David Perry Of Carro: 5 Things You Need To Know To Create A Highly Successful E-commerce Business

An Interview With Orlando Zayas

Passion. Do you care? Do you REALLY care? Like you’re making shampoo and it’s boring you to death, then don’t be in the shampoo business!

As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing David Perry.

David Perry is a 30+ year veteran from the video game industry, making games like Aladdin, The Terminator, Earthworm Jim, and the Matrix. After selling his last company to Sony PlayStation for nearly $380M, he became interested in moving from video games to eCommerce. Teaming up with his co-founder Jason Goldberg, Perry is now helping build Carro, which is used by over 30,000 brands (providing them with technologies to sell more by working together as a network).

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I’m from Northern Ireland and as I got older, I became interested in making video games and started getting published in books, finally getting an offer to leave high school and move to England to make video games professionally. That was going well, I had #1 hits like Teenage Mutant Ninja Turtles, but out-of-the-blue, I was asked to move to America for an opportunity, which is where I settled. I didn’t have a high school degree, but I did (years later) receive an honorary Doctorate in Engineering from Queens University Belfast. My teachers panicked when I left school (“You’re leaving to do what?”), but it all worked out in my favor.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

Assuming I was about to retire, I built an insanely cool man-cave that even included a photo studio. Nobody cared about my photos until I began to take photos of social media influencers. After spending time with them, I realized there was a big disconnect between brands and influencers, where brands hire influencers like billboards, and influencers yearn to someday work with the brands they truly adore. So I met a local entrepreneur, (we were both helping school kids learn about business) and after a legendary whiteboard session, we decided to build this company together. The idea grew and evolved, and we now have over 40 employees, and a recent investment from PayPal.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

A weird thing that happens to me often is that I find myself knee-deep in something and don’t even remember starting. I love the saying, “How do you climb a mountain?” “One step at a time.” You just have to start climbing, just start marching in that direction, and don’t stop. It’s the people that stop climbing in the fog that die on the mountain. As Nike says, “Just do it!”

So, how are things going today? How did your grit and resilience lead to your eventual success?

When you believe something and explain it to someone, it’s infectious. If you don’t believe it, then you sound like you don’t believe it. Momentum comes from being all-in and finding other people that share the vision.

One piece of advice I give is not to “point at hurdles.” I’m sure you’ve been in a meeting where someone keeps telling you why you can’t move forward. The people that succeed either jump hurdles or kick them out of the way. The trick is to know you’re doing it. Don’t be a hurdle pointer.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

One of our investors offered us a FREE office space. It was lovely. It quickly became clear that their side of the office was very dry, serious, almost somber. The other was jazzed, excited, having fun. The noise difference was remarkable (someone brought in Nerf guns and things went downhill from there) and they asked us to leave. I’m sure they don’t miss us, but I like fun energy when people are on a mission together.

The funniest moment was when it was someone’s birthday and one of our guys went and bought donuts and balloons. He pulled up outside the office (we had floor to ceiling windows), so he was just on the other side of the glass. He opened the rear door of his car, took out the donuts, but the box collapsed and the donuts hit the ground, then the balloons flew out of the car up into the air, and he couldn’t stop them as his hands were holding an empty donut box, and he just watched them fly away. He didn’t know the office was watching him through the window. It was hilarious.

What do you think makes your company stand out? Can you share a story?

We have a general mentality of “anything is possible.’’ I believe the video game industry beats that idea into you, where if you’re not inventing something new, you’re boring. An example? We have a lot of data to look at, so we look at it in real time 3D. It’s much more interesting that way.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

We understand our team has families, so we try hard to balance the work. Every single employee owns equity in the company and we pay them the best we can to reduce financial stress at home. It’s no good having employees worry about fixing their car or covering a medical cost for their children. With COVID, we’ve tried to help out by adding additional benefits, like paying for their streaming services, workouts, and even sending custom snack boxes every month, which is a little reminder of the snacks we had at our in-person office.

We also signed up for WeWork so our team can meet in any city they cover, anytime.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My friend Fred Fierst told me, “to win the war, you don’t have to win every battle”. It changed how I think about negotiation and strategy. It actually annoys me now watching people trying to win every single battle. They are missing the big picture. There’s also a quote I follow by Thomas Huxley, “Learn something about everything, and everything about something”. If you do that, you learn about so many subjects you have an immediate rapport with people that care greatly about these subjects. For the “everything about something”, that was the video game industry for me. You need to do a deep dive on something. (Commonly considered “Putting in your 10,000 hours.”)

Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?

When COVID hit, physical retailers closed and started returning inventory, it was a mess. Retailers had to get their online strategies up to speed FAST, and once they did, they became addicted to data they normally don’t have. Our Carro platform at the time was focused on helping brands gain attention working with influencers, however we immediately started adding the ability for the online retailers to collaborate, to sell each other’s products so they could immediately increase their sales. “You sell bikes, why not sell helmets?” “If you sell helmets in-network, you don’t need to buy them and store them in a warehouse.” “We will arrange for them to ship, you just need to sell them.” Between them, our brands have over a million products they could cross-sell.

Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?

What makes brands special is their vision, designs, curation, marketing, quality etc. Quality really matters to consumers, it’s why Starbucks exists. It makes you fall in love with the products. I don’t believe that people just want the cheapest eyelashes, or the cheapest jacket for their mission to climb Mt. Everest. We call it experiential shopping vs. intent-driven shopping. Intent-driven shopping is: “I just need some white socks, toilet paper, and a charging cable.” Experiential shopping is when the brand matters. Do you just want the cheapest possible cola drink? Do you want the cheapest possible sunglasses? Do you want to drive the cheapest possible car? Do you want to ride wearing the cheapest possible helmet? No.

Brands are here to stay, but so is low-cost intent-driven shopping. I see two markets, there’s the stuff that falls into “The cheapest version is fine” and everything else. Everything else is also trillions of dollars, and that’s where our Carro service focuses.

What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business? What can be done to avoid those errors?

The #1 mistake is underestimating the cost of traffic and attention. They spend money on Google/Facebook, but can’t afford to hire experts so the money they had gets flushed in a week. They double-down on expensive influencers and again they get no material sales lift, as that model they hired to sell their bikini mostly had male followers. Whoops. It’s just so dangerous out there and that’s why the vast majority of new stores don’t make it.

This is one thing we are trying hard to help with. On Carro if you add your helmets into lots of other bike stores, then you are getting your helmets seen by all their traffic for free. If you step back and look at the traffic of the brands on Carro (now 340M visitors a month), it makes more sense to share those people that are already shopping for free.

In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?

I think the #1 problem for eCommerce brands is staying relevant. They make a product like healthy spaghetti, then their website never changes. They only have 3 flavors and that’s it. They need to keep that store “alive”, and one way to do that is to post recipes and sell EVERYTHING in the recipe. People are busy, if you email them a picture of an incredible dinner, and their mouth is watering and they love the cutlery and the place settings, to then say “Sorry we only sell the spagetti” is kind of dumb in 2022. Help the consumer have an incredible meal. Carro let’s them curate bundles so all the items in the photo could be purchased in a single click.

Adding additional sales increases the average order value and average lifetime value of a customer, that’s critical to unlock your marketing team.

Interestingly the same thing happens to influencers, they are trying to sell sunglasses, but their fans are all posting in the comment feed, “Whoa I love that handbag! Who makes that handbag!”

What I have learned is that influencers are becoming brands (building their own Shopify stores) and brands are becoming tastemakers. Meaning that brands (like influencers) can curate multiple things into a photo and their customers will desire them. With Carro we have all these items, so brands can earn that additional money.

Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?

I think Step #1 is actually to take GREAT (I mean really GREAT) product photos, I’d personally consider animating them (cinemagraphs) or even better, making them 3D. It’s all about engagement and your shopping experience needs to be MUCH better than Amazon. Consider getting help from companies like Photorobot.com, Soona.co, Resultsimagery.com, Splashlight.com & Autoretouch.com

As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?

Besides great photos and copy, there’s a book on the irresistible offer, it’s things like “What is it?” “Why should I care?” “How much does it cost?” “Why should I trust you?”, “What’s in it for me?”, basically you have to remove every possible reason why they would hesitate. The #1 motivator is scarcity in number, not in time. So saying “You have only 24 hours” isn’t the best motivator. “Only 3 remaining” is much better. Discounts are also good, make them feel they happen to be in the right place at the right time. Another is to think about subscriptions, so for example if you’re selling a blender, and you’re about to sell ingredients, try offering a subscription to the ingredients. The value of a subscription is profoundly better.

Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?

Trust comes from quality of product, quality of service, quality of shipping, and quality of support/returns. If everything is 5-star you are winning. If everything is fantastic, but shipping takes 3 weeks, you have an emergency on your hands.

One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?

Reviews are really broken online, so much so they are close to useless. Competitors post negative reviews on other brands, I’ve even heard them say “The item caught on fire!” to have their competitor’s store entirely shut down. Paid review services forward 5 star reviews to Google, but if you put 1 star they ask you for more feedback, neglecting to send that review to Google. It’s a messy business.

Truly fixing the problem isn’t a priority to any company I’ve seen, so I think users are starting to apply their own filters. I personally only trust reviews when there are many thousands of them as that’s more difficult to game.

Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful e-commerce business? Please share a story or an example for each.

I’m a fan of Marcus Lemonis, I LOVE his TV show “The Profit”, he has something called the three P’s. I think he forgot 2, so I’m going to present the 5 P’s.

1. Product. Whatever you sell, would people off the street say the product is incredible?
2. People. Build a great team that provides an incredible experience for the customers and works well together.
3. Process. Is the company run well? If the inventory isn’t tracked, it will spiral out of control. Gordon Ramsey goes into kitchens and sees the nightmare that’s behind the scenes. That’s a bad process.
4. Pricing + Profit. How much is every single aspect of your business and product costing? As Marcus says, “Know your numbers!” It’s shockingly easy to sell a pizza and lose money on every slice.
5. Passion. Do you care? Do you REALLY care? Like you’re making shampoo and it’s boring you to death, then don’t be in the shampoo business!

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I want brands helping brands. I’m all about the hive mind of 100,000 brands sharing what they know. I was on the board of the main video game developers conference for 10 years (GDC.) We hit around 15,000 game developers attending and sharing their knowledge with each other. I’d like Carro to help that happen in the brand space. How do you get shipping rates down? How do you do better product photography? Who can I hire to write fantastic copy for my product descriptions? How do I pay taxes when selling into South Korea from Australia? There are a million questions, and I would like to attract really smart, passionate, experienced D2C industry leaders to contribute their time to help me build the biggest D2C community in the world.

How can our readers further follow you online?

If the reader has a Shopify store selling over $5K a month, they should install Carro and email hello@getcarro.com, mentioning this interview. We will take GREAT care of them.

To get me directly, my LinkedIn is: https://www.linkedin.com/in/dperry/

This was very inspiring. Thank you so much for the time you spent with this!