Jules Pieri of The Daily Grommet Wants to Make You Think Outside the Retail Big Box
Last month I wrote about the Daily Grommet, an e-commerce startup in Lexington, MA, whose website features one cool new product or service—a “grommet,” to use the company’s term—every weekday. Far from being yet another automated online store, the Daily Grommet puts its own staff members on camera to record short, homey, informally edited videos explaining what’s compelling about each day’s product, including their creators’ backstories. Yesterday’s grommet, for example, was an “athlete-engineered” sunscreen that doesn’t sting your eyes, developed by a former Apprentice competitor named Josh Shaw. In the video, Daily Grommet CEO Jules Pieri and chief discovery officer Joanne Domeniconi sit in the squinty-bright sunlight outside the company’s headquarters and demonstrate the product’s non-stinging, non-greasy credentials on their own skin.
That personal approach, along with the staff’s discriminating tastes, is winning the company a lot of fans. “If I buy [products] via Daily Grommet, I know that Jules’s team has tested them and determined that they’re actually excellent,” comments Dan Weinreb, a software engineer at Cambridge, MA-based ITA Software who is a repeat customer.
Pieri says the hands-on approach won’t keep the company from scaling up. She has plans to launch up to a dozen topic-specific versions of the Daily Grommet that would focus on sports gear, food and kitchen products, garden accessories, and the like; each such “vertical” could ultimately earn $25 million a year, she calculates. That’s ambitious for an angel-funded company that’s less than a year old, but it might not be too far-fetched. There’s growing buzz (and venture activity) around the category of so-called “curated marketplaces,” from Woot to Gilt Groupe, which seem to attract a more loyal following than typical e-commerce sites.
In a lengthy interview on July 7, I asked Pieri for the whole story behind the company— why she started it, how the product selection process works, how the company hopes to make money, and what it’s like to be a woman technology entrepreneur in New England. Here, as promised, is a complete (well, slightly pared down, but still pretty long) version of our talk.
Xconomy: What’s it like to be running an e-commerce company in the Boston area, rather than Silicon Valley or some other more likely place?
Jules Pieri: At the end of the day, I do think people form their impressions of an area by the products that come out of it. With Tokyo you might think of consumer electronics, with Detroit you think of cars, with the West Coast you do think of consumer Internet. I made a decision to locate the company in a place that isn’t broadly known for consumer Internet, but there’s no reason it couldn’t be and shouldn’t be. We obviously have the education resources and the technology credibility and the workforce to use technology effectively. And we have some consumer businesses—VistaPrint and Zipcar are well known, and there is a long list of not-so-well-known ones.
X: Can you tell me a little about your own background, and how you came to start an e-commerce company?
JP: I grew up in Detroit, on the wrong side of the tracks, definitively. At the University of Michigan I studied industrial design, graphic design, and French. Right out of college I went to Paris and worked as an intern, then got a job as an industrial designer for Burroughs, before it was Unisys, and then Data General here locally, where I designed computers and packaging for computers. Then I went to Harvard Business School, followed by a stint in Dublin, Ireland, from 2001 to 2005. My husband and I wanted our family to have an overseas experience, so we literally picked up and left. I consulted there with some Irish brands like Eircom and Diageo.
X: Why Ireland?
JP: When you live in the United States, the information overload is so enormous that you can actually get insulated. It’s hard enough navigating your local community, let alone your state or being cognizant of the federal government and all its machinations. In Ireland, you can cover the local news in about five minutes, and then you can pay attention to the rest of the world. My postman would tell me about his foreign holidays. I wanted that experience for our kids. We almost settled there—one more year and we would have stayed forever. But one thing that brought us back was that I really wanted to work on a startup, and there is no better place for that than the U.S. As much as I love Ireland, there are only four VC firms in Dublin, and the market is small, so it would have been a more difficult expansion from Day One, whereas in the U.S. we have the luxury of a very large market and access to capital.
X: How did you come up with the concept for the Daily Grommet?
JP: The very first thing I did, because I am an industrial designer, was to draw a picture of the business, based on the trends I saw as important in consumer culture. (At the end of the day, in consumer businesses you need to be a good cultural anthropologist.) Some of those trends were information overload in general—people being overwhelmed by choice. Another was people seeking deeper meaning in their consumer behavior and their experiences. People are wanting to support the little guy and the anti-big-box behavior, but they’re time-starved and aren’t able to do that very easily. Then I thought it was interesting how social media could make or break a film, or a presidential candidate, with a power I’d never seen in my career before. So for me, it was about combining my own passion for products and stories and their creation, with helping people find and connect to those stories, using media that could finally do it.
Now, social media is not commerce media. What travels in social media is news—whether it’s personal or national or just funny videos. I know that the stories around products have that same power, and the potential that people would want to share them. But you have to make them accessible and bite-sized and interesting. Finding them, and getting them to people, was the challenge.
So I drew the picture, and the next day I did a spreadsheet. I’m not interested in building a tiny business, or in building something that isn’t going to be self-sustaining, eventually. I was looking for a few numbers to pan out, and they did. So then I started doing what you do: you put together a presentation that makes this somewhat coherent for other people, and you reach out to your network. I did all the fundraising in the second quarter of last year.
X: I know from being involved in a daily blog how much work goes into publishing every day. Did you consider starting off publishing less often?
JP: We bit off the whole enchilada right away—daily, five days a week. I wanted to be a part of a person’s routine. There is a lot of serendipity to our experience, but I didn’t want there to be serendipity around telling people a story every day. I wanted them to be able to rely on that. So we focus first on those stories. We aspire to a journalistic curiosity and sense of adventure and courage [when selecting products]. If you limited yourself completely to the commercially viable, you wouldn’t have those qualities. We really believe in these products—we vet 10 other things to pick one. So there is a commercial responsibility, first and foremost, but you are not even going to care about buying something if our stories aren’t worth caring about.
X: Do you try to be the first to feature a new product?
JP: It doesn’t have to be a new discovery, but most days we are hoping and expecting to be talking about something you haven’t seen before. Then we’re really interested in four broad buckets. One is innovation. People really respond to problem-solvers and new ways of doing things. Another is style—sometimes the way something is crafted and executed is, in and of itself, interesting. Then there’s taste. Taste is subjective, but there is a certain sensibility to the things we do—you know it when you see it. Finally, utility. Something can be innovative, but is it actually useful?
X: How do you find ideas, and how do you put them into an editorial schedule?
JP: We get about 50 unsolicited submissions a week. We are also always seeking our own ideas. We look ahead at the calendar and try to recognize things like holidays or Inauguration Day. [The grommet for January 20, 2009 was a Barack Obama tote bag made in Vermont from recycled newspapers.] One of the cool things about this business is that we can be very responsive and timely. For example, we had an idea to do a natural hand sanitizer product with no chemicals. We had started trawling around to find one, but it was on the back burner for a while. Then swine flue broke out, and in less than a week, we found a scientist who had created such a product, verified his story, tested the product, and accelerated the story to publication. To actually be aligning content and commerce like that is not very common.
X: Will you feature products from just any company, or do they have to be special in some way to qualify for the Daily Grommet?
JP: For one thing, we vet what their likely customer service stance will be. Generally, companies don’t know us, so how they treat us is pretty indicative of how they’ll treat real customers. We are often dealing with small- and medium-sized businesses where the personality of the company is still fairly evident. Joanne, my partner, who leads product discovery, had these eco-friendly household cleaner products called Twist on her desk. I said, “Joanne, what is that?” and she said, “Jules, this is a really nice company.” That was when I knew it was probably going to be a grommet. We’re experts at this—we have done product development our whole lives—so we know how to evaluate the objective qualities of a product, the fit, finish, manufacture, and packaging. But “nice” goes beyond that. Is this a company that deserves support? Do they care? Are they passionate about their product, just as we are about ours?
X: Is it getting easier or harder these days to get an innovative new consumer product launched—and how does the Daily Grommet play into that?
JP: There are 30,000 new products every year. It’s honestly easier than ever before to develop interesting new products because of computer-aided design and computer-aided manufacturing and stereo lithography and 3D modeling, as well as access to international development talent and manufacturing resources. Also, because of the Internet, people can form their ideas much more rapidly and effectively. But on the other end of the picture, the distribution channels are shrinking and consolidating. There is the “big-boxification” of bricks and mortar retail. Wal-Mart and Target want as few SKUs [stock-keeping units] as possible to maximize their profits. They buy very conservatively and do not have a mission to support new and innovative products; it doesn’t fit their business model. Of course, e-commerce on the Web is ever-broadening, but the problem there is that by definition, if you are looking to discover something new, you don’t know what to search for. The Web does not really enable product discovery. That’s what we do.
As a tangent, the discount-store culture really worries me. It squashes opportunities for the young, the new, and the fragile. There has to be a ramp for these products to get discovered, at a price where the company can afford to stay in business. There is a new book about this that I can’t wait to read. It’s called Cheap: The High Cost of Discount Culture, by Ellen Ruppel Shell. [Shell is a professor of science journalism at Boston University.]
X: Why is it so important to you to tell the story behind a product?
JP: If I’m buying the same paper towels that I’ve been buying for the last 10 years, there is no deeper meaning to that. But there is a place for another kind of experience, which is that when I bring something into my home, if I know that there is a social enterprise or technology innovation or green innovation angle, it’s a richer experience. It’s like the experience people have at the farmer’s market. You may not even like rutabaga, but if somebody explains to you why they grow it and how to cook it, and you make that face-to-face connection, the texture of the experience matters. You can also get that by going on a factory tour or visiting a wonderful boutique where the person selects their offerings very carefully, or an old hardware store where the proprietor can teach you how to use every product.
X: Does a grommet always have to be a physical product?
JP: No. We’ve featured Mint.com, the personal online financial management tool. We did a service called Unigo, a brand-new company that is creating social-networking-like profiles of colleges. We have done Kiva.org—about once a month, we do a philanthropic organization or something that isn’t a commercial opportunity for us, but just part of the zeitgeist. We have 12 categories and one of them is services, so we featured Bookswim, which is like a Netflix for books—a way to borrow the latest, greatest hardcovers or college textbooks instead of buying them. In this world, a lot of our interaction with products is Web-based, so we can help to surface meaningful services that improve our lives.
X: Talk about the nuts and bolts of your e-commerce operation—the sales and fulfillment parts.
JP: The first 24 hours are different from everything after. For the first 24 hours [after a new grommet is published] our model is to control the consumer experience from end to end. We take inventory on consignment, predicting what the demand will be, and we have a third-party fulfillment operation. We deal with a wide variety of suppliers, and we don’t want to overwhelm them with a large quantity of orders that wind up taking four weeks to show up. So from the beginning we made the hard decision that we actually need to be good at fulfillment.
We also wanted the product to show up with its story—so there is a slip with the story that ships along with each product. And we like to surprise people with samples of products [usually previous grommets] packaged alongside. We can also do special configurations. With Twist, for example, we put together a Daily Grommet configuration of four products that Twist doesn’t actually sell together.
After the first 24 hours, we connect people straight to the supplier. We keep the video and the content live, but if you buy the product on day 2 or day 20, you are going straight to the supplier, and we earn an affiliate fee.
X: The videos are a key part of the presentation for each new grommet, but it takes some real work to make a good video. Do you write scripts for those? And why do you do the videos yourselves, rather than hiring traditional “talent”?
JP: It was a really big decision for the team to embrace video in the way we do it. We are really out there on the videos, personally. The night before we shot the first one, neither Joanne or I slept. This is not part of our history or our careers. But it had to be done. And like anything else in a startup, you just do it. At first, it was only us, because there was no one else to do it, but I did want it to be a broad range of people eventually, so it wouldn’t be just about my taste or my endorsement. It’s the team’s vetting of the product that matters. And you can see from our videos that they are not scripted, because I want the staff’s real reaction. But we do have a responsibility to cover the points—you can’t just do a breezy personal story, because this isn’t about us, it’s about the creator of the product.
X: Would it be fair to say that the demographic you’re aiming at with the Daily Grommet is one with a fairly high income—the sort of people who can afford to pay more for a product that has a unique story behind it?
JP: The really high-level opportunity here is a new way to launch and discover products. We are creating that via social media and new technologies and content. One investor said to me, “Jules, when I invest in this company, I invest in more than a business. If you do it right, it’s a movement. You’re giving people an opportunity to really support the little guy, the innovators.” I think that actually transcends income. I think about my college roommate, who works for a pesticide action network and has been in green and social enterprises all her life. She thinks deeply and thoughtfully about the things she buys, because she can’t afford not to. Even though her income wouldn’t be considered upper-echelon, she is a Grommet customer. So it’s not about having the most disposable income, it’s about spending thoughtfully. There is a great William Morris quote—“Have nothing in your house that you do not know to be useful, or believe to be beautiful.” That’s a way of thinking that’s bigger than any demographic.
X: But I think it would be fairly easy for a cynic to say that the products you feature may be innovative or eco-friendly or socially conscious, but they’re also luxury items that wouldn’t be affordable to most people around the world. For example, I think of one of your June grommets, the Arghand Soap Pebbles, which are made by cooperative laborers in a war-torn region of Afghanistan. It strikes me that those would really appeal to the housewife in Greenwich, Connecticut, who’s looking for a story to tell at her next cocktail party, to underscore how socially conscious she is for buying them.
JP: I’m not interested in Greenwich Housewife. I’ve been on the other side of the product world for a long time, creating products and trying to launch them. I’m interested in making each and every daily grommet bigger and better and more meaningful than it was before I saw it. This is the really high-level thing. It’s a new way to do things. You are taking what used to be the power that was aggregated in product buyers and retailers and handing it over to the people who can help make these products meaningful and pass on these wonderful discoveries and success stories. It’s about people, and the Daily Grommet is the platform. And because of people’s hunger for these kinds of experiences, if we do this right, it’s infinitely scalable. Bass fishing alone is a $7 billion industry—there are so many categories and activities where if we can get these stories told, it will be a new way for products to succeed that may never have had a chance before.
X: I noticed that your entire staff is female, and I wondered whether that was deliberate or accidental.
JP: It’s not deliberate—honestly, they all just happened to be the right people for the job. Patti Purcell, for example, started BodyShop.com, and has been funded by Brad Feld [of Colorado’s Foundry Group] three different times at three different startups. Wendy Chandor is from VistaPrint, where she was in charge of acquisitions and consumer products. Again, she was the right person for the job. The only twist on that is that a couple of our part-time people are what I would call “relaunchers”—people who took a career break [to raise a family]. That is obviously an overwhelmingly female thing, and I have a personal understanding of that phase of life, and of the untapped potential of that part of the workforce. I saw one report arguing that the “Celtic Tiger” phenomenon in Ireland was driven entirely by the re-entry of women into the workforce. That, for me as a businessperson, is a really smart thing to pay attention to.
X: I’m also wondering what it’s like to be a woman leading a technology startup in a region where you can count the number of women venture capital partners on one hand.
JP: I was at an MIT event two weeks ago with VCs and entrepreneurs, and I noticed that they kept saying, “Well, when a couple of young guys start a company…” It’s not deliberate, but I think investors have a pattern in their mind, which does tend to be a couple of young guys. Then I walk in, and they can’t project that on to me. I think investors are really good at pattern recognition, and when you don’t fit that pattern, it’s something that can actually be helpful, because you can get people to sit up and pay a little more attention. It’s to my favor in getting appointments, anyway. After that I probably do have to be Ginger Rogers to some extent, doing everything Fred did backwards.
In college, I was selected as the top student from the university to go to a national industrial design conference to present my work. I presented the work, and my dad was there, and after the presentation a man in the audience walked up, and my dad introduced himself, and the man said “Oh boy, industrial design is an entirely male profession—she’s going to have a hard time.” And my dad said, “You don’t know my daughter.” I like the improbable. I was the first person in my family to go to college. I moved my family to Ireland with no safety net. Compared with moving your family overseas, starting a startup is child’s play. You can’t let what other people perceive to be insurmountable obstacles get in the way. I have a responsibility to my own ambitions, and to the team, and the idea.