Recommerce: Billion Dollar Market Potential and Opportunities for Brands and Startups

Speaker 1: 0:00

I'm always skeptical of business cases that depend upon the consumer making a sacrifice of some sort, whether it be a sacrifice of choice or a sacrifice of quality. Of course there's a percentage of the consumer base that are willing to make those choices, but for something to be to really operate at scale, one needs to offer a win-win, and so I think it's very important to ask these questions of how do we make a recommers experience as good as, if not better than, a primary purchase experience for a consumer. If we can crack that, then we've got a really scalable market opportunity.

Speaker 2: 0:54

You're listening to ShiftClick by Kodup, a podcast about innovation and the people behind it. Now picture this Our planet Earth is like a vast, swirling ocean of environmental challenges. There is climate change, resource depletion, waste generation, and these are the colossal waves that are threatening our home. But imagine if there was a way, like a drop in the ocean back of ripple through the world, making a substantial change on all these issues. What if reusing everyday items and turning this practice into a full-fledged industry could alter the course of climate change? Well, unfortunately, the idea is too optimistic to think of it having an impact of that magnitude, but we don't yet have one single measure that can fix all the problems that I've listed before. However, extending the life of products isn't just a good practice. It is a moral obligation we owe to the planet and to our future generations. What if we told you that this practice could also be the cornerstone of a thriving, sustainable industry? Well, it already is.

Speaker 2: 2:09

Plenty of brands are taking an active interest, to the point where some have set separate, completely differently rebranded websites for re-commerce. Recent figures suggest that re-commerce is on the rise and it promises to continue growing. But here's the crucial question Will this industry's growth match the magnitude of the challenges we face. In today's episode, we're joined by Nile Murphy, a serial entrepreneur, a changemaker and an innovator at heart. Nile has a finger at the pulse of the re-commerce industry and will talk to us about the potential of re-commerce can it make the waves of change in our world and whether the idea is practical enough to be spread across a variety of industries, To get ready to embark on a journey through the seas of sustainable consumption and discover how issues like traceability and authentication can be resolved within the re-commerce industry using technology. Let's begin. Hi Nile, it's great to have you on ShiftClick. How do you do?

Speaker 1: 3:18

Hi, thanks for having me. It's great to be here.

Speaker 2: 3:22

Right now. I know you've been in the technology space and the e-commerce space for quite some time, so why don't we begin with what your background's been and build up to how you look at re-commerce and how that connects with the re-commerce opportunity that's there?

Speaker 1: 3:39

Sure. Well, I guess what they stereotypically refer to as a serial entrepreneur is. I've built and sold a number of tech businesses, mostly in Europe and the US, over the last 30 years or so. I'm a computer scientist by training. I grew up in South Africa and I live in Switzerland, so go figure what I am.

Speaker 1: 4:01

I most recently exited a business called Everything that I founded and was the CEO of, which provides digital twins for consumer products so we can manage the traceability of those products around the world.

Speaker 1: 4:22

That business was acquired last year by a listed US company called Digimark Corporation, but in the course of that journey of building everything over about a 10-year period of time, it was very involved in all sorts of aspects of traceability of consumer goods, and the deep motive behind building that business was really how do we achieve sustainability with the world's consumer products?

Speaker 1: 4:51

And we may can sell about 4 trillion things a year to consumers, and generally that's a one-way journey, and so what we were doing with everything was about being able to manage the traceability of every product item, because you're not going to achieve any circularity of anything if you don't know where it is and who's got it and what they're doing with it.

Speaker 1: 5:14

Right now I'm the president of an e-commerce logistics business in the US called Quiet Platforms, which I got involved in at the back end of last year and took over running earlier this year, and this is really at the cold face of moving consumer goods around the largest e-commerce market in the world, and so we handled about 60 million parcels last year in the Quiet Platforms business, and previously I've been the founder of a Wi-Fi business called the Cloud, which became the largest pan-European public Wi-Fi business on a thesis that mobile internet would become a thing. This was started back in 2003 and it's that to be SkyBee, the then news call phone business, in 2010. So I've been around the tech space a bit. I'm a World Economic Forum Global Innovator and I've spent a lot of time on all sorts of aspects of the changing supply chain environment and particularly the ability to achieve a much more circular supply chain model in the way the world's physical things are managed.

Speaker 2: 6:31

That's a lot of things to take in, by the way, and you sound like one of those rare breed technologies, who have an eye for business as well. Who can make pragmatic and practical cases of technology for the consumer.

Speaker 1: 6:45

I try. I think that innovation is great, but innovation is really only sustainable if it becomes adopted and delivers real value. You can fund innovation in R&D and you can fund innovation with investment dollars, but ultimately that has to turn into sustained value add and that's the only way that something's really going to persist. So it's important, I think, as an entrepreneur, that's the job is to take innovation and figure out how to build a business model around it that is sustainable and scalable.

Speaker 2: 7:22

No, that makes a lot of sense, especially when it comes to businesses that have as an objective to try and reduce the carbon footprint that we create as humans. So let's talk about recommers for a second here. They say it's going to be a $64 billion market in terms of revenue by the year 2024, but if we were to explain what recommers really is? I mean, the use of second hand items has been around for as long as humanity's been around, but to give it the label of recommers and to speak of it as an industry with such large numbers now does require us to be able to define what it really is. So how would you define recommers to an average consumer?

Speaker 1: 8:02

I think of it as extending the usable life of a product item through multiple owners, essentially. So we tend to make stuff, sell it to somebody that that individual has some utility of that object for a period of time, and at the end of that period of time we have a choice either it gets disposed of or we can pass it on to somebody who wants to continue the utility of that item. And so long as we can keep items moving from one user to the next, then we're stopping them going into landfill, we're stopping them becoming waste and presumably and there's an assumption of this we are saving less, we're creating less carbon impact than if we were to decompose the object and manufacture a new one. Right, but, as I said, there's an assumption in that.

Speaker 2: 9:00

Right. I mean I can understand how there's an assumption of me, because these things are sometimes hard to track as well. But in general, the idea that humanity will need to produce less if we start reusing the items that have already been produced does make sense, and I think we can back that up with a growing interest from the consumer basis all over the world in secondhand items, which could be backed by all sorts of things. I mean, it could be backed by inflation or a drive within the newer generation, a drive that didn't gen Z to save the planet. But what's in it for the brand? Things succeed when businesses have a motive, so what's in it for the brands?

Speaker 1: 9:39

Well, you know, somebody goes on to eBay and seeks out a branded product. I want a pair of Nike trainers. What am I doing? I'm expressing an appreciation for that brand value, and most of Nike's enterprise value is in the word Nike. That's really what they're monetizing, right Is the brand equity. The way that they monetize that right now is by selling me a new pair of trainers. So I think that the opportunity for brands in re-commerce is to factor the fact that consumers are purchasing their brand. They're just not doing it at a primary point of production. So the opportunity is to figure out how to participate in that eBay transaction or that re-commerce transaction and monetize the brand there, because you're serving a customer who cares about your brand and perhaps you're getting an opportunity to acquire a new customer who perhaps can't afford to buy the primary product but eventually will right, and so there's an interesting, perhaps reduced cost of customer acquisition for brands by participating in the re-commerce chain of events.

Speaker 2: 10:56

And these transactions have been going around for quite some time. It's just that they've suddenly become important to the brand because of the volume involved, right, that is correct.

Speaker 1: 11:07

I think that it's a complex set of driving factors. There's certainly some evidence that amongst Gen Z and millennial consumers there's an increased sustainability awareness and that's starting to bleed into Gen Xers like me who are the parents of those consumers. But I think there's also an economic factor here that Gen Z and millennials, again by a number of economic studies, have less disposable income than the preceding generation. So we've got a combination of economic pressure and, you could say, sustainability ethic that are combining to drive growth in this environment.

Speaker 2: 11:57

Right, and have you come across any use cases, any examples from brands where they have adapted and started taking part in the re-commerce transactions?

Speaker 1: 12:09

Yes. So if we look at an example of Levi's that are selling re what's the right word, refurbished genes to consumers, that's a pretty high profile brand that's engaged proactively in that environment. I think it's pretty interesting to look at marketplaces like rent the runway, who are increasingly position themselves as a service provider for brands to help those brands, in that case, be able to rent products out rather than necessarily re recommerce them. Right? That's just another form of another business model of of reuse, essentially right. And so there's two examples that I think are quite influential.

Speaker 2: 13:07

And then the Levi's one is really interesting because they have put some brand muscle behind it. They've in fact constructed an entire new platform for Levi's second hand, and they put a lot of marketing muscle behind it as well.

Speaker 1: 13:19

That is correct and I think that's driven off this business case of customer acquisition and some work I did.

Speaker 1: 13:28

I was pretty heavily involved in initiative in the World Economic Forum on how to scale recommerce in apparel in particular, and we really focused in on this business case of of reduced cost, of customer acquisition and also of the the interest that the consumer has in validating that the product they're buying in a recommerce environment is the authentic item, right.

Speaker 1: 13:56

Obviously. I think it's fairly widely known that there's a fair degree of counterfeit, brand fraud that takes place in in in the recommerce market and that's a problem. But from a brand's perspective, assuming they can actually intervene in a way that that allows them to provide proof of authenticity, then that's actually a really good opportunity because the consumer trusts the brand. So people are going to Levi's to buy second hand pair of Levi's because they can have a fairly high degree of confidence that these are authentic Levi's that they're buying. And so therefore, two things happen. Actually, there's a premium in the price that the consumers willing to pay and there's a very well definable revenue opportunity there in being able to bring bring that trust of that brand to bear in the transaction. The brand can actually monetize Right.

Speaker 2: 14:55

And that's interesting how you say a brand participating in the transaction gives it more credibility. I mean, if I'm buying it off eBay, I'll have questions on my mind. If I'm buying it from a platform that's owned by the city, that's just another website that Levi's has made, I'd be more confident. But if you think in terms of technology and you're definitely the right person to ask this question If you think in terms of technology, what sort of technology can be involved to assure customers that the product they're buying is authentic in terms of traceability, and what methods can be used to identify authentic products?

Speaker 1: 15:29

They can now apply various forms of of digital identifier physically to the product, whether that be in the label or, in fact, stitched into different components of the product. They can be linked with a digital authentication platform in the cloud so that the the consumer can receive a product, interact with it with their smartphone, authenticate that product utilizing some sort of digital credential, that's that's extracted off the document of the product physically and that is validated by the brand that's holding other data about product in the cloud. So the kind of technology is pretty scalable today. So my previous business, everything and the acquire of that company digital mark provides such capabilities. Other businesses, like every denison, who are one of the large providers of labeling for particularly a parallel items in the world, provide that kind of technology today and, and so physically, the digital authenticating items is something that's readily available to consumers with a smartphone in their hands.

Speaker 2: 16:46

So I remember back in 2021, you wrote an article where you refer to recombus as a quiet revolution and you spoke of certain challenges that the brands may have in trying to scale the recombus opportunity. So now the consumer looks ready, the brand looks ready to participate. There is technology already available that can add credibility to these transactions. Are we still looking at challenges in scaling the opportunity?

Speaker 1: 17:14

I think we definitely are. There's probably two that would highlight. The first is the logistical one. Right, we have to physically move items. Right, we have to collect products from consumers, we have to move them to other consumers, and that in itself has friction. Right, if you have an item that you want to, that you want to sell, is it easy for you to make that product ready and pass it on to a marketplace, or is it, frankly, easier for you to just let it languish in your closet or dispose of it? Right, and? And so there's a, there's a challenge around the ease of experience of actually participating in the recombus event. That's one big barrier, and the other one is is cultural really, right, brands have, for decades, to find themselves by being in the business of making and selling new things. Right, that's what they do.

Speaker 2: 18:18

Right, and there are large, large basis of their, their, their employees, that whose jobs are about designing new products, right, and if you make a product that's doing sturdy and it has a longer life, then what exactly are you selling for the next decade? Exactly, and if you?

Speaker 1: 18:41

think about the fashion industries to find itself on on shifting modes, to to make every product that they sell inherently redundant, because you need the next season style right and types of products like consumer electronics and so forth, and maybe some some real issues of how much lifespan can occur out of out of something safely, for example. But I think those are the two big issues the logistics aspect of it and the experience around that, and the and the cultural hurdles that the corporations still have Right but?

Speaker 2: 19:20

but despite those, we can see growth. We don't see a regression in the trend. We see progression and very steady progression.

Speaker 1: 19:29

Yes, we do, and I think that'll just gather momentum and, as with every early stage market, these kind of issues of ease of experience get solved, and as we get more economies of scale of the movement of items, then it becomes easier.

Speaker 1: 19:47

The costs of those movements drop right. Cost of delivery for e-commerce is still a big hurdle for e-commerce. It adds if I take a US shopping basket transaction, it'll add $5 to $10 to the cost of an online purchase to actually ship the item to you, and in a e-commerce situation you may in fact have two shipping vents right the one to get the item from the original owner and then you have another one to get it to the new owner right, and so now you've added $10 to $20 to the situation. Now how does that get solved? Well, with more efficient supply chain organization. For example, why doesn't the person who's delivering something to my door today also pick things up that I have to go back into the supply network? And so there's lots of initiatives to address those issues and they will get solved and we will improve the efficiency of the logistics flow.

Speaker 2: 20:43

Right, and I think I've come across a few startups, especially in the UK, where people have sort of built a communal wardrobe for wonderful, better work, where you can look at each other's wardrobe and see if there's items that you'd like to borrow, and I think that would also reduce the logistic trail that we're making, because, I mean, when you think in terms of impacting the environment, you've obviously got to have this in your mind as well. The additional shipping and then the transportation does not really favor the initial objective that we had.

Speaker 1: 21:12

I'm always skeptical of business cases that depend upon the consumer making a sacrifice of some sort, whether it be a sacrifice of choice or a sacrifice of quality. Of course there's a percentage of the consumer base that are willing to make those choices, but for something to be to really operate at scale, one needs to offer a win-win, and so I think it's very important to ask these questions of how do we make a recommers experience as good as, if not better than, a primary purchase experience for a consumer? If you can crack that, then we've got a really scalable market opportunity.

Speaker 2: 21:52

Yeah, I mean it does make sense in terms of communities, right where people already living close to each other would participate in something like this, but then again, involving the brand and making sure that the brand has benefit from it as well would be a challenge. But I mean, despite everything we say, we can see that the market is growing. I've got another question in my mind, and actually a couple of questions, for one, would you say this does have a net positive impact on the environment, all things considered.

Speaker 1: 22:24

I wish I could say resounding yes to that. I think we've got to do the math right. We have carbon emissions involved in moving things around and we obviously have carbon emissions involved in making things and we have carbon emissions involved in disposing of things. But I think it's true for many categories of products. It's true that if we keep a product in circulation, that the carbon footprints of those incremental movements will be lower than the carbon footprint of making a new product that would have filled that demand or the sustained impact of disposal. But it's easy to say that and logic says that that works. I think we have to substantiate that in each case and work out whether for this particular product type it does make sense or not.

Speaker 2: 23:32

Are you aware that somebody is making those calculations? Is somebody shaking into that?

Speaker 1: 23:37

Yes, I think they are, and I think we're seeing now that we're next year really, as the SEC's rules start to require companies to report on this, go through emissions and so forth, we will see an increased interest in doing these kind of calculations Because if there's a gain to be achieved, if we can substantiate the fact that we're reducing emissions by doing this, then folks are going to go after that. So I think in the early stages of the market people have been doing pretty narrow mathematics on this in terms of overall impact. That's going to expand and I certainly see a number of large brands doing that work and thinking of it not just in the context of recombos but just looking at that holistically across their supply chain. Same goes to where they're sourcing materials for example there's larger issues there.

Speaker 1: 24:39

Anyway, it will be that I'm using an environmentally sustainable material from the point of view of disposal, but the way that I actually get it to my production plants might turn out not to be that efficient from an environmental perspective.

Speaker 2: 24:51

It defeats the whole purpose.

Speaker 2: 24:53

Yes, yes, I don't know if you noticed, but I think there's been an undertone to the entire conversation that we've had so far. Most of the examples that both you and I referred to were from the fashion world. I understand, because fast fashion is one of the greatest contributors to the environment in terms of negatively impacting the environment. But I'm just thinking if an opportunity like recombos, how applicable is it across a variety of industries? I mean, on the top of my head I can say that it would work for certain electronics like mobile phones and other devices like laptops, which in the developing world already is. See the people living on that part of the world. It's nothing new, it's been happening for quite some time. But how applicable is it across a variety of other industries?

Speaker 1: 25:41

I think it's definitely applicable across almost all industry categories. It may require some rethinking of the format by which we deliver products. We have a lot of disposable packaging which could be reusable containers, for example, in which case those containers can actually be recombosed. So there's some reconceptualization of how we deliver products. If we start thinking of it in a second way To your point, the second hand car market is not exactly an innovation. That's been around for a long time and it's a very successful recombos environment. The same is true of baby clothes, for example. People have been passing baby clothes down through generations for decades.

Speaker 1: 26:37

It's not obvious how things like detergent bottles participate in the recombos environment, because you've used up all the detergent. That's really my point about how we think about the format of delivery of a number of these items. I also think we need to expand our definition I alluded to this a little bit earlier of what constitutes recombos. We think of it as I buy something, I've paid for it, I use it for some period of time, maybe it's six months a year. Now I'm passing it on to somebody else.

Speaker 1: 27:15

But fractional use is also a form of recombos. I always think of my lawn mower sitting in the garage here that has a utility rate of probably 0.05% or something in terms of it could be being used for most hours of the day, but it's pretty used for half an hour once every two weeks or something. Why isn't that type of a product participating in a collective environment where many different people could be utilizing it? In our environment, in my neighborhood, therefore, we'd have less lawn mowers and more utility of the lawn mower that I have. The broader concept here is reuse or shared use, I think how do we backward engineer that into the format of our products? I think with that sort of framing you can think of most product categories as being addressable.

Speaker 2: 28:23

Right, I think we've touched upon this before, but it comes to mind again with how we just described the reusing of the product, anything that impacts sales of fresh product, wouldn't that be a point of concern for the business making that product?

Speaker 1: 28:39

Yes, unless they can find an equally profitable way to participate in the subsequent sale. That's really the question that the brands need to focus on is how do I have a full product lifecycle economic participation? And that might be meaning that they have to become the marketplace. It might be meaning that they have to become the authentication provider. It might mean that they need to build some capability into their product that needs to be reactivated every time there's a new owner that has it. There are many different ways of solving the problem, but that's really what they've got to think about.

Speaker 2: 29:24

Yeah, it sounds very optimistic when I think of it in my mind and just struck me when you see a growth in numbers which is evident. The recombinant industry I don't know how it's been classified, but sort of numbers. We have have shown growth In my optimistic mind. I somehow feel that that could put the pressure on brands to look at the way products have been manufactured and maybe this culture of mass production that's been around, I think, ever since the Second World War could potentially change. Is that too optimistic to hope for?

Speaker 1: 29:57

I think it is optimistic. I think there's a lot of businesses.

Speaker 1: 30:01

I think there's a lot of businesses that. How do they classify themselves? We are a manufacturer of dot dot dot, right, and that tells you everything about the way that they are framing their culture. But this becomes a field of competitive differentiation, and brands that can crack this will access new consumers and they'll be able to demonstrate their credentials in a broader world context.

Speaker 1: 30:34

There's obviously other forces of resilience, for example, that are causing companies to look at how to reshore their production, for example, or reduce dependency on very, very long supply chains that are transiting the whole world, because, you know, whether you're thinking of it in terms of Ukraine war or whether you're thinking of it in terms of climate disruption, those supply chains are vulnerable in this world. So there are many different drivers and I think it's going to take some time, as with a lot of things, we will see, I think, premium brands being at the forefront here, because actually their consumers are willing to and demanding actually to be seen to be participating more proactively in the changing world, and they themselves want to have that ethos. But so we're still on a journey that's got some distance to go. I don't think we can see an overnight revolution.

Speaker 2: 31:46

That'll be too much to hope for anyway. So I think we've touched upon how there is growth potential. In fact, we've mentioned that plenty, that there is growth potential, but why do you anticipate, despite all the conversations that we've had around the challenges, why do you anticipate that growth still?

Speaker 1: 32:04

I think for two reasons. There's a fundamental requirement on brands to figure out how to become less negatively impactful to the planet and that isn't just a PR German exercise. Increasingly that's becoming an investment market accountable exercise and that creates a powerful force. So that's why obviously recommers models that actually can substantiate awareness and consciousness. That just builds a bigger addressable market for brands to respond to. So both of those forces are there and they're strong forces.

Speaker 2: 32:48

Right, and how fragile is this growth? I mean, with something like the pandemic that we saw, with something like that, completely take away this growth, because then with the pandemic, I as a user would have certain concerns on my mind. I remember during the pandemic how we were trying to reduce the number of contacts made over certain products. I mean deliveries were impacted. So do you think that is something that would play on people's minds? Another pandemic which is quite often spoken of. If there is another pandemic, something like that, any other seasonal change could impact the recommers world.

Speaker 1: 33:22

It could, and this is why it's important as we look at these models, we set a pretty high bar in terms of performance. They must be able to deliver business value to the brand that's incremental to their or superior to their current operating means of performance, and they must deliver value to the consumer. You should be able to buy a high quality recommers product with an experience which is as good as or better than a primary purchase, and you should be able to trust the quality of what it is that you're going to buy, and then you should be able to do that cost efficiently. You're obviously I'm going to pay more for a recommers product. You'd pay less.

Speaker 1: 34:06

So the threat that we have is obviously economic tightening. So if we have a tough economic environment, then people tend to be less willing to invert a commerce. Do the right thing. So doing the right thing has to end up making economic sense. And just as we've seen now, and if I look at the energy transition market, it now makes sense to buy renewable energy. Why? Well, because it's cheaper than fossil fuel produced energy in most markets, and the same has to be true in recommers If we cross that line in terms of quality of experience and actual cost of outcome, then there's no reason why that should suffer with other disruptions that may come along and impact our world.

Speaker 2: 35:03

Right. So it does sound like a robust industry. I mean there's nothing to take away from it. I mean we can see the progress grow.

Speaker 1: 35:11

Yeah, I don't see the recommers space as a fad sort of speak, I think, but it's a fundamental, just like e-commerce is a fundamental. That is just how the world works, and recommers will become increasingly a part of just how the world works, and I certainly see it with my own consumer behaviour, the consumer behaviour of my children, and it's not something that they are doing, though this season. This is what we're going to do. It's just it's sort of built into the way that they approach their consumption experience.

Speaker 2: 35:52

Yeah, I mean the world does seem ready in terms of consumer experience, and I think you'd be able to tell me better how that's looked across Europe. Have you noticed a shift in people's likeness towards using pre-loved goods?

Speaker 1: 36:07

Yes, and I can't give you any hard data points on this I do think that and this is sort of a GMZ, a millennial phenomena that it's becoming less cruel to be seen as only a new product purchaser, that you want to establish your own social credentials by being seen to be a recommissed consumer. I just think that that's become part of the social fabric in the European environment and sends a broader message to people that I get it and I'm a responsible citizen, I'm a responsible participant in our environment. I'm making a big generalization there, but I think that it seems to be relatively pervasive across most European markets that I'm certainly interacting with and you can see in the response of many high-profile brands in Europe. Particularly brands like H&M really had to up their narrative in this environment because they were disconnecting themselves from the consumer that they depended upon.

Speaker 2: 37:33

Right, and how's the e-commerce and recommissed combo sort of played out? Because I would imagine if I'm buying something that's already been used, I would want to look at the product physically before I buy it. But then we've spoken of authenticity, we've spoken of things that can be done beforehand to assure the customer, which I'm pretty sure a lot of these e-commerce platforms will be doing.

Speaker 1: 37:55

But how's that?

Speaker 2: 37:56

played out.

Speaker 1: 37:58

Well, obviously we've seen in the last kind of 12 months or so a resurgence of physical commerce, right. People actually have gone back out to stores. E-commerce growth kind of plateaued and in some product categories declined a little bit as people kind of really embraced the renewed experience of going physically shopping. Right, but I think the pendulum will swing back a bit because e-commerce delivered a great and easy experience Click arrive right and now recommissed is actually a store, a footfall driver, and you see a lot of brands doing this, saying bring your used product into our store. Lululens, I think, are doing this in quite a high profile way, and they're doing that because then they don't have to deal with the cost of transport to get to the product, they can check the product, but also they get a consumer into their store and they increase the probability that they will buy something else while they're going through that process.

Speaker 1: 39:14

So what we've seen is that we are now in an omnichannel consumer world. Right, there isn't a set of consumers who only buy from stores or only buy e-commerce people do both things, right. And there won't be a set of consumers who only buy e-commerce or only buy primary goods. People will do both things. And so what we've got to design is that is, an integrated form of experience, because perhaps it's convenient for me today to actually take the product back to the store, whereas maybe tomorrow I want to drop it in the postbox, because that's just easier for me, right? So I think brands need to think of it pretty holistically and in a multi-channel way, right?

Speaker 2: 40:04

We've spoken plenty of how the brands can drive their products and we've spoken plenty of how the brands can drive a lot of value from this. What would you say Is there an entrepreneurship opportunity here for somebody who's looking at the puzzle and saying, well, this is what's missing in it, this is the connection that's missing between the brand and the consumer, and I could come up with a solution and I could bridge that gap. Do you see any such opportunities for aspiring entrepreneurs?

Speaker 1: 40:30

There are definitely opportunities.

Speaker 2: 40:32

If I've got a hot idea, I'm not going to tell you about it, but I think that I should have worded that better to somehow get the information out of you, because I might as well be one of those entrepreneurs.

Speaker 1: 40:48

But I know this when you have big shifts in industries, that's the time that entrepreneurs and innovators get to scale businesses, because established organizations may not know how to ride this new bicycle. They need somebody to bring them the bike ready to go. They need to show them how to do it. If I take a business like Trove that has been very skillfully providing a tool set towards brands to help them get into the recommers space, right, that's an entrepreneurial play and obviously there are opportunities for new retail brands themselves to put themselves forward. I mentioned Rent the Runway earlier and they would present themselves as a consumer facing brand right and they're helping brands to participate. But they've taken the gaps, so to speak, to build themselves as an independent consumer brand on the back of this kind of shifting trend in consumer behavior.

Speaker 2: 42:03

I love the bike analogy.

Speaker 1: 42:06

Well, that is what entrepreneurs should always look for when there's a shift. There's a risk aversion in current established organizations, and even enlightened leaders of those organizations would understand they've built a whole company that does very well the established thing. It doesn't necessarily do very well the new thing and they look for, then, organizations they can partner with that do know how to do the new thing, and that's a great way to bootstrap a business. I've certainly done that a few times in the past.

Speaker 2: 42:42

I was going to ask you if there's an example that you could provide, because it makes sense in terms of logic. But is there?

Speaker 1: 42:47

any examples you could cite here yeah, I'll give actually quite an old one. So I mentioned earlier that I was co-founder of a Wi-Fi company called the Cloud. We built a very large public Wi-Fi network back in 2003 and initially in the UK, and at that time British Telecom were the big dominant provider of telecoms in the UK and they were curious about this Wi-Fi thing but they weren't ready to dive into doing something with it, thank goodness. So they kind of deal with us to use the network that we were building so effectively. We helped them mitigate their risk of being exposed to a new emerging market and they helped us kind of get into that market by bringing us a bunch of customers. So that was a very useful synergy.

Speaker 1: 43:47

And in founding my company, everything I'd say we worked with two brands at different points, but we worked with Diageo actually quite early on, who were very interested in pioneering digital consumer products interaction, because they were dealing with a world where promoting alcoholic drinks was above the line but the above the line advertising was being outlawed in various markets around the world. So they wanted to experiment but they weren't going to figure out how to build that capability themselves. They needed to find expertise that could help them do it, and Ralph Lauren, very early on, recognized the opportunity and digital traceability of their products to build improved consumer trust and improve the visibility that they had into the integrity of their supply chain. And again, they could have put resources together to try and innovate that internally, but they were very aware of what their core competencies were and weren't, and so that presented an opportunity for an entrepreneur like myself to bring them a capability and bootstrap ourselves with partnership with them.

Speaker 2: 45:08

So there's sound examples, and I mean there in lies great advice for a lot of entrepreneurs. You could tap into knowledge that already exists without trying to learn things on your own, as well as you know how. That's great for risk aversion and mitigating any circumstances you may have.

Speaker 1: 45:22

Yeah, or always look for somebody with bigger shoulders to stand on top of. That's the. That's the advice I would give.

Speaker 2: 45:29

I'm going to keep that in mind. Well now, it's been a pleasure talking to you, and I think we've had a very thorough conversation. Is there anything that you'd like to leave us with any more pieces of golden advice?

Speaker 1: 45:42

I think you've tapped me out, so thanks for the time. This has been a great conversation.

Speaker 2: 45:47

Likewise, have a great day.