EP128 - TopHatter CEO Ashvin Kumar
We caught up with Ashvin Kumar at the ShopTalk 2018. Ashvin is the co-founder and CEO at Tophatter an innovative live action site for mobile shoppers. With the engagement and psychology of a game and the economics of a marketplace, Tophatter generated over $300 million of GMV in 2017 (100% up on 2016) and sells 100,000+ items every single day. We talked with Ashvin about his background, including his previous start-up Blippy. The pros and cons of various auction format and how Tophatter appeals to it's entertainment seeking value oriented shoppers.
Episode 128 of the Jason & Scot show was recorded on Tuesday, March 20, 2018.
Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
New beta feature, Google Transcription:
Jason: [0:25] Welcome to the Jason and Scott show this episode is being recorded on Tuesday March 20th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.
Scot: [0:37] Hey Jason and welcome back Jason Scott show listeners we are live live live from shoptalk and Las Vegas excited to have on the show. Ashvin is the top Hatter co-founder and CEO and tophatter is the world's most entertaining Marketplace they've raised over 35 million in venture capital and we're really excited to hear your story hear about tophatter and talk about, marketplaces machine learning in a variety of other topics welcome to the show action.
Ashvin: [1:06] Thank you and thanks for having me Jason Scott have to be here.
Jason: [1:10] We are thrilled to have you so one of the ways we almost always start out the show is get a little bit of the background of our. So can you tell us sort of how you started your career and found your way to this.
Ashvin: [1:23] Sure so I'll let I'll start at the at the very very top so I was born and raised in in Silicon Valley. Local kid that that that never left the Bay Area basically there's there's not too many of us a lot of lot of folks descending on the Bay Area these days so I got to grow up in Palo Alto. Went to Palo Alto High School I was in I was in the valley and that the.com. Bubble and I remember I'm there is just remember there was a big there just weren't enough programmers and like the in hanging like the 99 2000 time and I remember getting your coffee. When your programmers you know how to write Java and I was like. Yes and I had no idea when got a book studied about the week before got in there and started learning job at up the I make great money that sell rather this is awesome and so that's where the bug started for me.
Jason: [2:23] Will assume job I was like a required freshman class at Palo Alto High School now.
Ashvin: [2:27] You know what's interesting at we we did do a little a little programming it at pellets high school so we had a little bit of that there but not a ton it wasn't quite as in Vogue as it is now. I know I think computer science is like Stanford's largest major by far and certainly the flavor of play for the decade. Yeah so after Polly Went to went to Stanford computer science Stanford actually while I was there I was interned at Amazon. That's where that's where my co-founder and I first spent a lot of time together he was an internet. At Microsoft and I was an intern at Amazon and so we decided to split the difference in. And find a place to live in between the two so we lived in the University District in Seattle. And every every night we come back and talk about the differences between Microsoft and Amazon which is awesome and I had a fantastic 2003. Does neutering there for a few months and it was it was already felt like a fairly big company with a lot of but still plenty of opportunity ahead of them and I remember. I want one thing I'm a Jeff Bezos would talk to the entire episode that has been. Like one of the treats was he come and talk to all the entrance and we talked about some some the company values and that there's two that I'm a really well as a frugality and Trust. And an enzyme I'm ever just wanted to hit like a soda need to go pay for stuff.
Jason: [3:55] Obviously like I'm imagining you comparing notes with your roommate and like the cafeteria on the Microsoft campus was a little fancier than the free bananas at Apple at Amazon.
Ashvin: [4:04] Do it what about that but what I found fascinating was that they were proud of that fact and so it just it just. You got me so it got me excited. Three different perspective than one person's proud of their reality and Microsoft obviously was touting there free food and free soda just two companies with very very different mindsets obviously. So after I graduated from Stanford where I worked at a small startup Enterprise social networking startup for for 3 years I would some of the so my friends from Stanford is the 3rd engineer. When I join we had about 7 people. I reread the series day we spend three years building the company in about. 3 years 23 years and my co-founder and my current co-founder and I decide to leave our job he went to. You went to a different start up use also 3rd engineer there so between us we had seen a couple we felt like we were the ground for a couple companies.
Scot: [5:07] Is this the same guy that was also a Microsoft intern.
Ashvin: [5:09] Single room the other after after college to and so after.
Scot: [5:13] This is like Millennials like this.
Ashvin: [5:16] Under that bastard us.
Scot: [5:17] Best friends for life come on get with the lingo your conversation.
Ashvin: [5:25] Do we have till we die. After after work it out of respect of guys to come back and jam on ideas together and eventually about two and a half years and we decided that we we want to. Tried on a run so we are we just started working hacking on various different projects and all all we knew is that we wanted to work together and that we wanted to build something fun. I interesting that people are going to like those sort of but that was a starting point but we didn't really know what that look like. And so we just are working on stuff we build stuff and we just put it in front of anybody that would it would see for feedback. We that weed weed send users to it and all sorts of ways that we can find a post on Facebook and post on Twitter viral things to try and get user to user experience. In the process of that was like right around $2,000 this is like the financial crisis.
Scot: [6:18] Great time to start compass.
Ashvin: [6:19] Yeah.
Scot: [6:21] Just leave her jobs and start a company in early 2000s.
Jason: [6:24] Frugality.
Ashvin: [6:27] Actually move back in with my with my parents my co-founder you move back here. You also trying to save money on on rent so he moved in with his girlfriend at the time. Way too early to move in with a girlfriend and they're married now so everything worked out but. Be trying to be frugal a hack on stuff share with anybody that would see it in the process we met if you see it at CRV and they weren't like they were doing a lot of deals at the time of the crisis. So things are a little slow there and they had a spare office in at the their office is on Sandhill and so is he invited us to come work out of their office.
Scot: [7:16] Sweet and nice.
Ashvin: [7:18] CBS on basic being in Resident entrepreneur I don't like to say I don't like say unfriend resident because that's like a fancy title where you actually get paid we were at in Resident on foreigners.
Jason: [7:27] That's like the difference between a country club and a club in the.
Ashvin: [7:29] Exactly. I got a big chunk of our day was figuring out which coffee shops wife I wasn't going to cut out so having like condition Wi-Fi and free lunch actually was really helpful.
Scot: [7:46] I spent a lot of time at the Starbucks in Palo Alto on I'm picturing you guys when I go in there it's like funny it's like all these startup books just kind of like you know you can see the founders and they're just like you know. Hey they have big red circles on it.
Jason: [8:07] And now everyone has to be in the official Patagonia down vest.
Ashvin: [8:11] But siding I stack that standard BC attire.
Scot: [8:14] Yeah that's a b c.
Ashvin: [8:15] Tina Turner wearing the Patagonia vest.
Scot: [8:17] Depth of funny humorous t-shirts yes I write Piper.
Ashvin: [8:22] So much of products in 2000 and in 2008. And when the benefits was being a b c Verma said we could we just walked down the hallway and showed us these. The folks there in got their feedback and eventually we found we we built something that they got really excited about that's why if we actually ended up raising money for it so it's probably called blippi, and it was a it was a social network for the type for the things that people are buying so the idea there was that we would. We would Connect into your your Amazon account your iTunes account and we basically passed we published your friends the stuff that you were buying so if you download something about the man so I'm kind of out your friends way of discovering what your friends are by. As I was going by first foray into Discovery shopping and we got really excited about that and and CRV got really excited about that and they wrote us a check to see if from the company and that's how we got started so they put.
Scot: [9:25] Serbia's Charles River Ventures for those of you that aren't in that VCU Palo Alto.
Ashvin: [9:30] So what we raise money for that and and actually we got a lot of traction initial traction a lot of hype around that product. And 6 months later we raise another round for that sweet we actually ended up raising $12 additional for that. Unfortunately six months after that after spending so this one year into the journey with blippi like we realize it but the product wasn't really going to work. So the retention numbers weren't there the engagement just wasn't there when we tried a bunch of things so by the end of that year we had a we had a lot of money in the bank but filled product. And so we have to figure out what we're going to do next and Mike O'Connor and I we just kind of went back to what we were doing before it was hacking on all sorts of different projects.
Scot: [10:16] It's a blippi was a consumer, thing did you try pivoting till like retailers integrating with their platform to do a staring contest.
Ashvin: [10:23] Yeah could question so there were a few different ways we could have hit it I think that at that time we we still felt really strongly that we wanted to be if your consumer experience and we didn't want to have a component where we were doing an Enterprise Integrations or working closely with. With folks without us having restaurant user base.
Scot: [10:42] Did was of oxidation like to an affiliate program. I think so Jason shares of cool GadgetEase bought I buy it you guys have been coded in the affiliate link.
Ashvin: [10:51] That would be one possible promise at scale and then we it was such a treasure Trove of information.
Jason: [10:56] I can say there's probably a data play where you're quick.
Ashvin: [10:59] It was it was. Is really fun products only only first build it and then other things that we buy every single day at the amount of like apps I download on the Play Store things that I just go on Amazon buy. Based on a recommendation from a friend or you know somebody recognizes me a book I'll just go buy it on the Kindle right now and have so I can have it there with one when I'm on the plane to like you're buying things all the time and are. Product would pull all that information in Niagara that information published in a structured way to other people could benefit from it.
Scot: [11:34] Remember Facebook Beacon where they tried this and then a people to buy gifts for their wives or wife's.
Ashvin: [11:42] Storage associate with it too but but all in all it was really fun product with a lot of information associate with it and there were a lot of different directions we could take it, the reason why we like there's a guy that had the fun engaging element that also had fantastic quantization potential. If you want use a product then so I can work and then that's where but we found we found it we can get people to initially engaged to the product but we couldn't get them to retain overtime. And so at the end of the year we've had some decisions to make when we decided to have basically Sunset the product and work on other things but we were really excited about probably really excited about the space of Discovery Commerce. I'm just at this the area that we stayed in and we started working on other ideas in an e-commerce so the next idea we tried we tried a bunch of things in between the next thing that we got a little bit of traction was we we we took the idea of Groupon and. Combined it with base e tried to build a Groupon like experience for Etsy sellers because he's at the sellers have fantastic. Merchandise they can make me a sandwich. But I have no distribution so we that will look spell the distribution list. For people that want to be introduced to new types of Pepsi products and so that actually was awesome we lost that in 2011. And I had really great traction for a few months but then a few months in we realize that this is actually hitting a ceiling that we just we can't. We can't attract enough Sellers and we can't get enough people on the distribution list to make this a scale at at a meeting for 8.
[13:12] I've been so 6 months after that we realize I can't wait this business or the tapped out even though it had some initial traction and we work and we went back to the drawing board works on a bunch of other consumer. Consumer products all in all in Discovery shopping and then 2012 is when we launched tophatter. And I'm we launched tophatter I had to lift head like a consumer heads consumer attraction in a list that we had not seen before. And then we'd work to my way to work then we work on so many different projects up to this point that when we when we initially launch shop in and saw the numbers were like wow there is something special here, I wouldn't know exactly what about it is Piggly special but there's something really special here that we want to that we want to make sure that we capture in Foster.
Scot: [13:53] And so as a as a function or in the consumer space What are the numbers you're looking at so you've talked about you. Retention stuff are you looking at KLTV are you looking at cohort analysis helplessness can't understand how someone building.
Ashvin: [14:08] So these days as a as a business scales at those are all really important numbers for us or we look at court we look at when we say chords for provokes international. We look at when a person signs up in month 1 how do they perform in 1 2 3 4 5 6 7 so we look at how that how, how to progress over time. We also look at tactile TVs we look at all that stuff but it's mainly like numbers as rescaled up initially When You're Building Products it's it's a little bit more like trying to find love.
Scot: [14:42] Just some Mau movement.
Ashvin: [14:43] Yeah you look at you looking for you looking for something special in the product trying to capture trying to capture Magic In A Bottle. And I think if you don't have that initial magic in the model of then all that other stuff doesn't really all that other stuff doesn't really make sense. It's hard to optimize for that other stuff. And so I think the thing that was special. Tophatters at it did have magic in the bottle really early on and and then as we scaled up we use all of you know we look at CAC LTV we look. All that fancy Jazz figure out if we're doing work on the right things.
Jason: [15:19] Tell her what's my little bit about tophatter and sore what the value prop is and what what makes you guys doing.
Ashvin: [15:24] Yeah so tophatter is a I just got to shopping app I always encourage people to to take to go download the app to get the full experience because it's a it's a it's a very differentiate experience we sell things in an in an option where I'm at. So we're on live auctions 24/7 I think the average eBay auction takes 2 weeks to complete our average auction takes 90 seconds and get us some other price so it's real time is fast. How are average price points 10 to 15 bucks so it's in like an Impulse impulse purchase. I don't feel they can make a decision within 90 second see if they want something. And we sell across the a variety of categories from jewelry to electronics to accessories.
Scot: [16:07] It seems like it's raining towards of value kind of consumer, like that wish kind of a Marketplace and you'll see some of that wants to have something cool for like under 20 bucks or something.
Ashvin: [16:16] So are consumers also shop at Walmart and Kohl's and and QVC and HSN and yeah it's it's at the dollar store TJ Maxx when these are all these are all of her consumers so they say it's about you wanting to customer.
Scot: [16:30] Never while they're there is he's really weird auction sites where you would like by kind of a currency to go to bed and you know I think they gave options are really bad name kind of there.
Ashvin: [16:38] And we're constantly kind of fighting yeah so we're like we we had to fight that kind of band brand misperception. Lots of people see that we're not inside that's the first place that's what one of the first question that we get his ass a penny auction sites with a pay for my beds and doing a lot of them are can we make make really clear. Beds are free. Only pay if you win so it's just an old-fashioned auction but it's not it's not an option for. For the reasons of price discovery on most items that we sell their free commodity items it's an option because it's engaging and we find that again we think about how we build an engaging experience that's what we started. It's just fun everything starts at a dollar and so you pick the price they want to pay you know so you like something at a dollar there's no reason why you won't like it at 2 and then if you like it at 3 instead.
Scot: [17:26] Is it a 1 winner wins got a thing or is it more of a Dutch auction so if Jason did six and I bid 7 we both kind of win or.
Ashvin: [17:32] Right now it's one winner of the challenge too is that is that if there has to be losers in the auction for you to feel free to feel good when you actually win something.
Scot: [17:44] That that hurts the you know the pack because she got to go acquiring up cat x x yeah and then it could hurt LTV cuz if I'm a loser lose so many times year.
Ashvin: [17:54] Better interest in their data shows that the folks that compete for items are the ones that are there are more likely to come back so if you if you try and win something you win something with no competition less likely to come back and if you competed for anyone, cuz there's a little bit of social validation in the fact that somebody else wanted to sing.
Scot: [18:11] I saw an article that said you're you guys had over 300 million in DMV in 2017 it was an idea the sky.
Ashvin: [18:18] Jessica sent a scale so we're going to do so last year we did over 300 million in Top by in this year right now like we're focused on doing a billion dollars in 2019 this year will do at least a half a billion dollars. It's a no it's not it's not like an Amazon CEO business but it's not like a small business either so.
Scot: [18:39] And your business model is typical take rate kind of a random.
Ashvin: [18:43] It's a it's a Marketplace business model we take roughly 25% depending on the category.
Scot: [18:49] So then I can figure out your revenues by multiplying GMB by 25% just making sure I understand.
Jason: [18:59] That would assume that Scott can do math.
Scot: [19:01] Yes and then are you guys a mix of first party and third-party entirely third party.
Ashvin: [19:11] It's an entirely third-party give me like our sellers do we sell things ourselves.
Scot: [19:13] Yeah yeah.
Ashvin: [19:15] So we don't take any inventory your Marketplace we just connect buyers and sellers so we asked her sellers to give us all their inventory so we tell sellers. Give us a spreadsheet everything you got and then destroy those into how we use data. Do we have it we have a big pool of them in Torrey millions and millions of items that we can potentially share with their buyers and then from that we Whittle it down to a small set of a relatively small so excuse that we show fires when they open.
Jason: [19:45] So how are you soliciting sellers.
Ashvin: [19:50] Are sellers are Swedish settlers faced in the you asked me if sellers we also have a team in China to work with our sellers in China today, about 70% of our sales come from sellers that are based in China and leave it to you in there that helps find and work with our sellers. They're actually found is just. Just looking at the broader internet. And selling like as a as a third-party sell on the Internet it's just very challenging to find places to sell on the internet there just aren't enough places to sell. There's some when we go and talk to our sellers in China they're always looking to diversify where they're selling and nobody wants to just be on Amazon. I prefer for obvious reasons but if you look but you look down unless there's actually not a lot of options Beyond Amazon you got the Amazon you got eBay. You got a Bye Baby I wish the list rise up pretty quickly and so when we come in there and say that we have no we're going to have to I know ours this year and we've got reasonable volume every two years. Because a that good volume and be that they wanted they don't want to be wholly dependent on on their Amazon sales.
Jason: [20:58] So when is Big trans here at shop talk has been Ai and machine learning. And you guys are like getting a significant amount of data now so that I imagine within an able the possibility of you ever drink some of those techniques.
Ashvin: [21:15] Death till we have it we have a fantastic day it is at and we have a dataset that's that's different and bigger than a lot of e-commerce. Players are size because we've got people spinning history to so not only do we have people buying things we have people expressing interest at various different price points along the way. We have a really expect all data said they're only be getting this to leverage as we get better and better at at machine learning. But for us via the business is only improved as its scale. And I attribute that to obviously improvements in logistics and operations that you get his knee Converse business scaling but just as much to to being able to leverage or data in more intelligent.
Jason: [22:01] When are you likely using that for merchandising as well I cute like so you mentioned like there's a big inventory of potential stuff to offer to your buyers.
Ashvin: [22:11] Yeah so like internal in our in our company we have nobody we have Noah merchandisers so I think this is one of the one of the Hallmarks as I see it if I can modern. The modern retail company is it is one that's going to use data my data is the new merchandiser us for one of our internal mottos so. And we can we learned this the hard way we actually it a few years ago we we did hire some folks with more traditional retail backgrounds and we had a hard time internally reconciling. The air intuition was laughing right we just had a hard time reconciling that with with the day that we were seeing. And so it's trying to get these Two Worlds 2 that's it come together as challenging but I think just are we got nowhere we're engineer's by training and that sort of our DNA. And out we we like to call the numbers and and and only talk about you comes and retail merchandising is like the core piece of that where we do spend a lot of time.
Jason: [23:09] So have you guys developed any of your own models are you using any of the commercial or Open Source Tax like what's the jewels that you're using.
Ashvin: [23:17] We use while he's a lot of Open Source. We do use a lot of open source code to take glue iron machine together but we're not using any off-the-shelf solutions for Ray I so we we build their own data model as we've got Folks at experience machine learning. I bet spend time tuning the models and then also thinking about how do we like what what types of data would make this model even better, and how do we go capture that data so a lot of what we talked about internally is Howard data structure and how can we structure it better to make it more effective writing everything. A lot of people ask me about about data and about a I and I always tell them that it just starts with structured data you got to have a data set and you got to have a schema that's easy to work with.
Jason: [24:04] We have lots of the sort of more old-world clients in the the starting points for a machine learning isn't even doing any machine.
Ashvin: [24:12] That can you get the data.
Jason: [24:13] Just about getting a.
[24:14] Attributes for your data and another thing we talked a lot about because it's a coming problem is it a government so I can just making sure you have the the right rights to leverage that date on all the way she.
Scot: [24:26] She mentioned can I join in on this so you mentioned you get this did data, do you actually didn't go and and go to like the manufacturer and say hey your price is too low if you know you're at $12 and if we did 899 you are model tells us we could sell twice the volume is that is that a example to use case.
Ashvin: [24:45] Yes so we have got me so that is like an example of division we haven't actually gotten it we haven't actually done that just yet but yeah if the core piece of our technology is that we can look at it and I didn't estimate the price that were going to get for it so. We like to have a good sense of what we're going to sell something for before we even put it up for auction before I buy or even sees it. And so we can look at our in our million just using save this these are the things that are going to perform well, I'm can we go get them for for better prices or can we how do we make this how we make these price-points works and they're there two ways that we can figure out how to how to make advertise ask you to sell it at a higher. Price that we think we can get a better price for or how do we lower the cost on the supply side.
Scot: [25:28] I'm convinced this is what drives a lot of Amazon private label you know the, the brands would tell you that they're just stealing their data and stuff but I think what happens is you know I think Amazon looks at like khaki pants and they see there's this conversion gap down at you know X dollars and then they will go and recruit Chinese sellers to fill that Gap and then. And we're like lahren you know some private label at that price point in there and I think they're looking more of conversion day that you kept getting data with sexy little bit.
Ashvin: [25:54] What's interesting about Amazon so like we we get compared to when we talk to investors obviously Amazon's the Shelf in the room and they want to talk about how we are different from Amazon Amazon everything is Sartorius on Amazon. Amazon has his wealth of kind of search oriented conversion day that somebody types in khaki pants and they can see what percentage of the khaki pants search volume has been fulfilled. We don't have that meeting we just have people open up the app and it's almost like a news feed of products and so we have to clean and we have to clean and make inferences in in in different Amazon.
Scot: [26:32] So just to change topics little bit so a lot of people contact me cuz I'm known in the marketplace world marketplace. That's great it's going to be harder than you think it is because unlike you know what say you were going to build like a Dollar Shave Club or something like that what's nice about that business is you you you control one side of the equation right you control the supply Dave's go to bring demand. You chose the what I would say is at least twice as hard if not for ex's heart of building Marketplace you have to not only do have to go build the buyer side if you could build the seller side so it's kind of like simultaneously building to businesses and you. There's probably some. Scot rule of the square of the number of sides to marketplaces you know that the exponent of the equation has that been your experience that is kind of getting to the school you're at. Arrow on one side of the boat too hard and they end up going in a circle to acquire all these fires the bars I have a terrible experience cuz there's not enough Supply logo acquire Ali suppliers they won't sell anything till at RIT because I didn't. Selling a product you have some scar tissue to share with us.
Ashvin: [27:37] I absolutely I mean this is like this is what working on all the time so try not trying to climb the ladder on demand and Supply at the same at a similar rate. On the challenging and visit this is why it's really hard to grow a Marketplace faster than it is very hard to grow, American pit playset and I can exponential rate it takes time to grow marketplaces until we've been fortunate enough to, the mostly double the business year of the year and even as we try and double the business of feels like the wheels are about to fall off either on the supply side or on the demand side. And interrupt you to see some of the conversations that go on internally it's always will be one channel screaming about not enough buyers in another slack Channel screaming about like not enough to use for a certain type of visors just like, constantly it is it feels like a battle everyday and then when you take a step back and look at the business we actually like. We actually got some stuff done and we grew even though that every single day feels like it feels like a dog fight.
Scot: [28:39] Is that the hardest thing about building tophatter or have you been surprised by the back end scale it's taken or the customer Discovery what's been the hardest problem in hindsight that the kind of surprise you.
Ashvin: [28:56] I made a promise to be changed your every year right now one of my biggest challenges around is trying to understand or Supply better and if so can I go to the data model we see that are 21 a big challenge is this your process. Dish Network Network routing with this this year is that we are our customers tell us that they want to see more things in the marketplace. When we first launched in 2012 and keep my everything we do is real time so when you open up that app everything that you're seeing is is available right now in this moment is going to sell the 90 seconds or anybody in the world named in the world that opens up the apps in the sea.
Scot: [29:29] Just have a QVC as kind of a model.
Ashvin: [29:32] It's like QVC. And in a when we first launched in 2012 because we had such a small demand days we can offer that much to fly so if you open up the app in Primetime you know if you open up the app there might be like 5 things for sale. Because that's all that our demand could so bored and that year, going to see more than these five things available and then in 2013 or demand a screw and we can put our supply base also and they said the same thing we want to see little bit more so every year it's it's kind of the same thing this year if you'll stick. because we we see the we see the option to break into all these different categories of issue with this deal that we do have and so, a lot of what we spoke Asana is trying to understand what categories do art buyers want to see, how do we get them how we brought in our category how do we go deeper into categories that we do have to sell better and better things so it's it's, trying to trying to build that Insight while then why like I'll mark while I system is is evolving is it super challenging and we have a pretty big. You're pretty big team of of analyst that. Are there looking at data all the time trying to trying to understand how the system is functioning and build more insight into what we should do tomorrow.
Scot: [30:47] We have a lot of entrepreneurial type sellers that sell on eBay and other platforms give us like the Quick 90-second Pitch like how do you pitch a seller to be on your platform.
Ashvin: [30:57] Yeah we say jeezy I use give us all your montuori and will we we we we connected with our bye week we look at what are bars in Taiwan. I'm willing to stop everything is going to do on you can tell us also if you've got a floor for the the things that you want to be like that price that you expect to sell it at and we won't listen unless our production models are telling us that it's and it's all about that rice.
Scot: [31:19] Set a three hundred million kind of run rate at a lower aov do you have like 30 million to buyers and sellers how many buyers like I kind of wanted to 30 minutes.
Ashvin: [31:32] Papyrus like last year we had I mean an exact numbers but last year we had over 2 million buyers on the.
Scot: [31:40] Are the churches buying for a minister.
Ashvin: [31:42] Did buy a lot of stuff.
Scot: [31:43] That's awesome yeah that's cool yeah.
Ashvin: [31:45] Dad and Elvia to get to the point like a 10 lb of 10 bucks I got 10 to 15 hours every transaction size to make this business work they better be buying a lot of things, and remember the classic thing about e-commerce businesses, 1015 years ago is the first question to ask you what's your HIV and if you're able V is like in the ten to $20 range like.
Scot: [32:07] Does the seller I would ask one thing that scares me is you know I give you all my inventory and I see all the stuff going on there for a dollar can I have a reserve or or do you guarantee if I want 10 bucks you'll deliver 10 bucks.
Ashvin: [32:19] Yeah so today on today I currently back a lot of the risk is taken by the sellers but we just Asher sellers that we're not going to run unless we think you're going to get a. We are prediction models think that you're going to get a price above the price that you want but I want to go rolling.
Scot: [32:35] Give you a desired price point.
Ashvin: [32:36] Writes about wanting a rolling out this year is for us to take the risk and so were you know we got all the data we're confident are predictions into at some point in time we feel really comfortable taking the rest and so from. From from a perspective a seller can treat our platform just like they treat any other. Marketplace so just like you work with eBay just like you were Vans I just give it everything at the best price that you have and what will sell it and will give you the price for it. We also have the option to take apps out on it too so.
Scot: [33:05] So if I'm if I've got a like a great price on this widget and we we, do this I know when a lot of sellers are working with like the Amazon and eBay deals team there's a certain kind of death what what kind of depth would you ask a seller to provide do you want like 10 of a widget a hundred a thousand and one.
Ashvin: [33:22] So today we don't work with our Salvage closely for volume commitments that's another opportunity we can have so we we anticipate that as we start to take as we start to give sellers commitment and we're trying to get better prices from seller anticipated volume of famous will go. Along with it today we do today we get more volume to the sellers that are willing to take more risks. And they don't have to take that rest me like we're happy to take that risk and so it's a little bit of a kind of value proposition mismatched right now they were excited to address this year.
Scot: [33:51] The last one is one of the knocks on some of these folks like an AliExpress or a wish is you in this thing and you you're all excited and then like it takes 6 months for the. How to get to do something you've got that feedback on in and have you work with your sellers on how fast you expect them to ship these things and get them to a consumer.
Ashvin: [34:10] So we expect the sellers to ship right away doesn't necessarily mean they're going to get it right away the customers that we have. Longer for value and so we haven't seen the shipping times be a huge problem and I really think there's a Class A customer that wants to get their item right away but those are nicer of those aren't really our customers broadly speed. Our customers though want value one thing that we we sound is that our Logistics are going to improve what scale. And so as we scale up we found that are sellers are willing to open up warehouses closer to the man. And we're willing to give them more volume if they open up their warehouse closer to man into labor faster different ways to get the products to the customers faster and are using a Marketplace model are sellers are willing to, I'm investing that are averaged it just be clear are average time delivery times are in a couple weeks if it's coming from from China and if it's coming from the US with a bunch of our inventory comes from the u.s. to is Justina today.
Jason: [35:13] And does the buyers see that delivery time before they did.
Ashvin: [35:17] And it's an important component so if we tell our sellers that if you can ship faster you're going to do something more to man on your products.
Jason: [35:25] Cuz I feel like that's an incremental fly in the wish model is like you're off and pretty far in the purchase funnel before you find out.
Ashvin: [35:33] Yeah you know I think they experimented both ways so I think that take a fairly similar mindset. Some terms of trying to figure out where it where to break this news to the customer quote on quote, and obviously it's it's pretty bad experience if you break it too late in the funnel but I'm sure they're trying to learn to an experiment with where's the right place though. Frostburg to share it right up front so people so we set expectations right away.
Jason: [35:58] So you mention in the beginning I always encourage people to download the app so I'm assuming that's just the sort of preferred iteration of the experiences the mobile app.
Ashvin: [36:11] Yeah so most of our business is done I mean the real time experience and so we saw things we sell things that are only available for 90 seconds. And so we do have experience but most are web expenses primarily for our seller so all of our seller tools are on the web and that's how sellers access it and our our website works just the same way that are at this. Vast majority of our business is done on our apps on on our Android app Android or iOS.
Jason: [36:40] So almost everybody that has a strong mobile experience I get the metrics are.
[36:45] They're on the mobile app experience the challenge usually is maintaining that that high active user base on the mobile app it sounds like.
[36:57] In your case it kind of matches pretty well to the demographic because he's.
[37:02] People that are that are going to want to be frequent purchase orders are you seeing like significant turn like what are you doing and try to maintain.
Ashvin: [37:11] Yeah I mean we got a liver specialist Discovery shopping experience together. We focus on engagement I think this is a big difference between us and Amazon we like to ourselves as the anti Amazon. And anyways Amazon focus on making things Amazon focus on the buying experience we focus on the shopping experience. Games on focus on efficiency they want to get you in the app and out of the act like my could you and find something quickly get it boom you're out where the opposite where did we help custom we help our.
Jason: [37:41] I want to go lighter.
Ashvin: [37:42] Yep we want we. Amazon helps you save time tophatter helps you spend time we want to go for us like we want our customers to be in the eyeball time we want them to be discovering great things even if they're not buying and I were constantly iterating on on that experience. The primary feedback from our customers that they end up turning out is the fact that we don't have the breakfast apply that they're looking for. And every year that challenge every year like we're able to offer more and more Supply obviously we want to have it overnight love love to have it happen tomorrow but it's it's it's just a process of building outdoor supply this.
Jason: [38:16] It's interesting the VC's are comparing you to Amazon they may be should be comparing you to like Clash Royale or some.
Ashvin: [38:21] Maybe there's a there's a game like experience to us.
Scot: [38:27] Chef fortnite wear like everyone's on an island at the Battle for the deal.
Ashvin: [38:30] There's a will there's a.
Scot: [38:32] Fortnite Meats products.
Ashvin: [38:33] People love the competition.
Jason: [38:34] Gamification for sure.
Scot: [38:36] A quick disclaimer Jason Scott show takes 10% of any ideas that utilize from the show that are lawyers make the same things.
Jason: [38:42] Do you disclose like roughly like what the active monthly users are on the mobile app is it like just I'm just trying idea border magnitude vs. Traditional shopping site.
Ashvin: [38:54] Yeah I don't want to get there like that monthly numbers.
Scot: [38:58] Denis Entre Nos RMA you there. You and you you probably know like time of day.
Ashvin: [39:07] They're absolutely is in and where it where are part of our business is making clever matching the right amount of Supply with the right amount of man so we have two man models that tell us. How much how many buyers we expect to be showing up, at this very moment and then what Supply we should be showing in this 90 second time frame so we have these models that tell us how much we should be listening to get that information so we have to know. We had an all the stator in terms of sharing though we sell over a hundred thousand items today and I just give you a sense.
Scot: [39:42] Are you limited by the time of anything since 90 seconds there's only so many things you like so many slow.
Ashvin: [39:50] One the middle the night there's less people on the side there's like less people on the app.
Scot: [39:53] Like let's say there's 10 people on at anyone given second do they they all see the same thing going for 9 year to you now start just going to say there's some point where it starts to make sense to show some audience maybe a ring and another people at electronic item.
Ashvin: [40:07] Right so ever so there's there's a everybody has a different sort experience so you can sort down and see you could do that access to everything. But it was me different place in this world so it's personalized to the person the information we have they said about the person based on what's available at this very moment.
Scot: [40:25] So you can go broader category and get more personalized and leverage those 90 seconds it seems like. I going deeper would be good too because you know a lot of sellers I've talked to you the kind of have these fees opportunities to. They don't see no volume come in there from you which is like where these deal platforms gets these really crazy great prices.
Ashvin: [40:46] We can sell things in volume to it just won't part of the Beauty from my buyer respective is that if you don't win right now you don't know when that's going to come up again. And people in by arbovirus and set reminders on certain items so even if they don't win it right now will send the notification the next time it comes up and sometimes the next time it comes up is in the next hour sometimes it.
Scot: [41:05] Never lose our kind of you know to notify them cuz I've expressed interest yeah for the show it the first thing.
Ashvin: [41:10] Exactly exactly so so we do we are able to sell things in volume but it isn't this really happen like in the same 90 seconds.
Scot: [41:17] What what categories do you want to add the most.
Ashvin: [41:20] Your work cited going to break into apparel for us like we find that. We think that the experience that we have or what we're trying to cater to a broad mass-market audience but our audience today is limited by the supply that we do sell so a few years ago we were only selling jewelry, and our audience is 90% women. I'm now we're selling a lot of electronics in her audience is closer to 6040 male female because there is something for guys to buy and sell. I'm excited like break into apparel and a bunch of other categories shoes.
Scot: [41:56] Pro tip hair extensions so hair.
Ashvin: [42:00] 10% for you guys.
Scot: [42:01] Go to hair extensions of the number one seller on AliExpress and it's like crazy volumes there's something about the price point in quality of imported from China hair extensions Jason's more of an expert than I am.
Ashvin: [42:13] I got high.
Scot: [42:16] It's all about the weave I think you should definitely look at this hair extensions.
Ashvin: [42:24] We saw a lot of drunks video.
Scot: [42:24] So drones are second only to two hair extensions.
Ashvin: [42:30] And I also tried to break in international markets so today were were 85% based in the US we think in many ways the business and be a lot more interesting outside the US.
Jason: [42:45] Very interesting is a trance personalized at all I can like do you use what you know about the user to decide what gets merchandise on that home page.
Ashvin: [42:54] Yeah we so so there's there's a set of items is available to everybody that's that is on the app at this given moment but we stored it based on the information that we have about you. I didn't know if it's you bid on a lot of electronics items you're probably see Electronics items do kind of times that are available you probably see sword at the top so we do our best to personalize it in that way. We make decisions about the demand that we're seeing today in the supply that we have available we're also. At Ross magnesia know what from that pool we should be listening to sell at this given moment in time.
Jason: [43:31] Well this is been super fascinating as men we really appreciate you coming on and talking to us, but it does happen again we've used up all that a lot of time so blisters want to continue the conversation we encourage you to jump over to our Facebook page and if you enjoy Today Show please jump on the iTunes give us that 5-star review and then you can download, tophatter from there.
Scot: [43:53] Yeah and obviously people should go in and try the platform do you do you publish stuff online where can people find you online if they're interested in learning more.
Ashvin: [44:01] Yeah you can that you can find us on our Facebook page fault on Twitter. Where are we have a were active on medium so we're publishing content everywhere we're also we're also watching it national TV campaign also so we're about to roll out a pretty big TV ad campaigns of silver, TV channel near you too.
Scot: [44:21] Congrats I'll be fun I look forward to.
Jason: [44:23] Going to star in the first.
Ashvin: [44:25] Yes absolutely.
Scot: [44:27] Just can you give listeners a little preview of a little little sneak peek.
Ashvin: [44:33] Yeah I think the world were appealing to the folks that want to have a fun experience shopping and so.
Scot: [44:41] Awesome watching NBA jerseys.
Ashvin: [44:43] Not yet.
Scot: [44:44] Okay well we really appreciate you joining us I know you've been really busy here at the show out recruiting sellers for the platform so we really appreciate take your time.
Ashvin: [44:53] Thank you Jason thanks God.
Jason: [44:55] Until next time happy Commercing.