On this episode, I wanna introduce to everyone, Jake from Outer. Jake, when did we meet? And also tell us more about your business. Like how did it all
start? Definitely pre pandemic, so time's fuzzy. I wanna say 2019 when I was just getting started. Before I even, no must have been until I'm 18 because I was literally just getting started.
This was before Shark Tank, before I took money from Mucker. Right. You guys were working at Mucker.
You know what, I remember you sitting with Will and you. That was when you, you were like raising, you were asking Mucker
for money. You guys witnessed, I think the birth of Outer and all of that. Think we met in 2018.
Yeah, so it's five years ago. At the very least
What is
outer? Outer is a premium outdoor living brand based in Santa Monica that I co-founded with my co-founder, Terry five years ago. Our vision is to build the category defining brand for outdoor living, starting with outdoor furniture, but then we're gonna innovate around.
Entire outdoor living space, you know, outside of Four Walls View Home. It's been historically been launched as DTC model, our website, live outer.com. And we also built this pretty fun program where we turn our customers backyards into our showrooms. So it's called Neighborhood Showroom. Currently in over a thousand locations in the US where you can type in wherever you live, and then find the nearby outer customer to go experience the product in person before you purchase.
It's been the wild five years. Wild, wild, wild, wild Ride.
I remember when this concept first came about. Literally no one's done this before the showroom, and you even mentioned to me as like a Airbnb of showrooms.
Airbnb of retail. Yeah. Yeah, but it's
your like go to market test that idea out. What did you
do?
First of all, you know. Probably, you already should know the outer, the furniture that we make are very premium. We use the best materials out there. It's all eco-friendly, and a lot of the materials are proprietary. So it's a premium product, right? Our average order value is about $6,000. So it's right between like Pottery Barn and RH with a people who, you know, know furniture retailer brands here in the US for such a considered investment and purchase.
My theory was that people probably want to go see it, you know, before they pull the trigger on a website from a brand that they've never heard from about, right. And so it was really out of necessity that I thought, you know, a showroom is necessary and we didn't have the money to build retail showrooms, and I thought that was pretty risky.
That's one side. The other side is that I just don't think the traditional furniture shopping experience is good, right? Like going to a. The showroom and talking with a boutique salesperson, and especially for outdoor furniture, which has not seen, you know, a drop of rain or array of sunshine, like it, it just doesn't, it doesn't feel authentic.
You know, it's not a good representation of how the product can do in the real outdoor environment. So that's the second reason. And the third reason was because I'm, uh, avid. I was an avid Airbnb host and. Customer. Right. And so I thought it was really innovative model and, and it, it also coincided with this, I guess this, this back in 2018 coincided with this wave of like death of retail was when people were chanting, you know, this is before Covid obviously, and.
You know, Macy's were shutting down and like a lot of these like department stores are just not doing well. And so, uh, press would, would love to write about it. Like, oh look, Airbnb for retail, or That's of retail, retail suite one. Oh. So it really kind of give us the, the, the spotlight as well as we innovate on a different way of distributing retail.
And so it's those forces that really coincided that, that kind of force it, that the creation of neighbor genre. Does that still
exist today?
We are in, like I said, a thousand locations countrywide. We're not potentially growing that footprint anymore, but it's still organically growing and it works really well.
As in we convert almost like 40, 50% of visitors to actual purchasers. And what's more fascinating than that is. It's becoming a true community. I mean, the word community has been thrown around by a lot of brands, but I mean, just long story short, like we've had friendships, business relationships, and even romantic relationships that were, that were formed.
You two visiting a offline showroom. You know, I love that .
So much. You guys should create a blog about matches that happen from these showrooms.
Okay. It's there. Aren't there many matches that you can tell? Like true in the, in the, in the history, but, but I mean, I guess my point is, you know, pretty powerful when you go and it's not pressure, right?
We don't, we don't incentivize, we call them hosts, just like Airbnb. You would call them hosts. They, they bought the furniture, right? They put money where their mouth is. We don't give them any free stuff. Like they buy it, they believe in the product. They go through the process of like putting their pictures up, their profile, everything onboarding, right?
And then, uh, we only pay them a flat fee. It doesn't matter if the visitor buys or not. We pay them the flat fee. And so when you visit as a potential customer, you're not, you're not like, It's not like Amway or Mary Kay or Tupperware. It's like you're not forced to buy, right? Like they don't get paid more or less because you buy or not.
You can literally show up and turn around and leave the the house and we'll still pay them all the same. And so you're trying to create this really authentic, like you're just hosting a neighbor, a friend or whatever, and then. We paid you, we compensate you a little bit for your time and your space. But you know, and honestly that's not what people do it for anyway.
Like, well, like I said, people do it because they need to kinda like showcase their outdoor space. Kinda like showing off a little bit, right? But also meet people and it's really just taps into this like evangelical spirit of like, well, you like a brand, you just wanna talk to your friends and you have strangers about it, right?
And so I think we really kind of caught that spirit. So yeah, it's been working wonderfully for us. Amazing. That's awesome.
Well, that's what's working. Tell us some stories of stuff that didn't work in your journey of building outer. Everyone knows it as like the darling startup of la Honestly, like when you talk about outer, it's like, yeah, people know it as like the success story, but I'm sure like there's, it was a shit show.
You know? Where, were there some moments where it felt like you just wanted to like give up?
Yeah. And I, I say this with like all seriousness, but because this is my second startup, I've never gotten to a point where like I want to give up on it yet. But there are definitely a lot of moments of challenges, obviously, right?
It's, I mean, it's physical goods product. It's very difficult supply chain, you know, for people who don't know, I mean it, even unlike furniture, you know, furniture you can find supply chain manufacturing. Globally, even in the us, even locally in la, right? But outdoor furniture is challenging because we use synthetic materials like plastics and special wood like teak.
That's only grown in Indonesia, for example. Right? And so, It, it's a lot harder to, to basically work with the supply chain. It's all overseas. Most of it is in Asia. Most of it is in China, right? And some, it's labor force that can handcraft and hand weave the wicker, ratan and all of that. So that was really hard to get started.
Thankfully, I do have a, a cousin who has been in, had manufacturing for a decade, and so he got us started. He got, he pointed us in right away, but it was really hard for us in the beginning because we were. My co-founder, were pretty stubborn in not using some of these, let's say, pol monopolistic brands out there, like fabric brands that have, you know, these really great performance characteristics and water is, and all of that.
But they are mono, right? Like you have to go to them. They really expensive, like video dollars a yard. And just so you know, like a chair typically take like two to three yards of fabrics to create. So even cost to me, like the, the, the creator alone is like $150 unjust fabrics. You don't, you know, that's not factoring the frame, the the manufacturing labor, the shipping and all of that, right?
So for any high quality apple furniture, you can't cut corners. And that's the truth of basically, you know, if you go to Ikea or like any of the mass market cheaper options, Most likely we're gonna fall apart within the first three months or first season of use, probably at most the first year. And they just dilapidated or anything that's like, that can last for years.
You, you, you have to use these materials. So that was extremely challenging and, and I've never done anything, you know, supply chain heavy. You know, I've, I come from a software enterprise, SaaS, you know, data, it's like the opposite of e TC consumer physical goods. You know, like it's a polar opposite of that.
And so, Getting started was pretty challenging, but really in hindsight, I was a naivete. And I guess that's, you know, every, every entrepreneur trip story starts that way. It's like, if I had known, maybe I wouldn't have done it, but, but yeah, that, that was probably the first boulder that we had to overcome.
I mean, there are many, many more supply chain logistics like the Covid surge and like now with the recession, like housing market cracks like. The huge and downs of the macro market in addition to the huge ups and downs of just starting a new startup. And it's compounded os oscillation of just instability.
That's been really challenging too. Right. So we can go into any of that if you want, but that's definitely big. Been a huge ups and downs. Yeah.
Yeah. Um, so five years of all, all of this highs and lows, what have. Cope with your mental
health. So like I said, this is the second business I I'm building. So the first one was also huge ups and downs.
You know, I would that for period of maybe four to six months, I was actually depressed. You know, in, in that first business I had a, found a fallout and you know, so I felt like I've already stared death in its eyes and I came really close to the rock bottom. And so this time around, I think. Despite the huge swings, and it's a different scale, it's a different game, right?
We, we race quite, quite a bit of ranch capital and we've hired up to a hundred people, and so it's the, the stake at hand is bigger, right? Compared to my previous startup. But even though it's bigger scale, I feel like mentally speaking, I'm more prepared this time around. So even in the. Darkest moments, right when the containers was stuck at the port and we can't do anything to unload them.
And I had to call 400 angry customers personally to apologize and try to save the orders. And, and the good news that I think we only had like seven cancellations out of the 400 after they called. You know, even I had to go through this riff, you know, with my team. And that was probably the, the hardest moment.
That's probably come close to the. Depression and I felt like a failure. And despite raising so much money, I can't even save, you know, my, my team's jobs. And I think I've remained at the end of the day, you know, pretty levelheaded this time around. I mean, I do meditation. I mean, that's cliche, but I do think it does really help.
And I just use call, you know, MySpace, call 10 minutes a day. And that's really helped me. And then this time around, I, you know, we just had this conversation before the recording, but like now I have two, two kids. My kids are my source of. Joy and sometimes they can take me not out of the, the, the vortex, right.
Of just getting all involved. Like, okay, my life's not all about the business and you know, that's not all me. I'm also a father. I'm also, and I'm also a friend. And so I, that's brought a level of, of like perspective that's helped me to navigate the up and downs as well.
Yeah. Yeah, there's like also just you getting older and us having the emotional maturity to regulate ourselves.
Whenever we do feel like that self-awareness of something coming, whether that's depression or anxiety and being able to take us out of that situation. I think that honestly just comes with time. You know, like there's so many founders that want start companies and they're so young, you know, and like you probably started your first company when you were really young.
For the founders out there that are wanting to start their company, what would your advice be? Especially in like the D two C space slash CBG space? I'm
developing this thesis that, you know, like, I mean I don't wanna, I don't wanna say D T C brand, right? Because to me DTC is a channel. Still believe that to this day.
And it's really good channel to get started to get awareness, right? But it's not the end all be all. But I just wanna speak to like creating a consumer brand, let's say, right? Like, but. Independent of like whatever channel that it goes. They all retail, btc, whatever, b2b, even b2, btc. I think a brand is a true representation of the founder or the co-founder's values, and it's such a microcosm of what you believe in, what your values are and it's, it's almost like an expression of your values, right?
I don't think there's a right way of building a brand. I think every brand is different, but what I look at. The brands that I look up to, the Nikes, the little lemons, the Patagonia, even the Teslas and the Apples, right? When I mention those brands, you would immediately think of the founder, Steve Jobs, Elon Musk, Ivan Trinar, bill Knight.
I think they're kind of inseparable, and so if that's the case, to me, building a brand is almost like a, it's, it's truly a life law pursuit. I raised venture capital and the venture capital cycle is such that you have to generate some return and show some return within a short, relatively timeframe within five to eight years.
But I really think starting a brand is quite the commitment and no one can convince you to do it, and no one can convince you not to do it. You just want to do it because Sure. Self-expression, and that's how I truly feel about Outer, and I think to even a bigger degree to to, to Terry. I can tell you that when, when I started, and you know, Terry came from a pretty impressive design background, you know, risd, ideo, and French design at Pottery Barn, you know, consulted for Casper, some of the highest, most famous DTC startups.
He joined me because, and he's a little bit older than me, and he, he says, at this stage in my career, I would do this only if meetings can. Realize my value of building a platform for popups change the world in the sense of like driving more, uh, eco-friendliness and environmental consciousness. Right. At the time when I met him, his daughter was three Piper five years ago, so she's eight now.
He tells the story of just he's in San Francisco of, of walking the beaches at the beach in, in outer sunset. And you know, Piper, his daughter would pick up a sea shot and say, you know, is this animal going extinct? Or pick up a plastic bag is like how many sea turtles stink gonna kill. I think kids nowadays are really aware of like the pollution and the environmental impact that we have on earth.
And so to Terry, you know, his lifelong missions, like, you know, just creating it like in 30 years. Look her.in the ice and say like, you know, I've done my part to try to change the course, or like, you know, for a better future for your generation and and beyond. And so that's what's motivating to him and that's why even to this day, you know, the fabrics that we use, we could have gone with the easier solution that's like really durable.
It can last forever outside, but it's light, no breath. And it's, it's a lot costlier and a lot riskier to develop fabric that is as performance. But also eco, right? So it kind of really translates to everything that we do. That's probably going beyond what you asked, but I think it's important to find the thing and the true passion of what you believe in and really ask yourself, is this what you want to dedicate at least the next 10 years of your life into doing?
Mm-hmm. Uh, before you start a consumer brand. Yeah. It's
interesting cuz like the commitment of a 10 year span. Plus, you know, like this idea of like a brand is a vehicle for self-expression, right? It's, it's really crazy because you as a person develop over time your beliefs shape and change and so the brand will shape and change too.
So it's truly strong how like alive it is, right? And if you do it well and you're true to yourself, then you know that community starts building. Which is actually what is happening without her. It's beautiful. Yeah. But then I
guess like how do you make sure there's that fi balance of like making sure that your full identity and your worth is not your company and vice versa.
Exercising that and making sure that you have the maturity to be able to, to do that is important to
Uh, totally. And that goes back to what we talked about, right? I, I do agree with you, Jane, that you know, does come with. Just time. You know, it's like the wisdom that you just kind of, all the mistakes that you make, all the relationships that you build and, you know, I think just shapes you, I, I call it emotional callous, right?
Mm-hmm. Can just kinda expand that level of pressure and the swings and yeah. Thinking back to when I first started, you know, building my first company 10 years ago, I'm definitely a very different entrepreneur and yeah, it's, it's important to have that third person view is how I kind of call it.
Sometimes just, sometimes you have to step out to view it objectively. But then own, you know, the, the values brand. Yeah.
Amazing. So let's wrap this up with just like one more question. Tell everyone what do you enjoy about, what do you do well Cool. About being an entrepreneur and why be a consumer founder?
Like why build a company?
Yeah. I mean, I, you know, I would be lying if I say I don't enjoy what I do despite the challenges. I think, you know, first of all, I sign up to do it myself. Like I can't blame anyone To me, you know, self-expression is important. To build something that's hopefully can outlast me and outlive me is, you know, alluring to me the idea of just building a generational brand, you know, that my kids and my grandkids will be proud of one day.
What I love about startup is I get to pick who I work with. That's important to me. If I work for a business, a company, I don't have the privilege of doing that. And so I really enjoy working with every single one on my team, you know, my exec team, my, my greater team. That's really awesome. The day-to-day of just working with the group of missionaries who truly believe in what we're doing, despite how crazy the vision might sound, and you know, that the, the camaraderie that's built, you know, despite the going through the ups and downs, winning, are you losing together?
I think those relationships are. I define the, the purpose of life, like a series of relationships, right? And so it's relationship with your family, your spouse, your kids, but also your friends and your colleagues. And we spent so much, and yourself and yourself, your relationship yourself. Yeah. Precious discovery, you know?
And I think a huge part of that is your colleagues. You spend so much time working. And I think that the thing about startups is, yeah, you get to choose who those people are. And so that to me is what's cool about building a startup. Yeah, and
what's really interesting is I know that the time is like ticking, but the first person we interviewed was actually csun, who was the founder of Morning Recovery, more Labs, right?
And his background was actually in software and he went into the consumer brand space. And whether it be why he left as a C E O is because he just felt like it wasn't naturally something that he wanted to do. He was such a software guy, not his self expression. Yeah, and what we're talking about right now, and it's interesting cuz your story is you started off as a star for cry, but you know what, I think internally you're truly like an artist because like you, you am creative because you truly
express yourself.
I'm a Pisces and I've told I'm more emotional, like more sensitive, and like more artistic. So maybe that's it. Yeah. I think you, you, I think you're onto
something. I am. I'm a Pisces too. I'm emotional as fuck. I
find. Yeah.
But like gets along with both of us, you know, like right
as an artist and both of you, a creative artist needed to fulfill.
It's almost interesting too, cuz you make it seem so romantic starting a company and growing it. It's like this romantic, lifelong journey with like your self creative and self-expression. And I think it's, it's funny coming from someone who's raised like multimillion dollars in venture capital and like super analytical.
But at the end of the day, and
I'm, I trade, I got degree community engineering and I'm a like gamer and all of that, so yeah. Yeah. But
I think that's like definitely the creative side of you that's coming out to the
world. So Cool. I need to explore that more. That's that's interesting. Yeah. Maybe some art
next time
you don't want to see me paint. I do. I'm a former musician, you know, I.
Yeah, anything visual. That's why I have a really good creative director and a c o, you know, too, for sure. And, and my co-founder obviously who's like a great designer, right? Like that's all their thing, but I can appreciate the work, so, yeah.
Awesome. Well, Jay, thank you so much for joining us for Thank you lunch hour.
Hope you know you had a lot of fun. Chatting.
Yeah, just like chatting with friends. Yeah. I really appreciate the time. I look forward to hanging out with Kirsten.