In the Loupe
In the Loupe
An AI-Powered Ring Designer That Actually Works ft. StoneAlgo
StoneAlgo's new Jeweler OS product is revolutionizing how jewelers convert website traffic into sales by generating real, manufacturable CAD files for custom engagement rings. The AI-powered tool creates a seamless path from online browsing to in-store purchasing while allowing jewelers to set their own markups.
Learn more about JewelerOS: https://getjeweleros.com/
Learn more about our sponsor, Jewel-Craft: jewel-craft.com
Send feedback or learn more about the podcast: punchmark.com/loupe
Learn about Punchmark's website platform: punchmark.com
Inquire about sponsoring In the Loupe and showcase your business on our next episode: podcast@punchmark.com
Welcome to In the Loop and got a demonstration of their new Jeweler OS product, which is this AI-powered ring builder, and it really blew me away. It was super cool. I think what really stands out to me about it is the fact that it actually produces a real editable CAD file and that is different than all of the other AI-powered engagement ring conceptual tools and the fact that this actually puts you on the last leg and maybe even order. It is kind of really stands out to me. And they also have a great partnership with Jewelcraft, who is sponsoring this episode, and their partnership allows these things to be fulfilled, these engagement rings to be fulfilled very easily and quickly, and I thought it was just one of those standout products. That is really kind of leveraging the current state of technology to push jewelry forward, and I had a really great time talking with him and I hope you enjoy listening. Cheers.
Speaker 2:This episode is brought to you by Punchmark, the jewelry industry's favorite website platform and digital growth agency. Our mission reaches way beyond technology. With decades of experience and long-lasting industry relationships, punchmark enables jewelry businesses to flourish in any marketplace. We consider our clients our friends, as many of them have been friends way before becoming clients. Punchmark's own success comes from the fact that we have a much deeper need and obligation to help our friends succeed. Whether you're looking for better e-commerce performance, business growth or campaigns that drive traffic and sales, punchmark's website and marketing services were made just for you. It's never too late to transform your business and stitch together your digital and physical worlds in a way that achieves tremendous growth and results. Schedule a guided demo today at punchmarkcom. Slash go.
Speaker 1:And now back to the show. What is up everybody? My name is Michael Burpo. Thanks again for listening to In the Loop this week. I'm joined by Devin Jones. How are you doing today, devin? I'm doing great. How are you doing Michael? I'm doing so well. We got a chance to meet at JCK and you and your company, stone Algo, really was one of the standout ones for me. It was real. I loved your guys' new tool and the demo that you guys did was really tight, really kind of felt like you guys had all the answers. Can you talk to me about Stone Algo and how you guys kind of built it in time for JCK this year?
Speaker 3:Yeah, man, thank you. We've worked really really hard to build that product. Obviously, I think it shows when you get into the details really really hard to build that product. Obviously, I think it shows when you get into the details. Just my quick backstory is I actually started out on Wall Street, so I worked in sales and trading in New York and when I was looking at getting my wife an engagement ring, I just felt like I was totally underprepared for having that conversation around, like what does a diamond cost and what are the styles I should be selecting from? And so I brought in another guy from Bank of America and the two of us built out a spreadsheet that ultimately looked at a huge inventory of diamonds that were available online and tried to reverse engineer, like what should the fair price of a specific diamond be, based on all the other diamonds that are in the market? And it's kind of like what Rapnet has done for the B2B side, but we did that for consumer and we ended up building a really great spreadsheet.
Speaker 3:But we needed to make this something that was going to be able to live and breathe on the internet for it to be useful to other people. And so eight years ago, we created Stonehawkcom and we grew that over the last eight years to being a website that gets 2 million website visitors a year. It's a very popular research platform for people who are buying diamonds online, but also people who are researching diamonds that they find in stores. I'm sure some of your listeners who are local jewelers have run into us because they've been shown inventory on our website or what have you, and we built some really cool tools on that website, and what we learned over the last eight years was how to build a product which is a website, but how to build an interactive product that is both SEO friendly so meaning people can find it on Google, um, and that's how we've gotten 2 million website visitors a year but also it's engaging, so people can use it. It's functional and I think, as you look at what's going on with AI I'm sure you guys talk about this at punch mark all the time it's like the value of a blog is going away. Um, what is it's going to be replaced with is the source of truth, and so what that means is, like Google, reviews are becoming more important because an AI is going to have to reference them right. It has to reference the core data that lives somewhere. So something like Google reviews is not going anywhere, but like a blog post about like 14 karat gold is not going to be as useful as it used to be in helping you rank in Google.
Speaker 3:What our thesis has been is that if you build a functional product into the website, that's something an LLM can't just respond with an answer to.
Speaker 3:Like somebody searching diamond price calculator wants something functional, and so StoneAugacom is where those functional products live, and what you saw at JCK Vegas, which we can dive into, is the functional product we built that we could give to local jewelers that make their websites more future-proof, more engaging and ultimately solve the number one problem that we were hearing when we were speaking to local jewelers, which is I'm getting website traffic. I've got a beautiful website whether it's from Punchmark or I built it on Shopify or my cousin helped me out but I'm not doing any e-commerce sales right, because I'm a local jeweler, and when people visit my website, they are doing so because they want to learn more about me, to come in store, right. And so what we identified as being the big hiccup between people getting website traffic and then being able to do something with it was having an online to offline sales funnel, and what we built was a functional tool that accomplished that. But, as you saw in Vegas, it's just so much more than that.
Speaker 1:Man, it's, first of all, the most high achiever of all things is building a spreadsheet of referencing diamond prices and then turning it into a business venture. I mean A plus to you. That is so cool. It's like like someone built a. I think that's how Rotten Tomatoes got created. It's like they wanted to have like an index on like good movies and like what other people thought about them, and then eventually turns into a company.
Speaker 1:You're totally right, though, when it comes to like a source of truth. I think you are right on to something. I think it almost is a delicate subject, because, at its core, the jewelry has this handshake agreement, and the agreement is that we're not going to like go direct to consumer ever, and that's. It seems to be like this big talk, and there've been certain vendors that have jumped the shark, and they, you know, get, you know, a lot of hairy eyeballs at them For you. It sounds like you guys have started on the outside and now are moving in. Have you felt any pushback when it comes to like? Oh, I knew about you guys because a client came in and you were showing them all the diamond prices. Have you ever had like a retailer? Be like, yeah, I'm not a big fan, kind of thing.
Speaker 3:I've heard everything in between man Like I there's one, my, my co-founder when he listens to this podcast. We'll, we'll remember this day, um, so I'm married and I've got a. I've got a one-year old daughter, um, and I remember there was a time where a jeweler called us or sent us a, send us a message through like the intercom chat bubble on our website on stonealgacom. Yeah, it was like call me, you guys are illegally listing this diamond that we just sold to a customer. This diamond inventory is coming from an online jeweler who's getting it from a wholesaler somewhere. Right, it's listed through a diamond feed and that online jeweler hadn't, you know, removed it from their inventory, or the dealer hadn't removed it from their inventory. So, honest mistake somewhere along the chain. And that information was getting sent to Stone Algo and then it was getting displayed, along with millions of other diamonds, in Stone Algo's feed that consumers could visit and check it out. And so somebody had keyed in the GIA ID, looked it up on our website, seen like here's our fair price estimate, here's the information about where you can buy this diamond online, cause it hadn't been pulled off.
Speaker 3:And and this guy was pissed and so I called. I called him and just immediately like 10 out of 10 aggression towards me and like I'm a very I'm like a very nice, calm person in general, and so I tried to diffuse. But he was like he the. The end of it shook me, which is he taught. He was like I know where you live and he sent my address to me and I was like I'm at the office, my wife's at home, right, and so like and so like. That's the extreme of it and I think that, like you know, in that situation I also feel for that guy because his livelihood depends on making that sale.
Speaker 2:I don't want to get in the way of that.
Speaker 3:Ultimately, he didn't understand that this data is flowing through multiple different steps before it gets to us and we're not the source of truth. The source of truth is ultimately the dealer listing it somewhere, that getting listed somewhere, and you've got this whole chain. And I think this chain has gotten more and more complicated and there's not complete control over where inventory is listed all the time. Even so, there's a number of problems there. So, yeah, there was big pushback from within the industry and I think whenever you're shaking things up and doing something new, you're going to experience that friction, and I think sometimes that's a good sign.
Speaker 1:Sometimes it makes you fearful for the life of your wife and your child Uh when.
Speaker 3:When it was, it was a weird experience. But, dude, I interact with jewelers every single day. I mean, we interact with a lot of punchmark uh clients and I'm. I'm on emails with your team on a regular basis, like getting them set up for jeweler OS, which I'm just meeting like some of the best people I've ever met. So I think I just want to make it clear that, like, that was an outlier, but that is the extreme. And yeah, we took attacks from all sides in the early days. I think over time, people saw that we handle those attacks by diffusing and understanding and solving rather than, you know, fighting back, and that that led to a good reputation within the industry.
Speaker 1:So just discussing, for example, before we get into Jules Roles and actually talking about this product that I was so excited about, I want, like, transparency. So transparency is one of those things that some people don't actually want. Transparency, because inside of the transparency is where you can actually have a lack of transparency for kind of a substantial amount of time. You know all the way, you know through the 1900s, before you know, these very complicated methods for you know accountability and things like that were actually discovered and implemented discovered and implemented.
Speaker 1:One thing I think about all the time is, for example, cars. Buying a car, it's one of the last vestiges of bartering. It doesn't seem like it exists anywhere else and, as a result, personally I hate that. I want to walk in, I want you to tell me what the price of the car is and I want to be like is that the lowest? And then to be like that is what the price of the car is and for me to buy it and then walk out.
Speaker 1:There should be no difference me buying you know some bananas versus buying a you know a truck, and I think that diamonds were kind of in that realm where there was like the bartering if you knew a guy, if you, you know, had this kind of relationship, that they would give you this deal and even still there is still a lot of deal and like kind of like you know, working through because Julie does experience this a lot of time Keystone markup at every level. Do you think that that's kind of where the core of pushback was coming from? Is people felt like you were eroding their markups and their ability to actually run a business the way that they have been for the last you know, 100 plus years? Or was it something more along the lines of like you were divulging trade secrets, kind of thing?
Speaker 3:I think you kind of hit the nail on the head. So we have a fair price estimate which is like a Zillow's estimate for diamonds, and it doesn't take in all information to be clear, Like it's not perfect. Uh, as well as estimate, it's not perfect either. I think everybody knows that right, Like it's taking in whatever information it can get but it doesn't know necessarily that the countertops in the kitchen are Carrara marble.
Speaker 3:And it's not going to price that in uh versus, like you know, some uh lookalike countertop that's not as expensive. And so, like everyone in everyone listening to this podcast probably knows that two, two diamonds that are graded the same by the GIA could be priced completely different. And it's rational because they're very different items. Where it gets irrational is where two items that are very, very similar or identical are listed at totally different prices because one guy is, you know, baking in more markup than the other. And then it's like, like you're pointing out, um, you're, if you're going to, if you're going to give transparent information to the consumer, you're going to be eroding the ability for somebody to add extra markup. Uh, ultimately you're going to converge to like what is the fair markup? And I think what this industry is missing on the diamond side is MSRP, and I don't think it's an easy thing to solve With diamonds specifically, it's, you know, on the dealer side it's, I think, a little more straightforward because you have professional versus professional, and even then you'll look on wrap net and you'll see like there's discrepancy in inventory pricing. And you'll look on wrap net and you'll see like there's discrepancy in inventory pricing and you'll be like you know, it's a bad make or you know, it's just it's grainy, it's not, it's not good material, like whatever, whatever it is, and there's a reason why the pricing is different at the consumer level. You have all those discrepancies, plus markup differences, and the markup differences can be really significant across retailers, plus markup differences and the markup differences can be really significant across retailers. And so, yeah, I think that a big issue is that there's not some sort of a concept of MSRP. We actually are very directly tackling this within our new products and not on the diamond side, although that is something we've talked about solutions for and I think we can get closer to that over time, but it is complicated.
Speaker 3:But I do think, like when you look at like, for example, there's an MSRP, like you have to sell at a certain price, you can't sell a new online, like there's all these decisions that have been made about how you create a premium experience for the consumer and you protect the brand Right.
Speaker 3:And I think the jewelry industry some jewelers are very cutthroat. Some jewelers are trying to bake in as big a margin as they can and most are somewhere in between, and there does need to be a fair amount of markup, because there is a fair amount of overhead and labor and all sorts and returns are a huge issue now, especially with, you know, lab and natural people are ordering multiple times. That time sometimes and like creates a lot of additional overhead costs for everybody, and so I think that there are reasons why markups should be healthy, and I think that some jewelers really shoot themselves in the foot by having too lean of margins, especially some of these online guys who don't really understand that when you're doing an online, if you're building an online business and you're going direct to consumer, everybody thinks they can charge lower prices, but in reality you have this massive customer acquisition cost of going out and spending on Google ads, facebook ads.
Speaker 1:Any jeweler who's tried to run advertising knows it's super expensive to drive a sale and you gotta, you gotta, start taking those things and then slicing it up by the number of sales that you have, or attempted sales, and as a result, you don't realize but yeah, like you almost can't even like discount that, like you have to have a margin, otherwise you're just doing this as a charity and we're not in this for charity. This is a luxury business.
Speaker 3:So and that's and that's why wholesaler or like. That's why these brands that you know will like just to name a brand that comes to mind that I know a lot of jewelers carry like they're willing to sell at a wholesale cost to a retailer who then marks it up and sells it to the customer, as opposed to going direct to consumer, because they're taking advantage of the network that that local jeweler has. And then they build a network of jewelers and instead of going out and spending millions of dollars on advertising that they would have to do to sell direct to consumer, they're happier doing it that way and I know they've got like. You know there's a number of things they do there that are smart, but I think that local jewelers have really struggled to do digital marketing.
Speaker 3:That's worked, and it's not that there's bad agencies out there who don't know what they're doing. There's a lot of good agencies that do know what they're doing. But it's like it's very difficult to convert website traffic into sales because you don't have a good funnel for it, because most people who are working like I said earlier working with a local jeweler, they want to come in store. They don't want to convert through the website. That kind of defeats the purpose of working with a local jeweler. They want to know what you got, they want to validate you, but then they want to come in and be concierge.
Speaker 1:Yeah, and you know we always say luxury or just jewelry in general, is so relationship building, that having the ability to build relationships online, it's it's. It's not easy. It takes, you know, concerted effort. But let's talk about this new product that you have, so a jeweler OS. Um, I thought it was really fascinating. It seemed like you had all of the answers so far and it seemed like it was built on a lot of experience and just user interviews. Can you, when you start the pitch for DrillerOS, how do you start this conversation?
Speaker 3:So I think the conversation starts with addressing the problem, and we've kind of already talked about that, right? So the problem is you've got a website, you get traffic, but you're not doing any sales. So one of our partners, for example, ton of website traffic, spends a ton in marketing and they were getting five engagement ring requests a month through their website, which is actually like decent, you know, and that might be through podium or through a contact us form. They're collecting five people a month who say I want to buy an engagement ring and maybe it turns into a sale or not. Yes, Without changing the amount of money they were spending on marketing, without changing how much traffic they were getting, month one of using our new system they went from five to 150 verified engagement leads. Now they get a lot of traffic, but it just goes to show that like there's untapped potential on the website that by installing a better system to capture that traffic and turn it into an in-store appointment or lead um, you can open up a ton of value.
Speaker 3:And so the conversation always for us starts with like, do you have this problem? And 10 out of 10 times the answer is yes, because it's a very consistent problem. And then it's like okay, here's how we think about solving it, and basically we think through the lens of a funnel. At the top of the funnel you have website traffic and at the bottom of the funnel you have a sale, and the goal is to build a system that moves people down and qualifies them and understand that the top of the funnel is always going to have way more people than the bottom right. Hence the funnel.
Speaker 3:Yes, it gets smaller and more narrow at the bottom, and the way that this has been tackled so far is by listing inventory on a website and giving a catalog for people to search through. But most people are coming into a jewelry store with screenshots or images that have been shared by their significant other via Instagram or, you know, by text, and trying to show them every possible ring design on their website so that you capture what they're looking for as an option is very difficult to do and becomes this really difficult search problem as the person's looking through your website at all of your inventory, trying to find that specific cathedral engagement ring that they received a picture of. So the way that we've approached it is to say, let's build an actual ring design tool that is powerful enough that a jeweler can manufacture a ring directly from the tool. So every ring that's designed within our, within our tool is a manufacturable CAD file.
Speaker 3:And we worked with one of the best manufacturers in the country to make that possible, which is Jewelcraft, as you know. Shout out to Jewelcraft.
Speaker 1:Wait, paul, run the ad. This episode is brought to you in part by Jewelcraft. Running a jewelry store is no small feat. That's where Jewelcraft comes in. They're a fourth generation family-owned business based in Kentucky that's built their reputation on being the reliable behind the scenes partner that jewelers across the country trust, whether it's jewelry repair, manufacturing, custom design or appraisals. They can handle anything that your jewelers don't have the time for and help scale your projects. And because their work is done right here in the USA, you avoid the hassle of overseas production delays or tariffs. That means faster turnarounds, consistent quality and peace of mind. With a team of seasoned experts and decades of experience, jewelcraft is your one-stop shop for everything you need to keep your jewelry business running smoothly, so you can stay focused on what matters most your customers. Learn more at Jewelcraftcom. That's Jewel-Craftcom. Learn more about them in the show notes below.
Speaker 1:And now back to the show. And we're back. That's so cool that it's actually manufacturable, because I think a lot of times these things almost go into the realm of like inspo. You know just like. This is the kind of thing I want, and I think nowadays people are so good at jewelry ring uh design, like engaging ring design that it's almost like. When you start to look at them it's like man, this is a really hard ring to build, or like I don't even know if this is even feasible, especially with like you punch in into, like chat, gpt, and have an image, create uh engagement ring for you, man, it's going to be the most insane thing possible, but this is not that for you correct?
Speaker 3:No, it's completely the opposite really. So what you said is true. Like the AI, the way that people are approaching integrating AI into the engagement ring design process right now is basically like describe a ring design and we'll spin up an image and then we're going to send that image image off to be manufactured, but some human beings going to have to sit down and build the CAD file. Right, we've said no, we're going to spend years developing proprietary software where somebody can design a ring. Have you ever, have you ever built a car online just to see what it looks like?
Speaker 1:All those things. I've built sneakers. I've built t-shirts.
Speaker 3:Yeah, Nike ID right. Oh, I'm way into it, I love it, so, so, like I'm the same way, Like I love tinkering, I love building things and like, if you design a car online, you can add a convertible roof and you can see how much that costs. You can change the wheels to be 20 inches or 19 inches and you can see the change. And we wanted to build that experience for consumers and we were going to launch it on stonealgacom. But once we built that experience, which is you design a custom engagement ring and it feels like you're building a car on Mercedes Benz, but you're building a custom ring and in real time you're seeing the price change thanks to a formula that we worked out with Jewelcraft, where we can show real consumer facing MSRP and each jeweler gets to set their markup on wholesale. So each jeweler gets to customize price and they can control it in their dashboard and update at any time. And then, from the consumer's perspective, there's 20 billion different rings they can design. So like, imagine trying to put a catalog of 20 billion rings on your website and then navigate it like not possible. So the consumer gets to design a ring in this 3D engaged ring builder. It looks like a full-on 3D ring because it is actually a CAD file. And then in the background there is an actual CAD file that's being generated that looks very similar to the consumer-facing render. But the consumer-facing render looks sleek and polished. The prongs are holding the diamond down. In the background, hidden away, is a manufacturing file where the prongs are sticking straight up, there's extra metal in all the right places to be polished away by the manufacturer.
Speaker 3:And then you know, when somebody's built this ring, we're using the ring as like a worm on the end of a fishing hook is the analogy I use. It's the thing that hooks the customer and gets them to hand over their personal information because we're earning it. We're not just giving a contact us form and saying fill this out and we're going to get back to you, and the customer's like well, maybe that's going into the void. I don't know where this contact us form leads. Instead, we're like if you give us your phone number and verify that phone number so there's no spammy phone numbers being put in, we'll let you into the 3D ring builder where you can build this amazing ring and customize it to the nth degree.
Speaker 3:And then the jeweler is getting that information with the ring they designed so they can reach out to the customer and they know how to concierge them before the customer has even given them any information verbally, Like they see exactly what the customer wants.
Speaker 3:The customer is happy because they were able to go through this interactive process and then the two ideally meet through an appointment in the store and either the jeweler can run them through their full custom process from there or, if the customer designed exactly what they want, the jeweler can either download the CAD a hundred percent free because we're automatically generating CAD files, so we don't charge for it. All of our partners get unlimited free CAD files, which is crazy or they can place an order through Jewelcraft and it's as easy as ordering a pair of socks on Amazon. Like imagine, instead of emailing back and forth a hundred times with the guy who does CAD design at your local menu, at your manufacturer of choice, you're just clicking send and the CAD design's already done. Just go straight to production and then in two to three weeks but usually closer to two weeks the ring shows up on your doorstep at your jewelry store and it's ready to be handed over to the customer.
Speaker 1:That's really it's a really cool process. I think the idea of this business of free is I mean, it's what we founded this podcast on is that our idea was, if we educate and we provide something for free, you know there's what we founded this podcast on. Is that our idea was, if we educate and we provide something for free, you know there's not a lot of strings behind it. A lot of times it's just like, in the end, people know why do we do this podcast? It's like like you're talking about with a worm on a hook. So why do we do this podcast? It is advertisement for Punchmark, but people are okay with you know, swallowing that because hopefully the podcast is good enough. Swallowing that because hopefully the podcast is good enough. And with you, it's like people are okay with providing their phone number and then verifying it because the builder is exactly what they're looking for, exactly. It's the right thing at the right time. Therefore, they're okay with that trade, right, exactly With that relationship with Jewelcraft.
Speaker 1:Talk to me a little bit more about that, Because it's generating this CAD file. And what I'm curious about is it does sound in a perfect world. It sounds perfect. Man, take it, you send it over to Jewelcraft. They create it and the ring's ready. But what if there's just a small tweak that they want to do? There's just a small tweak that they want to do and the client, this shopper, is, like you know, this ring, except I just want to like loft the ring a little bit more.
Speaker 1:I can't figure out how to do it in the, in the, in the builder? Is that something? Is that flexibility exist, or is it a little more constrained?
Speaker 3:Yeah, so it is a little bit more constrained within the builder. Now, like I said, there's 20 million different ring designs, so it's like pretty comprehensive and, as you saw, everything works together. So I think you know you and I were talking about this earlier like one of the things that really struck you at Vegas when you saw the demo was you can add Pave to the band and then you can resize the band and the number of Pave diamonds, the melee on the band changes in real time and the spacing of it is constantly adapting, so that if you stacked an eternity band right next to it, all the diamonds would be equally spaced on the eternity band and on the engagement setting, even if you have a cathedral. Like all of this was math. It took us years to build this out and perfect it and AI is just not there. Like, ai is not going to generate an image that can do that and it's not able to generate CAD files, obviously. So you give up a little bit of flexibility on being able to design anything because you're designing things that are actually, you know, producible.
Speaker 3:Now all of our files are editable, so in certain situations, jewelcraft can edit the file and any any designer who has access to software can edit these files. Um, we use an OBJ format for the file that it can be converted to STL. This might be going over people's heads, but STL is what most manufacturers use for producing the wax printout of the ring. But OBJ files are convertible to STL and they're also editable. And then there's the alternative, which is like if it gets too custom, you just run it through your normal custom process. You just have a human being design it.
Speaker 3:But yeah, I mean, the little tweaks are what make the products, I think, really sing. I think one of the things that I always mention is the number one button people click on when they're designing a ring on one of our partner's websites is changing the prong tips. So not adding pave, not. The number one thing they change is changing prong tip. And one of the most, the most clicks, I think, is is petite claw, which is like a tiny claw tip.
Speaker 3:It's like I remember, I remember my wife wanting something like that and that's why we put it in there and then it ended up being a hit. And I think that you you asked me about, like before the call, before the pod today you were like, you know, it really seemed like you had a lot of you had all the answers and like you've done a ton of customer research right. It was actually very much the opposite, like we took more of like an Apple, like a Steve jobs approach, where we had a real um, we had a real opinion about what the product should be and we followed that all the way to where it led us and we really kept it at a high level and when we got there we had something that I think a lot of people wouldn't have asked for but it really resonates with the consumer and the performance has been just like off the charts.
Speaker 1:What a really interesting kind of route because, like, I went to school for user experience design and what I find interesting about UX is they sometimes talk about, for example, um, you know, customer research and and and these experiential research uh, so I did some of that, when that's one of the best reasons why I like going to shows is I talk to people and just like watching them click around is really interesting. Also, like if you go in, you try to buy something yourself, just like. The number one piece of advice I always give listeners is like hey, when's the last time you bought something off your own website? You don't have to actually go to the last, actually like confirm it, but when's the last time you put something in your shopping cart and like got to the last step and just seen what that looks like? Well, maybe you should do it today.
Speaker 1:But what's really interesting is I saw you doing these demos and I could see that you guys had flown through this so many times and I guess I want to hear, like, what have you learned from both it being live and also doing these, these demos? What are you like? For example, I'm always worried, I have anxiety and I am anxious about, for example, losing a large stone? Have you ever had like? Do you have conversations with jewelers about a? This thing that your builder could do would make a liability Like. Are those the type of conversations you've had with with jewelers? What have you learned from speaking with customers now?
Speaker 3:Yeah, there, there had been so many of those conversations where we've we've kind of peeled back the, the, uh, the layer of like, what is the jeweler concerned about, what is the jeweler value? And, um, we do a lot of things to address. The reason we have so many answers is, yeah, we've've, we've onboarded a lot of customers very quickly. We've grown very, very fast and through those conversations we've learned what the pushback is and address those problems. Um, things that have come up are like, you know well, uh, if I'm like, how do I know that I can honor this price, for example? So we're like, okay, well, if we want to show an msrp to a customer, which I felt was crucial to the product being useful, I agree. Um, we needed to have a manufacturing partner who could deliver, and so that's why we chose jewelcraft is we I had a conversation with you, met bradley at vegas.
Speaker 3:He's the best, he's, he's our head of sales guy could, like you know, sell this in his sleep. He knows the product inside out, forward and backward. Um, and he had worked for a diamond wholesaler on 47th street Manhattan for a decade before I hired him over here and took him away, and, um, his job was to sell natural diamonds to local jewelers. So he knew a ton of local jewelers and he had tried to get in with Jewelcraft for years. But Jewelcraft kept turning him down and he like bought the whole facility ice cream at one point and like they remembered him because he's like the ice cream guy Right. Um, and so when I asked him I was like if you could choose any manufacturer in the country that you believe is going to deliver a consistently great product and they're going to have a fair price, um, who would that person be? And he was like my number one would be Jewelcraft.
Speaker 3:And I was like can you make an intro? He was like I don't know if they'll talk to you. I was like fine, he puts us in touch with Stephanie over there and we get in touch with them. And flew over there, met with them, did like we flew, we were, we were we're a startup, like we're not trying to spend money. We didn't have money for like hotels, right. So we flew in in the morning, flew out at night. We had like four hours at Jewelcraft.
Speaker 3:Uh, you know, flew in and out of Cincinnati and they saw the passion, they saw the vision and they loved it. And they, they were willing to work with us to make sure that all of our stuff was manufacturable and then give us a formula so we could price this stuff in real time. So, like that solved that problem, which was how do I know I can fulfill this ring and make the spread, the three X or two and a half X markup that I'm guaranteeing. It's like, okay, it's not an easy problem to solve, but like we listened, we solved it. Um, there's definitely, there's definitely a ton of questions and jewelers have a lot of good feedback.
Speaker 3:I think that you know every business is a series of constraints and you're always constrained in one area or another. So for us right now, the constraints on fulfillment. We don't have enough capacity to fulfill everybody we could sell to, and so that constraints sales like we could increase sales, but the throughput of fulfilling and making sure everyone's successful is the constraint. So we just brought on a customer success person today who's phenomenal and like that, will alleviate the constraint over the next few weeks, and then the constraint will be maybe on marketing or sales. Right, and jewelers are the same way. And so what we're focused on is, when you look at this as like a funnel of getting customers at the top and then producing sales at the bottom, which part of that funnel is currently broken?
Speaker 3:And for our jewelers right now, where we're focused on is not on generating more leads, because the leads we're generating a ton of. The focus is now on how do we make sure that those leads turn into appointments, those appointments turn into sales and that's happening at a good rate, but we want to ramp that up to like an amazing rate because what that'll do for us. It doesn't make us any more money because we only charge per lead. Uh, we don't get to earn more if you make more sales per lead. But what it solves as a business owner on my end is getting to have those relationships forever because our jewelers are happy with the product, they're not going to leave and we've never lost a customer so we have. Every single jeweler we've ever signed up is on the program currently At some point it's going to happen.
Speaker 2:It's happened for Punchmark and you guys are phenomenal, so like it happens at some point.
Speaker 3:but I'd like to keep that record intact as long as I can, and the way to do that is to make sure that if your customers are making money using your product, then they can always afford to pay for it.
Speaker 1:Wow, that's a really great way to look at it. We have that same conversation with our clients, is? You know, I think it's rather short-sighted to just take a client on, even if it's not a great fit, and I think that there was a certain point with Punchmark where we just we had to look some people in the eyes and be like, hey, this is not for you. You know, I always joke about, like, sometimes you don't need, you know, a muscle car or a Ferrari or something like that, not that I'm trying to call a punch mark a Ferrari, but it's more like a utility, uh, vehicle. Sometimes you just need, like, a bike, and if that's the case, maybe you don't need a, you know, a utility car.
Speaker 1:I wanted to ask, though, about this nurturing these leads that come through. So you were talking about how you guys get. You get paid when a customer verifies their, their phone number. That sounds great. So what about, like, this process afterwards? So I mean, it sounds great. You know, hey, I want to buy this ring, and they actually buy the ring and they go from there. But what is the actual process look like behind the scenes between they design something to actually, you know, having an appointment, or placing the actual order and coming in and actually picking it up. What is? Those actual steps look like.
Speaker 3:Yeah, we're a little bit crazy in this regard, like I think we're very abnormal, uh. So I love the way that our price structure is set up, where we only benefit if the client is benefiting because they're generating leads, but the lead is not going to pay the bills, like what pays the bills of sales? So what we actually we, we implemented this four or five months ago and it's completely complimentary is we have a concierge team that will act as your salesperson when you get a lead. We send out a text message five minutes after the lead comes in on a phone number we buy in your local area code. It's got to be separate from, like, your podium number or whatever your store number is, because you can only assign that number to one sort of third party and you know. So if Podium is using it, like, we can't use it, um, or whichever service you're using uses it, um. So we buy a phone number for you and then we, we set it up, so we send out a text message five minutes after somebody becomes a lead, and it feels very human and we don't have to say text stop, uh, because we ask, we ask for that permission when they're verifying their phone number, I see, and so we're able to make it feel really human. And that first message is a template, but every message after that, if the customer responds, is an actual human being in the United States, texting back and forth, having a conversation, and the goal of that conversation is to book an appointment or to get the customer warmed up and then put them in touch with the salesperson.
Speaker 3:So what we saw as the biggest bottleneck for our jewelers, like I said, series of constraints. The constraint was when we figured out how to generate a lot of very qualified leads. It was then holy shit, we're sending so many leads to some of these partners that their sales team can't just drop everything and just be managing this. We need to basically handle that so that they don't have to worry about it and they can just focus on selling, because that's what the jeweler is actually good at, not texting, and so we handle the texting for them and we offer that completely complimentary. It's optional.
Speaker 3:Over 90% of our partners choose to use it because it's, it's awesome, it's free.
Speaker 3:Why wouldn't you?
Speaker 3:Um, some of them are like I'm the face of my brand and I'm a solo uh, you know person and I I need to be great like less work for us, take it off our plates and and that's that's phenomenal we're we're launching something massive in the next few weeks that directly addresses all of this and takes it up another notch, which is within the dashboards.
Speaker 3:You're going to have a full suite of of little tools that help you re-engage those leads not just send out one text and then see if they respond, but actually send out one text and then wait an appropriate amount of time to send a nudge. And then do it in a way that's not over-communicating with the customer because you don't want to annoy them. You just want to make sure that if they're busy, you get in front of them at the right time and establish some rapport and hopefully get a conversation going, because one of the most interesting things we've seen is that we built an entire appointment booking system into the product. But of all the appointments that get booked, I would say 90% are through text message and 10% are somebody booking it themselves after designing a ring.
Speaker 1:Wow, yeah, it's crazy. It would be the other way around. That's 100%. When it comes to these conversations, I hate to ask you to pull metrics on the fly, but what's like the ballpark range for? Like the number of back and forths on average before an appointment is actually booked? Are you looking at like three or are you looking at like 20?
Speaker 3:It's closer to, I would say that it's, it's in the middle of that. It's definitely not 20. Just think off the top of my head, like the conversations, like you can. You can kind of like if you were to script a conversation, as if you were like writing like a screenplay, like what that conversation would go like. It's like the initial text message where we're like hey, you designed this gorgeous ring. Did you want to share inspo pics of what you were hoping to do, or was this exactly what you wanted?
Speaker 3:We asked them a question to get them to engage with us and then their response and we've AB tested the snot out of that. And one of the advantages I'm sure like punchmark doesn't may be testing across clients and stuff. When you work with so many different clients or partners, you can run a B test at scale and then everybody benefits from the winners. So it's like you know, evolution or data science, um, and that's what's. I'm a data nerd, I came from wall street, so like that's the stuff that like really gets me excited. Um, but we're able to send a text message that gets good engagement and then, if they respond, they're either sharing images and then we're uploading them into the dashboard so the jeweler can see all those things Did. We show you the image to 3D ring generation.
Speaker 1:I think you did at one point and I was very blown away by it. It's very cool.
Speaker 3:That is. I think it's the craziest thing we can do. And can you explain it for the people that are listening? Yeah, yeah, it's wild. So it's a very visual product. I feel like nothing that I've said on this podcast is doing a good job. No, it makes it. No, you're setting the scene. But to give you an idea of the power of what we can do and how we use AI and we're thinking about the future of AI in ring design AI and we're thinking about the future of AI in ring design we built a machine the ring builder that takes a series of inputs that are like buttons that a consumer can click and then it constructs a ring in 3D in real time out of those inputs.
Speaker 3:And it's a more simplified version of, like, full-blown design software that a professional would use right, it's got training wheels on it blown design software that a professional would use right, it's got training wheels on it. We are able to connect that machine to ChatGPT and let ChatGPT control the inputs, and ChatGPT has this thing that's called a vision API. And so, long story short, to put this in plain English, you can upload an image into the dashboard. So customer walks in the store, they show you the screenshot from Instagram and you say could you email that to me? Cool, I'm going to upload it to your, to your account on our dashboard and then, with a single click of a button, after you've uploaded the image, we read the image using chat GPT and then let chat GPT build the ring for you. So, literally, you click a button and then, like you see, like a loading uh circle, and then the ring just materializes. So you go from image to ring and, by the way the ring is, there's a CAD file.
Speaker 1:So, you've gone from a.
Speaker 3:you've gone from an Instagram image to a CAD file with a single click. Wow, Like very cool. It's mind blowing. Um, it's, it's my favorite thing to show off and it's not consumer facing. Yet it's only available to the jewelers in their dashboard, but that's going to be a consumer facing product at some point soon.
Speaker 1:So I've got a couple of questions related to that. One of them and I hate to make you defend your own product is supposed to highlight your product.
Speaker 1:Let's have this discussion. I have concerns sometimes with those related tools in that someone spent a lot of time designing that ring. A jewelry designer spent a lot of time, especially if it's from a brand that I consider a protected brand. You know the ones, but some of these brands, they have protection around their designs and whose responsibility is it to make it so that there is enough difference in this newly designed quote unquote newly designed ring if it was based on a protected design, if you know what I mean.
Speaker 3:Yeah. So I think, at the end of the day, what's great about our tool is that we've built it in a way that it can create manufacturable rings. In doing that, we've had to, we've had to constrain things. You cannot design something with a quilted pattern on the inside of the band, like a certain brand that I'm not going to name, so you don't have to dub it so that certain brand has quilting along the inside of the band the certain brand that I'm not going to name, so you don't have to dub it. Um, so that certain brand has quilting along the inside of the band, the shank, um, that touches the finger, and we don't offer that because, well, that would be wrong. Right, and so there are things that we do offer and things that we don't offer, and when, if somebody uploaded an image of a ring from that brand, our ring builder cannot construct it so what?
Speaker 3:it does is it constructs the nearest thing to it, and in that way it's sort of built to protect the copyright, or whatever you want to call it. Yes, yeah, so basically, like we would never bake in design elements that were proprietary in some way.
Speaker 1:I understand. Well, that's good to know, and I guess on the same topic and again not making you defend this product, but it's more when I think of the moving forward with technology. Unfortunately, there are people that were expert, you know, horse riders and then when the car came around, well, suddenly their profession was not in as much demand. So I sometimes think about custom ring designers especially. You know, with all these builders or just like custom jewelry designers in general, we have a bunch that listen to this show, that are that that's their niche and they are, they're good at this, they're good at this. Does this occupy a different vertical than custom jewelry design? In that sometimes I think of custom jewelry design as a bespoke, hand-holdy sort of collaboration, and this is almost like a fast pass what is even the right word Like more of like a seamless experience.
Speaker 1:Semi-custom? Exactly. That's a great term. Is this occupying a different vertical? Or is it just like if your expertise is custom jewelry design, then this product might not be for you?
Speaker 3:Yeah, I'll be very. I'll share some of my long-term thinking on this Cause I've thought a lot about this. Um, I wish we had talked about this earlier in the show, so hopefully we didn't lose the jewelry designers who are just off looking at my home address so they can curse me off.
Speaker 1:Um don't do that, don't do that. So I like Devin.
Speaker 3:So, look, I think that our product is going to generate more custom work than ever for the industry as a whole because it gets people thinking custom, and our ring builder will never be able to handle 100% of custom design. And the people who've wanted custom design for years and years. Why do they want it? They want it because it's custom, because it's unique, because nobody else can have it. Because it's unique because nobody else can have it, and so we are not going to be the product for that person who wants a full custom ring.
Speaker 3:What we are is a great starting point. So, in the same way that somebody would use an inspo image their girlfriend sent them on Instagram, we are the inspo image now, and so we're. We're what somebody is walking into a store with as a starting point for a full custom ring. Then you have the person who was buying something more conventional off the shelf, out of the case, as they say and, uh, that person that was buying that, that ring that was out of the case before but was oh, I want the prongs to be petite claw right, and so now it's like an existing design with a tweak. That's our end customer.
Speaker 3:Now, when you look at the numbers, the numbers, the stats and I believe this is from a survey by the Knot say that 85% of consumers want a custom or semi-custom engagement ring. Now how many of them actually buy it? Like if you, if I asked you, like, what percent of guys do you think prefer a bespoke suit from Savile Row off of a suit off the rack from Macy's? All of them, yeah, all of them. Like every single. Obviously Right. And then you're like, okay, but it costs 10 grand and the other one costs 500 bucks and they're like oh, actually, you know what?
Speaker 3:Actually, I think I'm going to step back.
Speaker 1:Great analogy, yep.
Speaker 3:Yeah, and so for us, when you look at that breakdown of 85% want customer semi-custom, the breakdown is 50% want semi-custom. They want tweaks on an existing design and I bet if you ask jewelers, who see customers every single day, what percentage of their customers want just tweaks on an existing design, that number is going to line up relatively closely to what they're seeing in real life. People want what they are like. People aren't inventing new rings. There's some people that are doing some interesting tweaks on existing design but ultimately they're referencing inspiration they've seen somewhere else. They're not creating something completely novel that's never been done before. Very rarely.
Speaker 3:Most people are seeing like, okay, there's 10 main styles or categories and within those there's 10 sub styles within each and I'm choosing from this grid of 100.
Speaker 3:And then I want to tweak the prong tips or I want, you know, the band to be slightly wider. And that's where our product thrives, because our product can make the band whatever 0.1 millimeter you want and it updates in. Our product thrives because our product can make the band whatever 0.1 millimeter you want and it updates in real time and you can add pave to it and you see the price update and you can resize the ring and you can actually see what it's going to look like. Not like a size seven rendering. It's your size 4.25 or size 13, whatever you want it to be, and it's manufacturable. So long way of saying to all the jewelry designers who were upset in the first 90% of the pod you know, I think we're going to generate more business for you than ever because we're getting people thinking custom and those people who want full custom are not going to ultimately buy a product from the ring builder. They're going to use it as inspo and then they're going to upgrade themselves to that full process.
Speaker 1:What a really interesting and very well put way to kind of handle that and I'm so sorry to put you on the spot, but it is something I think about is that like creativity? I mean, my semi-professional kind of job is I'm a watercolor painter and I sometimes think is like, will AI come for me? And I sometimes think it's like it could, if you want it for just the image, but if you want the product, well then suddenly you want like the paper, and the paper has, you know, this kind of tactile feel to it and it's slightly different. And when you start to talk about, yeah, suits are, that's a great one.
Speaker 1:Another object luxury clothing. Um, it's occupies the same niche as as jewelry. And you're right, I do want a custom suit. I don't really want to pay for a custom suit, but I do kind of. I, the best suit I own is a slightly custom suit. I got, yeah, from you know, like you pick from seven different things and like 15 different things, and the way that, uh, um, variations work is that, yeah, you multiply them against each other and then suddenly there's, you know, the combinatorics are crazy yeah, where'd you get?
Speaker 1:where'd you get the?
Speaker 3:suit, by the way just a bank just a yeah, yeah, so yeah, I mean, it's the same thing, like there's, um, there's a company called Charles to wit. I don't know if you're familiar with it, but they had a store right around the corner from our office in New York and every day on my way into work at Stone Algo I would see the Charles to wit store and they had a design your own suit thing on their website and it was the same thing it was you choose the lining and you choose the color of the exterior, and you choose whether it's two or three buttons and they'd render it and then you could order it and it's like man, this, this concept applies in so many different industries and I think that, like you just said, like you didn't go full custom but you went semi-custom and you didn't go off the rack either. Right, like that middle, that middle territory is where most people are gonna fall, because it scratches the itch enough, but it doesn't cost $10,000.
Speaker 1:And. But it also does spark that essence of um in UX. I always talk about the light Um, it sparks the the it's. It is mine, it's my suit, it's when I go to a wedding I know no one's going to have the same suit as me because I customized my suit. But at the same time, like did I go to you know Italy and have them take my measurements and, like you know, hand cut all the cloth. It's like no, that's beyond that. But I do think that there is a market for that still. But I do think that there is a market for that still. And it's almost like you're just offering more of a spectrum, a visible spectrum, as opposed to more of like kind of a sliver, if you will.
Speaker 1:So I think that's really well put, Devin. I think that that's great.
Speaker 3:Yeah, definitely. And I think, the last thing I would say.
Speaker 1:There is like did you design the suit online or did you go in and design it.
Speaker 3:I went in and designed it with them.
Speaker 3:So for somebody who's who's interacting online like charles, to wit, or if you're designing a car and you're actually in the market for that car you're not just having fun um, you grow more attached to something that you've put time into and you've customized for yourself.
Speaker 3:Right, you now only can have that special thing like nothing else is going to be as special to you. And so if those if buying something out of the case is the same price as buying a custom ring, like you said, everyone would buy the custom ring. Um, and we can make semi-custom comparable in price to out of the case and obviously, on the spectrum, semi-custom is closer to custom. So semi-custom should cost more if it's priced comparable and the jeweler's in control of their markup here, so they can price it higher if they want, but people are going to opt for it and the conversion rate is going to be higher. You're going to lose less customers who keep exploring and end up going to an online retailer from some huge conglomerate I'm not going to name names because I don't want to get blurred out but somebody is more likely to continue with the local retailer who they're already interacting with, because they've designed something special to them and that lives on that website.
Speaker 1:I definitely agree. I think custom stuff, man, it really just scratches that itch in it and it becomes yours. I think you're totally right on. But, devin, if these people are listening and they're interested in trying this new tool out, where can they go to learn more and maybe start talking with you about this?
Speaker 3:Yeah, they can go to get jeweler, oscom. So that's get g e, t, jeweler, the American spelling, and then OS, which stands for operating systemcom.
Speaker 1:Awesome and I'll have all that information in the show notes below, and thanks so much for talking with me. I really, when I went to, when I went to JCK, your guys's booth was, you know, the one, the vendor that that was really standing out to me and I thought it was a really interesting and novel kind of way of approaching things. I think you're totally right on with the semi-custom route being one of the ways forward, so I think it was a really cool conversation. Thank you so much.
Speaker 3:Yeah, thanks for having me and, yeah, I hope we talk again soon. Absolutely.
Speaker 1:Thanks everybody. We'll be back next week, Tuesday, with another episode. Check them out. Bye, all right, everybody. That's the end of the show. Thanks so much for listening. My guest this week was Devin Jones of Stone Algo. Check them out in the show notes below. This episode was brought to you by Punchmark and produced and hosted by me, michael Burpo. This episode was edited by Paul Suarez with music by Ross Cockrum. Don't forget to rate the podcast on Spotify and Apple Podcasts and leave us feedback on punchmarkcom slash loop. It's L-O-U-P-E. Thanks, and we'll be back next week, tuesday, with another episode. Cheers, thanks, and we'll be back next week, tuesday, with another episode cheers bye.
