Katie Hunt [00:00:22]: Hi, I’m Katie Hunt, the co-founder and CRO of SHOWFIELDS, the most interesting store in the world, and to me, it’s a matter of customers.
Kelly Kovack [00:00:36]: Many people think entrepreneurs are born that way, that they have some innate entrepreneurial DNA. I’m Kelly Kovack, founder of Beauty Matter. Often, the start-up bug bites unexpectedly because you found yourself in the right place at the right time and were open to possibilities. Every founder has their own path and a story that’s unique to them; some start young, we’ve all heard the lemonade stand stories; others take the plunge after working for the man; and so others become entrepreneurs because of circumstance. Start-up life isn’t for everyone, but those who are bitten by the bug are often ready, willing, and able to jump into exciting opportunities with both feet. Katie Hunt is the co-founder and Chief Revenue Officer of SHOWFIELDS, and a co-founder of the community-based VC called The Fund. Clearly an overachiever, Katie has set out to reinvent retail, building the most interesting store in the world.
So, I am so excited to have our guest today, who is Katie Hunt, the co-founder and CRO of SHOWFIELDS, and a co-founder of The Fund. Katie, when I was sort of prepping for our conversation today, you know, we met just a few months ago, and I looked at my calendar, and it was on March 11th in the afternoon. It is sort of mind-boggling how much things have changed in those few months. When we met, it was as if we’d known each other forever, which is always great, so I was looking forward to this, but in sort of looking back, we were talking about all of the ways we could collaborate, and we haven’t been in touch since, because obviously, you know, all those plans that you had for your business, we had for our business, kind of got pulled out from under us, and you know, like everyone, we’ve been in a scramble to figure out what it is we’re going through. But, here we are.
Katie Hunt [00:02:45]: Here we are.
Kelly Kovack [00:02:48]: So, welcome. You know, I’d really love to start with your background, because you have a really interesting background, and I think this was sort of one of the ways we connected, because I sort of started my career in beauty having the good fortune of being one of the early executive teams of Bliss, and you were the third employee for Warby Parker, which is…those kinds of experiences are so special, and at least for me, really kind of defined my career. So, I would love to hear sort of your Warby Parker story, and how it sort of led to kind of what you’re doing now, because I’m sure it informed a lot.
Katie Hunt [00:03:30]: Yeah, Kelly, it’s first of all just so great to see you. I have to say that there is this other level of connection that has been happening via Zoom video during COVID and getting to have these really in-depth conversations with women that I admire, and it’s something that I really look forward to, so I’m really happy to be speaking with you today and having this moment in this crazy world to you know, get back in front of you and to get chatting again, so I’m really grateful for that today. But, I’m also very grateful for the experiences that I’ve had in my career. Warby Parker, I mean, it fundamentally changed my life, and I had no idea that that was going to happen. I was an actor in New York City, I was an extra on shows like Gossip Girl, Ugly Betty, and All My Children, and I applied for what I thought was going to be just a customer service job on the side while I was auditioning, and it turned out to be Warby Parker and it turned out to be my utter passion in life. Start-ups are incredibly creative, and I was just so lucky to work with the team that was there. They were people that really empowered the team around them. They never pretended to have all the answers, it was very much a collaborative effort to come up with strategy together and to work together and to try new things, and there was no wrong or right answers, and I think for me, it allowed me to learn so much in such a short period of time, and mind you, I was the low man on the totem pole for sure.
Kelly Kovack [00:05:13]: But, you were still number three.
Katie Hunt [00:05:16]: Yeah, but at least, you know, it was a small room. But, I think when you take those moments in life and you lean in as far as you can and you try and learn as much as you possibly can from the people around you, and you have that opportunity, those things can re-direct the entire course of the rest of your life, and for me, they did. I never looked back, I never acted again, I moved fully into start-ups, and that was ten-and-a-half years ago now, and many, many companies ago, but yeah, here I am now in a very different life.
Kelly Kovack [00:05:52]: Yeah. You know, I remember when Warby Parker opened sort of the show room that was sort of just a very tiny piece of the office, because of course, you know, I love retail, in my early career, I was in retail, and I was like, “What are they doing?” First of all, was it in the Puck Building?
Katie Hunt [00:06:18]: Oh yeah, we had an office in the Puck Building, it was great.
Kelly Kovack [00:06:20]: Yeah, it was in the Puck Building, so that’s always cool, right? And, it was just sort of like some shelves and an iPad and yet the experience was so cool, and it was so, you know, now we kind of take those things for granted, but it was so sort of thinking-out-of-the-box, like letting people into your office, and there was no wall, like you could see fully into the office.
Katie Hunt [00:06:44]: Oh yeah, we were working right in front of the showroom. I think my favorite was the first actual office we had was Neal’s apartment in Philadelphia, and he’s married, he had his wife there, and we were taking appointments in his living room, and then our second offices were on 16th Street in a slightly illegal apartment where we had like a rickety fold-out table where we had all of our glasses, and then the Puck Building. So, by the time we got to Puck…
Kelly Kovack [00:07:16]: You were living large!
Katie Hunt [00:07:18]: Yeah, we thought, “This is advanced!” But, you know, I look back on why that experience was so valuable and what it’s informed for me at SHOWFIELDS, and I think what it was was that all of us worked in the showroom, including Dave and Neal, our two co-CEOs, and the amount of data that you collect by interacting with a customer and being able to ask them questions and see what they like and have that moment with them, is unparalleled, and it’s why Dave and Neal still are in our stores, and why they still actually answer customer service calls from time-to-time. It’s the ability to really understand what your customer needs, and if I can think about anything that has been a lesson in every successful company I’ve worked in in the last ten and a half years, it’s the companies that are going to win are the customer-centered companies, are the companies that literally figure out how to change the conversation to be entirely around the consumer, and to make something fundamentally better for them, and if they can, the brand loyalty there is unparalleled.
Kelly Kovack [00:08:29]: Yeah, no, I agree. You know, you hear all of those founder stories where you know, they’re up all night answering, like they are – it’s like their personal cell phone is customer service, and I agree with you. One of the – I call it one of the only “real jobs” I’ve had, was the VP of Marketing at Dr. Dennis Gross, very, very early on, and anyone who started in the marketing department, the first thing they had to do was do a rotation at every counter we had, and some people were like, “I don’t want to do sales, I just want to do marketing,” and I’m like, “Well, you can’t create marketing materials if you don’t know what the customers want, and furthermore, you don’t know what sort of the beauty advisors want; you need to be in their shoes.” And, I used to love, love, love going to PAs, and Kansas City was my favorite place to go. Those consumers were amazing.
Katie Hunt [00:09:25]: What?! I love them!
Kelly Kovack [00:09:26]: Yeah, they’re so smart, but you know, this idea that marketing and sales are disconnected, it’s, you know, and focus groups are whatever, it’s like you need to have real conversations with real people, and you need to have them, like you said, one-on-one, not sort of through the lens of somebody else. I 100% agree with you.
Katie Hunt [00:09:50]: But, it was fun, right? I mean, there’s something also about early stage that is so gritty and so hands-on that makes it somehow seem approachable, like I always say to other founders that every company has been built out of being naïve, like even SHOWFIELDS.
Kelly Kovack [00:10:11]: Oh, 100%.
Katie Hunt [00:10:12]: Yeah, I’m like, oh yeah, we can – myself and my MVs and co-founders are going to reinvent retail. If I had any idea what retail was really like when I joined the SHOWFIELDS team, I think I would have been a lot more scared at the amount of stuff it actually takes to be successful at it.
Kelly Kovack [00:10:31]: Yeah, yeah. Can we back up just a little bit before we get to SHOWFIELDS, because there’s so much to talk about, SHOWFIELDS and the world of retail today. Before we get to that, you are also co-founder of The Fund, which is a VC fund, but it’s very different. So, can you sort of share a little bit about the mandate and why it’s different and what kind of businesses you guys look for?
Katie Hunt [00:10:58]: Sure. So, I guess it was about seven years into my career in New York and 32 companies later, because after Warby, I became a co-founder for hire/strategy consultant where I was working with up to four different start-ups at a time, and so over the course of those seven years, I saw so many different companies created and so many different companies succeed and so many different companies fail, and I think the thing that I started to realize was the competitive advantage that a company could have is not just access to capital, but access to information; having the right ability in terms of your community around you to be able to access people to ask questions so that you could move faster. An example of this for a start-up would be like, I want to implement a widget on my Shopify to do X, and before I spend money on that widget, wouldn’t it be great to be able to speak to someone who has used that widget and to hear what the outcome is for them and not get the sales pitch from whatever that company is? So, that had been my understanding of the ecosystem in New York, but in New York, we were very different from each other. We were all building our own companies, there wasn’t a lot of space to really have those honest conversations or to be able to ask technical questions, and so when my co-founders and I started to talk about what it would mean to create a new type of fund, there were a couple of things that were on the table. The first is, we want to make sure that pre-seed and seed are getting funds, because as funds get more successful, they raise bigger amounts of capital, and then they have to write bigger checks, and they actually price themselves out of being able to participate in pre-seed and seed funds, and when that happens over time in an ecosystem, that means that less and less companies can get money to get started, and that means over time, the ecosystem dries up and is not as active and actually impacts the entire ecosystem, because then when I have a successful start-up, there aren’t a lot of people that I can hire, there aren’t a lot of other companies around that I’m able to work with; it impacts everyone. And then, B, access to information. So, The Fund started just in New York, and you know, everybody says that we picked The Fund because there’s so many VCs that this was the last name left out there, but we are The Fund and we started in New York, and we raised a round of capital, but we raised it from all founders, so everybody from Neal from Casper, to Josh who founded Plated to Sound Cloud to One Medical, we put these 80 people that we respected so much, and we went to them and we were like, “Take a chance on this. Let’s all do this together.” They all wrote us checks, and then we wrote those checks into 50 start-ups that were all being built in New York. It turned out that we ended up being the most active pre-seed fund in the United States, so we then launched The Fund London and The Fund LA. We run all three funds in a Slack channel.
Kelly Kovack [00:14:19]: Oh my god, that’s amazing.
Katie Hunt [00:14:21]: Yeah, with now hundreds of people. But, my favorite thing about it is that everybody who invests and everybody that we invest in are in the same community. They are in the same Slack channels. They have access to each other. So, somebody who has a question about that same widget on Shopify can put that up into the general chat and within ten minutes, some of the smartest minds in the world have answered that question from a place of experience, and to me, that’s life-changing.
Kelly Kovack [00:14:56]: Yeah. It is, you know, I was just on the website earlier, and it really does feel like a community, and you know, there’s…getting money is one thing, I think, but as a founder, you also need to make sure there’s alignment, you need to make sure that you know, it’s getting in bed with someone; it’s a big, big, big decision. I’ve witnessed what can happen, and there’s…when you’re dealing with someone who has gone through what you’ve gone through, it’s very different than someone who is writing checks and has lots of opinions about things.
Katie Hunt [00:15:34]: Yeah, I think there’s also sometimes a lack of empathy when someone is writing a check and their expectations of your performance on the other side of that check. I think that everybody in the fund has built a company before, and they know how near and possible it is to have a success, and so it’s not just a numbers game, it’s not just looking at the quarterly reports which are coming out of these companies, it’s looking at them and being like, “Oh, they didn’t hit that because of this, and maybe I can make an introduction to them for this, and maybe I can help here,” versus just like, “Their numbers are not where I want them to be,” and I think empathy is a big part of it. I mean, I’m very lucky that my co-founders in The Fund and now our co-founders who are – well, we don’t call them co-founders, our IC in LA and London, are all incredible people, and you know, really are approaching this in a holistic, community-based way. Jenny Fielding and Scott Hartley run the day-to-day of The Fund, and they are two of the most incredible, empathetic, and smart people I’ve ever met in my entire life.
Kelly Kovack [00:16:41]: And, you ended up at SHOWFIELDS because they were raising money, right?
Katie Hunt [00:16:46]: Yeah, I guess I’m not a great VC it turns out. I really like it, because it just means that I get to hear people tell me about their crazy ideas all day and I get to try to help them, and that part I love, but you know, SHOWFIELDS was the first company to pitch The Fund for funding.
Kelly Kovack [00:17:03]: Oh, that’s hysterical.
Katie Hunt [00:17:04]: After we had just raised The Fund, and I was like, “What a brilliant idea,” because my co-founders Tal and Amir are really two of the more brilliant people I’ve ever met in this world, and they had really identified this place in the market, and so when I heard them pitch, I called them and I said, “I’d really like to work on this with you,” and then I leaned in so hard I became their co-founder, and that was now almost three years ago, but you know, it’s definitely not what you’re supposed to do.
Kelly Kovack [00:17:36]: Well, you know, I remember when SHOWFIELDS opened, and listen, there’s been like, the death knell of brick-and-mortar retail has been ringing for years, but you know, people can say whatever they want to say, and I think you know, the pandemic aside, I don’t think brick-and-mortar retail is going to go anywhere. We’re social creatures, it’s how we’re built. I think everyone is kind of Zoomed out. I would do anything to get on a plane and go somewhere and talk to people, but you know, when SHOWFIELDS launched, it was, first of all, reinventing the department store, right, which was sort of a dying channel, and then your tagline is, “the most interesting store in the world.” Well, I mean, that in and of itself, like that’s a big promise.
Katie Hunt [00:18:36]: Oh, for sure. Yeah, no, I mean, go big or go home if you’re going to take on retail.
Kelly Kovack [00:18:41]: Exactly. Exactly. But, can you sort of share the early thinkings of SHOWFIELDS, and sort of, you know, how you approached kind of turning retail on its head?
Katie Hunt [00:18:55]: Sure, it’s a thesis that my co-founders and I talk about pretty much daily. Retail is not dead, it’s not dying, it’s not going anywhere, but like all things, it needs to evolve, and it was evolving very slowly; it was not keeping up with the current time, and it was not keeping up with the current customer. It was staying in bed with a business model and with an assortment that was no longer matching up with current trend. So, we believe that previously, everybody has thought that the world has two continents: traditional retail and direct-to-consumer, and that these two lands are so separate from each other, and they operate under different rules, and they don’t interact with each other. It’s not true. If you look at Warby Parker, if you look at Casper, if you look at any of the larger direct to consumer brands, they now can have over a hundred stores, so you have to give a new name to this new continent that has popped up, and this new continent is direct-to-consumer and traditional retail coming together and creating a new place, which we call C-commerce or consumer-commerce, and this is a continent that is completely run by consumers, it’s how they want to see things, where they want to see things, how they want to shop, and the content they want to see around it, and so there are very few models that work within this new consumer because it’s harder than ever to garner attention and to do it in a meaningful way, not in just an off-handed way, and so it’s almost in the same way that Warby Parker looked at the glasses industry and said, “How do I make this more convenient for the consumer? How do I make this easier for them? Let me look at every stage of the funnel through their eyes.” We took a step back and said, “Let’s look at retail and how we ended up here through the eyes of the consumer, and then reimagine every part of the funnel through their eyes.” So, it means that I want, as a consumer, to have a meaningful experience when I come to your store; my time is valuable. I want to see things that I’m not going to see anywhere else. I want to be empowered to take that story and to be part of that story in any way that’s meaningful for me. I want to see diverse brands. I want to see diverse founders. I want to see things that are better for me and better for the world. I do not want to be talked down to. I want an experience that is unlike anything I’ve ever seen before. And, that’s how we ended up with a four-story department store that’s 50% art and 50% retail. So, in the same way that we curate brands from all over the world and bring them into a space for people to meet and discover them, 50% of the store is actually emerging artists from all over the world that we actually pay to do these crazy, over-the-top installations that are all part of one store, so every six months, we have sort of one story that we’re telling throughout the entire building between the artists and the brands, we curate the entire store around that story, and then six months later, we close the entire store for four days and open as an entirely new store and story, because nativity is all I can say. We really went for it, and it’s exciting though. You come back because you want to see what’s new, you want to discover what’s new, and I think curation is just inherently broken right now. I mean, go to www.Amazon.com right now, and you are literally going to go knowing what you want and you’re going to buy that, and maybe you’ll search a little bit within that category of things, but you’re not going to meet that epic female founder who has created a completely sustainable beauty line that’s going to give back and help women around the world graduate from high school. That’s not what you’re finding there, and that has to exist somewhere, too.
Kelly Kovack [00:23:05]: Now, you know, what I’ve found sort of interesting in sort of what’s been happening with retail, is unfortunately, we’ve seen these iconic retailers that don’t exist anymore, Henri Bendel’s, Barney’s, Lord & Taylor, who knows what’s going to happen, but these businesses started a hundred years ago with sort of a similar premise that you’re talking about: it was curation, it was about the consumer, it was, you know…when I think of what Bendel’s was, it was a hundred years ago exactly what consumers want today, and it’s just such a shame that…you know, a lot of it has to do with private equity, we’re over-stored, whatever, but it is such a shame that those…that sort of old school idea of retail, like we’ve lost that history, one thing, which is always kind of sad, but I really do think, like you were saying that the way forward for retail, it is kind of some of that like old school, good customer service. Customer service, it can take you a long, long way to success.
Katie Hunt [00:24:31]: Yeah. I also think it’s devastating that we’re losing businesses. I don’t want any of the retail businesses that exist in this world to go away. I think that everything needs to change and evolve, and I think that these businesses are beautiful, and I will also make a very strong argument that nothing new is ever new; it is just a resurfaced idea that is brought back to the forefront. And so yes, if you look at SHOWFIELDS, yes, it was all about discovering new things from around the world and having an incredible customer experience. We’re not reinventing the wheel. I think what we did invent was the business model. So, instead of us holding inventory and then as a business, being responsible for the sell-through of that inventory, what we did, because we have a flexible system where we can put 40 different inputs into it, right, 40 different brands, is that at any given time, we can have 40 brands in the space that are all trying out retail, are all having exposure to a ton of customers, but maybe not going to be the most successful retail brand in the world, but because it’s a six-month commitment, they can come in and try something and do something flexible and have an incredible experience, and then six months later, we have an entirely new curation. We’re not holding inventory; we’re retail as a service. So, if you think about it, what would have been incredible for Warby Parker back in the day, before we opened our first retail location, would have been to be able to open a very small retail location in a place like SHOWFIELDS to try different designs, to try different merchandising techniques, and then make the big spend on the flagship store, instead of trying to go out of the door and say, “Okay, we’ve never run a store before, let’s put millions of dollars into a new location and cross our fingers and hope that it works.”
Kelly Kovack [00:26:29]: And, I would imagine that brands sort of use the SHOWFIELDS opportunity or structure in different ways. I know some people use it sort of as a launch platform, I think other people sort of use it as a six-month living focus group, which is very cool. I think you kind of have to go into it with your own strategy.
Katie Hunt [00:26:52]: When we meet with a brand for the first time to talk about them coming into the store, we set those KPIs with them, and for a lot of brands, it’s not about sales, even though I’m devastated if they’re not selling a ton of stuff, because then I didn’t do my job correctly, but for us, you know, it’s about listening to the brand, and hearing what their KPIs are for the upcoming quarter or year, and sometimes, it is just literally about we’re opening New York market, we are a very well-known international brand, and we just need a foothold here to get in front of your audience, or, we have a new product coming out, we don’t if the green label or the red label is going to do better; we would like to AV test that in a retail environment before we release it in our stores, and we can accommodate those things, which is really fun, because the entire store is created as a data collection space as well, and each of our brands has a backend that looks like Google Analytics, so they can understand absolutely everything that is happening in their space, which is not something that you get in traditional retail.
