Episode 152
April 17, 2020

Wyze Leadership: "This Changes the Climate Going Forward"

"I think that eCommerce only grows as we move forward, as people are being forced to realize the benefit of shopping online." Today's interview unpacks the eCommerce investment and technology adoption efforts of DTC consumer electronics and home automation brand, Wyze.

this episode sponsored by

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

Phillip: [00:00:05] I'm Phillip. I like the way you open it because you don't just pile in the doom and gloom right up top.

Brian: [00:00:10] No way.

Phillip: [00:00:12] I love it.

Brian: [00:00:12] There's a future here. We have a future. There is a future.

Phillip: [00:00:16] There is a future. And it's going to be a bright future. And to highlight one of the bright futures that exist in the world right now, we're welcoming. Anthony Potgieter, who's the Senior E-commerce Manager at Wyze. Say hello to the people. Anthony.

Anthony: [00:00:29] Yeah, hello, everybody. That was a very good opening, I feel like. A soothing voice. It was like...

Brian: [00:00:36] It's not always soothing actually.

Phillip: [00:00:38] You should hear... Brian keeps... I'm on the East Coast. Brian is on the West Coast but keeps East Coast hours. He lives in the Seattle area and the six o'clock call for him in the morning when we're recording podcast is very soothing and sultry. And it's a very soothing. Anyway.

Brian: [00:00:54] It ramps up throughout the day. That's the thing.

Phillip: [00:00:56] It does. He gets more excited. You can tell what time of day we recorded these shows by his exuberance at the top of the show. Anyway. Anthony, what do you do? What is Wyze? For people who may not know the brand.

Anthony: [00:01:09] Yeah. So like you said, I'm the Senior E-commerce Manager, so I manage a lot of the technology stack with anything to do with commerce for Wyze, and obviously the people that don't know about Wyze. We are becoming bigger and bigger. We have about 3.2 million users, at the moment, which... Yeah, it's been an amazing two years, right? So it's a two year startup. We're based in Kirkland, just over the bridge from Seattle. And the whole premise of the company was started on two main principles. The one being: be friends with the customer. And when we'll talk more about that later. That is a very easy statement to make. It leads to a lot more complications down the line for good reasons. And then the second was to make technology accessible for everybody. So when you look at kind of the landscape of home IOT devices, which is what Wyze creates, if you look at that landscape, you see a lot of hundred dollar plus devices. Right? And if you're thinking, you know, somebody wants to protect their home, you know, it's security stuff or things like watching a 3D printer. Do you really want to go out there and have to make that huge investment? You're in an apartment? Do you want to make that investment? All those questions come up. So Wyze, in making technology accessible, we kind of wanted to make devices that everybody could own because it's like, why should price be a barrier to having that convenience and that security? So that was one part of that. And that's kind of where Wyze started. So it started with kind of, I guess, our flagship product, as you would call it. I don't think we've ever referred to it as that until I just did now. But the Wyze CAM V2, which is essentially a small square camera, pretty good looking actually aesthetically. It's $20...

Phillip: [00:03:02] Everyone has seen this camera. Like you've seen this camera. You probably. Yeah, you know what it looks like, but $20. Yeah.

Anthony: [00:03:09] Yeah, exactly. I think a lot of people have seen it. And then they don't know because we obviously are not branding these cameras, putting Wyze logos all over them. But you definitely have seen it, right? We spot them all over the place. And with that camera, we packed it with features. I mean we have 1080p that has two way audio, records motion events for free for 14 days. So we kind of crammed this camera in. And the cool thing that Wyze did is we didn't just launched the product and kind of walk away. We kind of kept going and adding features and not changing the cost, which is kind of the Wyze motto, I think. We're never settling, and we're always going forward. So we started with the camera. Now we have a few other products. Obviously recently we've launched Band & Scale. We also have a smart plug, smart bulb and another camera, which is basically a 360 degree revolving camera called the Wyze Pan.

Phillip: [00:04:03] Wow.

Brian: [00:04:04] That's incredible.

Phillip: [00:04:05] That's a pretty awesome. Being that you're in the Seattle area. You know, we're recording this now on the 1st of April. I feel like we have to timestamp these because of everything changes so quickly. But were you impacted or was the business impacted in any way? I think you've had the longest quarantine in the United States due to COVID 19.

Anthony: [00:04:27] Yeah. Yeah. I mean, so, you know, we were definitely affected, right. Like everybody else. I think for us it actually started back in January because we have some of our manufacturing warehouses in China. So a lot of that supply was completely shut down for at least six weeks, if not more. We were not producing cameras. So I think for our company, we already started to realize the impact that it could have if it should come to the US. As soon as we started hearing about cases in Seattle, especially the Kirkland area, obviously. Our CEO made the made the call very early. You know, let's all work remotely. Even though it's not mandated, let's be safe. I think that was something to see. To have a company do safety first over everything is you always want that. And that's not always the case. So I think it's good.

Phillip: [00:05:19] And it sounds like it. You know, these are hard decisions to make you weep. I've seen a lot of mudslinging around brands having to make some really hard decisions. And that's been pretty tough. Brian, have you ever seen these Wyze cameras?

Brian: [00:05:33] Yeah. It's a beautiful camera, like you said. And I want to go back to your response to COVID 19. I just, I think you've done some really cool stuff there. Like I was looking through your initiatives prior to recording. And I think that, first of all, the repurposing of the camera into a web cam... It's such an incredible camera. Everyone's at home now. Not everyone's got a good setup for working from home and being on video. People aren't used to being on video. You also included one month of free complete motion capture, which I think, given that everyone's at home, a lot of offices are empty right now. And so just providing that sort of peace of mind, things are safe and, you know, are monitored is really, really, really cool. Talk to us a little bit about the response you've seen from some of the initiatives that you've put in place.

Anthony: [00:06:38] Yeah. Yes, that's a great point. So one of them, like you talked about, we repurposed the wise cam to be able to be plugged in by a USB. Our Firmware team pulled that together I think in a matter of two days, I have no idea how they did it.

Phillip: [00:06:53] Wow.

Anthony: [00:06:53] But we saw a big shortage of web cams. You know, Micro Center was for one. They were saying that they're selling out of webcams extremely quickly. So it was kind of that was one of our response things like, hey, can we turn this this $20 camera now? Can we make it a camera that you can plug into your laptop or desktop? And we managed to accomplish that. So that was one thing. The other thing you brought up is a very valid point. It's the complete motion capture. So what that does is it records motion from beginning to end. And like you said, right now, the biggest concern, especially for small business owners, is they're away from their restaurants or their stores or their auto repair facilities. And they're they're not able to monitor it. Correct. So it's they need that peace of mind, so actually before this, before we launched this free CMC for a month yesterday, this past week, we actually started an initiative of offering free Wyze cams to businesses in the Washington area. So there is specifically small businesses and we had some requirements around that. But we were able to. We've got a lot of entries, a lot of people requesting them, and it feels good to be able to give them free cameras. Because I think reading and seeing some of the comments come in, you know, about people being afraid of the security of their property. It's hard for me because I'm thinking if I'm in their shoes, everybody's worried about health, of course. Everybody's worried about economy and your business surviving. But then this added stress that people have that, hey, my place could get broken into... So it's like just knowing that we can at least hopefully help on that front. It feels good at the end of the day to be able to do that. And so that's been very successful. And I think we've seen a lot of positive feedback from the community. Yesterday we had I think we had over 4000 downloads of that new Firmware in just a matter of a few hours to turn into webcams.

Phillip: [00:08:48] Wow.

Brian: [00:08:48] Wow.

Anthony: [00:08:49] Yeah, we're trying as much as we can. And so trying to do our part.

Phillip: [00:08:55] How would you classify yourself? I know you sell in a lot of different channels, right? Very modern business to sell in some retail and on Amazon I'm sure. Would you classify yourself as a direct to consumer? Is direct to consumer wrong word here? I feel like you're not in the typical market verticals that would be considered direct to consumer. But you are owning a relationship with the customer in a very interesting way as an electronics brand.

Anthony: [00:09:23] Exactly. Yeah. Yeah. I don't know if that term needs to be redefined. Like maybe direct-to-consumer has very much shifted.

Phillip: [00:09:30] It has no definition. It's a misnomer at this point.

Anthony: [00:09:31] Yes. I think it's shifted a lot.

Phillip: [00:09:35] Yeah.

Anthony: [00:09:35] And I think, no you bring up a good point. We do have obviously the direct to consumer from Wyze.com, which is what my team manages. But we also have, like you said, we're in other retailers. But I think our kind of thinking is that it doesn't matter where a customer might get a product, they're still putting their faith in us. And they're still... They've done us kind of... They've taken trust in us and bought the camera. It might be $20. But in our minds, if you're spending $20 or two thousand dollars, you're still putting faith in a company. So we don't treat customers that buy it somewhere else any differently. In that way, we are direct to consumer because we're always thinking what's best for the customer. Whether that comes up to pricing, you know, I kind of touched on that earlier. There's so many discussions. It was very easy. It's very easy for a company to be like, oh, you know, customers are friends, customers first. But when you start going down that rabbit hole, you see the challenge, right? We have meetings that are three, four hours long. And all we're discussing is what is best for the customer. We can make very easy decisions and say, yeah, let's just do this, let's run with it. That'll be good for the bottom line. That's good for Wyze. But we'd never do that. Yeah, definitely. So yeah, I would consider esoteric to consumer a bit more from a mentality point of view than maybe the way that most people think about it like oh I'm just selling one to one.

Phillip: [00:11:08] Yeah. I don't know if there is a brand that exists that wouldn't consider themselves customer centric or at least in marketing. From a marketing perspective. In practice is different than like as an ideal as we're finding out.

Anthony: [00:11:20] Very different.

Phillip: [00:11:20] Yeah, for sure. Brian, you were going to...

Brian: [00:11:22] Yeah I can imagine that, you know, given that you're really customer centric, and you're also like your price point really reflects that as well. You want to make this accessible to everyone. And I would imagine that channel is actually really, really important because I would imagine this is actually a pretty low margin item that you're selling. Talk to me a little bit about, you know, the challenges of being in the electronics business, being kind of at the low end of the market and then picking where and how to sell, especially right now. And actually, I'll ask a follow up question now which is... {laughter}

Phillip: [00:12:07] {laughter} Classic Brian.

Brian: [00:12:07] Yes. Well, as people are are seeing delays in shipping on Amazon, are you seeing your customers kind of move over to different channels and expecting better shipping results, if you will? So, yeah, talk to me a little bit about that.

Anthony: [00:12:31] Ok. You know, it's a very loaded question. Maybe we'll start at the last question you asked me and work our way back because you might have to repeat some of that.

Brian: [00:12:40] It was a lot. It was a lot.

Anthony: [00:12:42] {laughter} Yeah. So like you said, Amazon made the... Well, I guess we can we can kind of start at the beginning. So we do offer a very low price point and channel is very important to us. I think the primary reason, if you think about it from a psychology point of view, and this happens to me in my daily life when I talk to people about Wyze or at conferences, especially, you say, hey, it's a $20 camera. People have got used to the idea that expensive is quality. Cheap is, you know, you're losing something, right? It's not going to be good. It's going to be called cheap. So I think when you look at pricing in that way, it's hard to kind of get that credibility. If we would just to do straight Wyze.com and not use channel partners that would be more difficult to get that message. But when you see us in Home Depot stores or you see us as the number one selling camera on Amazon.com, that kind of gives you credibility, right? Cause you're seeing all those thousands of reviews. You're seeing people buying it. Everybody trusts Amazon, obviously, or most people. So I think in that way, the channels are very important just from a psychology point of view and obviously from a business point of view. Also being the number one selling camera on Amazon, I think number one and number three, is great ,too, because we have that outlet and we're able to get a lot of new customers in kind of I guess, the funnel, you would call it, through those channels. Because we're never going to have the reach that somebody like an Amazon has or we're never going to have the reach of the in-store customers like Home Depot has. So I think that's very good for kind of getting them in the ecosystem and introducing them to Wyze. And then after that, you know, they kind of become... You get in to kind of the Wyze environment and you start seeing all the product and the community who's amazing. I mean, that community goes to bat for us. I don't know. They're so passionate that it can at times be overwhelming because you feel this this kind of pressure. You don't let these people down at any cost. So in that way, partners are very, very important to us. And then, like you said, the price. The price is having such low margin on items. It gives challenges, right? Like you can't just like I said earlier, you can make the easy decisions like we need to do this. Okay. Let's go. Let's roll with it. We're analyzing every single piece of costs where it's like technology partners, everything from shipping supply chain that we're we're so critical on each part because obviously, if we increased the cost in any one of those, it's going to affect the price of the camera. So we're very careful with that. And I'm sure we'll talk about it later. But that also, obviously, for my team, it brings up some challenges. We can't, you know, do the usual E-commerce playbook of putting them on sale every week or popping up banners or putting spinning wheels on the home page. So I guess, you know, your loaded question that led me to a loaded answer, you know?

Phillip: [00:15:59] Yes. It's almost like we planned how to ask that. {laughter} Almost. I find it fascinating because there's so many challenges. I feel like the customer is trained in how to purchase direct from a brand. And there are really only a handful ways to differentiate why you should buy direct. The first is you either preferred pricing or better pricing or some sort of loyalty program that builds in, you know, that price component or maybe product differentiation. But other than that, that's really the only two tricks in the bag. And I feel like, well the two that get used the most often. I feel like there's so many more that really could be leveraged. And I'm interested to know how you're trying to build that value of why a customer would want to come to you direct.

Anthony: [00:16:54] Yeah, that's a great question. So I think one of the kind of follow ups to the question that was asked about what are we doing today with prime shipping, for example? Amazon made the decision that they were going to prioritize kind of the critical shipments, which is amazing. But of course, then if people are trying to get Wyze cams at this point, previously they could get them in two days from Amazon.com. Now, I think the latest is probably about a week. So what we've done on our side and in that case is try and make our shipping speed quicker than they were before just so that we can get customers these products, because we are seeing a shift of more people starting to come to Wyze.com. And I think that's the nature of the business. I think any product that I've been looking at this last week, normally I would go to Amazon.com and kind of search it out. But, you know, if I need a cable sooner, it's like, where am I going to get that?

Phillip: [00:17:46] For sure.

Anthony: [00:17:47] So that's one of the differentiators. But I think the other differentiators that we definitely strive for, you mentioned one which is kind of the product selection. So we have what we call the Wyze Early Access. We have an early access program, which basically that's where we released the products first. So they'll will be it's kind of a prerelease, if you will. We give the customers who are kind of... Not "loyal." I don't like the word "loyal" because I never want customers to be loyal because then they won't tell you your faults. And that's kind of weird, right? Because if you're like, hey, I want all my customers to be loyal all the time, you're never going to get that critical feedback to improve.

Phillip: [00:18:30] Wow. Well there's the assumption built in that customers could be disloyal, right?

Anthony: [00:18:36] Yeah.

Phillip: [00:18:37] I don't know... That strikes... I think that's how I think about it. But yes, sorry. Go ahead.

Anthony: [00:18:41] Yeah. I mean, obviously a yes, I do. But when people say that that's where my thought goes. I never want to be standing still. Oh yeah. Everything's great. Let's keep going. So, yeah. So that's one way. Another way is we have a very, very, like I said, we have a passionate community. So on Wyze.com, we have a community with forums where we're consistently communicating with people. And I think that, too, is a differentiator. Like when do you get to talk to people directly from a company? We have like AMAs, we have everybody from our team responding on forums or on Reddit. So you kind of have... We have the direct relationship with customers, which I think differentiates us from other brands. It's like you can't just contact somebody and ask them a question or get feedback or, you know, we also ask the community a ton of questions when we're doing product development cycles. I mean, I don't even know the number of how many surveys and how much feedback we're gathering. But it's very much our products are very dictated by what customers are asking. So that direct relationship, I would say, is probably the big differentiator. And then the other reason that people support us, which is what we often get, is that we get messages saying like, you know what? I don't mind that the shipping is a bit slower than Amazon Prime formerly. But I wanted to support you guys directly. I didn't want there to be a middleman. I believe in you guys. I want to go straight to the source and support you directly. So I think those have kind of been differentiators that I've seen.

Brian: [00:20:16] It sounds like you've got quite a sophisticated technology stack behind this as well. Forums, shopping, reviews, being able to communicate with your customers. I would imagine this was a pretty expansive process to get the site going. Talk to us a little bit about the technology that you chose, why you picked it, how you picked it, and what that process looked like.

Anthony: [00:20:40] Yeah. That kind of, I guess, leads into my story at Wyze, a little bit. So I joined Wyze in January of 2019. And when I joined they had an existing E-commerce platform that they were using, but they'd never been able to build it right. The main reason is when you launch a product you anticipate it doing well. But the thing with Wyze is they anticipated doing well when they launched the first version of the camera and it obliterated what they were expecting. They sold thousands upon thousands of units. So they had to run extremely quickly and get a platform up. Get it e-commerce platform. You know, you want customers to be able to buy the stuff. So you can't really, you know, stop and kind of take a step back and look at what will work, what will not work. So when I joined in January, they were still on that platform and the first thing I noticed was definitely that the previous launches that they had had that the site had crashed every time. And I was kind of like, you know, this is going to be... If you're a e-commerce manager, especially the technology side, you you like the challenge, but you know that it's going to be tough. And so I went in there with expectations that it was going to be a lot of work. So soon as I started to kind of assist the platform and straight away, even in my interview with them, actually, I was like, "You know what? You guys need to move to Magento if you're trying to do all these things that you're telling me you want to do and how quickly you're growing. You're going to need a platform that can a) scale for these product launches and b) be reliable." Like you don't want the site just going down for some random reason and then running around and kind of like wondering what's happening. No metrics, no nothing like that. So that's kind of where it started. So when I started at Wyze it was on that platform. I had obviously in the interview stage already kind of said, hey, you know, Magento is the way to go, just because of having different warehouses, there was a lot of flexibility in that. So in that first part of the year it was hard for me because obviously I knew the downfalls of the current platform and we had product launches. We can't just stop the product launches. So during that first stage was a lot of planning about like how can we get a Magento platform and can we make sure that that it provides the value that we need? Like there is a lot of things when you're a small business and having these huge launches. We can't have people on call 24/7 because at that time that person would have been me. And it was me before Magento. So we needed somebody. We need that to have support. So that was one of the huge things we needed to be able to scale very quickly. On launch days we see easily 40 times the traffic within of a day within that one hour.

Phillip: [00:23:39] Wow.

Anthony: [00:23:39] So even that on itself was a big challenge. And then also just general performance, right. Like the page loads time, I think were around the 7 second mark when I started and we needed to get that down right there.

Phillip: [00:23:52] {laughter} Yeah only 7 seconds longer than what customers expect from you.

Anthony: [00:23:56] Exactly. So, yeah, you know, so that was why we made the decision to go Magento and we went with the Commerce Cloud because there was a few reasons. Like I said, it checked the box of the support because we would have Magento support if technical if something happened with the servers. The other part that we really liked about it is it was built on AWS Technologies, which is a plus for performance, for scalability and reliability. I think that was a huge checkbox for us. And then, of course, there's also, you know, there's a bunch of other stuff with caching and all of that good stuff. So that was why we made the decision to go with Magento Commerce Cloud. The journey after that was interesting.

Phillip: [00:24:43] I have to ask, because there's just you know, we have a very opinionated audience who likes to tell us their opinion, and a lot of them are fanatical about Shopify in the way that, you know, once upon a time, I might have been fanatical about Magento and full disclosure, I've keynoted some Magento events. I have a Magento license plate, so...

Anthony: [00:25:06] I recall the orange shoes.

Phillip: [00:25:08] Yeah, exactly. The orange shoes. Yeah, I know. Exactly. I'm a big fan, but there's definitely some preconceived notions that exist in the world. What process did you go to to arrive at Magento? You said you maybe you had some prior experience and would you consider Magento... Isn't Magento a legacy on premise platform, Anthony? Is that a... {laughter}

Brian: [00:25:40] I think we have loaded questions. {laughter}

Anthony: [00:25:45] Yeah, that's a good question. So the decision to go with Magento... There is a lot when you look at e-commerce. It's the platform, but it's also the partners that can connect to that platform. So we could touch upon that a little bit. But we had to assess not only Magento, but what partners could kind of plug into that ecosphere because you're only... In e-commerce, it's kind of like those old Christmas lights, right? Like one of the components goes out, your site is going down. The tech solution stops working and doesn't scale properly. You're dead in the water. Or your payment processor goes down. Oh, same thing, right? So it was for me, it was the approach of, yes, there is this technology, Magento. I had worked with it in the Magento 1.x era. And so to me, it was assessing. Yeah. It wasn't the legacy product. Because I think everybody who's used Magento, I think now, maybe back then we wouldn't have had admitted it, but back then there was a lot of oddities. If I could say that. A lot of frustration that things would happen and it would be like, why? Why can't this just be simple? So I think that was one of the questions, too, going into this was like, hey, has Magento kind of kept up with the times? Like, you know, I know that it became an Adobe company. And I was interested to see like, you know, have things changed or am I going to still get those frustrations? Should I look somewhere else? And then that's kind of when we started down the Magento Commerce Cloud solution and seeing all the things that they were doing from an architecture level was very impressive. Getting that kind of a look behind the scenes to how they've set up the structure and how they've they've not only thought about performance, but also like I was talking about earlier metrics and having a code checking built into this so that when we're deploying code, we're able to check for errors easily. So it was very good to see a very complete approach. They weren't just like, here's a solution. This is a shopping platform. Goodbye. Run with it. You know, Coast it yourself. Do it yourself. Good luck. You know, it's nice to see you. It was more like. What are you trying to do? That was the first question, which was actually interesting. There was a first question when we first talked to Magenta, they're kind of like, hey, what are you trying to do? Which is it's always a good sign when when a company you're kind of talking to asks that, because then you know that they're actually interested in making sure that they can provide the right solution. Yeah. So that was kind of it was good to see. So definitely I don't think its a legacy product. I think there's definitely a lot of Shopify fans and that's great. I mean I don't think to me I am glad that all the e-commerce platforms are kind of pushing each other because at the end of the day that's what's best for the customer. I'm a customer. Both of you are customers. So I think, you know, I enjoy the competition between the platforms. I think when people are like, oh, but this does this and this does this. Yeah. You know, but you can make... The beauty of Magento for us is that we are able to customize it as much or as little as we want. So there is never something where we can say that's impossible. Like we'll have business meetings and then a team will come up with some crazy idea. Sorry, team. They already know they're crazy ideas, but, you know, they'll come up with these ideas. And maybe previously we would have been like, no, you know, platform restricted. Sorry, can't do that. We're gonna walk away. Whereas now we're able to assess like, hey, you know, that crazy idea is actually very, very good idea. Let's do it. Let's go at this. And I think having technology not be a barrier is all you can ask for. You know, you never want to be putting a technology barrier in the way of company growth or customer satisfaction.

Brian: [00:29:39] Well, I can happily report while we were talking. I went on and I bought the Wyze Scale and it was an incredible experience.

Phillip: [00:29:47] Wow. Brian, that was a flex. That's great.

Brian: [00:29:51] It was super perform it. I use Amazon pay to check out. It was super, super easy. Incredible, incredible experience. Nicely done.

Anthony: [00:29:59] Great. Thank you. Yeah. And this is round one. So we will actually be launching a PWA coming up here in the next few weeks.

Phillip: [00:30:08] Oh wow.

Brian: [00:30:09] Congratulations.

Anthony: [00:30:09] Thanks. Yeah. So hopefully that performance will get even better. Like I said earlier, we were consistently trying to improve and never stand still. So I think we've done a lot of stuff around checkout process and things like that. I'm glad you enjoyed the current one, but maybe I'll send you the new one when and when it's up and then get your feedback.

Brian: [00:30:28] I'm excited to see it. Maybe I'll buy something else. {laughter}

Phillip: [00:30:31] So I'm curious when you're in your position. You're getting ready to make a tremendous investment. And by the way, this is none of this is sponsored by Adobe. But Adobe, if you want to pay me, just give me a call, baby.

Brian: [00:30:48] {laughter}

Anthony: [00:30:48] You know, if you're in your position, you're getting ready to make a tremendous capital investment, you know, and you've got a lot of decisions to make, and are probably in a hurry as it sounded like, you know, it's the world's not going to wait around for you to innovate. You have to you push. If you're going to innovate from the product perspective, you probably should be innovating on the customer experience perspective. So I get that. But how do you go about making those decisions and what were the kind of technology stack decisions you had to make to build this e-commerce site in the way that you saw you sort of envisioned it?

Anthony: [00:31:28] Yeah. Yes, that's a great question. So, like I said, started in January. We had a lot of meetings. And I think for me personally, it's like you join a company, and you're not trying to stand down on toes, but you also can see see the holes. So I think definitely the beginning was very stressful for me because we were still launching products, right? I'm still responsible for that current website, while at the same time working on this new solution. And I still remember this one Reddit post by somebody. I think I forget which launched it had gone the website had gone down on. The way I explain it, it's pretty much like I went into every launch knowing that the site was going to crash, which right now every developer, engineer, anybody in the e-commerce space right now is cringing. There's no worse feeling than having everybody in your team excited to launch a product and then you're the one who's like, I know the reality. I know this site's going to crash and there's nothing I can do about it. There was nothing. We did everything possible to that old site. We threw hardware at it. Which is the last thing you ever want to do in technology is start like oh increase AWS servers and do all this crazy stuff. And it was still crashing. Yes. And then I remember this Reddit post and this person was like, "Hey, Wyze, you know what? It's time to stop hiring 14 year old developers to run your e-commerce solution. Time to get real."

Brian: [00:32:56] Oh no.

Anthony: [00:32:56] You know, like in reading that it's the worst feeling because I'm like, hey, I'm building this new platform. But, you know, I can't go on there. Be like, hey, I'm not 14, by the way. But at the same time, it gave me more motivation. And like you said, we kind of had to go in to this solution of like, okay, let's build it how this is going to scale. I don't want to build a website that next year we're gonna have to rebuild or the year after that. Oh, guess what? Our company was successful and now technology is holding it back. I didn't want that. So, yeah, going back to your point, we had to look at e-commerce completely and fully. I mean, when I say those tax solution, right? How are we going to find a tax partner that is able to scale with us? Because I said that 40 x plus on launch days, our e-commerce, like Magento would have to handle that, but so would everything else. So it was going through that to every portion. So we went through looking at a bunch of tech companies. We eventually ended up going with Avalara. You know, they have a very... Their technology was sufficient in what we're doing, and they are consistently  improving things on their end. Obviously, they're one of the biggest companies right now.

Brian: [00:34:16] And they're local.

Anthony: [00:34:17] Yeah.

Phillip: [00:34:19] And just as a reminder, you know, this this podcast is sponsored by Vertex. So thank you. {laughter}

Anthony: [00:34:27] You have to put the warnings. I'm going to be honest. I'm an honest guy.

Phillip: [00:34:32] Honestly if we had to be beholden to those things, we would have stopped podcasting a very long time ago. {laughter}.

Brian: [00:34:39] True that. True that.

Phillip: [00:34:40] That would be a real tough thing. But I don't think people think about things like tax solutions and the kind of scale that you have. You have to be able to scale to the kind of demand that is just most sites and most e-commerce brands just would never see.

Anthony: [00:34:56] Yeah, exactly right. It's like tax solutions and payment processors, right? Obviously you have Amazon pay that was just used and then PayPal. But then there's also like payment. And then how does this stuff get to the warehouse? Because like the warehouse is making calls to get these orders to ship. So it was a it was a huge project. And we redid every single part. There is nothing on our old e-commerce solution that we used on the new one. Other than the products getting transferred, right?

Brian: [00:35:25] Wow.

Anthony: [00:35:25] There was zero. So no technology. So it was really a lot of work going through each company. And mind you, we didn't just assess these companies, obviously, on their ability to scale and performance. What we were talking about earlier about pricing of our products goes back into this, too. So we had to find the right partner and then talk to them and, you know, kind of tell them make our business model is very different from the other companies that you're normally supporting. We can't afford to just be like, here's a fixed cost for each transaction, for example.

Brian: [00:36:00] Actually, very, very interesting point you're making, which is each channel has their own expenses, building your own channel that you own. And that your e-commerce site, along with your email channel and you know, you're up marketing automation and other points, you know, those are all things you own versus going and selling in a major retailer like Amazon or a Walmart. Both have their own expenses. What have you found as actually the most cost effective way to get your product to the market?

Anthony: [00:36:32] It's a tough question. I think the most... When do we find the most cost effective way? I think it goes back to what I said, that we're so critical of each part. So that's been the most cost effective is going to these companies and having direct meetings with them and saying like, hey, we're trying to keep this price low for the customer. Like, we can't afford to do the solution. Because ours is more like a lot of people are buying the cameras. So it's a lot of transactions, but not a high dollar value, which kind of goes against other companies. Other companies are like very high e-commerce value, not as many transactions. I think that's been the most cost effective. Then like I said, having the direct to consumer obviously definitely helps.

Brian: [00:37:17] So would you say like selling a product through your own site is more effective than selling... There's more cost savings... You have higher marketing...

Phillip: [00:37:28] It's a better channel. A better margin channel.

Brian: [00:37:29] It's a better channel. Is it a better margin channel than going through an Amazon or a Walmart?

Anthony: [00:37:35] Oh, yeah, of course. You know, obviously, you're not having to the supply chain alone. Like getting cameras to the Amazon warehouses or you know, there's no way that other retailers are going to be like, oh, yeah, I'll sell your cameras, do all the legwork. You know, we're not going to change the price. You can just give it just the same price. We're not going to make any money. Right? So, yeah, it's definitely. And I think that's universal. That's the beauty of having a website that customers can buy directly from. And I think we've seen a lot of brands make the transition, I think especially lately. I think they were forced into it. But I think that is the beauty. The other part is you never know the decisions that other companies will make. You never want to put your brand or your company in a place where another company can dictate basically whether you survive or not.

Phillip: [00:38:29] Wow.

Anthony: [00:38:29] A company could... A competitive product could come out. They could have higher margins. And who knows? You just you never want to be in that spot where somebody, you know, a product gets delisted for whatever reason or a company stops wanting to sell your product for whatever reason, and then you're just kind of sitting on your hands at that point, right? You're like, OK, what do I do now? I lost all of that. Everywhere that customers could buy, my product is now gone. And I think that's a lot of what we'll probably see now is there is a lot of companies that were solely surviving, just if we use Amazon for an example, we're solely surviving on that. And I think now they're scurrying to how can we reach those consumers if we're not going through Amazon?

Phillip: [00:39:19] If you were, you know, you're thinking about how others that might be listening to this might be able to learn something. What are some creative ways that you've found to engage customers and message to customers that, you know, don't rob from that margin? What does your onsite messaging do and what is the... I assume that there's some sort of payback period that they have to be subscribers at some point to become a higher...to pay back the, you know, an investment that you're making in the subscription channel at some point, too.

Anthony: [00:39:53] Yeah.

Phillip: [00:39:54] Talk to me a little bit about that.

Anthony: [00:39:55] Yeah, it's onsite messaging, but I think it's also just our Wyze transparency. So we were very, very, very transparent when it comes to everything. That's actually something when I joined the company it was weird for me because I'd never been in a company that was so transparent. It was uncomfortable for me. It was like telling customers, oh, yeah, we did this. We messed up. This is why. X, Y, Z. And I was like, wow, like doesn't like is that admitting faults like that... You know, it was uncomfortable. And I think maybe that's uncomfortable for anybody. If you come from more, you know, I'd worked at a lot of different kind of bigger companies and corporations. It was uncomfortable for me. And I think that was that's where the pricing thing comes in. So we're very real, like, hey, you know, we're keeping these prices low, you know, and we don't tell people like, hey, buy from us, buy from this person, do that. But like I said, that by being transparent and by being human and having that touch, most customers who come and shop at Wyze.com are those people who are like, hey, I want to support you. I believe in what you're trying to do and I want to keep the company going. So we're never telling people, oh, you know, you have to buy from us. We don't pitch it like that at all. It's just an organic kind of side effect of the way that our company is structured.

Brian: [00:41:20] Well, we're we're coming up on time here and something we really we like to ask all of our guests before we get off the show is as we're heading into the next couple of years, obviously, we're in a period right now that's one of the most challenging periods that we've seen in our lifetimes. What do you expect to have happen in the next couple of years as we come out of this? How is it going to influence what we're facing as brands and merchants in the next couple of years? And what are you doing now to help address some of those challenges?

Anthony: [00:41:57] Yeah, that's a good question. I think especially what's happening now in the climate, right. I think that e-commerce has always been growing. I think we're going to see a huge growth now. Because people who didn't used to shop online or maybe a bit more uncomfortable about it, and that wasn't their first go to have kind of unfortunately been forced into doing it. Right now, when we go to the store and get products there, they're ordering online. But I think through that, a lot of people will see the benefits of ordering online. It's very easy to order online. It's very efficient. And I think people will see the bonuses of that. But I think likewise, companies will see the benefits of, you know, because there're a lot of companies now who have been selling online. I think Girl Scout cookies yesterday announced that they were going to start selling them online.

Brian: [00:42:51] Yup.

Phillip: [00:42:51] Wow, that changes everything for sure.

Anthony: [00:42:55] But I think that changes the climate going forward. Right? Because we were in the e-commerce industry. We've always kind of... We always wanted more engagement and people to shop online and kind of show them the benefit. But there's some people who chose not to do that, and that's totally fine. But I think this has kind of shown more people, hey, look at the benefits of e-commerce from both the customer point of view... They're getting the products. They're going to shop more online after this. And going forward, we kind of I think a lot more people be converted to online shoppers. But then brands, too, I think when they realized that, hey, you know, they were maybe too reliant on their brick and mortar stores, you know, making sure that they're not put in that position again. So I think yeah, I think going forward, we'll see a lot more. I think the e-commerce landscape will change. I think it will become bigger than it even is today. You know, which is under unfortunate circumstances, because I would have never wanted that to happen under these circumstances. But I think it will definitely change the landscape. And then, you know, as far as what you're saying going forward and how it will change business. I think obviously people are going to be more cautious of spending. I would say at Wyze we've always, that's always been a concern at our forefront is like making sure we can get those products to customers. I think not so much will change on that front, but I think going forward for us it's more about just making sure we continue to do the same thing that we're doing and not take shortcuts.

Phillip: [00:44:38] I think that's fantastic advice for everybody. I wish it were as easy to do as you said, but I think it takes a lot of.... It's hard out here right now in particular. I really appreciate you being so transparent and sharing this part of your journey with us here. Anthony, it's been great.

Anthony: [00:44:58] Great. Thank you.

Brian: [00:45:00] Thank you so much.

Phillip: [00:45:00] Yeah. And I wish you the best of luck and go out and check out Wyze. We'd love to hear, you know, more success stories about them and their product, as it grows. And if you yourself, you're listening to the show and you use Wyze, drop us a line. Let us know. And I'd love to hear more about your story and how you engage with the brand. You can always email us at hello@FutureCommerce.fm. And we do appreciate you listening. And we've got a bunch of stuff coming up. Just to tease one or two things that are coming out in the next few weeks, we've got a new project that we're working on that we're getting ready to drop. I'll tease it. It's called Nine by Nine. And the next four weeks or so, you should hear more about that. And you can find that... Why don't you go subscribe to our FC Insiders newsletter over at FutureCommerce.fm and you'll be in the know when that drops. And yeah, we've got so many cool things coming up. I don't want you to miss any of it. So make sure that you stay in the know and subscribe to our newsletter. That's it. Thank you for listening. Be well and be safe out there. And let's all make a future that we're proud of. Thanks, Anthony.

Brian: [00:46:11] Thanks, everybody.

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