Josh Payne - Founder of OpenSky Ventures, CEO of Onward

Speaker A: What we learned in Fund one is it's really about the founder. Everything is about the founder. Uh,

Speaker B: welcome back to the Marketing Playbook. The show where we dig into the strategies, stories and hard won lessons that that help marketers and entrepreneurs build smarter businesses. Every episode we pull out three game winning marketing plays that you can take straight back to your team. I'm your host Mark Friedman and my career has been built around direct to consumer marketing. From direct mail and physical retail to digital commerce. This show is presented by Forter and Details Interactive. We're on episode 149 today and my guest is Josh Payne, founder of OpenSky Ventures and and CEO of UH Onward. Josh has done something most people only talk about. He built a company from scratch, scaled it over a decade, sold it to global private equity firm and then did it all over again. This time as both an investor and a founder. In this episode we're getting into the realities of subscription businesses. What separates great founders from good ones and the emerging consumer trends quietly reshaping commerce as we know it. It's a conversation packed with perspective, pattern recognition and a few surprises along the way. Stay with us. Episode 149 starts right now. But before we get started, a quick thank you as always to Max Branstetter of the Wild Business Growth podcast for producing this episode. You can reach him@maxxpodcasting.com to help bring your podcast to life. Let's open the Playbook. Ready?

Speaker A: Break.

Speaker B: Welcome to the Marketing Playbook podcast. My guest Today for episode 149 is Josh Payne. Josh is an entrepreneur, investor and startup advisor. Currently he's the general partner at Open Sky Ventures where he invests in the future of commerce and he's also the founder and CEO of Onward Group, a uh, B2B retention software platform for ambitious brands. Previously he was the founder and CEO of Stack Commerce which was acquired by tpg which where he was a three time finalist for the EY Entrepreneur of the Year award for Greater Los Angeles and recipient of the best CEO in LA awarded by Comparably. Josh is also an active angel investor in more than 30 plus startups and mentored to early stage startups at Techstars and 500 Global. He's a husband, father of three, Ironman, triathlete, YPO member and an avid explorer. Josh, welcome to the show.

Speaker A: Thank you. Gotta shorten that bio.

Speaker C: Yeah, all good, uh, all good. Uh, thanks for joining me. We'll get to your first story in a second but uh, as we were

Speaker B: getting ready for the show, you don't

Speaker C: live in the United States.

Speaker B: You live where?

Speaker A: Uh, we are in Mallorca, Spain.

Speaker C: And what brought you to Mallorca?

Speaker A: Yeah, you know, um, I met my wife 15 years ago. I had studied abroad and just know like a lot of people and just really love that experience and just have always felt like Europe is a special place. And growing, uh, up, I didn't get to have that experience. Um, I think I flew until I was like 20 years old or something and, and I wanted that for my kids. And so I, I, I told her that on our first date. And then, uh, you know, after I sold the company, uh, there was an interesting kind of moment where it was like, could we do this, could we do this now in our lives? You know, when I'm 45, um, and kind of in the peak of my career and starting a venture capital fund and starting a new business. And at first the feeling was like, no, it's not feasible. Now's not the right time. The kids are kind of young. And then I really kind of pushed against that. I said, you know, why not? And we started sort of inching towards that goal. And my wife is half Venezuelan and she speaks Spanish. And we really have fallen in love with Spain in general before the trip. And it's just a really easy living place. Um, there's not a lot of fanfare and people are super nice. So we made it happen.

Speaker C: That's great. It's a good story. We had, uh, chatted about some business things, you know, over the last, you know, few months. And I don't think I ever realized in that conversation that you were not in the United States. And, you know, as I was mentioning that to you, you were saying that. Yeah, that's kind of the point. Right, so maybe elaborate a bit.

Speaker A: Yeah, I mean, this isn't at all a vacation. You know, fortunately, you know, both of the teams that I've built and are working on, both across venture and the startup, are remote. And I think if you're doing it right, you know, you're integrating your, uh, ambitious life with your ambitious work and finding a way, you know, that works for, for you to make that work. And I think the last 10 or 20 years there's kind of been all this talk about work, life, balance. And I think for founders, it's really, there is no balance. I think for founders, you end up, if you focus on balance, that the scale is always tilted towards, or not always oftentimes tilted towards work, and it feels out of balance all the time. And so the question for Me was like, how can I integrate my work into my life instead of delaying life? How can I sort of wedge work through it or into it in a way that like works for everyone? It's not, it's not perfect. I mean, but there are a lot of times when I'd rather not be working and there's a lot of more temptation here. But it's, it's been really good. I showed you all the graphs for Open sky and for Onward. They're all open to the right and you know, I don't think you would be able to plot when we came and when we're leaving. You know what I mean?

Speaker C: So, yeah, so we get first story usually uh, as we start the show. But in your case there was a little bit of some other interesting stuff to hit. But you know, this first story is, you know, was there something in your upbringing that might have suggested that your career would take the shape that it has?

Speaker A: I don't. Yeah, I mean, I think just the classic thing that everyone talks about, you know, my dad was a salesman. Just uh, uh, almost like a what you would call like a door to door salesman if you will. Just sort of old school. Did insurance sales and he did industrial, you know, supply sales. Right. So just your classic salesman. And I think I watched him in that career and watched how he could approach people and would continually like thoughtfully and aggressively kind of come back and you know, reintroduce himself. Um, and I learned a lot from him in that process. And I think it was also just ambitious in terms of, you know, and, and, and from an early age, you know, the classic delivering newspapers at a route. Paper route. And started, you know, mowing lawns, shoveling snow, all that. You know, it's, it uh, sounds um, uh, cliche, but it's, it's true, you know, and I think those cliches are there for a reason.

Speaker C: Early in your career, maybe, uh, one of your starts, strategic partnership role at Intel. How did you get into that role? Pretty early on.

Speaker A: Yeah, so I was a computer information systems major which was like a business side of um, computer. So I wasn't quite smart enough to be computer science, which was programming. So I did the business side um, knowing that I had that affinity for sales. And uh, I graduated in 2002.

Speaker B: Indiana.

Speaker A: Yeah, I went to IU, went to Indiana University in Bloomington.

Speaker C: I call that out because the, the uh, fellow Max, who uh, produces and edits this show is an Indiana guy and uh, he likes to uh, to make point of that.

Speaker A: I love it. I love It. Yeah. Who's yours? Um, yeah, so, so it was, it was sort of.com era and you got to remember uh, now you know, you talk to graduates now and everyone is starting a comp, every 22 year old is starting a company. Everyone's learning programming or you know, an AI prompt engineer and everyone wants to be an entrepreneur. That, that really wasn uh, 25 years ago. 25 years ago banking and consulting really ruled the world in terms of what postgraduates wanted to do. Most of my friends were finance and econ majors. So being CIS was a little bit uh, different. And um, anyway, I got an internship with intel in uh, my junior year which I was really fortunate. And I remember getting my full time offer. It was like a month before things really melted down and intel ended up rescinding a ton of offers but somehow some way mine wasn't and uh, made it out to Silicon Valley. And you know, that was the dream. You know, just being in the epicenter of tech. You know, if you're an actor you need, you needed to be in la, you're in finance, you needed to be in New York. So getting out there, I credit that to being a huge part of the evolution of my career.

Speaker C: During that early part of the career there was intel, there was Yahoo, there was a business called Meebo. What was Meebo? Meebo.

Speaker A: Uh, yeah. So basically, you know, that quick arc, there was Intel. To be honest, I couldn't stand working uh, in corporate America. Quickly learned that this was not for me. I was sort of like the, the best worst employee, um, who was doing the bare minimum to get along, uh, and not get fired. But I also wasn't, it was interesting. I also wasn't. I was too risk adverse to not have a full time gig. I'd had no, I had no fallback. My parents didn't have any money, I had student loans, you know, bills had to be paid. Um, so it wasn't like I could just quit. And um, but like I remember waking up living in San Francisco and just kind of like being like what the fuck am I doing with my life? You know, I actually call, I remember I called it my quarter life crisis. You know, I was 25 and just sort of like felt so unfulfilled. But I also felt stuck because I knew what I wanted, but I didn't know how to get there. I didn't know how to be an entrepreneur. No one ever told me. I wasn't from a tech family. I didn't grow up in California, no one in My family was an entrepreneur and so I felt this internal strife, you know, that was just constantly going and I couldn't figure out how to give up what I had in order to take this sort of cross the chasm, if you will, into entrepreneurship or into something um, different. And so what I ended up doing is I applied to business school, uh, to Duke, which was sort of this bridge. Even though I knew the business school wasn't really going to get me to entrepreneurship, I knew it would open up a gap. It would give me like two years to kind of think and hopefully meet people and network. So I came out, out of Duke two years later. Um, it was then the uh, financial crisis of 2008. So I graduated in the dot com crisis for undergrad and then I had the financial crisis for my, my mba and so jobs were super, super scarce and I couldn't find anything. So I just moved back to Silicon Valley knowing that I would be in better shape, applied everywhere, got really close, uh, at a bunch of, you know, places. But ultimately Meebo was this venture backed startup, uh, backed by Sequoia, so, so really fast growing, had like 20 or 30 people when I started. And that's really where I cut my teeth. That's really where I learned what entrepreneurship was. I met actually sat right next to uh, this guy Mikey Krieger, uh, who went on to co found Instagram and now I think he's like CPO at Anthropic or one of, or maybe it's Perplexity, one of the big LLMs, which is, which is crazy. And so learned a lot. But um, I love that job, I love that team. And then I got fired a year later, a year into it, which was devastating. It was sort of like I had never had anything like that happen to me before. Didn't really understand why I was, I was hired by one manager and then transferred to another manager. And I think my new manager didn't hire me and didn't know me. Wanted their own people. And so I think it was a little bit of a, um, uh, collateral damage there. But, but also it was just a huge wake up call. And um, that still I was in this process of how do I start this company, right? I was really close. I had met these people, I had seen what it was like. I loved everything about service. But I still was not a developer, I wasn't a coder. So I started building on the side but I still needed to pay the bills. And that's where Yahoo came in. So I was like, okay, I Need a gig, uh, that's stable, pays the bills, but I'm not working 60 hours a week. And Yahoo, uh, provided that opportunity. And so everyone has a different risk threshold. And so for me it's interesting. I'm an entrepreneur, but I'm not terribly risky. I don't take a lot of risk, which you'll kind of see in the way I build my businesses. And so I worked at Yahoo and I was building on the side. I probably built two or three companies over the next three years, um, two of which failed and then the third one, which was Stack Commerce caught.

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Speaker C: Why don't you stick with that one? Talk about Stack Commerce and what that was. And you know, there's so many different pieces of emotion. You know, you're starting a business, you ultimately sell it. There's emotional attachment, I imagine that comes, you know, now a paycheck, uh, or a big check. Um, I'm um, surmising if you had a, a nice exit. You know, sometimes that covers, you know, any emotional. But what was Stack Commerce?

Speaker A: Yeah, so Stack Commerce, I, uh, you know it's so interesting. Founders think that they have to, you know, are people who aren't, who are building but, but haven't launched yet, think that they need to build the perfect thing, think that they need to have it figured out. And my m, my, my tactic has been different. It's, it's to get a toehold and just, just find a niche. Find something that, that works, um, that makes money right away, that you know, has traction really quickly that you can sort of heat, heat test really quickly with, with some ads or with some money. And so, so we did that. So the very first iteration of Stack Commerce was um, this idea of selling Software in bundles. So consumers, instead of, um, you buy in the App Store today on your phone. But 15 years ago, people used to buy software on their desktop for $50 per app. And it was a one time purchase and there was no subscription. And so we would, we would get 10 software developers, app developers together at once and say, hey, we're going to get you a thousand downloads, but you have to discount your product 90%, um, in order to do so. And you're just, you're going to create some brand awareness and then those people hopefully go on to buy next year's version at full price. Right. And so, and then we would do a 50, 50 rev split on that first sale. So, ah, that was the very first version of Stack Commerce. It was essentially Groupon for software, if you will. Right. So Groupon in 2010 was the fastest growing company in the world. People forget that. Literally the fastest growing company in the world. And so everyone is creating a Groupon clone. And so, um, what was great about the business that I started, uh, even though it wasn't sexy, there was no marginal cost. I was creating value for both sides of the transaction. I was creating value for the app developers in terms of awareness and I was creating value for the consumers inherently by getting them a 90% discount that they couldn't otherwise get. And I was getting 50% margins still, uh, on what I was doing. And so that very first bundle, I always tell a story like, I'll try to make it quick, but I spent six months reaching out to these developers, getting them to give me this discount, telling them I was going to sell a thousand bundles. I said, it's a two week event, okay, a two week flash sale. So we launch first day, zero sales. You know, second day, like one sale was like my mom. Third day, you know, sales started kind of trickling. By the end of the week, I think we had like maybe a hundred sales, you know, and I was completely panicking. Um, I called my dad and frankly broke down in tears and just like, wow, I let all these people down. Um, I told them I was gonna sell a thousand copies. There's zero chance I get to a thousand cop. You know, this is yet another failure. You know, maybe I'm not cut out for this. And you know, his advice was really sage, which was, I was like, what can I do? What do I do? He's like, send another email. I'm like, what do you mean? He's like, send another email. Send another email. You know, like, take another swing, take another swing until, you know, until something clicks. And I was still working for Yahoo at the time and uh, called in sick. I was living in LA actually for the summer for this specific reason and then flew back up to San Francisco. Uh, Steve Jobs was alive and presenting at Moscone center and I was selling Apple software, that's what the 10 apps were. And so I went uh, out, printed out flyers and stood in front of Moscone center like handing out flyers about my digital bundle that these people could buy. Then I snuck into the conference and whatever and I met the founder of one of the top Apple blogs online called Cult of Mac. And uh, so, so he's like hey, yeah, good to meet you. You know, come, come by the party later, um, if there's room. And so I, I, I go over the party, I get there, uh, the person doesn't know that I know this guy and they're like no, you can't get in. And I'm like oh God, you know, so then I, I, long story, I sneak into this party, find the guy and I'm like hey, like you know, you said you were interested in this, you know, will you post about it on your blog? And he's like, I don't know, like sure kid, I'll, I'll post about it. So the next morning a post goes live. We sell 600 bundles in a day. And then another, you know, another blog post, repost their post on a different blog. So I get another 200 sales by the end of the week. We hit, we hit the thousand. That was it. The rest is history, you know, you know, we just kept going.

Speaker C: So, you know, one of the things about this show is we try to give the listeners three key takeaways that they can take back to their personal or professional lives. And you know, I think there's about five that you just gave. You know, it's don't give up, you know, the stick to it. Iveness of you know, and sometimes pivoting really quickly uh, to something that, you know, didn't work and trying something else. So you know, that's awesome. So you, lots to cover here. But uh, with respect to Stack, you then sold it to TPG and just quickly the emotional, was there any emotional

Speaker B: attachment to that business?

Speaker C: Did you stay on after it was sold?

Speaker A: Yeah. So we ran that for 10 years from the, from the story I just told to the exit was about a 10 year period. And uh, we did something I like to call seed strapping. So we raised a little less than a million dollars and got profitable and Just scaled it up from there. Yeah, we sold to TBG for majority stake, rolled a percentage and so I stayed on for a year. And yeah, that, that period of selling was really interesting. Right. Yeah. In terms of like your identity being wrapped up in that thing and then kind of trying to manage a really big change monetarily. And I think for a lot of founders, uh, you kind of think, why am I doing this? Well, I'm, I'm doing this to make a lot of money. And then when I make a lot of money, all my problems will be solved. And you know, Mark, you've been, you've been around for a long time in business and done, done really well, I'm sure. And it's just, you know, uh, I mean it, it, it just doesn't work like that. You know, money is nice, but it does not solve all your problems. And so, and I think that's a really, that's a big letdown to find that out. To find out that you've been chipping away, chipping away at something and then to get to it and just say oh wow, like this didn't do what I thought it was going to do was, was really devastating.

Speaker C: It's a means to an end and you know, um, you know, it's something you need money, but you're right, uh, there's lots of things that it doesn't, you know, solve. Um, so uh, that's another good call out, you know, for folks. So great uh, story around Stack, uh, commerce and there's kind of three other pieces of probably more but to your background, this business called Retention Brands. So um, that's kind of what I would characterize as a roll up of businesses. So what's the status of that and

Speaker B: your role in it?

Speaker C: And I guess the overarching question for me does a roll up business work? And the reason I ask is because I have seen so many roll up businesses in the consumer space fail over time.

Speaker A: Yeah. So Retention Brands is run by a good friend of mine, Chris Davis. And so that's really his idea and baby. And I'm a minority shareholder and investor and advisor. And so Chris previously had run a company called Loot Crate in the subscription space and, and it had really, it had done really well and ultimately, but ultimately fell into bankruptcy. And so he learned a lot about bankruptcy and what happens and um, in that process. And so his thesis here was to go out and acquire brands that were or could be run through an assignment for the benefit of creditors, which is an ABC process, and bring them out on the other side, clean. So before that process you might owe a lender $5 million. After that process you owe them nothing. And all the old stakeholders lose their equity. But you put a new cash infusion in and then it's negotiate uh, with some of the uh, creditors and you bring it out. So through that um, Retention Brands has purchased, let's see Birchbox, Altru Beachly, um, more recently a brand called Able Clothing. And so yeah, I think um, yeah it's a dog fight all right. I mean when you're bringing brands out of, out of bankruptcy especially. But the benefit for Retention Brands is that they're all subscription based businesses. So they have large subscriptions they're kind of holding on to. I mean that said, I do think the Holdco model for brands is a really tough one. Yeah, I'd agree with that assessment.

Speaker C: Uh, you've talked a lot about subscription and I know that's an important part of the businesses that you've been involved with. Being a subscription business or having a subscription as part of your business is a unique challenge that you know, other brands maybe don't have. What are the challenges that those businesses face? You know there's churn and other things. And how have you been able to get through those challenges?

Speaker A: Yeah, I think the biggest challenge is your CAC is a little bit higher, right? Because your CAC is a little bit higher because you're asking someone to sign on for a multi purchase right. As a, opposed to like a one time purchase. And so you know you have to be prepared to be able to spend a bit more with you know in order to get that higher lifetime value. I think the other thing is sometimes you spend assuming a six time repeat but you only have a three time repeat and that uh, can get you upside down really quickly. So really paying attention to cohort data and saying okay, like well what happened to this cohort and why did it go, why did it, you know, why do things improve or why do things get worse and then, and then remeasuring each month, you know as ah, as you kind of go along. So I think subscription based generally as an investor I can tell you through Open sky, you know we really are favoring subscription based businesses um, because the certainty of revenue is just higher. Right. And so you can manage the down months and you're not always reacquiring customers as often. And I think you see that a lot in the, in the exits too. A lot of these like runes and different companies are very subscription heavy.

Speaker C: Do you find that the subscription business is very similar across verticals, whether it be supplements or apparel or what have you. Or are there nuances within different verticals?

Speaker A: I mean mostly you see subscription and consumables. Right. So apparel doesn't typically have it. I mean, you know, I guess like the, like the box? Uh, yeah, yeah, the boxes. But those have mostly subsided. There aren't that many new box companies. I think that was a trend that was like 5 or 10 years old now and you don't really see much of that anymore. I'm not sure if it's, I think the economics of like hitting the boxes and getting those together was you know, maybe, maybe quite expensive. But yeah, I think, I think the game that you see most people playing today is uh, around subscription is supplements and consumables with really high margins and getting, you know, getting people to layer in there. Yeah, I think, you know there is the idea of memberships for apparel and I know you're, you have some uh, interest there, um, and experience there, but I think memberships for apparel can be really powerful. It's just really all upside, right?

Speaker C: Yes, you would hope so.

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Speaker C: You mentioned a few times today this business, Open Sky Ventures, uh, tell us about that and how it got started.

Speaker A: When I uh, sold Stack Commerce I started investing in startups more and more. Now I had done one or two investments prior to that one in a company called Teachable, founded by this guy Encore Nightpal, uh, which had a really successful exit. Then uh, my second investment was in a company called postscript, which is a SMS platform. Both the guys that started that actually worked for me at Stack Commerce for actually one for seven years, one for four. And so I was kind of like oh man, I'm incredible at this uh, angel investing thing. Uh, that was pre sale and then after I sold I sold and it was 2021 so it was literally the peak of uh, valuations. And uh, that cohort of angel investments had not done terribly well. But I learned a lot from that. And one of my investors in Stack Commerce was this guy, Josh Resnick. He founded a company called Sugarfina, which is a luxury, ah, candy brand. And um, we got together and he was doing a lot of CPG investments, I was doing a lot of B2B E commerce enablement investments. And so we said, hey, no one's really put together a fund that kind of does both of these things and is a sort of a full cycle B2B and B2C future of commerce fund. And so we put together Fund 1 in 2022, which unlike 21 was very prescient and incredible timing. Sort of the old Warren Buffett. Be greedy when others are fearful and be fearful when others are greedy. So I didn't follow that advice in 21, but we did follow in 22 and we started writing checks in late 22 and early 23 and really getting great valuations and incredible founders. And Fund one has done extremely well I think on an unrealized gains basis. We're well into the 40% IRR range, you know, have a lot of great names in the fund. And now we're raising Fund two and doing it, you know, doing it all over again. And pre seed. And seed is kind of our realm. And uh, fund one was kind of 100k to 250k check sizes and fund two is more like 200 to 500.

Speaker C: And are there specific types of companies, you know, particular verticals, capability, uh, that you know, you're focused on?

Speaker A: Yeah, I mean on the consumer side, like I said earlier, I think it's really about high margin, high repeat, uh, and really disruptive. So just I think one thing that we've noticed around consumers, it's really around these mega trends. Right. So every couple years you see a new trend. Like I don't know, 10 years ago it was like collagen and eight years ago it's right as, you know, it's uh, creatine or you know, a couple years ago it was creatine and now it's protein. So every protein infused candy, protein infused chips, protein infused ice cream. So that's like there's sort of like a trend and then there's a form factor trend as well. So, so pouches are now a big trend or gummies were a trend two or three years ago or. Right. And, and so I think you, you kind of have to evaluate and see where we are in these cycles. And then the other thing is, is, yeah, just figuring out, I mean it's really what we learned in Fund one is it's really about the founder. Everything is about the founder.

Speaker C: I was just going to ask, that was my next question is you know, tell me about, you know, what you're looking for in the founder. Because it really is about the. Maybe it's the form factor, maybe it's the fad of the moment, but it's really about the founder. So tell us what you look for in the founder.

Speaker A: Yeah, I mean, it's part raw intelligence, it's part charisma. It's part, you know, at the end of the day, it's someone who can lead and sell. Uh, they can sell a great team to join. They can sell. They have to be able to sell investors to put money to work, and they have to be able to manage, um, all that while bringing an incredible innovative product to the consumer. It really takes a really dynamic person, and you can kind of sense when someone can command the room right away. And I think the challenge for investors sometimes is it's. It. I mean, it's so hard because it's, you know, you see a great founder and like, oh, I don't. I don't know if I really like this product, um, or I would never take this product. And that, you know, we had a couple of those. You know, for example, we. We looked at Grooms, which just sold for 1.2 billion. We looked at their pre seed, and we had the chance to Invest at a 10 million cap. And we passed because we thought, you know, who would want to take five sugary gummies every day to get healthy? You know, like, yes, they have creatine in them, but like. Or greens, but. But ultimately it didn't seem terribly health, you know, healthy, um, to us. And we kind of thought, oh, you know, this is just a short trend or whatever. And, you know, Chad, who's the founder CEO of Grins, is incredible. And he had one. We were probably wrong on the trend. You know, we were basing off of our own personal taste, not broader taste. And secondarily, you know, the founder was able to raise so much capital and put it to work efficiently and so fast. It was just something that the market had never really seen. He sort of blitzed the market and did really incredibly well. So we kind of learned from that. You know, even if we don't necessarily, Even if a product isn't necessarily for us, you know, that. That's fine, you know, that should be fine. And, um, secondarily, when we're kind of thinking about the founder, it's about their ability to get people to believe in them. And, and, you know, I, I like, we have, or at least I personally have this idea that, that Serbs don't necessarily need to raise 100 million-plus to have a great exit. And, and Chad did in that example. They raised a ton of money but sold for a ton and that was amazing. But, but I do think even if we don't want them raising a hundred million, the ability, the ability to gain the confidence of investors and raise more capital when needed is really, really important because otherwise you just kind of, you run out of Runway and uh, you never get to live out your vision.

Speaker C: So in that particular example you said it wasn't for you in retrospect and sometimes you want to strike quickly in retrospect. Do you need broader research from customers other than your own potential bias to see if there really is a there there?

Speaker A: Yeah. It's funny, Josh Resnick has three kids and so he always has, they're older, they're in their like uh, 20s. He always has them try everything now, you know, like let me run it by my kids real quick. You and uh, their opinions, Gen Z opinions are different than ours. So I do think it's actually helpful to have a couple sample sizes on both sides for sure.

Speaker C: You and I met uh, through conversations with your business, uh, called Onward. Uh, tell us about Onward.

Speaker A: Yeah, so Onward is um, so coming out of Stack Stack Commerce. Uh, we were selling, it was B2B2C. So we were powering marketplaces and those marketplaces were generating about nine figures in annual revenue in gmb. And the challenge was is that customers, our customers, wanted more and more from us. They wanted more loyalty points, they wanted free returns, they wanted free shipping, they wanted sort of, you know, everything. Well why is that? Well that's what I get from Amazon, right? Like you know, Amazon does this or that. And uh, you know we kind of looked at the space and there were some, there were some products out there that were sort of add ons at checkout around shipping protection and things like that. And I thought that's interesting. But it didn't hold enough value in my mind for the consumer. And so we built what I thought was sort of a hybrid model of Amazon prime is an annual membership. So you pay you know, 150 bucks a year or whatever it is. I didn't think that would really work for most consumer brands. So we said what if we could do a one time fee where you pay two or three bucks uh, at checkout or an order upgrade. But well, what do you get for that? Well, you get 10% credit off your next order. Uh, we'll make a donation to charity. You get a free return shipping label and so for two or three bucks you're getting 20 or $30 of value. And so I kind of likened it to the Amazon, uh, or Amex, uh, platinum model. So where you pay 700 bucks for a credit card but you get $3,000 of credit to Uber and hotels and whatever. And so that's a model that we thought was not only for the brand, um, but also for the consumer. And so I started that in 2023 and it's just really taken off I think mainly because our solution has just been again had more had value to both sides of the equation. There were a lot of offerings in the space that were just really kind of better for the brand and not so good for the consumer. And we kind of felt like uh, ours was different and we saw a much higher LTV from our cohorts and I think, yeah, so that's, that's what Onward. Well, that's how it started and then, yeah, I can tell you more.

Speaker C: One of the things I think that is interesting is, you know, in my, as I got my education, there's a lot of companies doing it very similarly. Um, how do you, you know, view yours as your business as being different and better?

Speaker A: Yeah. So I think in the same vein at Stack Commerce we started with this, this one bundle and then, and then that grew into a completely different business. We didn't really get into what Stack Commerce grew into being and the solution, but the same is happening and happened with Onward. We, you know we started with this one uh, product which we call Checkout plus, which is this order upgrade at checkout. But now we have a full suite of post purchase apps which includes returns and exchanges, kind of like a loop returns. It includes uh, branded order tracking, uh, ah, it includes order editing and upsells. And we're about to make uh, another big addition. Uh tomorrow. Um, we're acquiring um, a company and going to make a big announcement. But we're sort of tying together an entire suite really focused on being a revenue engine. Right. Like we, we want to drive incremental profit for brands in a way that also improves the customer experience. So it's not a trade off like I mentioned earlier, like giving, giving, giving, but losing money or increasing profit but taking away things. And so we want to create this um, this offering that kind of does both.

Speaker C: One of the things that's you know, interesting, just going back to your um, uh, open sky, uh, conversations, what's out there now that we maybe have not

Speaker B: really heard a lot about, not necessarily

Speaker C: a company but a trend you know, you mentioned, you know, is it protein or creatine or whatever? Is there something new that we should be having our eyes on?

Speaker A: Yeah, I mean I think what we're seeing in consumer that's really interesting for us that we're trying to nail down is the science backed GLP1 and peptide type of products. You're seeing people be very hyper curious about getting an edge. Um, if there's one thing I've learned by living in Europe and looking back at Americans is that the US audience, everyone wants an edge. They want a quick fix, they want a boost. And um, what social media and science are telling us is on the horizon are, um, drugs or, I don't know, peptides or, or products, let's just say broadly that can provide an edge, uh, to either lose weight gain, uh, muscle or a variety of things. And so we think that's going to be a massive market. There's some regulation there right now to kind of figure out and whatnot. But like that's definitely one area that we're kind of, you know, looking around and seeing um, what's really interesting. So I'd say that's, that's probably one of the biggest ones. You know, again the form factors. I mean it's so interesting to see some of these companies in consumer. It's like, you know, a better pasta sauce, you know, goes on to sell for a billion dollars, you know, um, I think better for you was started 10 or 15, probably. Yeah, 10 or 15 years ago in the consumer space. It continues to work. So three years ago we invested in a company called Fishwife and it was better for. You tend to fish.

Speaker C: My son is crazed about fish wife, it's his favorite. Uh, you know, and I grew up, obviously grew up a long time ago all you had was sardines, you know, in a can and now the Fishwife product. And you know, this is a little uh, outside the show, but I have a granddaughter who's 20 months old. Uh, we've introduced her to some of the Fishwife products and she loves it. It's uh. So yeah, odd things.

Speaker A: Yeah, that's, that's incredible. And, and yeah, so it's like, you know, what are we looking on? Uh, looking for? Um, yeah, I mean the better for you still works finding, you know, Starkist tune and all that. You know, it's, it's just like, you know, the stuff that we grew up with. The problem with those manufacturers is, and I think this is a problem with, you know, again, again being in Europe. I'm Not a big fan of regulation generally, but, but you see what happens here around, especially around food products is the EU is really good about defending its citizens from corporate efficiencies in order to drive more profit but potentially harm its consumers. So things like, let's just take an easy example, red dye 40 or whatever, you know, so Europe bans that because it's not good. It's just not good for its citizens. It probably hurts some corporate profits because when a consumer looks at Skittles and you look at it with red dye 40, it visually is more pleasing, it looks more, it pops off the shelf. When you see Skittles here in Europe, they don't look the same. They literally look different. Like the color is not the same red. And so it's not as visually pleasing. And so you, you might not go and grab that thing, but it's going to be healthier for you. And so I think, you know, one of the, one of the things, um, back home that we're seeing is, is the starkist tuna of the world. Sorry to pick on stark, but um, as, as U.S. based companies, we want our boards, our investors want more profit. But how do you get more profit out of a, out of a space that isn't growing right, like, well, efficiencies. What does that mean? Well, it means higher shelf life. Well, how do you get a higher shelf life? Well, you put more preservatives in it. Is that good for us? No, but like it's going to get more profit. And so um, that corporate cycle introduces the, enables the introduction of a better for you category. So that was roundabout way of saying that better for you will continue to go on because I think a lot of these legacy companies, they're not creative and so they don't create new great things, they just squeeze. And so then that allows like someone like Fish wife to come along and you know, when we invest in that, that, you know, Josh Resnick definitely was like, I've never, this is a good example. I've never eaten fish. You know, something like that. I wouldn't, I wouldn't eat it. And, and, and, but the, I really pushed hard for it. And the reason why is because the branding just was incredible and you could tell that the founder fit with their creative was just really on point.

Speaker B: Well, we're down to the end of the show.

Speaker C: Lots of interesting stuff. Josh, thanks very much.

Speaker B: We do a two minute drill.

Speaker C: Uh, seven questions, one word answer. Are you ready? All.

Speaker A: Ah, right, let's do it.

Speaker B: Favorite app on your phone.

Speaker A: I'm Gonna go with, uh, Whisper Flow.

Speaker B: Last website other than Amazon that you

Speaker A: shopped from, um, Maple Boost.

Speaker B: Something that you're not good at but wish that you were.

Speaker A: Tennis.

Speaker B: A charitable organization that you're passionate about.

Speaker A: Charity. Water.

Speaker C: If you had one superpower, what would it be?

Speaker A: Oh, man, that's a good one. I would say the capacity for infinite love.

Speaker C: Huh. Oh, boy, that's a new one. I haven't heard that 1 in 149 shows. I like it.

Speaker B: Other than family, what's your most prized possession?

Speaker A: I'm going to go my espresso machine.

Speaker C: Okay. Where can people reach out to you on social median?

Speaker A: Uh, Payne. P A Y, N, E. Great.

Speaker B: Hey, this was fun.

Speaker C: Thanks for, uh, making the time, taking yourself away from the beach of Mallorca, and, um, look forward to catching up with you again in the future.

Speaker A: Awesome. Um, thanks, Mark.

Speaker B: That's it. Today's game ball goes to Josh Payne for coming on the Marketing Playbook. To me, today's three game winning marketing plays were as bet on the founder, not just the idea. Josh made the point that great investing and frankly, great hiring and partnership decisions come down to the quality of the person sitting across from you. Raw intelligence, charisma, and the ability to sell are the signals that matter most. The product will evolve, the market will shift. But a great founder finds a way. Ask yourself, in your own world, are you evaluating the people around you with the same rigor you apply to the ideas? And number two, integrate work into your life. Don't just try to balance them. Josh moved his family to Mallorca, built remote teams, and kept his business metrics strong. His philosophy isn't about finding balance. It's about designing a life where work and things that matter to you actually coexist. That's a harder thing to build, but it's a more honest goal. What's one thing you could redesign right now to make that integration more real? And number three, watch the cohort data. Not just the top line. This one's for anyone running a subscription model or thinking about launching one. Josh was clear that subscription businesses live and die by repeat purchase behavior. And you won't see the cracks until you're looking at cohort level data. Don't get seduced by gross revenue numbers.

Speaker C: Numbers.

Speaker B: Understand who is coming back, when and why. That's where the real health of the business lives. Thank you Playbook marketers, for listening to another episode. If you want to check out more pages of the Marketing Playbook, make sure to subscribe on your favorite podcast spot and leave us a five star review on Apple podcasts. Until next time, the devil is in the details.

Speaker A: Sam.