in your day to day, we wanted to have a positive impact on those people with circular. And so circular is both synonymous with the sustainable and circular economy, which is all about reducing waste because you're using existing materials. So essentially, you're creating more value with less input. And the other part is really driving genuine value to everyday businesses and people. And when you mix the two of those two Unless you create real magic, because everyone will benefit. And so that's what circular is. Okay,
Nicole Denholder:perfect. Perfect. So, you know, if someone was to go to circular today versus circular, I don't know, in three years. I mean, what are they? What's their experience today? And what do you see the experience in three years if someone was to go onto the platform? Yeah,
David Friedrichs:I'll fill it up in three parts. So January last year, we had, we started off with two brands. And we just started off in the US. Fast forward to today, we have close to 1000 brands, we have around$1.5 billion worth of inventory on the platform. And now fast forwarding to 2025, will exceed probably around 14 to $15,000 on the platform. And we will be operating in key markets that connect both local and regional ecosystems without international and global network. So what circular will then offer is not just a globalized platform, in fact, we're going the opposite, we're going to become a de globalized platform, thinking that will function and expand whilst operating locally. But we'll be offering our global expertise when it comes to connectivity, shipping fulfillment, so that you get everything you want, preferably locally, because it has low to no impact on the environment, you're supporting local economies, local businesses, local employees, local everything. But you'll also be able to source internationally with the same convenience. So by 2030, every interaction that you have online, whether it's a product or service will be not only verified, it will have a positive impact on both people and communities, as well as the environment. And we'll be on search and powered by circular. And the reason why we're doing this is not only to to do wonderful things for the environment, but to really reconnect people. And I think Hong Kong is the best Launchpad possible for all of Asia, because it was one of the hardest hit countries post COVID. And Dhokla wasn't born as a result of COVID. In fact, we can see it in a before COVID. But we noticed that people become became detached as a result of this sudden change. And what circular ends to do is reconnect people based on values based on identities based on lifestyle based on things that really matter to us. And those things are typically found in things that resonate our individuality. And as a result of that circular will amplify those in a positive way through make every business not only more profitable, engaging in the sustainable economy, but also all of their investors, their stakeholders, and therefore, supply chains will shift, you know what and how things are manufactured, will shift. And our entire mission is to have a positive impact ultimately, as to what and how things are manufactured. And at that point, that's when we will see a dramatic shift towards a sustainable and circular economy.
Nicole Denholder:I love how you're looking at the whole journey for not just the business, but the supply chain, the development, the delivery of that product. And I know you're talking that there'll be services on there as well. And I mean, I've looked at the Hong Kong website that's in the process of launching, and really love seeing brands that I already know, but what's been exciting to look for brands that I'm not so aware of, and seeing that I can do some local support. So I've seen that on the website already. So I can see how you really as you said, D globalizing what you're doing so fantastic. Now, you also mentioned fundraising. No, we're not to talk about that here at Next chapter is, and I'd love to just learn from you. How are you building in, you know, sustainability into the DNA of the business and how you're representing that to investors? I think, you know, we've talked about this, around that when you start talking about your a sustainable business, you know, how are investors interacting with you? Because they can be, you know, considering Well, where is the focus on profits, or financial goals versus the focus on impact based goals, right. And so, I'd love to hear from you what you're doing. It's circular to, you know, talk to investors about how you can both achieve financial success, but also how you going to show the impact that you plan to meet through building a sustainable business and it's part of your DNA it's baked in from day one.
David Friedrichs:I'll start off by saying circular is for profit, and we're intentionally for profit to make every interaction on circular positively, both financially as well as driving positive impacts in terms of consumption. And as a result of this, we want every interaction whether it's a seller and investor, a manufacturer or a packaging supplier to Have a financially rewarding result interacting with circular. And the reason why that's important is the term impact investor or sustainability investor or minority investor, these terms eventually will be removed, and they will just be investors. And that is what we want to remove. Yeah, we want to remove identifications. And the reason why that has to happen is it was at one point in time niche where people thought I'm going to become an impact investor. But we're now seeing that it's actually the complete opposite now, as a result of regulatory advances, you know, the evolution of millennials and Gen Z's that will soon dominate the workforce by 2025. And the ultimate deadline of 2030, when the global economy will need to transition, well will have transitioned to become a sustainable economy. In fact, China has also pledged to be carbon neutral by around 2040, in many Western countries by 2030, between 2020 and 2050. So the way we pitch this to investors is, it's a genuine story. And we find our investors are those people. And I'm saying people, quite specifically, individuals who, who really have the ability, the experience, the networks, and more importantly, the real energy to be part of the right side of history. So what does this really mean? It means we have the option of so many investors, so many people want to be engaged in what we're building, because an investment in circular is a direct investment in so many different parts of the ecosystem. But the reason why we actually find that we're having tremendous success with certain parts of the investor community is because we connect on a human level, we are not just pitching return on investments, we're not just pitching numbers, we're actually pitching a lifecycle evolution where these investors become deeply involved in either becoming part of our ecosystem, or involving the commercial enterprise with circular or just really engaging as advisors or as champions, or as individuals in the broad ecosystem that we're creating. And we find that when people ultimately have skin in the game, they perform better as investors. And so all of our investors are 100% of them, are people that we connect with on a deep and personal level. And that is so important, because we're building a big machine that requires a community impact with probably requires a country to really move the needle. And thankfully, day one, we we found investors who understood the pain points coming from their own perspective, but one that we draw together to create a big solution. So just to give you an some examples, it is by chance, but now we're becoming quite laser focused that, you know, 95, probably over 95% of our investor community, are female. And it's not because we've targeted women, or any group, it's actually because women, and especially women who are engaged in the corporate world, or in terms of accessing the corporate world, have found that there must be a smarter way to not only involve their skills and capabilities that they've acquired throughout their career, but to also get involved in something that they're actively engaged with. And circular permits that, you know, we're we're we're a social platform, as well as a sustainable platform. And so we find that the connection piece with female investors is definitely there. Because if you look at every other plant on the planet Earth, essentially what you find is that they're all the same, they only differentiate themselves based on price. So whether you look at all the mega platforms across Asia, or the US or the UK, or Australia, they all sell the same types of product, they all have the same differences. You know, with membership programs, they may compete on lowest shipping prices, but ultimately, they're the same. Where circular differs is that we promote products based on value centered around people and communities, animals and wildlife and the environment. And we find that still to this day, the I think the advancement of female entrepreneurs, as well as investors is the past is any other minority group. And I don't even like to use minority group because I'm, I'm a person who likes to d label everything and to make everything normal. And that's what we're all about. So, to this day, we're very proud to have a very diverse, diverse investor community group. They just so happen to be incredible women, and as a result of that circular has gone from two brands to well over 1000 By the end of this year, almost 1000 today, and it's because of these people who are rolling their sleeves up, and they just get it, that's what it is. So you can combine money, you can combine return on investment, but there's nothing more valuable than combining it with real understanding. And that's what it's all about 100%.
Nicole Denholder:And I mean, I'm so pleased you brought up that, you know, you've had quite a lot of female investors, you know, come on to circular, because there is research that is out there that shows that women are two times more likely to invest into something with an ESG angle, you know, women are looking to align their investments with something that is meaningful to them, they're looking for opportunities to do that. And it's great that you've been able to engage with the female investor community, it's one that we want more and more female investors, you know, next chapter is we're often asked if we know female investors, and you know, that is a community that there's a need to have more female investors get involved. And so they're always looking for those that are out there, they're looking for great opportunities for anyone listening, that's interested in investing, I mean, hearing about circular story should be an inspiration and motivation to recognize this companies out there supporting, you know, people's passions and goals, as they see what the world needs, I
David Friedrichs:think, to echo that many of our investors are, you know, x, of company, current heads of companies, some of them are you behind it, both individuals, some are, you know, people who are even brand owners on the platform, who has decided to invest in circular. The diversity of women, the diversity of a person is what makes it super interesting. But what we find is that the female investors on our platform are so dynamic. And it's because they have been so involved in buying, selling, interacting with product and service, probably more so than men or other parts of the community, whereby they, they really feel the pain points. But on top of that, I think what's really important is, I don't even like the term minority, but to find a connection that is based on genuine merit. And I can speak from Circulus perspective that all of our investors, both male and female, have been exceptional, because when you connect and remove the friction points, and you remove the fragmentation, people usually perform to their best ability. And people do things differently than what maybe a typical VC will do. Because a typical VC, whether it's, you know, a bank, an investment bank, or you know, some type of Silicon Valley firm, they really just looking at the, you know, urgent short term outcome, the people who we partner with early on at this stage of those who really care about, number one, the quality of the infrastructure, the quality of the solution, and the quality of the communication to their community. And all of our investors have been positioned so that we have investors per the markets that we operate in. The circular today operates in the US, we're now launching in Hong Kong, and we have US investors, but we now also have a very, very diverse pool of investors, locally to Hong Kong. And it's because we want to build and flourish locally in Hong Kong, it means that we want to build out and generate wealth. In fact, our absolute mission is to redistribute wealth value and opportunity to otherwise would have been minority groups, but also to everyday businesses and people. And that also means, you know, giving other business owners a chance to thrive. So in addition to investor groups, well over 60 minutes, probably around 63 to 65%, of all of our sellers are also female led businesses. Again, it's not intentional, in fact, there's not been no profiling, it's just been that the quality of these businesses are female. And it's because they're advanced in really hitting the milestones that is needed in the world. So circular was all that for the next generation,
Nicole Denholder:ya know, very inspiring, very inspiring. I mean, just what's been the key, do you think to some of the early successes that you've been having? And I'd also love to hear how are you, you know, through, you know, quite quick growth. And I think you really do have goals to grow very quickly, how do you ensure the quality of everyone that you're onboarding onto, you know, the platform, you know, ensuring that, you know, growth doesn't move away from still staying close to those original goals as a business and that you've built that into onboarding processes or the way you interview? You know, new organizations that you're interacting with?
David Friedrichs:That's a really big question. It's something we thought a long hard about before starting circular. So the fact is, we never thought even within the short period of time that it would be as big as it is we thought we would probably have around 100 But within this period of time, we've become the Literally the largest non conventional platform globally. But the reason why it's grown so fast is not because of any single factor. It's a result of doing a lot of different things consistently, differently to other platforms. And it's communicating the right messages, it's fixing problems in a timely way. But it really comes down to really personally understanding the pain points of supply and demand sides of the economy. And not just creating something for a quick dollar, that we created circular with both sides of the economy in mind sellers and buyers. And so the platform is, without a doubt, the best and easiest to use, we can onboard a brand with any volume of product within an hour on Amazon, it's about you know, six to eight months on average plus a headcount plus plus plus. But it's not just that the ongoing maintenance for the average brand is nil. And so we've always found ways to make business more efficient, that brands can then divert more of their capital, and profits into product development, and research and development. So that circular then gets the benefit of that forwards, you know, shopping community. But the way we look to really, you know, maintain a level of quality is because of our our values and our principles. And that's what it really comes down to technology does a great job. But you need to have the right values and the right architecture in place to decide what works and what won't work. So we've made a pledge day one to never compete with any brand on the platform. As a result brands are very open as a result to give us their complete inventory. They're open to do advertising with us, because they trust us. On the other side, other customers, every brand, every product on the platform is genuine, there are no cheap knockoffs. Everything is trusted, we've done that diligence with the businesses. And in terms of verifying these things, that's never an easy thing. And that's where the time is. So right now we focus on brands that that businesses, So an individual cannot join. And it's because we need to make sure that we can tap into the supply chain, the origins of where those products are sourced from an individual, not because we're discrediting or trying to remove them. At this stage, we just don't have the ability to work with an individual to find where they source the product from. So that you must be a registered business. And the second part to it is, we need to make sure that whatever claims you're making about your product, you can substantiate. And so we work with brands on this level to really get the best out. And so when you as a brand, make an unsecured, it's actually quite a feat, because, you know, we have a waiting list of probably around 3200 sellers at the moment. And so when you do make it on, you're actually on a platform that for the first time thinks with your ethos, you know, there's no friction, there's no fragmentation that this connects you on other platforms. And so we work very hard to connect the values of our buyers, sellers, and the overall community through technology, making sure that we are always looking at what changes in supply chains that come from sellers, making sure that you know, packaging is always shipped plastic free, all of those types of things. So there's a lot of work from our end. But thankfully, we've set up processes so that it's pretty much automated.
Nicole Denholder:Perfect. Yeah, absolutely. And I think that's, that is when you start looking at scalability, having the automation come in and experience to grow and work out what are those points that needs to be put in place to allow you to maintain that quality, I think is key. So it's great to hear that you've really built that in from day one. I mean, just one last thing I'd love to ask you on today's podcast is having started this business. And if you're talking to a new founder starting their own business, I mean, what would be one of the the key tips you'd give them or things to watch out for, that you think was either important to your journey or a roadblock to your journey.
David Friedrichs:It never gets easier, you just become better. That's something I've learnt, literally. And I told myself that every day, the workload, the complexity of your business never becomes easier, but you become a lot better. So the takeaway is identify a business that ideally that you've actually experienced either a pain point, or a positive impact from and make sure that you're creating something that actually generates more positive value for more people. I believe that most days in the business presents so many complications that if you're not really in love with what you're doing, it's going to be a short lived exercise. And I think our experience as humans in this beautiful experience as a person is too short lived to do something that Isn't meaningful. So as a result, find something that is going to nourish that inner part of you, that just keeps you coming back for more. Number two, have trust in yourself. Number three, don't be hard on yourself. And most importantly, surround yourself with people who connect with you. You will find people who will expect financial returns, you will find people who expect you to perform, you'll, you'll just meet a lot of people who expect a lot of things. But ultimately find people who will connect based on the values of why you started this business and where you see this business going. No one can do it alone. That's a fact there is no single person that has created something great independently. We certainly haven't we've we've done it with, you know, hard work from a lot of people. And then one find investors, if you are going down that route, who are not only people who you can talk to, but who you can tap into their networks, their intelligence, their experience, to find positive criticism, find ways to grow your business. And the other thing is never stop learning. That is so important. You know, the amount of things that we have learned building this business is astronomical. And it takes someone to reduce the ego, that's really what it comes down to you drop the ego, to the point where you have no ego. And you just really work hard to make sure that you're generating tremendous value from it for everyone. And as a result, I find that the more you give, the more you get back. And it's just one of those things, the law of attraction just really takes its course organically. So I really hope this has been value added. I think that this podcast is incredible. And I encourage absolutely everyone who's spent more than three nights thinking about an idea, to not spend a fourth night thinking about it, just do it. You will never regret something failing. But hands down, you will regret not starting. In fact, that's what Jeff Bezos has said. He said, the reason why he took the leap to start Amazon is not because of, you know, any fear or anything, but it was the fear of not trying. So everyone is a great founder, everyone is a great entrepreneur to something to solve a problem. And the world was a beautiful place to do it in right now. Because it's in this evolutionary shift. So
Nicole Denholder:thanks for sharing that. And that is 100% What I tell everyone just do it. I mean, time passes way too fast. And you know, you can really sit on things. But the point is try because actually the first thing you put out, there will not be the final results or the best result, right? So it does take time to, you know, connect with your customers to really understand your price points to understand the way that you can put this together in maybe a more cost efficient way better marketing, improved product or feedback or service on feedback. So 100%. So thank you so much for today. Thank you for sharing that circular, you know what you're trying to achieve how you've really engaged with female investors, female business owners, which is really speaks to the DNA of our own business. So always really happy to be really trying to highlight and showcase people who are really making a difference in the world. So thank you for coming on today.
David Friedrichs:Thank you so much. And look, look, we'll connect all founders will connect all investors. I think now's the perfect time to do something.
Nicole Denholder:Yeah. 100%
David Friedrichs:Thank you so much.
Nicole Denholder:Thanks so much, David.
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