Madeline Fraser is the CEO and founder of a groundbreaking company called the Gemist - a new way to shop for jewelry. Madeline started the Gemist with the idea of putting the customer in charge and empowering them to be their own designer at a price point accessible to them. She was named one of the top women entrepreneurs to watch in 2021 as well as being on the Forbes Next 1000 list.
Tune in to hear Madeline’s journey through serial entrepreneurship, how she got the Gemist off the ground and thriving, and her advice for young female entrepreneurs.
Episode Sponsor: CorpNet helps me out with all my incorporation documents, trademark searches, and filings, and keeps me compliant for state and federal filings. CorpNet makes it super easy and is reasonably priced. I even have my own CorpNet representative to call on when I have questions. I wish I'd found this company sooner. I would've saved money and slept better in knowing that I filed all the right forms for my company. To learn more, go to the badassceo.com/corpnet
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https://thebadassceo.com/female-serial-entrepreneur-is-disrupting-the-jewelry-space/
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Madeline Fraser is the CEO and founder of a groundbreaking company called the Gemist - a new way to shop for jewelry. Madeline started the Gemist with the idea of putting the customer in charge and empowering them to be their own designer at a price point accessible to them. She was named one of the top women entrepreneurs to watch in 2021 as well as being on the Forbes Next 1000 list.
Tune in to hear Madeline’s journey through serial entrepreneurship, how she got the Gemist off the ground and thriving, and her advice for young female entrepreneurs.
Episode Sponsor: CorpNet helps me out with all my incorporation documents, trademark searches, and filings, and keeps me compliant for state and federal filings. CorpNet makes it super easy and is reasonably priced. I even have my own CorpNet representative to call on when I have questions. I wish I'd found this company sooner. I would've saved money and slept better in knowing that I filed all the right forms for my company. To learn more, go to the badassceo.com/corpnet
Please subscribe above to be notified of our new episodes.
I put together a Free Top 10 Checklist for Every Entrepreneur. Click here to get your copy:
https://thebadassceo.com/tips-for-every-entrepreneur/
To learn more about our podcast guest, click here:
https://thebadassceo.com/female-serial-entrepreneur-is-disrupting-the-jewelry-space/
If you enjoy this podcast, please help support the the podcast by using the link to our sponsors and companies I use for my business. I receive a small percentage for each sale. Thank you so much for your support!!
http://thebadassceo.com/tools/
Follow us on Instagram at:
Mimi MacLean:
Welcome to the Badass CEO podcast. This is Mimi MacLean. I'm a mom of five, entrepreneur, Columbia Business School grad, CPA and angel investor, and I'm here to share with you my passion for entrepreneurship. Throughout my career, I have met many incredible people who have started businesses, disrupted industries, persevered and turned opportunity into success. Each episode, we will discuss what it takes to become and continue to be a badass CEO, directly from the entrepreneurs who have made it happen. If you're renewing your career, dreaming about starting your own business, or already an entrepreneur, the Badass CEO podcast is for you. I want to give you the drive and tools needed to succeed in following your dreams.
Mimi MacLean:
Before we get started today, I wanted to tell you about a great company I found that takes the stress out of all the legal stuff we hate to do. CorpNet helps me out with all my incorporation documents, trademark searches and filings, and keeps me compliant for state and federal filings. CorpNet makes it super easy and is reasonably priced. I even have my own CorpNet representative to call on when I have questions. I wish I'd found this company sooner. I would've saved money and slept better in knowing that I filed all the right forms for my company. To learn more, go to the badassceo.com/corpnet.
Mimi MacLean:
Welcome back to the Badass CEO. This is your host, Mimi MacLean, and today we have on Madeline Fraser, and she is the CEO and founder of Gemist. It's the first digital platform for customized fine jewelry. More than just a brand, Gemist is the first digital platform that lets users interactively design their jewelry from the comfort and convenience of their home and try it on before purchasing. Gemist is revolutionizing the jewelry buying experience by putting the customer in charge, empowering users to be their own designer and create pieces that are truly unique at accessible price points. She was named as one of the top women entrepreneurs under 30 to watch in 2021 by Business Insider, and made the Forbes Next 1000 2021 list.
Mimi MacLean:
Over the past seven years, she expanded and developed multiple startups, including Zoom Interiors, the first online interior design platform, landing her on ABC's Shark Tank; and Hutch, a mobile app that disrupted the furniture industry by allowing customers to try before you buy. To get your top 10 tips every entrepreneur should know, go to the badassceo.com/tips. Madeline, thank you so much for coming on today. I really appreciate it. I'm excited to hear about your journey with Gemist and all the great publicity and Shark Tank and entrepreneurs under 30 to watch. And so I'm excited to dive in and I congratulate you on your success. So how tell us about your journey. How long ago did you start Gemist?
Madeline Fraser:
Sure. Well, first of all, thank you so much for having me and I'm thrilled to be here. Yeah, with Gemist, I started about two years ago. Fun fact, we pretty much launched our digital platform right when COVID hit.
Mimi MacLean:
Oh, no. That's great. Perfect timing.
Madeline Fraser:
Kind of, and also just a bizarre whirlwind to be a founder. It's already hard enough, and when you're battling it during a global pandemic, it's a little bit nuts. But super lucky that we had a digital platform and a really interesting offer for kind of bringing the retail store to you with our home and try-on model. So it's been great. We've really been able to figure it out and get it off the ground. And it's just been a lovely way to sort of, I think, innovate the jewelry industry. And this is my third business, so I've been running startups as long as I can remember. It's pretty much all I've ever done. So I think the good outweighs the bad in most days, but it's been an interesting few years with this pandemic.
Mimi MacLean:
Wait, wait, so you've already started three businesses and you're not even 30?
Madeline Fraser:
Yeah, no, I'm 30. I'm 30 right now.
Mimi MacLean:
Under 30, you just started. But so tell me about your first two businesses.
Madeline Fraser:
So I started my very first company in college. So I was a sophomore in college. I went to GW in DC and I was a fine art, an interior architecture major. And I happened to meet my two best friends in my very first architectural drafting class. And we were sort of the token design kids at GW, which was very focused on econ and poli sci. So we were known for design, and what started happening... This was in about 2013. A lot of our friends were moving out of their dorm rooms and into their first apartments, and at the time the world of buying furniture online was just starting.
Madeline Fraser:
So it wasn't really a big thing. And we came up with the concept, people were like, "Oh, no one's ever going to buy a sofa online," for example. And look where we are now. And so what we ended up creating was a platform that allowed younger consumers to basically be paired with interior designers for a small flat fee to basically affordably and quickly design and furnish their apartments, to be like an adult, right, in life? And so we called it Zoom Interiors, and we just completely dove in head first and bootstrapped it and bartended at night to make ends meet and just started running this company. And I think that's the beauty of being really young and starting companies, is you kind of have that perfect amount of feeling super-naive to just dive in. [crosstalk 00:05:25] There's not a lot of risk.
Mimi MacLean:
You don't know how big-
Madeline Fraser:
You don't know, 100%. You have no idea. Everything is happy and positive. And then you start learning what it really takes. And so I was always trying to find ways for us to get eyeballs in the business. We did not raise venture capital funding for that company. I don't think I even knew what capital funding was at that point in my life. And I was watching Shark Tank one night and there were these three college boys pitching a moving company, and we were three college girls with our business, and it just... I was like, oh, well, I'm going to get us on Shark Tank. Why not? And of course, my co-founders were like, "You're crazy. You can't just get on Shark Tank." I'm like, "Okay, watch me." And I basically just consistently pitched them probably for like two months.
Madeline Fraser:
And I found every single person on that show, and all of them heard from me multiple times. I always say persistence is incredibly important. And then finally, one of the producers called me back and she said, "Listen, we love your concept. We love you guys. If you get us an audition tape in the next 24 hours, we'll pop you in when the producers are looking at 200 candidates before the hundreds of thousands of applications come in." And I'm like, "Okay, fine okay." So we made the most embarrassing audition tape ever, sent it in, and then they're like, "Great, you're on the show." And it was just one of those crazy things. It took about, I think, six months to a year to even just tape the show and then another six months for it to air.
Madeline Fraser:
So it was this very long-winded process, but it was really the first time that we were challenged with, okay, pitch your company in a clear and succinct way, talk to investors and figure out how to sell this thing. And that was the first time that I had ever entered into that world. And anyway, the company did really well. We kind of spun it off into a more tech-focused platform called Hutch, which was a mobile app where you didn't have to work with the designer, you could actually drag and drop and build your rooms with the furniture you wanted, all on an app, which was really fun. [crosstalk 00:07:16]
Mimi MacLean:
Now, where was the furniture coming-
Madeline Fraser:
All the normal places. It would come from... We aggregated everyone. It was like West Elm, CB2.
Mimi MacLean:
So it was already direct to consumer interior design shops.
Madeline Fraser:
Mm-hmm (affirmative). Yeah. So we just partnered with... Then we did wholesalers. We just partnered with a ton of different furniture brands and white label brands to just make it work and give... And then we 3D-modeled and rendered everything, which was really interesting. And we raised funding, right? So it was interesting because we knew we wanted to evolve the concept, make it more tech-friendly based off of consumer feedback. And once Shark Tank aired, it opened up a world of venture capital people.
Mimi MacLean:
Wow. Did they invest?
Madeline Fraser:
So yeah, well, we technically made a deal on the show with Barbara Corcoran. But fun fact, only one in nine deals that are made on Shark Tank go through in real life. It's very much a handshake deal, it's TV. And so we talked to her after. We're like, basically, "Listen, we'll do this if you're going to really help us. We're 23-year old kids, we don't know exactly what we're doing. We need a mentor, and do you really have the time for that?" And she was so sweet and basically was like, "No, I don't really have the time for it. Good luck." And it was a nice way to kind of amicably part ways, but it led us, the exposure led us to many more doors opening, which I think that's what I tell people.
Madeline Fraser:
I'm like, don't really go on Shark Tank to quote unquote, get an investment. But it's a great way to get eyes on your brand and to potentially make other partners. And so after the show aired, I actually got a Facebook message from Sean Rad, the founder of Tinder, who I guess had seen the show, and he basically, I don't know, wanted to work with us. He pinged me and said, "Hey, I love your concept. Do you need help?" And that was kind of us manifesting, like yeah, we needed a mentor in that point in our careers. We were so young and unsure about what it meant to grow a business, let alone raise funding for something and really disrupt a market.
Madeline Fraser:
We needed somebody to show us how to do that, and Sean is just the most lovely, kind, talented, charismatic human. And he just kind of came in, swooped us up and taught us everything, which was really fun. And so he became the chairman of our board and our first investor in Hutch, and then helped us raise multiple rounds of funding for that business, which was just... I like to say that was my business school time. It was just this really overwhelming, confusing, learn a lot kind of just you're flying through. You're learning what it means from an emotional perspective, what it means to hire people, run teams, create the right environment, and really what it means to fail a lot, to make sure that you figure out how to get to that success.
Madeline Fraser:
And so our mantra during that time, which is still huge and I use it a lot with Gemist, is fail fast, fix fast, learn fast, which is just, I think, so important to anyone starting a company, because you're paving the path. This hasn't been done before. That's why you're able to raise funding for this. And so you don't have a rule book, you don't have something to follow, you sort of just have to figure it out. And in order to figure it out, you can't be afraid of failing. And so what we learned was it was kind of taking a lot of these little failures, or little missteps, to figure out, okay, that didn't work.
Madeline Fraser:
Let's understand why. Let's talk about why and learn from it, and let's pivot and figure out how to make that better. And so that sort of added up to us figuring out how to grow and scale that company, and it's definitely what we use with Gemist today.
Mimi MacLean:
So, okay. So you sold Hutch, is that what happened? Or that your partners are still there? How did you exit that?
Madeline Fraser:
I ended up leaving for Gemist and my partners are still there, so we'll see how that kind of pans out. But I was very much ready to start something on my own. So I was with Hutch for about four or five years.
Mimi MacLean:
Hutch was your second company?
Madeline Fraser:
Yes.
Mimi MacLean:
Okay. So the other one went into that Hutch. That was one too. And then, okay. So they're still there. You decided to go on your own. I was about to ask you, having three partners is really hard.
Madeline Fraser:
Oh, yeah. And then we brought actually on two more for Hutch. So we had five.
Mimi MacLean:
It's like, who's in charge?
Madeline Fraser:
It was a lot of cooks in the kitchen. Exactly. It was not the easiest of times, but it taught me how to kind of handle the rollercoaster of this job, because that was a time in my life where I was in my twenties, or early twenties. I was still figuring out very much who I was as a person. And what I found was happening a lot to me was I'd drive home crying, like everything's horrible. Or I would drive home on cloud nine, like this company [crosstalk 00:11:34] whole world. Exactly. There was no middle ground for me. And that's when I started [inaudible 00:11:40] that and saying, hey, I have to stay in the middle.
Madeline Fraser:
Because basically, what I'd figured out is that everything that was terrible would end up being not that bad, and everything that we thought was so great was never even that great in the first place. So nothing's as good or as bad as you think it's going to be. It's just, in that moment, you have these intense emotions about it, so you kind of have to just like, ooh, calm down. Stay in the middle. That's one of my other mantras that I use a lot because things change like that with these types of companies.
Mimi MacLean:
Did you start Gemist on your own?
Madeline Fraser:
I did, yeah.
Mimi MacLean:
You did. Okay. So is that a little bit harder now that you're like, okay, before you had two other people, you could bounce ideas off of. This time, you're on your own.
Madeline Fraser:
Well, I have built an unbelievable team. I'd say in the first year it was a little harder, because when I raised our first round of funding, for example, I had a few samples of jewelry, and then I had an Envision app that I just built and you could tap through it. It was literally an idea. And so when you're in the depths of fundraising, it's really hard, because that, again, talk about figuring out how to stay in the middle. Because you're getting rejected all the time. [crosstalk 00:12:44]
Mimi MacLean:
No, no, no, no. Right? It's like one to 100.
Madeline Fraser:
... getting dangled along. Exactly. Oh, and you think maybe it'll work out, and you spend all this time figuring out how to get this one person to say yes, and then they end up saying no, anyway. And so, and then you find the right people, but it's very much one of those things where you have to have a thick skin. And so I think that's where I feel a little more lonely, because I'm the one who has to fundraise and I'm the CEO, so that's literally my job, huge part of my job. And it's constant, right? We're finally about to close another round of funding. I've been doing it for the last nine months. It's been all-consuming, it's been exhausting. That's a part of this job that's really hard. We, as founders, want to be creative. We want to grow, [crosstalk 00:13:22] we want to do these things, and then you get in it and you realize, well, a huge part of your job, maybe more than half [crosstalk 00:13:26] of it, is raising money.
Mimi MacLean:
Did you hire somebody from the outside to help you raise the money? Or how did you figure out how to do that? Because as you said, it's time-consuming, so you can't completely be doing it all on your own.
Madeline Fraser:
I do it all on my own.
Mimi MacLean:
You do? And then how did you learn all that, to do that?
Madeline Fraser:
I learned it through Hutch, really. I mean, I learned a lot. I learned- [crosstalk 00:13:45]
Mimi MacLean:
Who taught you at Hutch?
Madeline Fraser:
I'd say probably Sean, and the investors that we had. I learned what it meant to raise funding, I learned kind of the documentation and the A plus B equals C kind of strategies around it. And it's very strategic, which is really interesting. It's kind of like, it's mostly psychology in sales, is kind of what it boils down to. So it's like a) being able to craft and create an unbelievable pitch that is succinct, clear, and insanely passionate. You have to walk away from every meeting, making sure that that person on the other end of the table or the camera is like, whoa, this girl, a) knows what she's talking about. This is a fantastic idea. And wow, she is going to make this happen. So you have to have that [crosstalk 00:14:30].
Mimi MacLean:
It's the person who you invest in. Not the [crosstalk 00:14:33]
Madeline Fraser:
It is, in a lot of ways, yeah. And I'm lucky, I'm good at it. I'm weirdly good at it. And I like doing it, that's the part that I like. I don't like the rejection part and the uphill battle part of it. But then it's... You can't just do that. So then it's managing these people you're talking to, and that's psychology. So creating-
Mimi MacLean:
Because you don't want to be like, oh we're closing a deal next week. And then all of a sudden next week comes and then they reach out in a month from now and you're still not closed, because then they're like, well, what's wrong?
Madeline Fraser:
100%. [crosstalk 00:15:03] And you can't just reach out to reach out. That's the other thing that I've learned very quickly. If you don't have something important to say, don't bother people. So it's like, it's hard enough getting in the door and getting that first conversation. It's incredibly hard to keep that conversation moving, and to then finally get somebody to say yes, I believe in this enough to actually put money into it. And by the way, the whole fundraising space has gotten increasingly more difficult since COVID.
Madeline Fraser:
You're about a global pandemic, huge issues with our economy across the board, funds are by and large changing their strategies, changing their thesis, changing even sometimes the level at which they invest. Like, maybe an iconic seed fund who's been investing at seed stage forever, all of a sudden, nope, we're only investing series A and above, because it's less risky. So a lot changed. It was really interesting having to go through this during this crazy time in our world.
Mimi MacLean:
Okay. So let's divert quickly to Gemist. So there are so many other websites that were out there that were selling jewelry. So what was your hook? What was making you different to launch that, and how you were able to get funding from that? Because I would think that would be a hard sell.
Madeline Fraser:
Yeah. Well, we're a tech company, so that's the core of what we do. So I'm not selling just like buying jewelry online. It's a whole new way of doing it. And so I'll tell you how the idea came to me, because I think that's the problem that we're solving. And so, I was in my personal life getting engaged while I was running Hutch and doing my normal job. And I just sort of thought Gemist existed. And what I thought I could do as a consumer is go on a beautiful website with fantastic user experience and technology and see a design come to life. I thought I could design jewelry online. That's what I assumed. But all the technology around 3D modeling and rendering, which a lot of that we were doing at Hutch with furniture, in my head, I just thought that's a thing.
Madeline Fraser:
It's not a thing, until now Gemist is doing it. But this was 2018 or 2019, so it's like, there was nobody doing that. The people that were out there were like Blue Nile, Brilliant Earth, very sterile brands, very outdated technology and very overwhelming user experiences. So for example, let's say you find a ring that you like, or whatever, you have to go then pick your diamond or gemstone for that ring. Well, you're then aggregated to basically the rap sheets, which are hundreds of thousands of different stones, colors, clarities, carats, cuts. And you basically have sensory overload, you get frozen. Because no one's a gemologist who's a consumer looking for a fricking diamond. So it was like, I was like, what the hell am I going to do? This is crazy.
Madeline Fraser:
And even if I could get something into my cart and be like, okay, I guess that's a good stone, because I did a little bit of research and that ring looks pretty and big, I was like, I need to see and feel and touch this before making a purchase. It's like, why on earth is home try-on not a category in jewelry? Because it wasn't at the time at all. And I'm thinking to myself, this is so silly. What am I going to do? So I thought, naively, oh, it's going to take me two weeks. It's going to be so easy. I'll do it all online and done. I, as the perfect digital consumer for this, being a tech-savvy individual, a young person, could not buy jewelry online.
Madeline Fraser:
I just couldn't do it. Especially for an engagement ring. And so I ended up asking friends and family what they did, and it was interesting because everybody had a really roundabout kind of shitty story to tell me. Nobody had a good experience around this, which is really fascinating. And I started getting curious and asking more and more, and I just never really heard one. And then I learned that a lot of people were going to family jewelers. So talk about a very traditional industry, that's jewelry. It's been kind of operating the same way for an incredibly long time, where you kind of have a jewelry district in certain larger cities, or you have a family jeweler type person that you can go to.
Madeline Fraser:
And for me, my option was downtown LA. So I got a number of a guy from a friend of a friend, went down to this tiny little shoebox office. It was totally a bizarre experience. Drew my ring on a piece of paper for this dude, gave him a cash deposit. And my now husband and I, we were laughing. We were like, are we ever even going to see this ring? What's going on? It was such a manual, exhausting, overwhelming experience. But he ended up making me this beautiful ring that I'm... This is it, I'm wearing it now. And it's totally an extension of who I am if you know me well. And that's what I think is so important about putting meaning back into jewelry, especially fine jewelry.
Madeline Fraser:
How can we allow consumers to have this feeling where they get to say, I designed that, I had a part in that, this ring doesn't belong to anyone else? And that's what I wanted to bring to the industry as a whole. And then home try-on was something that was super important because I wanted them to design, create what they wanted, but then be able to physically see it. Screw VR. It's not even ready, the tech isn't even ready for that stuff. It looks bad. You need to actually physically feel it. So what we've done is we've created identical replicas of your designs in fashioned materials. So they're affordable to make from our end, they're made of sterling silver, gold plate, against Swarovski crystal. To you and me, we're not gemologists, it's awesome.
Madeline Fraser:
You totally get the look and feel. Then you can come back on the site and tweak your design, once you know this is the carat size I want, and this is the cut I like, and here's the band that I like or whatever it is. And then we've added on a section of the platform called On The Hunt, where if you want something a little bit more custom, and you found a beautiful image on Pinterest, let's say, you can work with us and we'll just make a CAD for you, render it, and then you can approve it. So we sort of have all of these entry points depending on what you want as a consumer, but basically the end result is totally custom, made to order jewelry, fine jewelry.
Madeline Fraser:
We do bridal, we do engagement, and then now we do all everyday categories, where you, the consumer, feel like, wow, this was actually made for me. I had a say in what this looks like. This isn't mass-produced, collecting dust on a shelf from fricking Amazon or whatever. This is sustainably made in Los Angeles. And I think that's something that is so important to really kind of shake up the industry in a lot of ways. And so that's what we've built and that's what we're continuing to grow and scale with this next round of funding.
Mimi MacLean:
Now, has it been hard for you to get the sourcing for the jewelry?
Madeline Fraser:
Surprisingly, not really. Because we have the jewelry district in Los Angeles. I'd say, yeah, maybe it'd be harder if I was not in LA, but I found incredible team members who this is their bread and butter, they've been doing this for 10, 15 years and they helped me figure it out.
Mimi MacLean:
Yeah. And your pricing, I would assume, is either the same or less than if I were to go in to 42nd Street, or whatever it is in New York City.
Madeline Fraser:
Oh, yeah. Yeah, yeah, yeah. We're actually probably a little bit less because we are direct to consumer, so we don't do average markups. Markups in the jewelry industry can be a lot, they can be high. We just do a solid 2x markup, usually. So it's a way to kind of create these pieces that have more meaning, that tell a story for the consumer, that are high quality, at the right price point, and that are sustainably made. And so, that's another big thing for me, is what does sustainable mean? And that's what I was really interested in when I was looking into this industry, because it's really very confusing.
Madeline Fraser:
I think in general, jewelry is just really confusing. I think it sort of was meant to do that, to get people to just kind of buy or whatever. But we're trying to kind of strip that back and reeducate the consumer around what sustainable actually means in the industry. And for me, there's two pieces of that. It's where you source your materials. Are they conflict free? Where are they from? Can we-
Mimi MacLean:
Who's mining them?
Madeline Fraser:
Exactly. That's the most important thing. And all of our stuff, that's what we do. We have the best relationships with all of the people who are doing everything right. Secondly though, I think what's even more important is the social impact, which we don't talk enough about, in my opinion. So how is your jewelry made? Is it made in a sweat shop in China, or in Thailand? That's really common. Is it mass-produced and using weird chemicals that are not even approved in America? Again, very common.
Madeline Fraser:
Is it just sitting on a shelf collecting dust and they have a shit ton of inventory and then it's just being doled out to you and it'll probably break in a month? Yes, very common. So for me, it was like, let's make it with not only the best materials, but the best practices for the right amount of social impact. So that's when I decided everything was going to be made to order, so we do not hold inventory at all.
Mimi MacLean:
That's great.
Madeline Fraser:
You place your order, we make it, and it's a two-week lead time. And it's literally handmade custom for you. And that's really also again unique at the scale that we're at.
Mimi MacLean:
That's great. How many people do you have as a team now? Are they consultants or do you hire... Well, you did do fundraising, so you were able to hire people and you said you have a great team.
Madeline Fraser:
Yeah.
Mimi MacLean:
So I assume they're full-time, or... I think a lot of entrepreneurs, they struggle with at what point do I hire full-time and take on that expense versus doing outsourcing or consulting work?
Madeline Fraser:
Yeah. Right. I would recommend having a mix. So you don't just want contractors, because the problem with too many contractors is a) turnover a lot. So you're retraining people and you're wasting your time doing that. Number two, they're not as dedicated to the work. So if you can have employees that you really trust, that you can train well and actually give equity to, which I think is incredibly important, because we can't, as a small business, you can't pay people necessarily the going rate for what they really deserve.
Madeline Fraser:
So you have to give them some equity, which I think is incredibly important. And we give all of our employees equity, which I just think that is so meaningful. It makes them feel like they're part of this team, they have a piece of the pie, and they work much harder because they want to see that come to fruition one day.
Mimi MacLean:
So, yeah. So how did you do that? Is there someone who helped advise you how much equity you give? Are you afraid to give away too much equity? Where would somebody who's listening and who wants to do that go to get resources, to find out how much you [crosstalk 00:25:07]
Madeline Fraser:
Sure. There are standards. Y Combinator has an awesome website and they have really, really comprehensive articles on a lot of these types of topics. So they'll have stuff on equity, they'll have stuff on co-founder things, which are always difficult. They'll have things on documentation per round. So are you raising on convertible notes? Are you raising on a SAFE? When do you do a price round? How do you actually decide on a cap or evaluation? And that really comes down to how much equity are you giving away. And so again, all these things are complicated, so it comes down to making sure you do the research, asking people in your community that are... Find people that you know, like I'm sure your uncle might be a lawyer and he might have a friend who knows about this stuff.
Madeline Fraser:
So it's really about, I think, getting crafty too and finding the right people to talk to, reach out to people on LinkedIn. People are very willing to share information. I do it all the time. I'm like, I want more women in this industry, so I have a lot of people reach out to me. I'm right there. I'm going to get on and call you and tell you what I know, because I know things now. I wish I could have talked to myself when I was 22. And so I think it's important to get more women into this industry because the statistic is actually going down, which super sucks. And I think it's mainly because of COVID. So it used to be, a few years ago, that 2.7% of all VC-backed startups were run by female CEOs. Just 2.7, that's already a terrible number. Now, it's already down to 2.3. So we're going back here.
Mimi MacLean:
Which is crazy, because the stats for return on equity for VCs is higher for women than men.
Madeline Fraser:
Of course it is.
Mimi MacLean:
So why wouldn't you invest in women if their return's higher?
Madeline Fraser:
It is crazy. It is crazy. It's super boys club energy, I'm telling you, the whole VC thing. Listen, I found the gems and there are a lot of people that are not like this, but there are a lot of people that are. And I've been in those meetings, I've been in those calls, and it is honestly shocking when you get into that situation. And it's a problem, it's a big problem. And there's not enough female VCs either. So it's like, women are a minority on both sides of this conversation. And so we need more women. And then a lot of times female VCs, unless they're higher up or they're working with men, I've found, they don't have enough money to even give you, really. So their funds aren't huge. So they might be able to give you 25K, 50K, something like that, but they're not going to be giving you the $2 million check that you really need.
Mimi MacLean:
Right. And that's a lot of work to get there for 25 grand.
Madeline Fraser:
Well, exactly. Exactly, it's so much work. Yeah, exactly. Yeah. 100%
Mimi MacLean:
How did you get the Forbes Next 100, on that list? That's great, and congratulations. But can you tell people about how you did that?
Madeline Fraser:
How did we do that? I think that we applied. So they have an application process and we have a great PR team. And so we kind of just filled all that out and kept following up and were pretty persistent. And you just give them stats on your business. You kind of let them know who you are, what your background is. And luckily we got chosen. It was really exciting. But it honestly wasn't really a crazy process to go through that, which was nice.
Mimi MacLean:
As we were just talking stats, only 1.7% of women ever reach $1,000,000 in sales in their businesses and I would love to know your take on why you think you have reached that numbers, or what would you attribute that to?
Madeline Fraser:
I think, number one, and this is actually, I would say, something that I've noticed with women, and men too, but mostly with women, you have to ditch ego at the door. You got to let it go. And you need to have a mentality that we're either all going to win this together, or we're not going to win at all. And that's been my understanding of this business and how I grow my teams and how I run my companies since day one. And so, give equity, find the right people, respect them, help them, grow with them. You cannot do this alone. So number one, if you don't have the right team behind you, you are 100% not going to be successful. I think number two is people probably get really bogged down in the tiny details of everything. And it's that really terrible word that I hate, which is perfect.
Madeline Fraser:
This has to be perfect. I can't launch this until it's perfect. I need to make this 100% exactly what my brain is thinking, because I know everything. No, you don't know everything. Number one, nothing is perfect, that word doesn't exist in my vocabulary. You have to get things out there, and you got to get it out there and then do user testing, if you're a consumer-based product. You have to understand how this works for the consumer, and then if you do that and you listen, again, ditch the ego. I don't know everything, I want to know from you. You start learning amazing things about your business. I mean, so many things that evolved from Gemist came from consumer feedback, like a ton of stuff.
Mimi MacLean:
How did you get feedback? Did you give surveys, or they just came out and told you?
Madeline Fraser:
Oh, I get on consumer calls all the time. So we're always emailing our consumer base, being like, "Hey, do you want 15% off? Get on a call with our founder." And I ask them, "What did you like about the process? What didn't you like about it?" I have a whole list of questions that I go through with them to really understand the emotional interests that they have and what worked and what didn't. And then yeah, we do a ton of surveys, we do a lot of focus groups. So we would do them a lot of times in person, pre-COVID. Right before COVID, we were in beta. And then now we do them on Zoom and stuff. So it's a nice way to basically just get immediate instant feedback. You can also do Zoom screen recordings. So you literally have them go through the tech.
Madeline Fraser:
And literally you're just like, "Okay, go ahead, go buy a ring." See what they do. Like, if they screw up here, this is not clear to them here, you can see it happening. So it's about figuring out what is wrong with the flow, what's not working, what's not easier, something to understand. And that's something that you will always be iterating. So if you are not somebody who can consistently be learning from your consumer and iterating your product and evolving your product, you're just putting it out there and nothing's changing, again, you're not going to be successful. And I think that that comes back to this mantra we always have, which is fail fast, fix fast, learn fast. You have to be okay with failure, with fear. You have to learn to look that in the face, and face it head on, and sort of say, "I'm not scared of you."
Madeline Fraser:
These are things that are normal, and this job is something that is going to always have rejection linked to it. It's always going to have failure linked to it. It's always going to have unhappy consumers. Not every single person is 100% happy and you just can't take that stuff to heart. You have to look at it, learn from it, and move quickly past it. And that's where you start sort of seeing this version of success, because it's not a straight line at all. It just isn't. Because again, you're starting something new. You're doing something that nobody ever did before. So that is a) a very hard thing to do. And you got to just kind of figure out how to pivot and alter and get there. And I think the last thing is just being self-aware as a person and an individual.
Madeline Fraser:
So are you taking care of yourself? Are you a happy person? Are you doing therapy? Are you looking inward? Are you a centered, stable individual. And are you working out? Are you eating well? Because all of those things reflect on how you treat your employees, how you raise funding, how you show up every day to the people that are looking at you for leadership. So it's a lot of pressure as a founder, because you're holding all this on your shoulders with all these people that you care about, and you want this to succeed, and you've got all these people rooting for you, if you find the right ones. And so, as long as you have the right team, and the right investors, you're pretty much in the right place to start figuring out how to grow. You have the support.
Mimi MacLean:
Those are great insights. One other question I was just thinking of, because I think a lot of people do this, where they have a great product, great website, they launch, they turn the switch on, and it's like, wait, I built it, but they didn't come. What did you do when you launched Gemist to get the name out? Was there any tidbits?
Madeline Fraser:
Yeah, we did a lot. I think the key is diversify your outreach. And it also comes down to like, no one ever really... Unless you're raising a lot of money. Not a lot of people just have money to throw at things. So when you can find avenues where you're making money with a partner, that's really great. So one of our best channels that we found really early on was affiliate marketing, which I actually... Talking to a lot of my female founder friends, or founder friends, I realize it's not something that a lot of people talk about openly. It's like very much, "Oh, you got to do Facebook ads and Google ads." And like- [crosstalk 00:33:49]
Mimi MacLean:
No, affiliates, I tell people right now use all those micro influencers, not even the big, big guys. It's the five to 20,000 Instagram followers. Those are the ones that I have these great followers. People listen.
Madeline Fraser:
Yeah. So that's good if you have the right strategy. I have found the influencer marketing thing to be a little bit touch and go, and kind of smoke and mirrors if you don't have the right strategy, meaning if you're going to do an influencer strategy, my best recommendation is to get a group of the right people that have a similar demographic and following, that all post around a similar timeframe. So then what you end up creating is this burst of your company being talked about within this realm of these certain consumers. And those people then think, oh, everyone's talking about this company. [crosstalk 00:34:37]
Mimi MacLean:
It's like when you see a car once and then all of a sudden you see it every time you go around. You're like, wait, how did I never see this car, and then all of a sudden I see it?
Madeline Fraser:
Because if you just do one influencer here, this is their group, one influencer here, this is their group, nobody's going to cross-populate that. So it's not going to feel like anything. It's just like a bloop and then it's gone. Very hard to track. So what I actually more so mean from affiliate marketing is partnering with... Mainly pairing that with press, I think that's really important, and getting articles about your business everywhere that you can fricking look. So we did partnerships early on with Brides, with Buzzfeed, with Nylon, with really interesting specific partners that would write articles about us. They had their CPA, their commission that they would get. And so they would get like a 10% commission on any sale made when somebody would click that link through that article.
Mimi MacLean:
Oh, I didn't realize they do affiliates too.
Madeline Fraser:
Yes. And you do it through a platform. The one we use is called ShareASale. So that is what I think people are not tapping into enough, and it's very interesting. You can also run your influencer partnerships through there as well, if they're connected to that platform. And then the other one that a lot of the editors and publications use is called Skimlinks. So I would look into that and think about that critically, especially aligned with your PR strategy. So you're doing PR outreach, you have affiliate backing that up. A lot of times for smaller articles, like roundups, or like Top 13 Engagement Rings of 2022. They're going to want an affiliate link to that, because they're smart. They know they want to make money. Whereas, if you're getting a full Forbes feature on raising a round of funding, that's not an affiliate situation.
Mimi MacLean:
That's great. Because it gets expensive to get eyeballs and that's a lot-
Madeline Fraser:
That's what I mean. So the cool thing about that is it doesn't cost anything, it just is your time and your energy. And then what I love about it, what seems so fair to me, is then, okay, great, we agree to work together. They write the article, part of it. And then any sale made we both make money together.
Mimi MacLean:
Right. Well, I never understood that. One other company I had, same thing, I would approach people, especially digital marketer, like Google ad people. And they want a fortune to run the Google ads for you. And I was like, "No, I'm not paying that." If you believe in your product, I'll pay for the actual ad, but for your salary, I want to share, I'll give a percentage of my share. It's like, "I don't do that." I'm like, "Well, then I'm not doing it," because there's no skin in the game to be successful. Because you just want your big fat check and you're going to move on.
Madeline Fraser:
Well, exactly. And now, by the way, the thing that's so fascinating right now is this whole iOS 14 update, which is a lot of companies are taking a hit right now because of the tracking, probably half of the people that you could track are not trackable anymore. It's really hard because all the data that we used to be able to collect last year, it's not there anymore. And so the algorithms are not learning at the same speed, you're not getting out of the learning phases fast enough, and essentially your ad's just not performing as well, unless you are already a very established brand and have put a lot of money behind it, then it works.
Madeline Fraser:
But you need to be putting a lot of money monthly into it. And so, you have to come up with creative strategies, top, middle, and bottom of funnel that are diversifying, not just Facebook and Google. Important to have them, but that cannot just be your only thing. We do really well with email and SMS, as a retention play to get consumers back. We have a very healthy repeat consumer rate. So you have to think about that lifetime value of your consumer. So you have to make sure you're building enough traffic, it's the right audience coming in top of funnel. They're getting there, they're coming to the site.
Madeline Fraser:
Okay, maybe they're there for a second and it didn't convert them. That's normal. Okay, then what's happening on your site? What's the flow? What's working? What's not working? What's your conversion rate? What's your bounce rate? Okay, great. Let's make that better. Let's tighten that all up. Then they get re-targeted for another ad. It's middle of funnel. Great. Maybe we get them into a product page. They get a sample of a ring or something. They're like, okay, tap one, Gemist, tap two, Gemist. Okay, cool. Then they're out. Maybe we figured out how to collect their email. That's really valuable. Okay, I collected their email or they signed up for SMS.
Madeline Fraser:
Then we get to re-target them based on who they are. So really thinking like this person came, they looked at this page. That might not they're in the market for an engagement ring. Okay, let's market them this type of content, and get them excited about this brand. And so it's so hard now, because it's multi-touch. They're coming through that funnel multiple times and they're not buying. It's a puzzle, it's like, you have to have this really intricate roadmap to be able to get them all the way through that funnel to that conversion. And that can take... Depending on the platform and the product, it could take a few weeks to get that to happen, which is really just, it's all-
Mimi MacLean:
Well, how do you do that, though, if you don't have their email? If they don't sign up for the email until like the third time, you're not able to still target them, are you?
Madeline Fraser:
You can re-target them through advertising.
Mimi MacLean:
Oh, through advertising. Yeah.
Madeline Fraser:
So you have different ways. But it's more intimate to find a way to get their email.
Mimi MacLean:
Of course. Yeah. That's what you want.
Madeline Fraser:
And then you get them down a page, you got a purchase. Now, how do I grow that lifetime value of that consumer? Because investors are not interested in a one-time consumer purchase. They want a [crosstalk 00:39:49]
Mimi MacLean:
You need a gift for every Christmas, [crosstalk 00:39:52] or Valentine's Day, birthday.
Madeline Fraser:
Yeah, exactly. So it's like, okay, how do we make sure that they come back for something else, something else, something else? And then we start seeing that grow over time. You have to be a critical thinker, you have to think outside of the box. And then by the way, all of this also comes down to the content, the messaging, the branding. How are you talking about this? How are you letting people know what you're doing? Is it confusing to them? Does it make sense? Is it the right value add? It's a very intricate process, and it's a really hard thing to do.
Madeline Fraser:
So if anyone's listening and you guys have a company and you're kind of floundering a little bit, that's okay. People are floundering right now, especially with this iOS 14 update. Start diversifying, look into affiliate, look into ShareASale, Skimlink. Make sure your email and SMS strategy is super on point and really tight. Make sure your social strategies are really tight. Make sure that you're not just taking a lot of cash and putting it into one or two channels. That's my best advice.
Mimi MacLean:
Yeah, it's true.
Madeline Fraser:
And do user testing, talk to your consumers, listen to them, hear what they have to say. Because that's going to take you out of this little bubble that we get in. Oh, I'm growing my company, I'm in my bubble. You've got blinders on. Talk to them, see what they have to say. They're brand new eyeballs on this experience, on this product, whatever you're selling. And learn from them and listen. You start seeing patterns really quickly.
Mimi MacLean:
Madeline, this has been amazing. Thank you so much. I appreciate it.
Madeline Fraser:
Thank you for having me.
Mimi MacLean:
Yeah, you're welcome. Okay, great. And then I'll have the link in the notes, so anybody wants to go check out the website to go buy a piece of jewelry.
Mimi MacLean:
Thank you for joining us on the Badass CEO. To get your copy of The Top 10 Tips Every Entrepreneur Should Know, go to the badassceo.com/tips. Also, please leave a review, as it helps others find us. If you have any ideas or suggestions, I would love to hear them. So email me at mimi@thebadassceo.com. See you next week, and thank you for listening.