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July 31, 2020

Rethinking Everlane on the Nine by Nine Report

What makes a brand meaningful? Future Commerce sought to answer this question in our recent report, Nine by Nine: 81 Brands Changing Our World. In this episode, Part 2 of 2, Phillip & Brian sit down and reflect on the report and the categories included.

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Phillip: [00:00:00] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:00:07] And I'm Brian. Today we are doing part two of our Nine by Nine Report Recap.

Phillip: [00:00:13] It only took us like five weeks to get back around to it. Sorry to keep you all waiting. If you haven't listened to Part One, it's imperative for you to make sense of what it is we're talking about. And, you know, we like every episode to be standalone on its own. You're going to have fun this morning. You are. You're going to love this. It's just going to be great. But to make sense of it, go listen to Episode 165 which was published on July 10, 2020. And that sets up what the Nine by Nine is, and it covers the first four categories in the Nine by Nine, our report that we put out in spring of 2020. And it got so much press. Like all the things. Very beloved. We have about 40 minutes to cover five categories today, so it's going to be a bit of a whirlwind. I encourage you, if you want to check it out for yourself, go check it out. Download it right now at FutureCommerce.fm/NinebyNine

Brian: [00:01:07] I feel like I'm pointing to something right now.

Phillip: [00:01:10] I know. It's like, "Right here. Smash that Like button. Give us a thumbs up." Did I ever tell you about that kid...? This tweet I found that the guy went over to his friend's house and as he was leaving, his friend's four year old was like, "Bye bye. Like and subscribe," because he thinks that that's how you say goodbye in the modern context.

Brian: [00:01:33] That's kind of scary, I guess. I mean, I guess, like, one of my youngest's first words was "Alexa," so I can't speak. {laughter}

Phillip: [00:01:45] {laughter} That's often cited on this show. That's more than once. Just to finish the thought, if you want to download the report, go to FutureCommerce.fm/NinebyNine. That's Future Commerce FM slash N I N E by N I N E. So we're going to kick it off with Purpose Driven Brands. And what I kind of love about doing these categories now some months later is we have a little bit more clarity on sort of the the last few months of how they've their stories have unfolded. A purpose driven brand. Brian, what is the purpose driven brand?

Brian: [00:02:19] Well, purpose driven brands are really focused on having an alignment with their world view. So they're actually stating a purpose behind their brand, a worldview, a specific bent towards something. And they're providing that to their customers. And so it's transferring from them to you, their purchaser, and for purpose driven brands, consistency is key. This is something that should be single minded in their pursuit. And so specifically, when it comes to purpose driven brands we're seeing more and more purchasing based on your lens that you view the world, especially with Gen Z and millennials, we're seeing more and more purchasing towards this. So this is an extremely important part of the Nine by Nine in that it's the actual driver for which someone will actually come engage with your brand, and so typically these brands are making it clear what kind of world they want to build and they're actively working to achieve that.

Phillip: [00:03:44] As Sandra Capponi said, who we quoted in the Nine by Nine, and she's the co-founder and CEO over at Good On You, which is an Australian brand rating agency that focuses on fashion. She says, "It just goes back to having a core purpose and a core connection to the person that your brand is intended to serve and the problem that your brand is intended to solve." Right? And that kind of sums up everything. Let's dive into some of the companies that made the list. I mean, obviously, if you had to think of a storied retailer who has really had such a clear and defined purpose in how they see the world... And you may have thought when we were talking about purpose driven, that it was only sustainable brands. I think that's one side of it.

Brian: [00:04:32] Yes.

Phillip: [00:04:32] One part of it. But brands like REI, who came in at number one on our Purpose Driven Brand list are doing so much more than just sustainability and ecology. They care about a lot of things.

Brian: [00:04:44] And I think we wanted to add REI in at the top in this category. REI could have been in so many category categories. They're such an incredible company. Such an incredible company.

Phillip: [00:04:57] And again, I encourage you to go back and listen to part one if you're a little lost, because one of the chief criticisms here is like, can you really just put these, any one of these brands, into just one category? A brand is any one thing. Right? And we recognize that. That was actually the thing that was hardest for us. But what were some of the other brands, and why would why would you say that they made the list or what are some standouts here?

Brian: [00:05:25] Yeah, well, just to finish my point about REI, I think there's something that's really, really important here, which is hey retailers, you can do this. You don't have to be a direct to consumer brand.

Phillip: [00:05:38] Yeah they're a retailer.

Brian: [00:05:40] Right. They're a retailer. Retailers can have just as much purpose in the world as anyone else.

Phillip: [00:05:45] You know what's interesting is that they're... And with their co-op model, I think that that's where they are truly differential. But they've been around for like one hundred years, guys. Like they're not trying to achieve scale in three years or five years and then exit and go public. Like they took the long approach to building... They took the long view with the customer, and they built a sustainable business and in many senses of the word over a long period of time. So they weren't in a hurry.

Brian: [00:06:15] I like how long you made that "long."

Phillip: [00:06:19] I wasted half this podcast just making that one point. Allbirds obviously makes the list at number three.

Brian: [00:06:26] Yeah.

Phillip: [00:06:26] The one that I thought was really, really interesting... A couple of call outs for me. And then I think one of your favorites is on the list here, too.

Brian: [00:06:32] Yeah.

Phillip: [00:06:33] Bowery Farming was an interesting submission for us. They had really not come up on the show before. If you don't know about Bowery Farming, they do indoor farming and without pesticides. But they're doing something truly interesting and unique that's very tech centric, very tech forward in the way that they're approaching farming. And it's not like, I mean, if you watch Bon Appetit, Bowery has been covered on a number of occasions. What they're doing, I think, is really, truly unique. They're using less water. They're producing more food in a more sustainable way with no pesticides. I think they're hitting on a bunch really interesting areas of tech and again, just being purpose driven. And then the other one for me is Blueland, which if you've been stuck inside watching TV, HGTV, Blueland is now doing advertising on TV. It's incredible to me, but they are making essentially concentrates and tablets, and you use those to refill your cleaning supplies. They started in surface cleaning, but last week they at the time of this recording... We're recording this on... What is the month that we're in now? It is July 31. So as of right now, they just recently put out a laundry category. So they're now in laundry detergent as well. And this concentrate model allows them to shift less water around the globe and ship reusable containers for people. So that's their particular approach. I really like them and their founder. I'd really like to get them on the show at some point.

Brian: [00:08:14] Yeah. by Humankind. Another one trying to eliminate a single use containers. Super, super cool. Super important. And I mean, yeah, there was some really cool ones down here for me as well. I got to interview Coulter from Sunday a while back.

Phillip: [00:08:35] The lawn care company. Yeah.

Brian: [00:08:37] Yeah, I met him back at eTail West when we could all get together.

Phillip: [00:08:43] Which feels like many years ago. But it was actually in the same calendar year that we're in right now.

Brian: [00:08:49] I had such a genuine conversation with Coulter and just the passion and commitment that he brought to it and a very like a realistic view as well, just a better understanding of home and garden from a philosophical perspective.

Phillip: [00:09:08] Yeah.

Brian: [00:09:08] Which allowed him to create a product that played into that. And I just love seeing founders that can understand the point of something, the real point of something, and then build a product that helps advance that. So cool.

Phillip: [00:09:30] Yeah, I just... We got to get moving. But yeah, I feel like we could probably do one particular episode on every one of these. But to be honest with you, we're putting out such incredible content and reports now that I feel like we just don't spend enough time on each one of them. But that is the problem that we have to solve.

Brian: [00:09:55] On to the next category.

Phillip: [00:09:57] Well, this is the most probably maligned or misunderstood. Misunderstood's the right word, not maligned.

Brian: [00:10:04] Well, we named the category the problem. That might have been the problem.

Phillip: [00:10:08] Well, so it's like when you're trying to... Stop trying to make fetch a thing. Remember Mean Girls?

Brian: [00:10:16] Yeah, yeah, yeah.

Phillip: [00:10:16] Fetch is not a thing. Nobody's going to use the word fetch. I feel like we tried really hard in the last couple of years to make Late Stage Retail a thing, which is, you know, it comes from Late Capitalism, which is then sort of evolved colloquially to Late Stage Capitalism. Like we all have a disease, it's capitalism, and we're in the later stages of it. But the idea of Late Stage Retail... What is it, Brian?

Brian: [00:10:44] Yeah, so the idea of Late Stage Retail is that as eCommerce has developed and as retail has developed... Sorry, I should say, as retail has developed, we are seeing more and more moves to try and capture attention and dollars with basically not so great techniques...

Phillip: [00:11:08] Dark patterns.

Brian: [00:11:08] Things like dark patterns, subversive techniques, hyper personalization, FOMO, just all kinds of things where it's like, "Oh, you didn't sign up for our email subscription? You must not like discounts."

Phillip: [00:11:28] "Click on the "I'm a horrible person because I don't like discounts" button.

Brian: [00:11:31] "I hate the environment if I don't sign up for this newsletter."

Phillip: [00:11:36] And I think it comes down to you like the normalization of those techniques as best practices. As if this is the best way for you to to run your business, because these are the things that... We call it conversion rate optimization, and in reality it's like customer persuasion through subversive means.

Brian: [00:11:57] Yup. Totally. Now, the one thing I'll say about this category is that I feel like this is actually seeing some attention right now simply because a lot of brands that have engaged in some pretty dark practices are bumping into a big wall right now.

Phillip: [00:12:14] Yeah.

Brian: [00:12:14] I feel like people don't have time for that. And we're seeing brands that have have maybe not the best practices in their supply chain or that don't treat their workers the best or that haven't gotten out ahead of taking care of the environment, which are all part of this.

Phillip: [00:12:39] We're going to probably spend an inordinate amount of time talking about one on this list that now having had some time and having gone through a couple of social movements and revealed some data about it, we probably would have rethought.

Brian: [00:12:52] But at the time it wasn't clear.

Phillip: [00:12:55] It wasn't totally clear. And I think some of the concerns around it had been put to bed at some point. But let's talk about it, because I think that's worth talking about. In fact, it might even just... I hope it doesn't dominate the whole rest of the show, but it probably easily could.

Brian: [00:13:08] No, no, no, no. Let's talk about something that's good first.

Phillip: [00:13:11] Well, let's do that. But I just want to read from the report real quick, because I think it's really interesting. This, I think, captures Late Stage Retail. "These retail heroes are seeking to uplift underserved communities, create and market sustainable products, pay their employees a living wage and treat their suppliers ethically and fairly. They're the founders of numerous DTC brands who are focusing on sustainable and ethically products, B Corp certified companies and even members of the Business Roundtable, which recently redefined the purpose of a corporation that speaks directly to our Future Commerce values." I think that really kind of captures what Late Stage Retail is all about. And if I had to think of one, Patagonia's at the top of that list. Patagonia as a storied retailer and as a brand, like a manufacturer of goods, and then later as a retailer in its own right, Patagonia stands for something.

Brian: [00:14:11] Yeah.

Phillip: [00:14:11] And if you've ever listened... Go listen to the How I Built This interview. It was born out of the idea of repurposing and keeping pieces for life and standing behind your products with such fervor that someone could realistically buy something once and keep it forever. That obviously is a really difficult thing to achieve. And if anybody has tried to do that in a way that has made a mark on the culture, I would say that Patagonia has done that. They have led the movement of countercultural, anti Black Friday type events. They have stood very, very firmly against the encroachment of federal property on native lands. They've stood for Black Lives Matter. And they have taken cultural stances to their own detriment. And I think that really epitomizes a brand that really has captured the values of what we would call the opposite of Late Stage Retail.

Brian: [00:15:22] It's making sure that you do right by people all the way across the board.

Phillip: [00:15:26] And even to your own detriment. Because in the end, I think the way that you achieve success is to always do the right thing.

Brian: [00:15:38] Yeah. Yes.

Phillip: [00:15:39]  [00:15:39]You always do the right thing. And that is so hard to do today because the right thing sometimes is very muddy. [00:15:45] It's very unclear. The right thing sometimes can result in just marketing hype and not actually... The right thing is to put your values front and center, but what happens is not everything else lines up with your values, Brian?

Brian: [00:16:01] You end up like Everlane.{laughter}

Phillip: [00:16:02] Yeah. Which is number three on our list. And probably the thing we should talk a little bit about.

Brian: [00:16:07] Yeah, I mean, it's interesting and this is something I want to kind of talk about. The fact that Everlane made this list is the fact that we believed them. And I think that that's something that's really interesting, that if you fall in this category and then you don't deliver, you're going to receive more criticism than anyone else because you were saying we are doing right by people.

Phillip: [00:16:39] Yeah.

Brian: [00:16:39] And so if you do not put your money while you're where your mouth is, you're going to fall from grace quickly because you can't make all these claims and have people buy into this and then effectively bait and switch.

Phillip: [00:16:54] And that's what it is.

Brian: [00:16:56] It's worse.

Phillip: [00:16:56] You're taking advantage of people's values for a marketing campaign.

Brian: [00:17:02] Yes.

Phillip: [00:17:03] And you're held to a higher standard as a result. And not only has Everlane... Listen, no one's above criticism. I think every brand has its shortcomings. One hundred percent. Right? There's always room to improve. There's always room to grow. The fact that Everlane has so much criticism... In fact, at the time of the writing of this report, the chief criticism of Everlane was that they were trying to break up a unionization effort within Everlane. And from its own employees perspective, they had laid off a number of workers at the beginning of COVID, and the workers had created an Instagram account that I think very emotionally and maybe accurately described what it was like to work inside of Everlane. And having been at a startup, you know, I was sort of dismissive of the idea of like, can this really be targeted? You know, I've worked for a startup before being asked to work long hours, being asked to put in extra time, being asked to sacrifice on behalf of the company. These are all parts of being a startup because your sacrifice eventually could pay off in some way. That company grows up, it gets acquired, it goes public. There's exit optionality for a business like Everlane who was the first to sort of preach radical transparency. But it turns out that it's just a bunch of B.S. You have to believe people. And I think I... Yeah, I think that rethinking the list at this point in time Everlane probably should not be on this list.

Brian: [00:18:40] Oh yeah.

Phillip: [00:18:40] Because their values, it seems, from a wealth of sources and from a lot of journalism... The New York Times had a piece just five days ago about the unraveling of Everlane's false claims around transparency and what it's done to quiet workers. Yeah, I think that that's... It's all very problematic and probably something that even if time will tell and prove them as not being the bad guys, at a particular point in time when the list was published, they probably shouldn't be on or at the top of this list.

Brian: [00:19:18] I would say so, too. You know what's interesting is there's a lot of retailers out there that can't make the claims that Everlane was making about the way that they were doing their business. They're just not able to yet.  [00:19:35]But being honest about where you're at, and getting specific actions and taking specific steps towards where you want to be is better than trying to get out there and say that you are something before you're it. [00:19:51]

Phillip: [00:19:52] Yeah, I think maybe or at least it doesn't try to... It's more honest. You say better. It is probably just it's more honest for you not to lead with your values, to try to market yourself with something that you're truly not. And the fact that they've resisted calls to answer the criticisms and create an action plan, I think it's very telling. If you look at some of the criticism of Michael Preysman, who's the founder and CEO, his apology notes are like he types them up on Apple notes, screenshots them, puts them on Instagram. I don't think that that's an effective way that a leader should answer these really heavy and often pained and very, I think, very emotional outcries from people who used to work there or who have worked there or have anonymously given tips to journalists. Lean Luxe had a piece on Everlane earlier this week that basically was like, "Come on, you guys, we all know how marketing works. Like, let's all get real for a second. We're all as much to blame as Everlane is. Like, shouldn't we all just kind of like stop drinking the tea? Like, let's all just kind of understand that half of this is marketing and whether you are a fan of the brand or you work for the brand, like you should just know getting into this that like 50 percent of this is B.S." And I think that's a really cynical take. We should be able to hold brands to standard, right?

Brian: [00:21:33] I do too. Yeah. And seeing brands out there like KNOWN SUPPLY, who I actually went to college with Kohl Crecelius.

Phillip: [00:21:41] Oh you did?

Brian: [00:21:42] Yeah, he's an incredible person. You should absolutely go watch his TED Talk. Really genuinely cares about people.

Phillip: [00:21:49] I'm pretty sure I saw that already. I just didn't know that you knew who he was.

Brian: [00:21:51] Yeah. I meant you, as in the general audience.

Phillip: [00:21:54] Oh. Oh. Sorry. I thought you were just talking to me, Brian. {laughter}

Brian: [00:21:59] {laughter} Yeah. Kohl is an incredibly passionate person. He started the company knitting. He really got into crocheting. He had like a group of friends he would just like go up into an attic and start crocheting with. And he realized this is something that anyone can learn and that anyone can do. And he has this whole idea of radical transparency for manufacturing. And so every single person that makes something for him puts their name on it. And it's just really, really consistent, really beautiful, really wonderful company. Not many companies out there like it.

Phillip: [00:22:41] That's incredible. If I were to... This is something that I find sort of fascinating and nobody else would probably find fascinating. That's totally OK. There's a lot of brands here that I didn't expect to make the list, King Arthur Flower in particular, and Abel, who I wish actually was higher up based on score.

Brian: [00:23:05] Yes.

Phillip: [00:23:05] They're early days for them, but making sustainable fashion and then publishing their annual, I think they are three years in now, but providing job skills to persons of color, specifically to those in poverty, and then publishing an annual wages report that is extremely transparent in the way that they pay people...

Brian: [00:23:26] It's so good.

Phillip: [00:23:28] I mean, it's beyond good.

Brian: [00:23:29] Yeah.

Phillip: [00:23:29] It's truly groundbreaking, and we need more of that in the world. Listen, like other brands that kind of fell below the fold, if Everlane were to have fallen off. I mean, there's some on our list that I was really rooting for. Elizabeth Suzanne. Reformation. But it has its own problems and was demoted early days.

Brian: [00:23:58] Yeah.

Phillip: [00:23:59] You know, and I think that this particular category is kind of fraught with... It's tough. This one's going to be a tough category, I think, next year on the Nine by Nine coming back to it. And it's one that we would probably take a second look at.

Brian: [00:24:16] It'd be interesting next year, as we redo Nine by Nine, to add a Category for MVPs or most improved players, MIPs.

Phillip: [00:24:30] Oh I love that. Yeah. Honestly having to explain to the press 15 times what Late Stage Retail, like maybe this is the one that kind of we might have to rethink the one altogether, this category altogether. But you know it's really interesting because we have to move on. Audience First is something that I think nobody really needs to explain, because I think everybody gets the idea that creating an audience and then marketing products or goods or services to them in 2020 is a proven success. Kanye and Yeezy. Emily Weiss and Glossier. Virgil Abloh and Off-White. They're obvious ones. Topping the list is Disney, which can we even argue that? But the more impressive ones that came out of our research as nominated by the expert network were Ryan Kaji's brand Ryan's World, which has licensing deals and has a YouTube channel with millions... He was the top earner, I think, on YouTube in 2019 with something like twenty five million in revenue. KonMari. Marie Kondo. And obviously like what, five different Jenner/Kardashian appearances? Three, at least. Yeezy.

Brian: [00:26:09] Good American. Kylie.

Phillip: [00:26:10] Yeezy and Good American and Kylie topping the list. Well, yeah, Yeezy at number two, Kylie at number seven, Good American, which if you're not familiar with, is an apparel bran focused on, I think mostly on intimates, if I remember correctly.

Brian: [00:26:28] No, no. Its size and inclusively and a lot of denim and all kinds of...

Phillip: [00:26:35] Thank you for reminding me. Joanna Gaines and Magnolia is also a standout here, which I find really interesting and sort of the Martha Stewart for this generation. She's truly interesting and has captured the hearts of a lot of people.

Brian: [00:26:50] Yeah, what they've built is nothing less than astonishing. I think that they... Talk about building an audience and then turning that into a monetized audience. I think that they're the definition of this right now.

Phillip: [00:27:04] Yeah.

Brian: [00:27:04] Maybe after the Kardashians/Jenners. {laughter} But, yeah, the content, they really, truly led with content. And then they understood and took the steps to give that audience more ways they can buy in.

Phillip: [00:27:21] That's a great transition, Brian. Ways to buy in. Just everybody understands Audience First. If you want to see the full list, go over to FutureCommerce.fm/NinebyNine.

Brian: [00:27:32] One last comment before we transition out of that.

Phillip: [00:27:34] You always have to do one last...

Brian: [00:27:35] Oh yeah. I get a one last...

Phillip: [00:27:36] I had the perfect segue, Brian.

Brian: [00:27:38] OK, fine segue then. I'll come back after that.

Phillip: [00:27:40] No, don't do that to me. Just go. Just go.

Brian: [00:27:42] Paul... And I don't know how to pronounce his last name because we haven't talked with him yet. We're going to have to. From BK Beauty, the founder of BK Beauty.

Phillip: [00:27:54] Oh yeah. Real supporter of the show. And I really appreciate that. I'm going to say it's Jauregui. I know I'm murdering that.

Brian: [00:28:05] We just need to reach out and say hi to him. That's what it comes down to.

Phillip: [00:28:11] Hi Paul J.

Brian: [00:28:11] And he did a poll on Twitter not long ago about what this category should be called. And actually it landed on Audience First. And I think he actually changed his Twitter to say, building an audience first brand BK Beauty, which I thought was really cool. Very nice tip of the hat. Appreciate that, Paul.

Phillip: [00:28:31] Yeah, I do too. And Paul's very active and is a year end and has built a very a million dollar brand in a year. He and his wife. Very, very interesting stuff. Love to have him on the show. Paul, thank you for paying attention. OK, Local Heroes. This is the one. It's six paragraphs about Chick-fil-A. And just going to tell you, by the way, you killed the world's best segue. The segue was giving ownership to people.

Brian: [00:29:03] Buy in?

Phillip: [00:29:03] Yeah, having ownership or buying in to something is is one of the reasons why Chick-fil-A in local heroes tops our list, because, remember, there's different types of exclusivity. And I think the different styles of businesses, especially co-ops and employee ownership models that are represented in our Nine by Nine in a way that I don't think any other brand rating list has ever done in any report that I've ever seen.

Brian: [00:29:36] Bold claim. I like it.

Phillip: [00:29:37] Yeah, I think that I believe that to be true because that was the, that's what we set out to do. [00:29:43] What we set out to do is not just cover venture backed or private equity backed brands. We set out to get a more fair representation of brands that are changing our world. That was the Nine by Nine strategy.  [00:29:56]

Brian: [00:29:55] Yes.

Phillip: [00:29:55] And Chick-fil-A, being a franchise model, particularly a quick serve restaurant or QSR franchise model, has an incredible track record in investing in its local community and allowing founders like business people to have a path to, a real path to the middle class with the smallest financial investment you can possibly imagine.

Brian: [00:30:24] It's incredible.

Phillip: [00:30:24] A ten thousand dollar investment from a franchisee can result in a year's time to a quarter million dollar salary for the founder of that local franchise. It's an incredible story of investing in people and giving meaningful work to people and leading with values. You may not appreciate those values. There have been a lot of people who have talked about Chick-fil-A's values, and we are not necessarily qualified to talk about that. What I will say is that I feel like the good on the whole for a lot of people outweighs the bad, and so I'll let you be the judge of that. In our expert network's submissions and in our qualifying rubric, in our scoring system, Chick-fil-A came up, came up very high on the list because despite cancel culture, Gen Z seems to eat their chicken regardless of the values, almost in an ironic way. And also the amount of money that they've given back to COVID relief, the way that they have invested in things like local hero knights, the fact that they are the second largest fast food chain in the United States at eleven billion dollars in revenue in 2019, which supersedes even Starbucks. They're really hard to ignore when you're talking about brands that invest in local communities. So that's me ranting about why, because I feel like we had to justify it. But I think it's a really interesting model and franchises are often overlooked in the way that they help provide a path to the middle class and maybe a path out of middle class for a lot of people.

Brian: [00:32:03] Yes. Yeah, I think Ace Hardware is another really interesting one. They've got a really interesting model that allows for local ownership as well. And that's why they made this list. Super interesting and overlooked.

Phillip: [00:32:13] And by the way, if you look at the time frame in which... And we can't spend a ton of time on this. I think 100 Club is going to take up some of our time. But I think if you also look at the brands that are on here, I think they're a product of the time in which these surveys were conducted and which spanned into some of the early days of coronavirus. And I think, yeah, looking at brands like Publix that show up here, that's a privately owned company 75/100 years. And in South Florida, in central Florida. I think that that's also really interesting one. They were early in the fair wage grocery movement. But listen, if I had to point one out for your own benefit, go look at Thistle Farms. Becca Stevens. They've created a brand that is carried in a lot of retailers, including Whole Foods, which are creating products that are giving work to survivors of abuse and like one hundred percent women and female employee base. I think it's a really interesting business to appear alongside these others. And now I feel very pressed for time. I went and spent way too much time. Sorry, Brian.

Brian: [00:33:31] No, no, no, no. This is a really important category. And I can't get away from this category without mentioning Costco, whom I love.

Phillip: [00:33:41] Yeah, there's deep love for Costco.

Brian: [00:33:42] A deep, deep love for Costco. I heart Costco. I did a little heart.

Phillip: [00:33:51] {laughter}

Brian: [00:33:51] I love Costco. You know what's interesting about Costco is that in the areas where Costco goes in for the people that subscribe to Costco that are part of that community, is literally like almost a hangout place. People go there, and they see their friends that like literally they walk in and be like, hey, George. This happens all the time at Costco. If you go to Costco, if you're a Costco member, you know what I'm talking about.

Phillip: [00:34:24] All right. Costco stan. I will just say I go to Costco at least once a week. I've never had that experience, but I'm glad that you do.

Brian: [00:34:34] How have you not had this experience?

Phillip: [00:34:35] I don't know. I don't live in a small town, I guess. I don't know.

Brian: [00:34:40] Maybe. Yeah, maybe I have too many friends.

Phillip: [00:34:43] You're a friendly guy. I'm not. So that's totally OK.

Brian: [00:34:47] Yeah, that's not why Costco made the list. Actually, the reason Costco made the list is because they are also a pioneer in wages and like supporting the local community and doing what's right. And yeah, they've received a fair share of criticism for some things. But in general, Costco is net positive on communities and people's lives in those communities.

Phillip: [00:35:13] And speaking of net positive, rounding out the Nine by Nine with the very last category here is 100 Club. We cannot mention 100 Club or what it's about without tipping the hat to Frank & Eileen's founder, Audrey McLoghlin we had on the show, she said this phrase, and it just stuck with us. The 100 Club is defined as a business having raised no outside capital, no outside capital in exchange for giving up an ownership stake in the business. And Audrey's mission was to educate female founders that small percentage of VC funding goes to women and that results in many female businesses relying primarily on funds from friends and family or other traditional non dilutive loans. I think we went ahead and expanded this idea of the 100 Club to include ESOPs or Employee Stock Ownership plans, trusts, or other co-ops. And when we broadened it out, the kind of businesses that were really exemplars of this model, of taking a very long path to prominence... It's really, truly inspiring. So Frank & Eileen does make the list. Congratulations, Audrey. Scored at number six on our list right next to Farm Girl Flowers, who I know you had a wonderful interview on the show not so long ago.

Brian: [00:36:46] Christina Stembel.

Phillip: [00:36:46] And then if you pay attention, I would say we have, of all of the categories we have most representation of brands that have appeared on the Future Commerce podcast, Industry West CMO, Ian Leslie, had shown up and I think earlier this year in 2020... This has been like, felt like seven years. But he came and sat down and told us about how they're building a direct to consumer furniture brand with no outside capital. And they just, by the way, congratulations to Industry West. They're crushing it. If you follow them on Twitter, you'll see that they're killing it in every regard, in every way. They are doing a great job and growing that brand. They just reopened their SoHo showroom. But what are some other interesting stories that we probably wouldn't have time to jump into is like how Chobani made this list.

Brian: [00:37:46] So cool.

Phillip: [00:37:47] Went through a traditional, I think, a private equity investment at some point. And the owner like went through the trouble over a 10 year period to buy back the company and give it back to the employees, which I think is just an incredible story that should be celebrated. That's a beloved brand in at least the United States here and have created a whole category unto themselves. And other call outs, Brian?

Brian: [00:38:19] Yes, Spanx. Really interesting. Sara Blakely.

Phillip: [00:38:24] That's the story, right?

Brian: [00:38:26] Yeah, absolutely. Absolutely. Yeah. And I know Audrey called her out. It's just her story, and then she's been posting some stuff on LinkedIn lately that I've been blown away by where it's like she didn't go into it with the business plan. She went into it with passion. She kept it simple, you know, followed the Occam's razor sort of thing.

Phillip: [00:38:50] Yeah.

Brian: [00:38:51] And just built. She built it. She didn't need help. She just did it herself. And that is so admirable. Blown away by that. The other one on here that I think is really interesting is Eileen Fisher, who we actually like ended up stealing from another list because she is just incredible. The quotes from her about why she decided to go with employee ownership as opposed to going public is just...

Phillip: [00:39:23] Incredible.

Brian: [00:39:23] Incredible. So principled, so thoughtful, so caring about her people and her brand. [00:39:31] And that's the beauty of 100 Club. You have the ability to stick to the core tenets of your brand and not sacrifice them for a bunch of suits. [00:39:47]

Phillip: [00:39:49] I think that there's a quote right there "for a bunch of suits." I love that.

Brian: [00:39:53] And for a very demanding public that if you take your stock, or your company public, there are demanding quarterly results that are going to sort of influence you to make decisions that maybe you shouldn't be making.

Phillip: [00:40:09] This is this has been great. I hope you got something out of or learned something out Nine by Nine. I know we sure did. It was the result of six months of research and really partnering with so many different people, getting different people to weigh in and help us develop our score. More on the methodology can be found by downloading the report. It's toward the end of the report and our qualifying criteria. It's definitely a first effort. And we did not expect GQ and Ad Age...

Brian: [00:40:41] WWD.

Phillip: [00:40:41] And Retail Dive. And so, yeah, we didn't expect sourcing journal and everybody else and their mom to cover the report as well as they did. We were like home page on GQ for like ten days. And so very many tweets...

Brian: [00:40:59] It's very humbling. The first effort.

Phillip: [00:41:05] Very humbling. For our first effort and certainly something that we'd love to try to replicate, but I have no idea how to do. But it's one of those things that I think just resonated with people, and we're very proud of it. I'd love to hear some feedback. We want to make it better, and we want you to lend your voice to it. And one way you can do that, go get the report right now. FutureCommerce.fm/NinebyNine. And when you do, you'll get an email welcoming you to the Future Commerce Insiders community and in there is a link to our Future Commerce expert network. We'd love for you to go and join that expert network on LinkedIn. And our expert network gets involved in qualitative research for all of our reports. But as we start looking at what the future of Nine by Nine might look like in 2021, we would love you to help us develop that. If you're a brand operator, a founder, a VC, if you're in finance or in operations in any way at a brand, we want you to help us. And we want you to join that network. So go do that right now at FutureCommerce.fm/NinebyNine. Brian, last word.

Brian: [00:42:10] I think you've already given the word that I wanted to give, which is next year we are very, very excited to engage more people in this process. And as you walk away from this episode, be ready to start hearing about this sooner. I mean, we've spent like six months making this report. So come end of Q4 expect to start hearing some more stuff about this, and we'd love to get your voice and your feedback about how to make it better. So please, please, please provide some feedback to us.

Phillip: [00:42:47] This is us begging you. We're on our knees.

Brian: [00:42:49] Yes, begging you.

Phillip: [00:42:50] Please help us. It's a lot of work. No, thank you for listening and thank you for being part of this journey. We've got so many cool things coming up. Keep paying attention, keep sticking around. Make sure you subscribe everywhere podcasts are found. Or on your smart speaker. And remember, we can shape the future together. So thanks for listening. Chris, roll that outro music right...here.

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