A Conversation with Tina Sharkey, co-founder and CEO of Brandless

I had the pleasure of interviewing Tina Sharkey at the sold out StrictlyVC Insider Event on February 27th produced by the talented Connie Loizos. Here at Redpoint, we have been investors in Brandless, and I’ve been lucky enough to work with Tina and team since day 1. It’s incredible to see how far they’ve come from being just an idea to a movement that is resonating with millions of Americans across the U.S. It’s been amazing to see how Brandless has been embraced by young and old, coastal and central across age, race, and income levels.

Tina and I talked in depth about her vision at Brandless, consumer trends and building a community. I’m excited to share an edited transcript for those that were not able to attend the event.

Medha: Tina, Brandless is trying to democratize better by giving people who previously couldn’t afford it access to organic, non-GMO, and gluten-free products, all for $3. Brandless talks about being able to offer that price point by cutting out inefficiencies. What are those?

Tina: What’s interesting is that we’re not the first people to invent the direct-to-consumer business. And in many ways, that is exactly what Brandless is doing — we’re building a community and we’re selling products directly to consumers. Having said that, this particular area of the market, the grocery and “better for you” or “BFY” market (an industry term for products much like you would find in a natural and organic market) is not set up for that kind of distribution.

When you think of the largest CPG companies in the world, they don’t have any customers that are people. Their customers are channels, a.k.a. stores. A product leaves a factory and goes to a distributor and you pay a commission. It then goes to the wholesaler, who puts them on retail to the shelf with a stocking fee. If you want to get a certain shelf, you pay more. You want an end cap, you pay more. There are breakage fees, there are settlement fees, and a whole lot more.

Everything has a markup. By the time you actually bring that same product home, it’s stacked with all the extra built-in costs that have been layered onto it after it leaves the manufacturer. By eliminating all of that markup, which we at Brandless call the “BrandTax,” we create enormous savings. So, across everything that we sell on Brandless.com, from better for you beauty to personal care, to housewares, to food, snack, pantry, cleaning, etc. — on average, people are saving 71% versus national brands whose products take those inefficient journeys that add extra costs.

Medha: So, Tina, despite the name, it feels like Brandless is building a brand around the lack of a brand. How do you think about creating a brand without all of the excess of traditional brands? And how is that different from the value proposition of other e-commerce companies that are cutting out middlemen and going direct to consumer?

Tina: Well, first of all, we’re not an e-commerce company. We’re a community. And so, I think the key word that you said was traditional.

Brands were originally invented to be trust marks. The problem is, we’ve all lost trust in brands. So the question is, what does it mean to reimagine being a brand? Brandless is unapologetically a brand. We’re just saying we think brands should be about community. We think brands should be about, in our case, living more and branding less. We think people should transact kindness. We think people should be transparent and that trust should be reestablished.

If you look at the top 100 CPG brands in the U.S. last year, 90 were in decline. That means the entire CPG core is coming apart. And that’s because people lost trust. 77% of millennials don’t want to use the products their parents used. People want to know who they’re doing business with, who they’re transacting with, what is their social good platform, and who am I actually working with?

So we don’t think of ourselves as an e-commerce company. Yes, you can transact and you can buy things on Brandless, but first and foremost, we’re a community. And we’re a community who believe that everyone deserves better and better doesn’t need to cost more.

If you do a circle around this block here in SOMA, San Francisco, you could probably buy any range of things, but not at these prices for sure. America does not look like this block, and America cannot afford these prices, and America does not have these salaries, and America is not being treated in a way that reflects the America that we want to see.

And so, we’re not waiting for anybody to fix it. We’re doing what we all know how to do as entrepreneurs and investors — just fix stuff. We’re building a community where people trust each other, and they support each other, and the false narrative is just not necessary. Everybody else’s story, a.k.a. the community members’ stories, are so much more interesting than any story we can imagine ever writing.

We sell to red states, we sell to blue states, we sell to purple states. We don’t see people as political vehicles. We don’t care about their race, or their color, or their ethnicity, or their sexual orientation. They’re just people.

We just want to get back to the idea that people are people. And people deserve better. So if that’s a brand, okay, we’re a brand. For me, that’s a movement. And I wish other people would join us in doing it whether they are selling our kind of stuff or they’re building something else. Transacting kindness feels like it scales.

Medha: So you talked about a community several times and it’s something that’s front and center in what you’re building. Can you talk about how you’re building that community? How are you leveraging social and content to do that?

Tina: Yes. I’ve had the privilege in my career of building, shepherding or being part of some extraordinary communities, whether it was co-founding iVillage in the mid ’90s (the largest online community for women at the time), or overseeing all of the social platforms across AOL networks, AIM, Buddy List, People Connection or the vertical communities on BabyCenter. Understanding people are people, first and foremost. Connecting people around their affinities, around their passions, and understanding that any individual product we may sell today or tomorrow, or in the future, is ultimately just a souvenir of being connected to people that care about something that’s much bigger than that.

While everything we sell at Brandless is $3, not everybody has $3. That sucks. And so, what do we do about that? Because if we really mean better everything for everyone, we have to fix that too. And so, when you check out at brandless.com, we buy a meal in your honor through Feeding America. If you’re one of our members (which you don’t need to be), but if you want to be, we’ll buy 2 and we’ll buy 10 in your honor when you check out.

We walk the walk. For example, Giving Tuesday, what’s that? That’s a campaign. What about Giving Monday? Giving Wednesday? Giving Thursday? And just telling people that modeling the behavior that we want to see in the world is the only way that we could actually build a culture and build a company that is as authentic as we believe it needs to be in order to be fully transparent.

When we went to raise venture capital dollars from your elite firm, we said, “Look, Jeff, Ryan, Medha, we are for profit. For sure, we’re going to make a ton of money, but we are absolutely for purpose and we don’t wait to do our purpose — our purpose starts now. And so, if that’s not the kind of company you want to invest in, you shouldn’t invest in our company. You shouldn’t invest in our movement.”

We’re very upfront about that. We don’t believe those are things that you should wait for. We think that you should walk your walk, you know, when you get out of bed in the morning.

Medha: Let’s talk about the products themselves for a second. The website is laid out like a traditional grocery aisle. Can you talk a little bit more about how you think about merchandising? For example, today Brandless sells hygiene products but it doesn’t yet sell deodorant. How do you think about what to sell and the timing of products that you roll out?

Tina: That’s a great question. When we talk about the better for you market, it is not something that consumers really talk about but it’s a cut of how merchants think about these things. So for us, “BFY” means we think about “Just What Matters” and what that means to us in each particular category. Then, we use that filter to create that category, to create a benchmark, and then to create extraordinary savings and better value for more people. In food, it has to be non-GMO and preferably organic, so all of our food is non-GMO and over 70% of it is organic. In beauty, for example, it’s not really as much about organic, as it is about the 400 ingredients you don’t want in your beauty or personal care products. In that particular case, no phthalates, no sulfates, no artificial anything, and also cruelty-free, meaning we don’t do any animal testing, etc. In the case of cleaning products, “just what matters” for us means EPA Safer Choice certified.

Having said that, there is a lot of data that goes behind the art of creating an extraordinary experience. And we don’t ever sell one product to one person. Everyone is building their own Brandless boxes and they are coming back on a regular basis and they are exploring, they’re trying things, and then they’re replenishing things.

We’re finding that every single day, we ship to 48 states. The fastest growing states are states that a lot of people who build businesses in this region, don’t even think about. Of course, the biggest states are the ones with the highest population of density, so New York, California, etc. But we’re also reaching out to the rest of the states across the country and we often ship to them before noon.

There’s all kinds of data that informs us on household penetration rates, the fastest growing parts in the market, how we think about that, what’s the consumption turns, how often do people buy snacks, how often did they replenish them, what’s expendable consumption versus one-and-dones, etc. If I ship you a huge case of snacks, you’re likely to, either taste them or bring them to the office, or throw a March Madness or football party, or bring them to the soccer field.

Whereas, if I ship you a case of our extraordinary peppermint oil mouthwash, alcohol and fluoride free, for $3, you’re probably not going to gargle more. But having said that, when we roll out our content strategy, which we’re in beta right now, with #BrandlessLife, we’re going to share hacks of other things you can do with mouthwash. Did you know you could clean your washing machine with it? Did you know you could soak paper towels with it and put them at the bottom of your garbage? We’ll share all kinds of these videos because we’re teaching, we’re learning, we’re engaging, and most of all, we’re listening to the community. Then we’re highlighting them and their stories by taking their content and putting them in the spotlight.

If you haven’t seen a Brandless product, we trademarked the white space. And the reason we did that on every single product is because we wanted to say we are actually capturing back the truth and essence of every product attribute using a clean and consistent UI and UX. Having built so many social products in digital, I felt like there was no real user interface for packaged goods for consumers or anyone actually.

When people go to the supermarket, they have so much to think about. They have to deal with national brands and with private label brands, and they have to deal with whether or not they have a club card or if they should stock up and save. What’s $3.99? What’s $4.62? Is it organic? Is it gluten-free? When they look at a product, they turn it over, they look for the ingredients, they put it back and they take one step back.

When they take that step back, they’re looking at what’s called “the tape” because nobody directly tickets products anymore because everybody changes their prices dynamically both online and offline.

When they do that, they’re making a decision after they’ve gone through this whole calculation. That whole process takes seven seconds. Five to analyze the products and two to decide on the price and what you’re going to grab. And then when they get to the register, they have no idea what it costs. That’s why “The Price is Right” is still on the air 30 years later.

I think the challenge is to really try and simplify things and to make people understand what they’re getting, what the pricing is, and the transparency of what’s actually in their products because the products can speak for themselves.

Medha: So, it’s so clear that you live this brand. I’m really curious, since you launched in July, what has been something that surprised you?

Tina: I remember my co-founder, Ido Leffler, and I were in New York right after our launch on 7/11. We’re on our way to our last meeting and I get a text from the office and it says, “48.” We hadn’t checked the numbers because we had been in back-to-back meetings.We responded, “Wow, 48 boxes, the first day?” And they replied, “States. We just shipped to the 48th state.”

Another surprise is the unbelievable letters that we get every single day. One of our Slack channels is #peoplelovebrandless, where we share thank you notes and emails that we get from customers. And that thing is running like the Times Square ticker, like a Bloomberg terminal.

People write to us that they didn’t have access to these things before. They used to have to drive 100 miles round trip to actually know about these things. They didn’t know that things like tree-free toilet paper, which is made with sugar cane and bamboo grasses, existed. And they don’t believe in cutting down trees to make toilet paper.

Some people are freaking out and saying, “OMG. Awesome. Awesome” with emoji after emoji. Or saying, “I love your brand and I’m using it to redesign my life.” And some people are sharing, “I didn’t know that I could afford this,” and “I was never able to give this to my children.” Or “Now, I don’t have to use those drugstore brands that didn’t reflect my values.”

Most recently, we got a customer service email that said, “I’m just curious, is your EPA Safer Choice Certified multi-surface cleaner gluten-free?” And of course, my first response was, “Don’t eat it.” And they said, “No, we’re not eating it. We’re celiac, so we don’t just worry about the gluten-free for our bodies, we actually can’t touch gluten-free surfaces because it gives us skin irritations. And what about your shampoo? And what about your conditioners?”

And all of that is gluten-free but we hadn’t tagged it that way on the package. We hadn’t put it in the search results. So, we instantly did all of that, just using everything we know how to do as long-time content producers. As a result, the celiac community is suddenly saying, “Thank you, thank you, thank you. I didn’t even know that was possible. I didn’t know there was a store that I could actually talk to who would talk back.”

Every single day, every Brandless employee writes a thank you note to a customer. Every single day.

Medha: I could listen to you talk all day but it sounds like we’re out of time. Thanks so much.

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