The Breakout Growth Podcast Episode 6 - Freshly CMO, Mayur Gupta
SEAN 00:23 In this episode, we're going to look at Freshly a meal service that aims to reduce the barriers to healthy eating. I'm going to be speaking with the CMO at Freshly Mayur Gupta who was previously the VP of growth and marketing at Spotify. So he's going to give us a really interesting perspective comparing the two companies. Mayur's going to explain how he's now focused on building the right culture and mindset to support rapid iteration so that they can accelerate the number of healthy, convenient and tasty meals that they deliver across the USA. So let's get started. All right. Welcome to the breakout growth podcast buyer <inaudible>.
MAYUR 01:07 Thanks Sean. Thanks for having me over.
SEAN 01:09 So before we jump into how you're approaching growth, can you give a brief introduction to what Freshly is?
MAYUR 01:16 Sure, yes. Freshly is, um, the largest direct to consumer, fully prepared meal subscription business. And, uh, our meals are never frozen. They're fully cooked and ready to eat in three minutes or so. And our mission is quite simple. It's removing the barriers to healthy eating, uh, with the purpose of inspiring every individual to unlock their full potential to five. And we strongly believe that can only happen at the instructional three core things, which is health tastes and convenience. And that trichology has never, never been, um, never come together. It's very similar to good, fast and cheap has never happened. And as of January this year, so earlier in this year, we went nationwide. So we are delivering now in 48 States and by the end of this year, we will have delivered close to 35 million meals just in this year alone. Wow. And, uh, exciting news is we just had our million teaser, you know, a couple of months back. So we're super excited about the goats we've seen in the last four and a half years or something.
SEAN 02:22 When I look at the product I did see that you're delivering in my area in Southern California. So that's, uh, that explains the 48 States that you're into now. But, are most people interacting with the service through the website or is it more of a mobile experience? I mean, clearly, clearly the physical experience of eating is, is that the most important part? But how do they, uh, digitally engage with you?
MAYUR 02:47 Yes, yes. And I think you kind of subtly hinted at another point, which is what's relevant to the consumer is only the, the physical aspect of consuming the core product or is overarching. And I'm sure you've been a big proponent of theirs. It's everything matters from the web to the up to the mobile, to the native app. But to answer your question, we are absolutely a mobile force experience. That's a mindset that is where we are, you know, inching every single day forward. And um, you know, a big percentage of our users, uh, are leveraging on near that from the quality of the user. From the engagement. We absolutely see a big upside on our native app users. The lack of friction in mobile for any product definitely has a measurable impact on the overall experience. So from that standpoint, absolutely. Yes. And, um, I feel our users get to our magical moment and, uh, you know, the aha moments much faster and in a more quick way when they download the app and the experience when, uh, as part of a product road map, there's a lot of focus on how we add incremental value, incremental features and capabilities on a native app that will elevate the experience overall.
SEAN 03:59 That's great. And then what is the target customer or the typical customer that uses Freshly?
MAYUR 04:07 Yes, that's a very exciting part. Again, coming from Spotify, I could pretty much tell you exactly the core audience at Freshly. What's super exciting is with the kind of challenges we are solving for people in people's lives, which is healthy food, which is extremely tasty and delicious with a lot of variety but also convenient and, and you know, not, not 25 bucks a pop, uh, that opens up to a very divorced, extremely diverse group of audience. So if you think about it, you know, we are solving the problem for somebody passing out of college, looking for their first job, you know, moving out of their house and starting to figure it out. How are they going to live? Um, you know, in a, in a very interesting part phase of their life to someone who's just, uh, for example, we just got married or a family that is expecting a baby, uh, you know, in their first, second or third baby or even empty nesters all the way down.
MAYUR 04:55 So it's not, I would love to say, Hey, we are a gen Z platform targeting millennials. They obviously represent a big percentage of our audience, but we also have our empty-nesters who are again at a very different kind of life stage trying to say, look, I've cooked all my life and, um, I'm tired of cooking. And is there something that is healthy for me because I have all these limitations and restrictions, but I don't want to co, I don't want to compromise on taste. I don't want to compromise on the appreciation. Uh, you know, for what I eat every day. So we solve different, distinct life challenges for people at different stages.
SEAN 05:34 And do you feel like the competition is a home cooked meal or it's probably a little bit of everything but home cooked meals or frozen meals from the grocery store or the other meal service companies or a cross section of all of them.
MAYUR 05:52 So we definitely get a big portion of the market share from people who are buying frozen meals because they realize, look, that's not, that's not the sustainable path. Needless to say, the kind of categories in the option innovation happening there is far limited. A big portion of the market's moving from home cook because that age old mindset, that healthy cook, healthy, cooked meal can only happen at home has dramatically changed. And I think I gave a lot of the credit to meal kits, which is not who we are, absolutely not, but they, they created a whole category and a belief system where people now have a mindset that I can eat healthy. Um, even if I order something on the cloud, you know, via online. Now what hasn't happened in that category in that example is they've solved for health, they've solved for taste, haven't solved for convenience.
MAYUR 06:43 When I compare that to meal service delivery, like Uber Eats and GrubHub they solve for taste and for convenience but have not solved for affordability, have not solved for health. You know, for some of these places, the highest repeatable restaurants are, like Chick-fil-A and so on. So I think there is always the way we think about the market share shown is in terms of the share of stomach now these categories is thinking that you expect any of your consumer to consume your product 21 times a week. As a matter of fact, we expect our users to skip weeks because we are a weekly subscription model. We want every three for three weeks or so. You know, skip a week, skip two weeks and then come back because, and then within a single week, you know, Freshly plays different roles for different kinds of people. So, but there's a lot of market share from those categories coming into fashion.
SEAN 07:34 And so how much variety are you able to offer? How does, how does the variety piece work?
MAYUR 07:41 Oh, it's huge. We have 30 plus meals every single week. There is one to four new meals they get added to the menu every single week. So there's rapid innovation, which is the byproduct, um, of a direct to consumer business. Um, you know, we innovate and launch new meals. Um, uh, you know, a brand new meal from idea and inception to getting into market, which includes 48 different steps, you know, coming from the best practices of Nestle, which is one of our investors in two to four months. But every single week there is at least one to four music at launch. And at any given point of time you'd have 30 meals. We just launched bowls. We also piloted snacks only this year. There's a tremendous amount of variety, um, that we have that now we obviously are not focusing on certain types of, we've been not too big on Tito just yet. We, you know, if you're a pure vegetarian, you may have some limited options here, but we are gradually maximizing and expanding our addressable audience, which will reflect in our menu as well.
SEAN 08:37 Awesome. Well, I know it seems like I'm asking a lot of questions about the product and the service, but to me, I think, um, sustainable growth is really a function of, of the service that you're offering and the need that you're meeting and what that competitive landscape looks like. So that's, that's part of the reason I go into those details. But I would love to get your broader picture of what you think are the key factors that are driving the growth in the business today.
MAYUR 09:03 Yeah. You know, there is not a single thing that I can point out, but I would say as someone who's still still new, you've been here now 11 months or so. Um, I would say there are three or four things. One is, there's no doubt every proven over the last four and a half years we've proven a strong product market fit. Um, and it's just the virtue of operating at that intersection of, of you know, health tastes and convenience and which is also evident from our growth year over year, our retention rate, our NPS and not saying we reached the pinnacle of where we want to be. We are, you know, quite far away from there, which is also exciting. But I think if I were to say there are three things I would call out as, as what I firmly believe are a reason for why we read a product market.
MAYUR 09:47 One is the data culture and the mindset that is inherent deeper in DNA. And that has led us to brain build what I call a strong business, which spawn on economics. Um, and, and not as much, uh, a strong brand just yet. So I compare that to many startups when I was going through this process late last year where I feel there's two categories of startups. One that built a halo effect on the brand in the first three or four years and IVG in economics have a weak underlined business. They call a few of those. We happen to be on the other end where we built a very strong business. And a lot of that is, is because of the DNA of our co founders, especially Microsoft CEO, um, who built a very strong business underneath. So our unit economics, the fact that we are not locally producing, we are national.
MAYUR 10:35 How that has given us a lot of efficiency in our supply chain. How have you applied data on our supply chain in an acquisition, in a growth, in a product. So one is that is cool too. I think the DNA to pivot and reprieve it the moment you sense failure and having a good, what I call a good healthy amount of ego to say, yes we have a belief system, but you also don't want to have an ego that prevents you from saying, you know what, I came over that idea of that isn't working. And it's okay to say that we are going to change and we made a mistake, but here are the wins. Here are the victories because we learn from it. And, um, and, and so that's, that's, that's the other part which I think is key. And the third is just the rapid iteration where you almost measure your success, not in terms of how much you move the KPIs, but you read arbitration.
MAYUR 11:28 And that applies to everything we do from creative to the core product to how we actually ingest consumer feedback. We apply, you know, NLP on it to figure it out. Hey, which meal needs to have a different kind of side as opposed to what it has right on. Because the users are given different kinds of feedback, which we get in a meal ratings as an example. So I think some of those co-tenants, but I firmly believe Sean, that in today's industry, in today's world, which is, which is absolutely disrupted and driven only by one thing, which is a consumer, the only moat companies have today, and this is my one and the biggest lesson alone is Spotify is the only moat you have today as an organization is your ability to move faster than the competition. Everything else is conquerable, which means that underneath you have to build a culture that feels safe and confident to run a hundred miles an hour, even though you can only see 10 meters ahead.
MAYUR 12:27 And that is easier said than done because very quickly and very easily that culture can cross it into anxiety. Lots of negative energy. And one thing I learned as 45 was that growth companies and successful organizations in today's world are not the ones who are going to tame the chaos down or kill the chaos. They have to learn how to harness that chaos in a healthy way where you pivot multiple times, where you move fast, you change, but you do not let that create a negative force inside the organization or an anxious force. And how Amazon may say, how do you continue to be a day one organization solving day one problems and not worry too much about day two, day three pounds?
SEAN 13:14 When you look at the challenges and opportunities like clearly you're coming off of Spotify, that super exciting company, super cool company, um, some, so many good things going for it. When you looked at Freshly, I mean, one, what was the big attraction to join it and then to how, how are the challenges different there and how are the opportunities different there as well?
MAYUR 13:36 Yes. Um, so what drove me to Freshly of like is that loop Spotify is a fantastic brand, perhaps one of the few iconic brands or the last 15 years that anybody would love to work. So I feel very fortunate to have gone through that experience. Lord learned a tremendous lot. Uh, it's also not easy to get off of that ship, but as an engineer, which, which is my background and as a product guy not selling in marketing a bit of a misfit, what mattered to me always was to get all the on into an idea where I could be part of the sausage making, where I could be part of making something really big. When I joined Spotify, you know, back in 2016, you know, we were still, the company was valued at $8 billion. And of course when I left, we were 30 plus or so.
MAYUR 14:23 But I still can say that I was part of the early product market fit stage journey. I wasn't there. It was already built and I helped, I played my role and took it to the next level. I had this innate desire as an engineer who's had two failed startups to find something I felt at Freshly. I felt that too. I loved the mission and the purpose. I felt there was a massive vacuum in the world right now in terms of nutrition, um, because everyone's talking about diet in the sense, eating less as opposed to really appreciating it. Three, I love the founders. I love the executive team. And, and this ties into what excites me about the opportunity here is as a, as a makeshift marketeer who grew up as a technologist than into polygon. Then, I want it to be at a place where marketing is synonymous with growing the business, which means that we, and I define growth of the business in, in three in this Venn diagram, the three bubbles, growth of the brand, go to the user base to the user value.
MAYUR 15:25 I spoke to so many founders and I've seen so many growth tech product companies where marketing is a facade right now where there is this banded of growth, you know, that sits outside of core product and core marketing and they have very specific reasons to be like that. As a marketeer, I want it to be in a place where marketing was not isolated to just building the soap called brand or building PR. I want to get me in a place where marketing's impact inclusive of, you know, defining the purpose and living that purpose and the mission and reflecting that not only in the brand, in the messaging but also in the product also in every aspect of the business, but then also tangibly measure the impact of marketing in terms of topline growth. Whether that is in terms of the user base, the CACs, the LTR, the LTVs, the retention rates. So that's what I have at Freshly where marketing is ultimately a P. and L, um, you know, as of a few months back where we have the other girl tangent for the company, working very closely, hand in hand with a product, with the engineering, with supply chain. But all those kinds of exciting things for me still haven't figured a lot of shit out, which is part of the journey and the fun part, at least on paper, you know, that is what excited me.
SEAN 16:47 All the things that you list are the things that I find important as well because there's, there's challenges and if you don't feel that that chemistry with the, with the founding team and with the rest of the team and you're not really attracted to that mission, then it's that it's hard to have the sustainable energy and, and will to succeed. That is so critical to overcoming the challenges that are inevitable in every company that I've been a part of. When you look at the role of COO, and it really jumped out to me when you listed that you have, you know, that product background, the marketing background, the engineering background. I love the idea of marketing sitting right at the core of the organization. So when you look at your role as COO, how do you scope that? What, what, what is included? What's not included?
MAYUR 17:34 Yeah, yeah. You know, I've, I've taught a lot about it and I, I've written a bit about it because I traversed through different categories. So from a pure tech and product side, we, we, we were, I was leading some product development for ad tech and marketing tech solutions back in mid 2000 fives to traditional CPG fortune 100 to a billion healthcare marketplace and Spotify and so on. And I have my perspective on the rule of marketing, but as I've looked at the dime dynamic and the diversity of the business models, I've come to realize that there are two macro areas and you can slice it further, but there are two macro buckets of businesses and that is important to call out before I address how I see the function of the CMO or marketing at large. Um, the way I differentiate is if you sell is your core product and online conduct.
MAYUR 18:27 Um, where, um, there is, it's almost impossible to isolate. The online experience would be tangible product itself, examples being um, the Spotifies of the world. Um, you know, our um, uh, you know, on the lifts and the Uber's and, and, and so on, right where the, the experience itself is, is just online. Compare that to a manufacturer. Um, you know, or let's say CPG. Um, and let's just talk about direct to consumer for a moment. It's a lot easier comparison where you are selling a physical product but it's sold online. I feel the rules for a CMO differ in those two broad packets and in the first pocket in the category. And you can put Facebook in that example as well. Growth is a stronger function of the product. As a matter of fact, product becomes your strongest lever for marketing, which is virality and network effects, slacks or the wool and so on.
MAYUR 19:24 And I totally get that. I think I've seen now it could be wrong with the CMOs, may challenge me, but what I've seen the CMOs there play a role on more on the brand, more on the awareness, the halo effect. And in some cases they also own acquisition. Even that is debatable by the way. I've seen a lot of organizations where even that sits with product, okay, performance marketing media because they will argue, Hey that requires a lot of data in science, which is a problem. Whereas in direct to consumer, I feel if marketing is not the goal tangent which includes building a brand. So all the aspects of that from content to PR to actually top of funnel brand awareness, which I call create new demand along with building a user base, which is acquisition, not just paid organic acquisition, which as a matter of fact as a function of how strong your brand is as well.
MAYUR 20:15 And how could your product market fit is um, you know, organic, organic growth like that. Virality and referrals and word of mouth and all of that. Then the third portion is retention, which doesn't matter which business you are in is a function of every aspect coming together. So retention ultimately sits based on, I think, the skill set based on how the organization is structured. You can put it wherever, because ultimately the only way you retain is when your overarching experience continues to get better every single day. So at Freshly marketing and Freshly owns all those three pieces, acquisition, retention and building the brand. And we also have BD and partnership, hence it's a P and, L, you know, especially getting into next year where ultimately we want to show if here's our gross revenue, here's our gross margins. You know, what is the investment in marketing across the board?
MAYUR 21:07 And if you want to grow marketing and make it more efficient, well bring more organic users, you know, bring more water and reduce the dependency on paid acquisition by increasing your retention rate. So you increase the load each user, et cetera, et cetera. So that's super exciting, challenging at the same time. But underneath that requires a lot of data science. So we have an incredible global data team that has embedded analysts and data scientists inside marketing. And um, we are very, we are cross functional pause, which is now a mainstay for many product companies. So while I've mentioned these functions, these are not isolated functions. So these are cross functional pods where we have product VM engineers, you know we have um, data scientists, we have copywriters, content brand teams, second by second.
SEAN 21:54 Where do those pods report into?
MAYUR 21:57 So the pods, the top of funnel awareness pod, which is over-indexing on building the brand, the acquisition part and the retention part all reporting to me ultimately if you're missing the numbers, I'm the first line of questioning for the leadership team, you know, for the CEO. And then underneath that may not, and that's the way we built our reporting structures as well in terms of weekly reports, what are the North star KPIs we look at. But then you also have underlying contributing KPIs or leading slash dependent KPIs and so on. Ultimately the way we've organized marketing is outcome driven as opposed to output driven.
SEAN 22:36 Totally. But obviously outcome is a function of output to some degree. So yeah,
MAYUR 22:43 there's a direct correlation there. The only caveat I would say is I've been in, in my previous roles and I've learned the hard way. When you stop at the output, you literally are producing a lot of shit that, and there is no accountability for the ultimate impact.
SEAN 22:59 Exactly. So tying back that connecting output to outcome well will help you redirect resources to where they can really drive impact
MAYUR 23:07 100% because, and we just literally had this discussion with the whole organization this morning. All of us can do a lot of things any given day because we have these great, incredible leaders with tools and technology and budgets and so on. But determining which ones to do is what comes from outcomes.
SEAN 23:28 So you mentioned the North star metric. What do you guys have? I'm going to assume it's, since you brought it up that you have one, what is it?
MAYUR 23:38 Um, and, uh, it's a wall because you realize that the ones we had over at this point, I can very confidently say that our North star metric for my organization, which that isn't the company is, is LTV CAC. Um, it is neither one of those in isolation. And that is the reason why I say LTV because I think it's a great encapsulation of a strong brand with an efficient engine to acquire those users either organically or in a paid way and a very strong retention. It removes the mindset where these views are running in isolation where one unit is focusing on just driving efficiency in your acquisition costs. Um, you know, and not holding themselves accountable to bring a higher quality user who's more valuable and highly retained.
SEAN 24:22 If your ultimate goal is to drive impact on the mission, I mean you, you obviously can, can actually improve ratios by growing less and that would, that would help you improve the ratio, but you're making less impact. So how, how do you factor in the overall growth into that number?
MAYUR 24:40 Yeah, so obviously I mentioned the North star metric. Um, you know, for the marketing which ladders up to the North star metric for the company, which ultimately, um, you know, is topline goals that we have, top line revenue goal that we would have, we would have an EBITDA goal, which is again, something very, uh, something I don't see often in growth companies that often talk about just the Mau growth as a fiber growth. But we especially focus a lot on our unit economics. So we have very tangible numbers next year for what is going to be a top line goals, number, pure revenue and gross and right. Um, and then what is EBITDA because everything that sits underneath that, right? So if, if I'm the ciphering, those two metrics and saying, Oh, how do I translate back now and do marketing's mission to get to <inaudible> supply chain will say, how do I translate that into driving efficiencies in my logistics and supply chain product?
MAYUR 25:33 We'll have, uh, you know, a derivation of that. And I see this as, and I know you're a big proponent of this, but I see this as, you know, multiple levels of cascading KPIs. So there are Northstar KPIs, but equally important, all those leading indicators that we all have. And then underneath mine NASTAR KPR of LTRO pack, I have many leading indicators, leading KPIs or contributing KPIs that different teams monitor because you may argue and say, well you can kill your mission, you can kill your purpose and still hit your LDL cap number. Absolutely, yes. So how do you balance that and how do you clear to go on this model? And that is where you have some of those contributing KPIs that um, you know, that collectively have to meet to hit that, that North star KPI.
SEAN 26:20 And, and do you feel like EBITDA as the, as the overall metric that you're trying to grow, is is something that um, is tangible enough for the broader team in terms of feeling kind of the connection to mission or, for example, if I thought about you guys, I would think something along the lines of weekly meals delivered, uh, within our you acceptable unit economics or something like that, which would also account for it, but it would feel closer to mission and feel like something that everybody feel great about growing. Uh, have you, have you thought about something like that or is it almost a function of bad unit economics and some of the competitive companies that have made you over index on making sure that the economic strengths of the business are strong?
MAYUR 27:05 Yes. You know, that's a great point. And look, some of that I would say is dependent on Havi how we bought, defined the NASTAR metric and North star metric for the company. And then saying peel bad from it and say what is going to be the North star metric for different functions as well. And, and I think we, we swung many different ways. I personally have swung many different ways and I saw that what glues the organization together has to be clearly measurable. Um, KPI, which you can see in big and bold, you know, every single day, every single week. And I think that that I can, I can say yes that is our top line growth number. That is our EBITDA number. But to your point, which is absolutely spot on, is every single person in the organization related to that? And can they correlate and connect their work that they do every single day to an even a number?
MAYUR 28:02 The answer is absolutely no. And that is where I feel the leading KPIs or the Northstar KPIs for the functions is very important. So how does that get translated back down into marketing and the different functions of marketing into supply chain into product. So that's the strategy that I feel we are trying right now, which is starting to work a little bit. I personally struggle in the belief that you can have one set of KPI that, that everybody now says everything I'm doing, I can see it ladder up. You have to peel it off. Yeah. As long as you can say all these leading KPIs are contributing KPIs, this is how the ladder up to that ultimate NorthStar KPI.
SEAN 28:46 And then as well being able to make sure that, uh, when my KPI growth hurts your KPI growth, if we're in different functions, that we have something that says overall the, the improvement in my KPI, even if I brought yours down a little bit, if say yours is a ratio overall, the impact on EBITDA growth is positive. So we should, we should continue doing maybe this new approach to something.
MAYUR 29:12 Yes. And, and I would love to say yes. I would say it's hard. Um, especially when you're also running at a hundred miles an hour. And we are, we are, we have incredible leaders. Um, you know, who looks at a goalpost and they run at that goalpost. And, but the good thing is that's where agility, you know, and, and nimbleness. And some of the underlying processes play a role where, how are you measuring the OKR? Do you have a rhythm every month? The paws across the organization come together and analyze and assess before you move forward. But those are, I mean you touching up some points, which I will love to talk about after this session to see how you seem being sold because I haven't found a silver bullet to solve it. And it's also ties to the culture and the value system you build in the organization.
SEAN 30:03 Absolutely. And I think in my experience, that's the biggest challenge of what you hit on earlier. Rapid iteration is absolutely critical. Rapid iteration across all of those customer touch points to accelerate growth in the overall business. But where I've seen it break down is in, is in the cross functional side of things is that um, you know, different functions. It's really hard when people are focused on their, on their kind of very functional metrics to step back, look at the big picture and stay aligned with the rest of the group. And that's where I think, uh, with the rest of the company. And that's where I think, um, tying it all back to mission and an overall metric can be really effective in getting that, that cross functional alignment, which is, which is critical to make sure that everyone stays on the same page.
MAYUR 30:50 Huge. And one thing I would add too, I couldn't agree more with that, Sean. And um, I would say from what I've seen at, at various growth companies, which are now at multi billion dollars in value, they all grew with this mindset of autonomy or the mindset of squads and tribes and chapters. And because that was what propelled, you know, that growth solid day one problem about a hundred miles an hour, have the autonomy to make up decisions in pockets, remove the bureaucracy. What happens when you reach a certain stage in terms of your scale? That same thing that was a proposal. You know, the biggest proponent or the catalyst for growth now becomes your barrier because you're not losing the interconnectivity. Now you create so many fragments and I think that is a time and you have to take a step back and to your point, see how these indigenous and individual pawns now correlate with each other because they can very quickly become unmanageable and difficult to create one single mission, one single experience.
SEAN 31:53 But I, I still think that what you've touched on already as kind of the key factors that are driving growth, so that pivot and re-pivot and just really tied on product market fit and then continuing to drive rapid iteration across all of those customer touch points is, is super powerful for driving growth. And it sounds like a lot of the, um, organization that you have has, uh, in terms of these different pods is working well. I'm just, I'm curious what the, you know, obviously different pods covering different parts of that customer journey. Um, it's important to specialize in and be good at those. But what is the path that someone takes from consideration right now about Freshly to becoming a raving fan? Who is driving that NPS score and just spreading the word about how great it is. How do they find out about it typically? And then how do they, how do they get to the point where they're really dialed in as a raving fan?
MAYUR 32:40 Yes, yes. So as I said earlier, we built a great business having built that iconic brand just yet. We planted that seed this year, literally, um, even went back to the drawing board, do we look at our mission and purpose? And we are the whole organization now aligned on, on where we are. So the cause of that, a lot of that discovery is not happening. Uh, the way discovery happens or something like a Spotify, you know, because we are not there just yet from a brand standpoint. So a lot of the discovery and the funnel begins to the power of our existing user base, to the power of some of our paid media.
MAYUR 33:29 Um, you know, across, of course programmatic pay, social, etc. We are now starting to see a massive uptick in our organic growth in a direct user base. And that is just, this is the year and the next six months they will start to, we are challenging ourselves to see a hockey stick there because we are investing in content investing in brand. So one that is part one. Um, also I have to highlight the fact that the opportunity we have is not just to build the Freshly brand but it is also to lay the foundation for this category. And I remember reading your book, Shawn and I know you would, you talk a lot about how people never believe that Dropbox could be free. I feel it's the same way that people do not have the mindset that a never-frozen Freshly prepared meal that was cooked yesterday can come to their doorstep and they have to do nothing.
MAYUR 34:20 So we have to do that work as well, which she kicked off this year. So that's one that's top of funnel and we are gradually starting to expand that way more than what we've done in the first four years where it's been laser focused on acquisition. Now we are focusing on education, awareness and consideration. Now, once we have, once we have acquired users and of course we have our own, you know, the seventh and 10 days of Facebook, we have our own correlated behaviors. You know, we, we, we love our users. Um, you know, when they change their meals because that in my mind is very similar to someone creating a playlist on Spotify. You see the value proposition, um, skipping the meal. You know, it's not a bad thing. It's a, it's a very positive behavior. When you skip your fourth week, you know, you're taking a break and you come back two weeks later, you know, when you're eating your meals.
MAYUR 35:10 So we have some, we have some very tangible correlated behaviors and we were talking about Apple. You're, so we encourage a very high percentage of users to download the app, which organically opens them up to a lot more of that experience. So that's the funnel. And like any growth companies, we, we focus on, you know, onboarding to activation and then mulatto focus on habit creation as well as um, you know, virality and some of that organic growth, which is, I would admit it's a newer muscle because we are now investing in core components like content for our muse, for our food philosophy, which we strongly believe will become some of those, you know, organic content loop levers.
SEAN 35:53 It's interesting because I, my wife, I just got back from a three week trip to Europe and she was saying something about let's order out. And I was like, I haven't had a home cooked meal in three weeks. I really want a home cooked meal and I can see how this really fills that void of, you know, she, she didn't want to prepare a meal and I was too tired cause I just got back from traveling. And that, you know, being able to have that, that healthy meal that we crave, but having the convenience of having it delivered to the doorstep. Um, when I tell her about this service, I'm sure she's going to get really excited. But she probably would've never thought of it.
MAYUR 36:31 Absolutely. And actually in that moment, Sean, that's a great use case in that moment. In fact, you're not ordering any more because it's lying in your fridge and it's never frozen, so it's not in your freezer, it's in your fridge. And um, you know, and it's literally three minutes, whichever way you want to heat it in the microwave or on the oven and so on. And I think you're spot on and within a week, there are always these moments where you don't want to eat outside. It's not healthy. You don't want to pay 30 bucks for a single meal or for a meal of two and so on. So there's definitely a very, I see a massive void in opportunity in the world.
SEAN 37:08 So have you really found what drives that retention? I mean, I know you talked about activation and there's a number of steps. I assume that ties into the retention, but I guess the opposite would be when someone has done all of those things and stops using a Freshly, what, what is it that that causes them to decide they don't want to use the service anymore?
MAYUR 37:30 Yeah, I mean, you know, the, the different factors of course. And um, it's like I feel if you were to ask anybody or at least ask me, uh, what is the biggest challenge and opportunity for any organization? Any product is going to be retention. Because you can, you can buy your way into acquisition. You can buy love. You can, or you can buy your first day. You can't buy love and you can buy. And so, uh, I use that analogy all the time. So if you figured out three things to improve your retention, it becomes a commodity. Nine months later you have to figure it out, you know, find more things to retain those users. So first of all, philosophically and fundamentally, I believe that retention is a function of your ability as an organization to add incremental value. Every single time you touch the user or the comeback, it cannot be, it is not static. It's the Amazon mindset. And we we also believe at Freshly that you, you think like that for your highest value and highest retain user, not only for the user at risk
MAYUR 38:29 that's a tough mindset to have. It's a tough road to walk on, but there is no option product because consumers have insane amounts of choice, access and control. And it's hard. So having said that, the, the reasons why people may leave are, it could be a temporary reason someone's moving or it's thanksgiving, you know, they want to really eat home, good food fair. Um, sometimes it's human nature. Even though we focus massively on innovation and variety, sometimes you're tied over ID and you want to take a rate. So we have a lot of users who tell us, look, I wanna take a break for three months and we monitor that. I, we come back and engage with them. And we also look at some of the causality for, for retention. So we are now investing way more in the why behind the what, which is a little bit of a healthy petty comment of having too much data is when you let your data tell you exactly why it's happening.
MAYUR 39:27 Whereas data may just be correlation not causality. And that is where we are investing, especially within marketing, to really take an both qualitative and quantitatively to understand if someone's saying variety, how is that definition different for you versus me and what do they really mean? So there are some of those foundational stuff that we're doing to now dig deeper. We're also in a waiting on business model. You know, we actually should check it out. We have what we call Freshly plus in the market now where you know, you get a lot more benefits. It's like an Amazon prime model where you get access to a nutritionist, you know, for a certain amount that you pay upfront. You know, you get free shipping, you get um, you know, different kinds of opportunities. We are investing in partnerships where if you are especially plus user, you'll now get access to the Freshly ecosystem, which may be, you know, different kinds of, uh, bundles that, uh, that we all use to in our daily lives.
MAYUR 40:23 So those are, again, those are efforts to ultimately add incremental value. And the way I talk it out, Sean, is you have all these ways of bringing a user in your ecosystem and they should not have any friction. The ones that are one, they are in your ecosystem almost like a playground. The walls go up and those goals have to be the world's values. Either you're adding the value of data where if they leave, they have to feel they're leaving something behind meaningful for them, right? Or there has to be the value of reward, then I'm going to lose all of this. Or there has to be the value of experience that nobody can replicate that personalized hire and experience. So, in other words, if the value they get is purely functional, it is very easy for them to leave because you can fulfill the functional value anywhere else for a lower price. If it is functional and emotional, it's harder for our users live. And our journey is all about how do we not only focus on the functional value but at the same time more so focused on that emotional and cultural value as well.
SEAN 41:33 Awesome. Like picture of how you're approaching it and, and where the
challenges are, where, where I think you're, you're really thriving. You, you did say that you, you do a ton of rapid iteration and that's, that's one of the things you believe is important for, for growth in any business. Um, I'm sure there's a lot of iterations that drive positive results and some iterations that don't drive positive results that you need to roll back. Do you have any examples of things that you thought were going to work really well but that turned out not to work so well?
MAYUR 41:59 Um, there are, there are lots of examples. Um, um, I'm just thinking in my head which ones I can share. But yeah, now I understand very high level and I'll be a little bit abstract here, but it's real. It's not made up. Um, we've launched some product lines, um, during this year that, uh, we had a very clear mission and purpose behind and, uh, we launch them, um, to prove that we can actually be a multi-product line ecosystem because all of that ladders up to a core mission and purpose of being a VMs platform. And when we launched them and we launched them at faster speed than I've seen in any CPG because that's the benefit of being direct to consumer. We saw some tremendous growth in the first eight weeks. We beat our forecast. What we realized very quickly was we had to now go back, pause, build that underlying ecosystem because there were some gaps from a product engineering overarching experience from pricing standpoint, right?
MAYUR 43:01 So the beautiful thing was we did that very quickly. We built a team. We did that in a, in a pure, um, you know, rapid, iterative way without, without impacting the core business. So it was a separate pod that was created like a mountain bet in a way. And we learn from it very quickly. We very quickly realized that before we scale, we now had a lot of loaning to where the gaps in the underlying ecosystem at Freshly before we can sustain four or five, six different product lines. So that's an example where we did something fast. We had an idea, it was true to our mission. We tested it, failed, learn a lot from it, which means it was successful. Now we are in the process of building that foundation.
SEAN 43:43 And it sounds like even there, you validated demand, but you just realized you needed to operationalize that demand a little better.
MAYUR 43:49 You are spot on. We validated demand, we validated there's an addressable audience, which overlaps with a core product, which is our meals. Now we just have to do some, some, you know, doubling. And we realized we were reaching the top floor without having a basement in place.
SEAN 44:07 But I, I, to me that's part of the excitement of testing is that, um, it's the hardest part is, is to validate that your, uh, your, you're driving some consumer behavior in the way that you were hoping to. And once, once you've validated that because consumers are fickle and it's really hard to predict what they're going to like or not like, then, then it comes down to execution afterwards. And I feel like the execution pieces within your control.
MAYUR 44:32 Absolutely. And one thing I would say though, Sean, is when all these iterations happen and you, and you repeat it as an organization, what matters most is the culture of the organization to ensure that that repivot is a success. Um, you know, because at the end we are all humans and the team that's working on that has to believe that this was extremely successful because guess what? It paved the whole direction for the company for the next five years.
SEAN 45:00 Right, right. And, and yeah, and as long as it keeps tying back to miss. And I think that's the other piece is that if you, if you get too, too crazy with your testing and you go too broad, then, then you might get pretty fragmented around how does this relate back to mission. But if that's, if mission is driving it and I mean failure is part of realizing new and better ways to do things. So hopefully some, some a comfort with a bit of failure is okay. And then, uh, and then, you know, just keep, keep doing what you're doing. But we're, we're getting close on time here. So I wanted to ask you really quickly, and then you've, you've had such a different experience obviously at Spotify now. You said you said 11 months, you've been there, yes. Paid off 10, two and a half months. Yes. So when you look back, um, I think in particular in the last 10, 10 and a half months, what do you feel like you understand differently about growth now than, than you did coming off the heels of leaving Spotify?
MAYUR 45:57 Yes, I think, um, well there are many beliefs I have around growth with which I've been reinforced. So, um, they haven't been changed. The biggest one that I always talk about is growth is a function of every single function working together. Uh, it's not a bandaid. You can create a growth team, you can call it whatever you can call the CMO, chief growth officer, you can bring another chief growth officer at the end of the day. The only way you drive sustainable growth has been all pieces come together. The biggest learning for me is, is, you know, when I used to, early on in my career, I used to do a lot of readings, including a lot of the workshop you did back at Dropbox. And many of the places I think we are all as good people or good minded people. We are all chasing that big hockey stick, that big idea, that credulous integration of Airbnb where as I now believe that sustainable growth is a function of compounding interest of small changes, small iterations and small win here.
MAYUR 46:52 A small win there. And every now and then, you know, you'll catch a big fish, but we cannot go after that big fish. Um, you know, and, um, and that's my biggest lesson learned. It is. It is all about that. And, and I will say the one last thing which I learned in my second half of at Spotify is its culture and value system in your organization can be the biggest catalyst or the biggest roadblock for your growth and the company. So yes, all these values, all these ideas, you know, all the KPIs, but that is the single biggest roadblock or the single biggest for any organization.
SEAN 47:30 Yep. No, I, I that that makes a ton of sense. Um, well, I'm, I'm so appreciative that you took the time and, and helping all of us understand growth a bit better. So just some of the key takeaways from what you covered. Um, I, I'll go back to what you really listed as the key drivers of growth that you believe there. So the data, culture and mindset, which just reinforces what you just said right now. Um, and you know, making sure that you have good unit economics. I think that that's critical, especially in a sector where there, there's a lot of companies that look hot and then maybe not so hot. And I think it's probably, um, people have come back to me recently and said, well, how could Uber be a great growth story if their stock is not going up? And you know, I mean, again, growth and unit economics are not always the same thing.
SEAN 48:19 Healthy growth is when you have good unit economics and uh, and, and it's, it's supporting a mission that's worthy and all, all of those other pieces. Um, but I also think this idea of pivot and re-pivot is so critical that, uh, I think the best growth and marketing people in the world on a product that doesn't have strong product market fit are going to struggle. And the opposite is also true. People who may not be great at executing growth and marketing, if the product is super strong with product market fit, they're going to do well so that that need to pivot and reef pivot and just constantly readjust that product market fit, I think is, is absolutely essential. And a lot of that happens then through the rapid iteration everywhere that you're talking about, and constantly having that mindset of how do we drive improvement over every single customer touch point. When you do that, you're gonna better convert, retain, and drive referral off of customers. Do those takeaways sound about right?
MAYUR 49:13 That is, that is beautiful. I will recall that and transfer that into my personal book, Sean.
SEAN 49:19 Perfect. Perfect. Well, I'm just playing back what you said, so those are your words. Awesome. Well, thank you Maya. I really appreciate the time and I'm excited to get this podcast interview out there so that people can hear it.
MAYUR 49:31 Okay, wonderful. Well, thanks Sean. It was wonderful talking to you and looking forward to it.