Inside the chaos at the Bored Ape Yacht Club
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I'm Yasmin Gagne. I'm Josh Christensen. And this is Most Innovative Companies. ♪

On today's episode, Fast Company staff editor Connie Lin. To put it in luxury car terms, Lamborghini sold an NFT at Sotheby's for $1.6 million. Bubble Goods founder and CEO Jessica Young. We get coined the Etsy of health food all the time, and we love that comparison. It's a huge compliment. And as always, keeping tabs. Let's not pretend Providence is a major city. Providence is a great city. How dare you? But first, here's the download. ♪

The news you need to know this week in the world of business and innovation.

It sounds like a Middle Ages treaty. The Walgreens Boots Alliance. It does sound like that. They're replacing Walgreens Boots Alliance. Walgreens Boots the House Down Slay Queen Alliance on this exclusive stock index. That index is just 30 blue chip stocks. The change comes after Walmart's three for one stock split, which go to FastCompany.com to read what that means. The

The TLDR of this is that the Dow Jones Industrial Average needed to rebalance the index after that split. So the lowest stock, Walgreens, is out and Amazon is in. Thanks, Josh. I definitely understood all of that. Yeah.

Florida is back at it, baby. Governor Ron DeSantis, fresh off a disastrous bid for president, is considering a new bill that would block kids under the age of 16 from owning accounts on TikTok, Instagram, and Snapchat, regardless of parental consent. If passed, this would be one of the most restrictive social media bans in the country. Look, it's not that hard to fake your age.

It's really not. Or your height, as Ron DeSantis has been trying to do lately. Yeah, he did that so successfully. So funny. All right, next story. The SEC is scaling back emission disclosure requirements in the corporate climate risk rules it's planning to adopt. Specifically, they will no longer require public disclosure of Scope 3 emissions, which are greenhouse gases released from a company's supply chain and consumption of its products.

According to Deloitte, this represents 70% of most businesses' carbon footprint. Yeah, nice work, Gary. Yeah, great job, Gary. That's the SEC chair. This is under a Democratic president, too. Yeah, seriously, I hate this. I really hate this. We stand no chance.

In better question mark news, GoDaddy announced a new suite of AI-powered online marketing tools called Arrow on Monday. The tools available to business owners will include AI-generated domain name options, logo generators, and a number of other features to aid in building a website. You know when you try and create a new email address and like,

your name is taken. So they give you like a bunch of, I feel like that's just going to be this. I feel like that's there either that, or it's just going to be a bunch of stock images and logos that have like six fingers and fucked up hands. And finally, are you an AT&T customer? Did you experience the massive outage last Thursday? Well, yes, I did. Good news. Yes. AT&T is giving you $5. Yes. That,

That definitely makes up for my journalist salary. Yeah, exactly. Well, for all of my Verizon fans out there, so you know, thousands of AT&T customers lost service for several hours, including having trouble using emergency call functions. So yeah, $5 should cover any discomfort that caused. That's the news you need to know today.

So Josh, we haven't actually done housekeeping in a while, but we've got a pretty big month coming up. Yeah, March is jam-packed with exciting news for us. First and foremost, the most innovative companies list in our print magazine and in digital as well will be released. So you'll get to see what we have considered the most innovative companies from this past year. So you'll want to check that out. And we'll have a special episode with Amy Farley, who shepherded the coverage of this list alongside our since-departed guests.

David Litsky. He's not dead. He's just at the Ankler, as you may have heard on this podcast. He's basically dead. He's dead to me. And Josh's favorite boy will have a list with one of our honorees. My boy. I love him.

I love Jeff Beard. It's going to be a great interview. Really cool honoree for this year that may be a little surprising to some of you. So that's our little tease there. But in addition to that, we're also going to South by Southwest. Yaz and I will be there doing some live records on stage there.

Slide into those DMs. Yeah, if you're going to be in Austin for South by Southwest, let us know. We're going to be talking to some people on the floor there, and we'll have a special episode recapping some of the biggest trends that we're seeing there, as well as some featured interviews that we're doing at the Fast Company Grill at South by Southwest.

And in addition to those conversations, we'll also be dropping a special episode from our editor-in-chief, Brendan Vaughn, with the CEO of Verizon. So that's going to be a great conversation on stage at the Fast Company Grill at South by Southwest, and you can hear it

in this feed in March. And then finally, we're going to be featuring a special series from our friends at Fast Co Works and SAP. So stay tuned for more of that. You're going to have two episodes a week dropping in Mark every Monday and your regular Wednesdays. So keep your feeds refreshed. We got a bunch of content coming your way and it's going to be a really great, exciting month. So we're going to get right into it. Today, we're talking about the story that I unfortunately have been keeping track of for the better part of two years.

In 2022, the Bored Ape Yacht Club was kind of inescapable on some parts of the internet.

People, including celebrities like Gwyneth Paltrow and Eminem, were spending hundreds of thousands of dollars to acquire some monkey JPEGs that were recorded on the blockchain. We call those NFTs. The conglomerate overseeing the collection, along with other NFT series like CryptoPunks, is called Yuga Labs. Now, VCs in 2022, including A16Z, flocked to invest in the company, valuing it at $4 billion. That's billion with a B, and it had only been around for like a year and a half.

Yuga stated ambition at the time was to create an interoperable gaming metaverse where NFT holders could game on a browser. Josh, do you understand that? Nope. Do not have any idea. Do they? Maybe. So lately, it seems like things haven't been going very well for the company. One of the two BAYC co-founders who goes by Gordon Garner stepped back for health reasons.

The company tried to professionalize things by installing a new CEO, Daniel Allegra, who joined the company after having a long career at Google and gaming giant Activision. Last week, though, Allegra was basically deposed and co-founder Garga took back the reins.

Here we're going to talk about all the drama, how and why that happened, and whether NFTs are even still a relevant thing. There's so much to unpack here. And I promise you that even if you don't really understand NFTs, it's worth listening in because the story is so insane.

Now, because I wrote this article with another writer from the newsroom, Connie Lin, tech editor Max Uffberg is actually going to be interviewing us in this segment. Welcome to the show, Max and Connie. Thanks for having me. Hi, guys. Hi, Max. Thanks for having us. So before we get into what happened last week, let's set the scene. What exactly is Yuga Labs?

So NFTs are basically JPEG archetypes.

artwork whose ownership is recorded on the blockchain. You know, people call them overpriced JPEGs. Overpriced JPEGs, right. There's a podcast called Overpriced JPEGs. Yeah. So Yuga Labs started as a project between a couple of self-described literary bros who love

like infinite jest i will say if your favorite book is infinite jest i don't think you can consider yourself a literary bro i think that's like considering yourself a music nerd well it's like being like oh i'm a i'm a music aficionado what's your favorite band dave matthews band like you're not slanders copy of infinite jest i take personal offense to that have you read it though

Well, part of it. I read part of it. It's on my list.

I will say the first like third that I read is really good. And then I forgot about it. It's just the Dave Matthews band equation is perfect because Dave Matthews band is a perfectly good band with a terrible fandom. Infinite Jest is probably a perfectly good book with a terrible male fandom. I'm going to push back and say that a better comparison would be Radiohead.

That is a good comparison. Radiohead fans are insufferable. But Radiohead fans include women? We're talking specifically about the men. The men are talking here. Kidding. Okay, so back to Infinite Jest. I mean, sorry. Back to Bored Ape. So these are some Infinite Jest loving bros. What do they do? Well, their names are Wiley Arano and Greg Solano, but they go by their screen names, which are...

Gordon and Garner and Gargamel. I hate that. I hate everything about that. Gordon and Garga, that's what everyone calls them. And so they founded this company, which took off during the pandemic. It got a $4 billion valuation in 2022 from VCs like A16Z. So it was a big deal at the time.

It's so funny because we make fun of these people and they're like, oh, they love Infinite Jest, but like jokes on us because they produce some ugly artwork. But the value of NFTs has fallen. It's true. It's true. So where do things stand now? Yeah, I mean, that's a good point. NFTs have kind of...

fallen from grace. There have been several market crashes. NFT trading actually lost 81% of its volume from January 2022 to this past July. And actually in September, there was another report that said that most NFTs were basically worthless and analyzed 70,000 collections and 95% of them had a market cap of

basically zero. To put it in luxury car terms, in 2022, Lamborghini sold an NFT at Sotheby's for 1.6 million. But then a year later, when Porsche did its first collection of luxury NFTs, they were only sold for $1,500 each. And even then, only 16% of them ended up being bought

So people weren't really interested. That's so embarrassing. But Yugo Labs doesn't just oversee NFT collections. And when I say oversee, what I'm saying is when somebody purchases a Yugo Labs NFT, they also fully own the IP rights to them. So basically, Yugo Labs just sort of makes sure the quote unquote NFT community is going well, but doesn't actually like make money from projects.

that NFT holders pursue. That makes sense. They're sort of like vibe curators for the NFT community. They are vibe curators for the NFT community. Can I ask a stupid question? I do feel like probably for a lot of people, maybe myself included, it's been so long, uh,

since NFTs were kind of dominating the news cycle, what have people been doing with their NFTs for the last, you know, year plus? So Daniel Allegra, who we'll get to in a second, described his office and he said, I have some, you know, like Bored Ape themed vodka. Snoop Dogg has opened a Bored Ape themed something, ice cream store?

Ice cream store or it's a hot dog store. It's something. Yeah. So people have basically been using their apes as like fun branding opportunity. It'd be like if you opened like a Pokemon themed restaurant, but they do it with their board ape. It's just a licensing business really with NFTs. With that, it's what like media companies do. So kind of except that like, uh, Yugo Labs does not make money off of any licensing. So when somebody buys them. Oh, so it's worse than a licensing business. Yeah, exactly.

I mean, I think a lot of their money honestly came from like the funding round that they had. But their sustainable business model, I think, in theory is that they take a 2.5% cut from every trade of a board of NFT or, you know, a CryptoPunk or any one of their other NFTs.

And that ended up adding up to like $150 million or something since they started a couple of years ago. But it's dried up, right? Like OpenSea is no longer doing that. OpenSea is a trading platform for NFTs. It was at least the world's biggest trading platform. I think now there's one called Blur that is bigger, but they announced that they would stop enforcing these like

royalty fees. Those are the 2.5% fees are called royalties. And so that is kind of a huge like revenue stream for them that just completely got cut off. It's kind of interesting to see how they're going to adapt to. I mean, that's a major hit. Totally. So at this point, Yuga Labs wants to be a gaming company. For the past two years, the company has been promising to release a sort of browser based gaming platform or metaverse.

that NFT holders could access, play, and build in. There were early previews of Other Side. Connie actually went to one of them that were super promising. Don't embarrass me.

Yes, I did. I did. Okay, so let's back up for a second. What is the deal with Daniel Allegra? How did he become involved in all of this? So Yuga Labs was founded by two MFAs. Allegra is a Harvard JD MBA. He is a Google and Activision alum, and he has an expertise in kind of monetizing platforms and gaming. So he came in as CEO about nine months ago, and it really seemed like he could follow through and make OtherSide a success and revenue driver. But...

I think the problem was that in contrast to this sort of really freewheeling vibe that the Bored Ape founders and NFT holders had, you know, they love stuff like irreverent toilet humor. I think we can be more mean about the irreverent toilet humor. Look, they like games where like apes throw shit around.

And there was like during a call that we listened to 690 people joined and they were like, we got to pause and take a screenshot. Like that's the vibe of the community we're talking about. And it's like pause and take a screenshot when they hit 690 participants. So it's just like a very Elon, right? Is that? Yeah. Yeah. Yeah. Very Elon. Sorry. So lame. I interrupted you. No, that was good color. Yeah.

Like, I feel like that's, you know, very much the crowd. And then Allegri is coming in. He's kind of this, like, to them, boring corporate executive. And it was funny because, like, when we met him, he was actually wearing an Eddie Bauer jacket. And he'd, like, put his, like, a sticker of his, you know, mutant ape. I don't even think it was his own ape. Like, I think it was just a random, which is sad. Like...

So he put a random ace on his Eddie Bauer, you know, fleece or whatever it was. A classic iconoclast garment is the Eddie Bauer vest. Yeah, exactly. So basically what we're saying is the vibe of these people are like that meme where the dude's screaming in the woman's ear, which is mainly about... Yeah, and then he was just... And I will say this, I

I actually like when we met Gordon and Garga, I really liked them on a personal level. And maybe I do have famously bad taste in men. That is true, but they're pretty nice. Like, yeah, the culture is terrible, but I don't want to say that like everyone is the worst here. Sure. People contain multitudes. It's okay. Exactly.

We can criticize some of their choices and problematic aspects of their personalities and still think that they're like kind of chill dudes when you meet up. Yeah. Yeah, that's how I feel about you, Josh. Thanks, Max. Wait, but so now last week, Allegra abruptly stepped down and Greg Solano, the co-founder, announced he would be coming back to take over. So what happened there? So I think there

I think there was a lot of lead up to that decision, which was, I think, ended up being sort of a breaking point. But in the days before that, on February 17th, in a town hall on X Spaces, Allegri kind of gave an update to the community, which, you know, 700 people dialed into this town hall. And he told them that the release of Other Side would be stalled in large part because the technology was just not up to snuff.

And, you know, he said, and this is quote, it may seem slow going to some of you, but the reality is that in just a matter of months, we have had to retool other side from the ground up.

So he also talked about the fact that some recently released games by Yuga didn't perform super well. Like they were too cumbersome and kind of difficult to understand. And the company was instead going to focus on creating more games like this game that they released. It was a hit called Dookie Dash that is like all about poop. The toilet humor. There's the toilet humor. Yeah, it's horrible. Like I can't stand scatological humor. I think that's...

I think that shit is horrible. Nice. This seems like so, so like elder millennial of a while because like flash games and like that sort of thing. It seems like really built out of that, like early aughts. Totally. And you would know is our resident fruit ninja expert. But yeah,

one of the things that also upset people in the town hall was kind of just the fact that he hadn't really been transparent or communicated the extent of the technical problems with the BAYC community. Like he literally said, you know, in focusing on the work, I did not give you all any update.

So I just want to make sure I understand it. It's that basically, Yugo Labs was creating this metaverse that would cater to the NFT holders, and they've kind of dropped the ball on its development. Yeah, that's correct. Part of the drama around that was that OtherSide had been sort of the big thing that they were staking their future on after the crypto.

crash happened and then the NFT values fell. People were like, what do you do now with these? Like, what's the next step now that the hype is gone? And sort of their answer for that was we're going to create this gaming world. And in theory, you know, everyone's going to come and play in this gaming universe. It's going to be this

unifying kind of mainstream appeal, but that just hasn't been panning out. And it's not even necessarily something that it sounds like the NFT holders want to become in the future. So there's a second part to people's unhappiness. And it's the fact that earlier this month,

Well, Yuga Labs acquired another NFT collection and a lot of Bordet Biote Club members were totally surprised and upset about it. They felt like the announcement had taken them by surprise. They felt like the company was maybe focusing on ancillary properties or collections instead of actually making other side. I think part of the problem was that the NFT group that they bought, it's called Proop Collective.

their sort of big collection is the moonbirds, which are just these owls that I think everyone felt was really random. As opposed to born apes? Yeah. Apparently it's even more, it's too random. You know, monkeys are fine, but owls are random. But also,

Also, I think some callers were suspicious about Kevin Rose, who ran Proof Collective. And he's sort of this serial tech entrepreneur. His first company he founded was like a Web 2 company. And then he moved on to Web 3. And now he's sort of gone and done a lot of podcasts about generative AI. And so he's kind of been somebody who's sort of always ridden the wave of what is cool at the time. Hell yeah. And I think...

Yeah, he is going to be taking an advisory role in this, you know, integrated Yuga Labs, Poop Collective company. But, you know, a lot of people were suspicious about him. Isn't that kind of ironic? Totally. I mean, Allegri also spent some of the call trying to head off questions about insider trading around the deal. So it seems like on OpenSea, maybe people saw the acquisition of Moonbirds coming and maybe made some money off of it.

That was kind of funny to me because the space, like the NFT space in general, has always been rife with insider trading allegations. In 2023, there was an OpenSea manager who was convicted of the crime. That was kind of the first insider trading case involving digital assets.

The FTC is investigating stuff. And in our original piece about the Bored Ape Yacht Club and Yuga Labs, we talked about Madonna's music manager, Guy Osieri, who owned a piece of OpenSea, the trading platform, you know, was involved with Bored Apes and was basically was like sort of active on every side of a transaction, which seemed incredibly fishy. So the thing with Yuga Labs and FTs is that the company doesn't own the IP rights to them. Owners do.

Yes. So during the town hall, Allegri was describing his office and he said that he was surrounded by these kind of cool ape creations that NFT holders had made with their IP rights. And those were watches and hats and toys and jackets and signs and stuff like that.

And then not long after that, he also brought up corporate partnerships with companies like BMW. And he said that BAYC members would have special groundbreaking privileges with some of those brands. And it's interesting because while Bored Ape holders are obviously generally entrepreneurial, want to pursue sort of businesses with the rights to their Bored Ape, a lot of people on the call felt like that statement about

Maybe that gets to an interesting point. Why is BMW not cool, but your company getting support from A16Z cool?

Yeah, I mean, I would say that is totally fair. The company also literally has a $4 billion valuation. And you kind of have to be uncool to become a company that's that big, right? Yeah, name one billionaire who's cool. Elon Musk. We're going to get a lot. I think there's a crux here that like the Bored Ape Yacht Club community seems really obsessed with the sort of aesthetic appearance of their company as cool.

quote unquote cool because I find it deeply uncool, but this is like a moving target. But culturally, NFTs have become kind of a punchline. Bored Ape is kind of a punchline. And that may seem tertiary to their business goals, but it's not really. Is that like a fair assessment?

I think that's totally fair. I'll never forget there was one guy in this town hall who dialed in and he was like, hey guys, sorry, I'm dialing in from my car. I'm at a charity dinner with my family and they're not very happy that I slipped out to talk to you and join this call. I was like, damn. Oh man, these are not the cyberpunks they think they are in some ways.

Yeah, it's... It's just so affected. It's so like... All of it is... I'm trying to say this in a nice way, but... No, just say it in a mean way. I'll just say it.

I would fucking hate to be a member of this community. Like, this is like everything that I could not stand. Granted, I am noted musical theater nerd, so I feel like that's completely... Those are concentric circles of those communities. And I certainly don't consider myself cool by any stretch of the imagination, but like the Bored Ape Yacht Club stuff just makes me cringe so hard. And I think a lot of people feel that way. Yeah.

No, definitely. And I feel like there's also this paradigm where it's like part of what's cool about, you know, the Bordeaux Bioclub is that it's like, you know, the image is like renegade and it's like,

decentralized finance is so much cooler than like traditional finance and all this stuff. But like I went to Ape Fest, I guess, what, two years ago now? And like the vast majority of the people that I went were just like people doing traditional finance jobs. And they were all just people who like bought these NFTs because they thought that they were going to be really valuable and they were going to turn a huge profit.

And that was like, I mean, I'm sure you have people who care about, you know, the art and the stuff they want to create with it. But like the vast majority was just people that were like, oh, this number is going up. So I'm going to buy it. Totally. And I think in some ways, because of that culture and that attitude, Allegri was set up to fail. I mean, he needed to fail.

needed to justify a $4 billion valuation. And that naturally means setting up businesses that work and that are mainstream. During the call, he drew a pretty interesting comparison between Yugo Labs and YouTube, right, Connie? Yeah. So, Alagri worked on YouTube right after it was acquired by Google. And he talked about how YouTube was, at the beginning, this platform for just funny cat videos and memes and things like that.

But according to him, this is his quote, what YouTube ended up becoming was this entire platform where creators and influencers came together and new business models started evolving. Yeah, it's worth noting, though, that YouTube mostly makes money from just serving users ads and through a subscription model.

It's not like a super innovative business strategy, right? It's sort of hard to see a community that's so obsessed with the number 69 getting excited about a leader who wants to shepherd through. I don't even know what expression that is. A leader who is trying to execute that kind of transformation. Exactly. I feel like that parallel between YouTube and Yugo Labs just does not really work.

Well, so shortly after the meeting, it seems like Allegra was effectively deposed by co-founder Greg Solano. So do we have a sense of what comes next? Not really. So far, Solano has said he's committed to, quote, unshackling the BAYC team from Yuga in order to create the space for the magic and crazy shit we used to get up to.

But, you know, what exactly that means is, for now, anyone's guess. I mean, you never know with this company, but things are not looking good at the moment. They've gone through, what, is it three CEOs in a year and a half, two years? How long did Allegra last? Nine months, is that? Nine months. And what does it mean to, I mean, I guess we don't know, but what does it mean to unshackle the Bored Ape Yacht Club from... It seems about as clear as their metaverse strategy. Yeah.

Max, he said he's basically going to unshackle the Bored Ape Yacht Club from the broader Yuga Lab strategy. What?

But I think they did say that they were going to spin out, I think, BAYC LLC, which is going to be this little subgroup that just deals with the apes. And I guess that would try to address the problem of the ape holders feeling like Yuga's getting too big in corporate. It also just, it may be a matter of creating a different, a separate BAYC Discord channel for them all to talk to each other without the weird moon birds freaks coming in. Yeah.

Well, I guess we'll just have to see what happens. We're going to take a quick break, followed by my interview with Bubble Goods founder and CEO Jessica Young. Bubble Goods CEO and founder Jessica Young wanted to create a marketplace where you could find products from your local farmer's market or specialty retailers right at your fingertips.

Bubble Goods claims to have the freshest, healthiest food products for consumers. We spoke to Jessica about what led her to create this space for food, working with small businesses, and the vetting process for products being on the site. Then we talked about some of her favorite items on the platform. And I will say my favorite item are products from Paro, which is a sort of Indian spice packet and dried goods product that I can't recommend enough. Okay, here's the interview. Tell us what Bubble Goods is.

Sure. Bubble Goods, we're an online marketplace for primarily emerging food and beverage brands, but everyone is centered around quality foods. So it's a marketplace for food and beverages that are making the most amazing, innovative products of today to sell online. So we get coined the Etsy of health food all the time. And

We love that comparison. It's a huge compliment. But a fun fact, we actually have stricter standards and Whole Foods, Erewhon, any other food retailer. So we don't accept products that contain refined sugars, dyes, gums or preservatives and really stand by that. So how did you all come up with those standards? Yeah.

It came from a place of, you know, we were starting the business. We knew what we were out to do. We were going to drive and our mission as a business is to drive more sales to some of these amazing products of today. But we wanted to do that in the way we felt best. And at the same time, like what customers today are looking for.

And those really match up. So we know kind of in the better for you food space, one of the fastest growing segments of grocery food and beverage that that's what consumers today are looking for. And they really are looking for someone trusted in the space in terms of the retailer side, you know, responsibility, like someone who really wants to do the work for them, essentially. So we see it as like the ultimate customer convenience, like one of our taglines to kind of on the customer side is customer.

we read the labels so you don't have to. So, and customers really like that. We actually target consumers who identify as label readers, which is really an interesting cohort of people that are passionate about reading the label, turning over a package and seeing kind of what's in there.

You know, I'm a fan of some of the brands on your site. I actually had some kitchari from Paro for dinner last night. Nice! Yeah, it's so good. But I am curious about, I guess, like how you reach your customers, how you target them, and also how you market yourself, right? Like, I would say a lot of food selling platforms are still fairly expensive. You know what I mean? Like, it's probably a sort of slightly wealthier consumer, but do they come to you on a weekly basis? Do you see yourself, you know what I mean? Like, how do you

how do you see yourself in people's lives? When we launched the marketplace, it's very different than sort of where we even are today and where we're going in terms of the offering, the type of ways customers now shop with us because we offer so much more. And so we started the marketplace, we had a few products and people were kind of clamoring on the brand site to get on what we were building, just given our background in the food space.

And now we do very little to no reach out on the brand side. Brands are like hearing from each other that they're getting sales. And so that's sort of fueling that side. We do zero dollars like brand acquisition. We never have day one, which is nice.

And on the customer side, you know, we have a huge peer to peer referral. So customers that find bubble goods, they find a lot of value in the mission that we have in terms of supporting small businesses, but also like our label standards and quality standards. And then so I would say that there's probably like discovery standards.

attraction to, oh my gosh, what are all these like amazing products I've never seen before? And then secondary is how do I stock up? So purchases like two, three, four, repeat purchase are very stock up driven. So people are finding things they like, they'll stock up and then they'll probably try a few other things in their next basket. So that's kind of like our...

primary behavior of customers that find us and shop. It sounds like smaller vendors are for the most part finding you, but I'm curious about the challenges of working with smaller companies, you know, whether that's supply chain, whether that's like, you know, dealing with a smaller team. Tell me about how that works for you all.

Yeah. I mean, the brands you work with and partner, their inventories are inventory. So we care a lot about that. We're acquiring customers on their behalf and driving sales, but their fulfillment and their fulfillment times are our fulfillment times. So we have really tight SLAs and reporting around that. So really, again, like we can all come together around that shared mission, shared customer experience. And so when brands onboard with us, we're really, yeah,

above board and we do a lot of communication like in the onboarding funnel with brands to let them know like what those standards are and why it's sort of like not arbitrary why we want you to fulfill orders within a two business day window because like that's what customers are really expecting you know at a modern commerce experience so

you know, kind of rallying around, you know, high standards and expectations on all fronts, right? Like the products we're selling, the service we're trying to provide. So, you know, you mentioned the fact that your platform is often used for discovery, right? How do you keep customers coming back to Bubble Goods instead of like going to FlyByJing's direct website? You know what I mean? Like, how do you think about that? Yeah, that's a good question. And part of our whole value prop, right,

A marketplace and sort of why, again, another reason why we started the business and seeing opportunity is that, you know, most brands have three or four SKUs. It's really hard for them to get that initial acquisition of a customer, but they get them to come back. What works really well for us as a marketplace is that we always have brands launching, onboarding the latest cool thing. We do a lot with trends and seasonality. So customers really love the experience that they find within the marketplace versus the

you know, a solo brand. We're not trying to totally compete with the brands on our platform, but we are trying to be very value add with customers and like a more holistic shopping experience. So yeah,

Yeah, it's different, right? If you find Fly by Jane on Bubble and you go buy on their site, awesome. And you become a super fan. That's great. We, again, aren't aiming to be competitive, but stay in our own lane in terms of like offering a lot more. So if you like Fly by Jane, plus all these other products and Paro and your discovery, you can find that all in one place and you can earn rewards, you know, discover other brands like that on the marketplace. I'm curious, you know, how did you think about

for bubble goods? And how do you all make money? Do you take a cut of each sale? Like, what does that whole thing look like? I guess there's two questions in there. The dreaded F word, right, of today. Okay.

Not my favorite part of my job, but something I've learned a bit of the art of in fundraising. So yeah, how we approach fundraising, you know, again, was I think we had a lot of tailwinds going into the pandemic when we were starting the marketplace of consolidation, people shopping online.

You know, we saw five years of compression in online grocery when the pandemic hit. A lot of adoption of like curbside and people in some older demographics adopting online shopping and grocery. Totally. Although I know like, you know, I profiled the CEO of Instacart a while ago. And it's interesting because I feel like that company had such a high valuation. Everyone assumed that

Those trends would keep going. They have, but not to the not quite to the extent that maybe people thought they would. You know what I mean? Like people still go back to grocery stores. They totally do. But I think in terms of like adoption, it was really helpful. And at the same time, brands that were emerging, we saw want a partner because the retailers themselves were doubling down on inventory during that time. They weren't accepting new brands and kind of being risky with their own inventory. Yeah.

So we had a huge rush of brands trying to get on what we were doing on the sell side. And then from the customer side, again, there was a lot of adoption. And again, it's still, you know, grocery primarily is a brick and mortar play right now. But the growth in the category for online, those numbers like still can't be compared. They're still like super high growth. And I think Instacart, part of their play is like going outside of grocery now and doing like,

fast delivery for Five Below and Sephora, right? So, and that's something that I think, you know, again, Sephora, it's like, I still want to try on my makeup, not just kind of that, that's that more second repeat purchase kind of play there. So yeah, when approaching fundraising during that time, really,

Really difficult. Yeah. Not even going to beat around the bush there. It was new for me. I'm a longtime operator and I've been, you know, first employee at some great startups, early employee. I've kind of done a lot of the heavy lifting. I know what it takes to go from zero to 100 and from 100 to 1000. Yeah.

in both phases, but I'm a first time founder. So building a network of investors, early stage investors, you know, people that are backing early stage businesses aren't the funds. They are, you know, high net worth angels, micro funds, totally. And that's not something I had a huge network in. So really, um, had to, you know, go on tour. I did a lot through zoom. I think, um,

If anything, the pandemic did me a favor and I could get a ton of calls done. I didn't have to fly around or take meetings or line up conference calls. It was like everyone was locked in a room. So got a lot of that done. So, yeah, we got our kind of friends and family secured. We're in the process of closing our pre-seed funding right now and just taking things to the next level. So we're really excited for the chapter we're embarking into. Yeah.

You know, the fundraising pictures obviously changed a lot. I don't know if that has affected Bubble Goods, but I am curious how you think about profitability. Oh, yeah. I don't actually know that it's changed so much, more reaffirmed. I've been around the block and I've been involved in a lot of startups where I've seen some of the pitfalls.

and not on my own dime. So I think when doing this business, I knew a lot of the mistakes to kind of steer clear from. And also I hail from the operations side of startups. So I'm in the business of profitability and growth. And so...

I think it was day one, how can we keep headcount low, sales high, drive profitability. We chose to not take on inventory and we're 100% dropship marketplace, partly because of that reason. We really want to drive sales and allocate as much into our tech and business

marketing for like driving sales and add be very value add for the brands on our platform. We don't charge brands currently to have accounts list and sell with us. We only take a commission on sales. And so we're like, we're really firm believers and we want to drive sales for you. And when the timing is right, we'll all start to kind of win together, make more money together. But yeah, we 100% drive to profitability. So inflation has obviously been a big

topic the past year. We're in this weird situation where the economy is going well, but I'm going to my supermarket and it seems like everything's more expensive. I'm curious, you know, whether you've seen any of that in your customer behavior or whether pricing has gone up on your site. How has that affected bubble goods? Grocery in general, just from a top level in our industry, is very complementary. So people will, you know, go to Sam's Club or a bulk kind of grocer to stock up on toilet paper and kind of what we call like commodity goods.

maybe bulk nuts, cleaning supplies and things. And then they'll shop at an Erewhon, a Bubble Goods, for some of these like premier brands. Right. So you're like, this is a premium product. So yeah, so we offer premium things. We're not really price competitive because like the

brands on our platform are young businesses. They're emerging. They're using quality ingredients. And so we're competing on quality standards and supporting businesses, not necessarily the cheapest protein bar that you're going to find on the market that's already mass circulated. That's

That's not really one of our areas of concentration or competition right now. I think as we scale, I would love to get in the conversation of, hey, brand alpha, how can we help you lower your costs? Because you're selling really well.

we think we would like maybe up conversion um do you need help with like a supplier match part of also our onboarding is we have a whole resource guide on the dashboard that brands can download and access and that has everything from fulfillment partners legal partners you know supply chain partners

that we try to be as helpful as we can. Because again, their inventory and sales are our inventory and sales at the end of the day. So we try to just be a good partner in that way. I want to talk about some fun stuff now, which is trends. What are some of the big trends you're seeing when it comes to purchasing behavior? Is there any like hot ingredient or hot company right now in the bubble goods world? It's wild when things trend or we have a good amount of brands that get on Shark Tank and then their search goes up. And so...

Oh, like Fishwife was on Shark Tank recently. That's a bubblegum. Uh-huh. And so like Fishwife gave us a bit of a heads up. And so we did some stuff on TikTok with them. The TikToks went well. We boosted that. Their sales, you know, went up on our site. So like anyone who kind of has a Shark Tank moment...

we see some of those after effects, which is great. And then random things will happen with keyword and search. So over the past 48 hours, for example, we are selling a ton of maple water. We have a company that sells maple water in like small and large sizes, which is spiking. And we're like, okay, so something's either going on with that brand or keywords. So like sometimes brands on their own have peak moments and then it'll also kind of spill over into what we're doing.

We also have someone kind of doing a lot with TikTok right now. Her 18th video, she's a marketing associate on our team, joined us. And her 18th video with us on TikTok got like 800,000 views. So then we'll take that and like boost ads. And then we'll make sure that that brand's aware and they're cranking on sales. So yeah, we have stuff coming from the brand side, from customers and search, whatever's trending, TV, all the way to like our own efforts. So it's a fun environment.

I didn't, you know, I didn't even think of maple water as like a category. I like, then I'll Google it. I'm like, why is maple water? I'm like, is there a trend? Yeah. What are some of the products or companies you think

Well, actually, I'll ask this in two parts. The first are what are your favorites? And then the second are what are some that you think are underrated? All the products are my favorites. I get this question a lot. So maybe right now, some of my favorites. You mentioned Paro. I absolutely think there's a movement in more like West Asian cuisine. So I think like East Asian cuisines have had some big trends. They turned into big markets. But I think like

West Asian flavors and people kind of getting into like West Asian and also like African spices and like regionality. So I think the far West, like us, like Americans are kind of catching up into regionality within Asia and Asian cuisine. So I think all of those categories are like majorly on the rise. And

and something we have our like finger on the pulse of within the food scene. And then, you know, so we bridge the bridge between like food, beverage, health, and wellness. So we have a lot of like supplements and protein. So we have a really exciting brand that joined us that's using a vegan protein made out of the chocho bean, which is related to the lupini bean out of South America. And they've got some great like South American athletes signed to the brand already. And as a vegan protein, I think, yeah,

is just has like a big opportunity and the taste is pretty good and yeah.

The brand is called Makuna. Yeah, there's a lot of bad vegan proteins out there. Yeah, a little chalky. I mean, look, like pea hemp has been around for a while. But I think, you know, seeing like chocho protein have them. I'm like, oh, you know, I think that that's interesting. And then we ask ourselves as bubblegum, like, what can we do to kind of elevate that? Or how do we sell more chocho protein, you know, with this company? It's a fun exercise. Are most of the sort of smaller vendors that you work with U.S.-based? Yeah.

I would say 95% are. We have some brands that are like based in Canada, but they distribute here. So 100% of brands need to distribute here. So and, you know, be able to kind of show proof of business and operation tax. So even if they're kind of operating out of Canada, they still need to do some stuff for us here. That makes a lot of sense. Are there any brands that you've seen sort of like or any categories that you've seen customers really clamoring for?

That changes, I think, also seasonally. It shifts all the time. I don't know that they're clamoring. I think it's pretty equal. Yeah. Well, this was great. Thank you so much for taking the time. I think this was really good, like a nice introduction to a bunch of your to the business and also, you know, making people understand what it is. But thank you. Sure.

Okay, we are back with Max and Connie, and it's time to wrap up the show with Keeping Tabs. This is where each one of us shares a story, trend, or piece of pop culture we're following right now. And Connie, since it's your first time on the show, what are you keeping tabs on? One thing that I always find interesting is just very random world records. Good. Like Guinness book? Exactly. Yeah, just very random Guinness World Records.

So last week, a diver in the Italian Alps broke the record for free diving in ice water. I guess it's actually called apnea ice diving. You are not lying about random world records. What does that mean? Is that by distance, by temperature of the water, by what is the record?

By distance, I think. But free diving is just like when you don't have an oxygen tank or anything and you just basically take a big breath and hold it underwater. So she dove. Okay.

Okay. Yeah, she dove 140 meters under the surface for a minute and 40 seconds in water that was three degrees Celsius, which to me is just like nightmare fuel, honestly. Christ. You know what? You don't need that record. No one needs to do that. Max has all the equipment he needs in his yard to complete this world record. I just pictured Max holding his breath in a kiddie pool. I mean, you're not far off.

Max, do you do cold plunging? Is this what this is coming back around to? No, I don't do cold plunges, but I do. I'm absolutely going to spread this rumor. I do take leisurely swims in my stock tank in the backyard. And you know what? In this Texas heat, it's a real respite. But let me just ask, where do you find all these records? Yeah. Are you a Ripley's Believe It or Not subscriber? No. No.

I just saw a news story, actually. No, this is like big news. People care. It was like on Reuters. I saw it on Reuters. Oh, I was going to say, this feels like a Daily Mail headline. Yeah, this is like a yes. This is a Reuters headline. That's legit. Max, what are you keeping tabs on? I am excited to see the sequel to Dune, Dune Part 2. I am keeping tabs on the reviews, which so far are pretty positive. You know I'm flying back...

from Houston after South by Southwest at like a stupid, it's like at six in the morning because Luis wants to see it with his friends at midday. I was like, I'm going to kill you. I didn't see Dune 1 and I never read, I completely missed like the Dune train. Like it was obviously like a very popular sci-fi novel. Like it has like a place in culture. I just never, and I was a sci, like I read a bunch of sci-fi like stuff. Like I, you know, was all over that.

big Ender's Game fan, like all of that shit. Yeah, listen, I've been rude about my husband many times on this podcast, so I'm fine doing it again. He loves the book because, quote, it's actually all about the spice trade during the Middle Ages, which I was like,

Not appealing. Oh, my God. I don't know. I heard that. I was like, that's kind of cool. I'm kind of into that. Wait, yes. Does he also think about the Holy Roman Empire multiple times a day? All the time. All the time. He and like three friends did this thing where they all read that history book, SPQR, and then they got a steak dinner to talk about it. And I was like, this is so lame. That's cool. I'm into that. Are you married to an octogenarian? Mm-hmm.

Maybe. You know what? I'm team Luis in this. Yeah, as you're being too mean to your husband. He sounds like a stand-up fellow. Yeah.

minus the cat thing. A stand-up senior. Josh, what are you keeping tabs on? Love is Blind. That's what I'm finally keeping tabs on. I need to know how this ends. I need to. I'm one episode behind. I just started it last week. I think there's seven episodes so far. I'm in the point where they're in the Dominican Republic at the

And like, there's just been some wild storylines in this. I mean... I think they've gone full train wreck on this one. Wait, can I ask then? Are you a fan of Below Deck? I have gone in and out of Below Deck. I'm not a huge fan. There was someone from my hometown on Below Deck, like early seasons. That's awesome. Who? Also, and they kept describing... I forget their name. I don't... I didn't know them personally. Describe them. But on the show, they were blonde and...

And on below deck. Cat. I don't remember the name. It's a while ago, but they were like, I'm from this small town in Rhode Island. I was like, Warwick, Rhode Island is a suburb of Providence. Okay, let's not pretend Providence is a major city, though.

It's a mid-major city. Providence is a great city. How dare you? Okay, I just Googled it, and I'm right. It is indeed Cat from seasons one and two. Oh, it is Cat. That is the name. Yeah. Yeah, they're from Warwick, Rhode Island. I forget which high school they went to. There's been a number of reality TV show stars. I went to high school with someone who was on Made in Chelsea, which is not cool at all. Oh, it's Jared and Ashley. Jared and Ashley. Jared is from Warwick, Rhode Island. Oh, he seems like a...

Nice man. He seems like a guy who went to Warwick Vets High School, which a very small percentage of people who will listen to this will get it. Wait, yes. My friend's wife was on Made in Chelsea. Which one? Amber Atherton. I think she was like one of the OG ones who like, I don't know. I didn't watch the show, but she like had a jewelry line. And they all have jewelry lines. Everyone has jewelry lines.

Finally. Oh, yes. What are you keeping tabs on? Yeah, listen, over the weekend, I think something that weirdly hit all of us New Yorkers really hard is that Flacco, the Eurasian owl who escaped from a zoo, lived in Central Park and then was basically spotted in tons of people's windows on the Lower East Side, died from flying into a building. Oh. Just...

so sad. This is extremely embarrassing, but I wrote to a zoo. This is how much I cared, but like the reason Flaco was seen flying around New York is because he needed to find a mate and there were no other Eurasian owls like anywhere in North America. And I was like, what if we released a Eurasian owl girl and they found each other and then they could, anyway. Did the zoo reply? No. No.

That is a great children's book idea. Flacco finds a friend. I thought you meant that a woman writes to a zoo and it doesn't respond. And then the owl dies. Mentally ill woman wrote to a zoo at 2 a.m. I was also like devastated by that news. I don't know. I like read it right before I went to sleep and I literally could not sleep because I was so distressed. I have no idea why it hit that hard.

I was on the subway coming home from a birthday party and my husband texted me and was like, dude, Flacco died from flying into a building. And I shed a tear. I was really upset. Animal things kill me. It just hits you differently. Yeah, it's true. Yeah.

I'm just kidding. Well, on that sad note, with a little undercut joke from Max. If it perks anyone up, I'm slacking you all a photo right now of a squirrel eating some corn in my backyard. Oh, this is the thing you set up in your yard? Yeah, I nailed a tiny picnic table to a tree and stick corn on like a nail, also sticking out of the picnic table. And now squirrels come and sit on the picnic table all day and eat corn.

Amazing. Well, thank you, Max. And thank you, Connie, for coming on the show. Our show is produced by Avery Miles, Blake Odom and Julia Xu. Mix and sound design by Nicholas Torres. And our executive producer is Josh Christensen. Remember again to subscribe, read and review. And we'll see you next week.