Sara Rodell – CEO & Founder of Loop & Tie Digital Gift Giving Platform
Episode 61
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Transcript
Kara Goldin: Hi everybody. It’s Kara Goldin from Unstoppable, and we’re here today with one of my favorite founders, Sarah Rodell from Loop & Tie.
Sara Rodell: Hi.
Kara Goldin: Welcome.
Sara Rodell: Excited to be here.
Kara Goldin: Yes, super excited. And we’re taping from The Wing in SoHo in New York, which is an amazing, amazing spot. So we’re very, very excited to be here.
So, just a little bit about Sarah. Sarah and I first of all, are on this great list called The List, and Rachel and Glynis, if you’re out there, hello. Thank you for introducing Sarah and I, appreciate it.
Sarah is the founder and CEO of Loop & Tie, which is a digital gift giving service. It’s been written up in all kinds of publications, but it’s also just this amazing, amazing service for lots of enterprise companies including Salesforce, the 49ers, The Muse, another Lister as well. And, just overall, gives you digital collections of gifts that you can pick out based on lots of different budgets.
So, if you haven’t gone to Loop & Tie, you should definitely go to loopandtie.com and check it out. But we’re here today to talk a little bit more about Sarah and how she got going on this whole great idea. Launched in 2012?
Sara Rodell: Yes, well, the long version that is.
Kara Goldin: Yes. Let’s hear it.
Sara Rodell: The idea was born the… first version of the site, 2013, but I look at 2015 was sort of the time when it became-
Kara Goldin: Official.
Sara Rodell: Yes, what it really is today. It’s been a journey but an exciting one.
Kara Goldin: That’s awesome. And so you’re backed by, well, Steve Case is one of your original backers, right?
Sara Rodell: Yes.
Kara Goldin: And how did that come about?
Sara Rodell: So I first had the opportunity to meet Steve when I pitched it at a Google Demo Day.
Kara Goldin: Ah.
Sara Rodell: So that was the first big pitch competition I’d ever done. And it was one of those rare binary moments where there was a clear difference before and after that day-
Kara Goldin: Yes.
Sara Rodell: … for the trajectory of the company. And Steve was a judge and decided to make a personal investment after Demo Day.
Kara Goldin: That’s awesome.
Sara Rodell: And then we joined what is now the Rise Of The Rest portfolio that he has, which is this really fantastic fund based off of investing in companies that are headquartered outside of tech centers. So he is single handedly doing a lot to grow ecosystems outside of Silicon Valley.
Kara Goldin: That’s awesome. And so you didn’t actually get the funding here in New York, you went to the pitch competition where?
Sara Rodell: Right. Well the competition was actually out in Silicon Valley, but I started the company in Austin, Texas-
Kara Goldin: Okay.
Sara Rodell: … Which is where I’m from. And I left New York-
Kara Goldin: Go Texas.
Sara Rodell: Exactly.
Kara Goldin: Yes.
Sara Rodell: Even though I didn’t go to UT, I’m a UVA grad, but I will always have Longhorns in my blood.
Kara Goldin: That’s awesome.
Sara Rodell: And Austin’s a fantastic place to start a company.
Kara Goldin: That’s terrific. So you didn’t start out in sort of retail or the gift-giving, you were at UBS?
Sara Rodell: Yes. So my first job out of college, I worked on the trading floor at UBS, and it was a pretty wild time, I was there in 2008. And the name of the game was doing anything creative you could to really assert your value.
The industry was changing, a lot of people were losing their jobs. And it was a really interesting foundation for me to come in, 22 years old, not having a strong, I would say, industry knowledge, or a lot of concrete skill sets, but really trying to creatively figure out ways to be relevant.
And I think that creativity has infused the way that I think about building and running companies.
Kara Goldin: That’s awesome. So how did you… do you remember the moment when you had this idea-
Sara Rodell: Yes. It was kind of funny. I volunteered to handle the gifts that we were doing for our clients for the holidays, and the silly part of why is twofold.
The first thing is, when you first start working on the training floor, you do any favor possible so that people like you and give you opportunities-
Kara Goldin: Yes.
Sara Rodell: … and so something everybody was complaining about. And I was like, “Oh, how hard can this be?” And I’d just gotten my first corporate card and I wanted to put charges on it so I could get points, which is [crosstalk 00:04:30] the silliest thing.
Kara Goldin: I love points too, yes.
Sara Rodell: Yes. But, it was like checking both the boxes.
And so I volunteered to do it, and I couldn’t believe how inefficient it was. And I’m a systems thinker and I was like, “Oh my gosh, we’re spending so much money buying these… ” We ended up buying gift baskets for these clients that I had no idea if they actually cared, it was more of a formality than it was something useful.
And I was struck by how often when you’re buying something for somebody, there are these constraints that you may or may not know about. So I didn’t know if people didn’t drink, or some of our clients were kosher. Some of our client’s kids have peanut allergies.
Kara Goldin: Totally. Yes.
Sara Rodell: And there were all these things that were risk factors and made it such that in some cases it would have been better if I didn’t buy something.
And so I just spent time thinking about the market, and the miss that I saw were most entities in this space that are approaching the gifting budgets are leading with product catalogs. Nobody is leading with a process.
And so my thought was if I can change the process by which gifts are given, which is by the way a $90 billion industry-
Kara Goldin: Yes, it’s huge.
Sara Rodell: … I can fundamentally reduce waste that’s happening. I can actually make sure that the intention serves the relationship building desire that people have when they’re giving gifts to begin with.
And eventually, my goal was to support a whole new community of makers and small businesses that I just didn’t see being represented in the corporate gift purchase.
Kara Goldin: That’s awesome.
Sara Rodell: So, yes. That’s why choice is such a big part of what we do, because through this idea of sending choice, it’s a fundamentally different process. And then all of a sudden, now the choices can be really niche items sourced from small businesses.
We allow choice of charitable donation, which is incredible. It’s a top five thing that’s selected by a lot of gift recipients.
Kara Goldin: I bet.
Sara Rodell: And so now, all of a sudden, instead of this fruit basket rotting away in a kitchen, you’re actually… charity water is a top cause that we support, and we’re actually making a difference.
So there’s a lot of things that sort of spun out of this initial moment of me trying to just do a favor and get some points on my corporate card.
Kara Goldin: That’s awesome. That’s super, super cool.
So, let’s go back to actually pitching, and when you went to the Google competition, what do you think was the key thing that made you stand out?
Sara Rodell: You know, this idea of pitching process has been fundamentally something that has defined us from a product standpoint.
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: I also think, as I’ve gone back and had the opportunity of perspective and understanding… it’s been a long time, like why am I still here?
Kara Goldin: Yes. No, exactly.
Sara Rodell: There’s been a lot of moments of failure along the way. And one of the biggest gifts that I had, was launching the first product that did not work. It was more consumer facing, it’s what I had initially raised on, it was not what I was pitching at the Google event.
But in the moment of declaring that this product wasn’t working, I had to go back to our investors and say, “Hey, I have this idea,” and Loop & Tie was actually one of the initial ideas that I had, I just didn’t decide to launch with it at first. Going back to them and saying, Hey, “This didn’t work and I have this idea for something that could, I could either return the money that I have- ”
Kara Goldin: Investment, yes.
Sara Rodell: … “Or try this new thing.” And the response that I got was, “We invested in you and your ability to change tact. And so we believe, it’s not necessarily the product, it’s just we’re banking on your ability to create something that the world needs.”
And that was… I mean, hearing that just fundamentally transformed the way that I thought and the way that I led, because I realized, before that moment, I was really in a loss aversion state. I was afraid of letting people down.
But then hearing that, I was more in a growth mindset.
Kara Goldin: Yes.
Sara Rodell: And so I think that a differentiator for me that I now know, is really having the good fortune of being backed by people that see the way I think-
Kara Goldin: Yes.
Sara Rodell: … and that really believe in my ability to change tact.
Kara Goldin: So was this before the Google competition?
Sara Rodell: Yes. When I had some… friends and family… money and some [inaudible 00:00:09:06], a bit larger.
Kara Goldin: And did you talk about that in the Google competition?
Sara Rodell: I think the Google competition was just very product focused-
Kara Goldin: Yes.
Sara Rodell: And I remember, I still get this, or where people are like, “Huh, it’s a $90 billion industry?”
Kara Goldin: Yes.
Sara Rodell: And I think that the biggest opportunity for me is that when I say the word corporate gifting, people think it’s boring.
Kara Goldin: Yes.
Sara Rodell: And it is. And that’s what-
Kara Goldin: People just want it handled, and-
Sara Rodell: Yes. And it’s this massive amount of spend that I think is actually only becoming increasingly important, and we’re seeing budgets grow as companies need to differentiate through their relationship management-
Kara Goldin: Yes.
Sara Rodell: … as product is getting a bit more commoditized. And I think, seeing that market opportunity and the amount of money that’s being spent, and how loud it is that everyone is selling into it in the same way, is the biggest opportunity.
And the fact that people think it’s boring, there’s so much opportunity when people think things are boring.
Kara Goldin: Yes, it’s interesting. It’s interesting that it’s such a big industry and more retailers aren’t really officially in that. I mean, I remember Tiffany used to have a whole corporate gifting program, but then, it just… it’s crazy.
Sara Rodell: Well, a lot of people are in the market, but because of them choosing to sell product, they’re very focused, they get anchored to occasion. So with Tiffany, they have a business selling crystal commemorative plaques-
Kara Goldin: Yes.
Sara Rodell: … and that is their corporate gifting business, and they have crystal bowls and all of these anniversary gifts. But, then all of a sudden, your growth is hinged to your product relevance.
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: And a crystal bowl is only relevant to certain demographics and certain occasions. And I think, in many ways it’s becoming less relevant.
Kara Goldin: Yes.
Sara Rodell: The products that people are choosing are more of the DTC variety, where you want to understand the story behind the maker, you want to have a connection to it. We’re not just looking for more stuff, we’re looking for stuff that we resonate with.
And so we’ve got to fundamentally rethink what the process is that that’s accessed. And so, Loop & Tie is a technology company first, or we rethink what the platform is. And then we have these stores that sit on top of it. And there’s a world where we can work with Tiffany and make our catalog grow.
Kara Goldin: Yes.
Sara Rodell: And so, I think… the way that I approach growth and company building is really understanding the deeply ingrained behaviors that are driving each part of the purchase decision and the seller’s decision. And gifting is interesting to me because there are deeply ingrained behaviors that are not actually starting the intention, which is pretty fun.
Kara Goldin: Yes, it’s Interesting. And you’re able to really see behaviors based on generational, right?
Sara Rodell: Mm-hmm (affirmative). Yes.
Kara Goldin: I mean, do you see a huge difference between a Gen X versus a millennial and sort of what they’re shopping for, too?
Sara Rodell: Yes, absolutely. So one of the biggest industries that we sell into is apartments who use us for moving and lease rental gifting.
Kara Goldin: Interesting.
Sara Rodell: And so we’re able to see from a demographic sample, we sell it to some properties that are 55 plus. And then, we sell into some that are more focused around college campuses, or folks that are just graduating college.
And the kind of… before I answer the product question, I always think it’s funny, people get worried that the 55 plus community won’t appreciate a tech forward gifting exchange-
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: … but all of them have iPhones.
Kara Goldin: Totally.
Sara Rodell: It’s like a funny piece of pushback we see at the beginning, and there’s tons of engagement from that community. It’s not a real piece of pushback, but what we’re seeing on the lower end, lower age end tier, is this preference for food and more experiential, entertaining based items.
Kara Goldin: Interesting, I’m not surprised.
Sara Rodell: Yes, right. It makes sense sort of the-
Kara Goldin: The community and social-
Sara Rodell: [crosstalk 00:13:04] and starting your home and that kind of thing. And, if we look at the older demographics, it’s much more things that you would use yourself. So, bath products, home products, things like that.
Kara Goldin: What’s the average price point for a gift?
Sara Rodell: So across the board, $40, which is also the average price point that the research shows nationally. So it’s interesting to see that it’s exact in our data.
Kara Goldin: What’s the best gift that you’ve ever gotten on-
Sara Rodell: On Loop & Tie, or [crosstalk 00:13:32]?
Kara Goldin: On Loop & Tie. Yes.
Sara Rodell: My current favorite gift is this kimono robe that we just started selling.
Kara Goldin: That sounds amazing.
Sara Rodell: I know. It’s this maker in Austin called The Robery. And it’s this perfect light flannel, and it’s great in the winter and in the summer. I love it.
Kara Goldin: That’s awesome. So what’s next for Loop & Tie? What are you super excited about for 2020?
Sara Rodell: Well, what I’ve been spending a lot of time thinking about is, what does the future of brand building look like?
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: And, a reason that I care about growing this business is because the context that I sell into is a gratitude mindset. So if a company is buying gifts, they fundamentally care about showing appreciation, which is something that I feel really strongly about.
I’ve, over the past… I’d say it was 2019 but really in the end of 2019, we really started seeing companies who came to us because they wanted to have a gratitude moment in their customer journeys. And they were actually using that word, gratitude, which, in 2015 if you talked to a company about what they were doing around gratitude practices, that wasn’t a conversation that was happening.
Kara Goldin: Totally, yes.
Sara Rodell: And so I’ve seen a really big shift. And also, companies were wanting to make sure that their product exchanges were more sustainable, and is a big piece of how we reduce waste through choice.
So the future for me is really taking these nuggets of interest for companies, and building content around that. Because I think something that’s important to me is, I think our world is better if companies behave in a way that is more human.
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: The way that you and I would treat each other as friends. There shouldn’t be a difference in relationship-
Kara Goldin: Yes, it’s the relationship, right.
Sara Rodell: … with how we treat our customers. And, I think even this language of consumer, customer is going to change over time as we stop seeing barriers, and it’s more just with people interacting with each other.
And so, what we’re creating this year is really how do we create content that serves that larger conversation around how companies are interested in connecting in this different way, and moving away from this transactional mindset, and then more into a relational mindset.
And when you’re thinking in that way, it feels better to be an employee-
Kara Goldin: Yes.
Sara Rodell: … that’s empowered to do kind things for people, and not just… you talk to any cold calling sales person, it can feel pretty demoralizing at the end of the day if you just feel like you’re push, push, push.
And I think the future of how companies build brands is really supportive of the product that we’re selling, because I think it’s more invitational where companies are establishing, “Hey, this is who I am, these are my values, and if you want to associate with me, come and do that.”
Kara Goldin: That’s awesome.
Sara Rodell: And I think about that a lot with your brand. You’ve been very successful in building a brand that people want to associate with. There’s kindness, there’s sustainability, there’s just a really powerful ethos, I think, infused in Hint that I definitely admire.
Kara Goldin: Yes. Well, and we’re also having… hopefully we provoke or we get people thinking about fun. Right?
Sara Rodell: Mm-hmm (affirmative).
Kara Goldin: I think that drinking water is really boring. And so we come out with… I mean, right now we’re drinking the blackberry lemon water that we just came out with-
Sara Rodell: It’s so good.
Kara Goldin: … it’s so yummy, and I think it might be my new favorite. But, again, it’s like why should water be so boring?
Sara Rodell: Mm-hmm (affirmative).
Kara Goldin: And that was really… but I think just in everything we do, all the branding and the advertising… we just did a Superbowl ad, which was crazy. And it was a pie eating contest, and lots of fun. And again, we like to have fun with it. But I think that that’s what I want our customers walking away with.
But it shouldn’t be a chore to buy water. I mean, it should be fun, it should be easy, and I think you guys do a great job of that as well.
Kara Goldin: So, one other thing. You won, way back when in 2017, the Salesforce Dreampitch. How was that? Was it just so crazy?
Sara Rodell: Oh my gosh. So That was another very binary moment where there’s a fundamental difference in the company before and after that. And I have to tell you, the way I prepare for any big talk that I do is just talking to myself. I have nauseam, I walk around my house cleaning things because it’s enough of a distraction to simulate what would happen if I was kind of knocked off my game on a stage.
So I did that for about two weeks. My house was so spotless. But it was such a moment of excitement, and really validation, because for me… first of all, if you talk about a company that’s grown with an incredible ethos, Salesforce is it.
Kara Goldin: Yes.
Sara Rodell: And I’ve always just really respected the way that they’ve grown. And there’s such a shared ethos there, also with relationship management. And I see the gift exchange as a core part of a relationship building endeavor for acquisition and retention. And I’ve been always just very excited about the products we can build within the Salesforce ecosystem. And that’s actually something that we’ll be investing in this year as well.
But winning that was so rewarding because Salesforce ventures became involved, first through that prize money, but then they also became an investor in a later round, and they’ve been incredible to work with and-
Kara Goldin: That’s great.
Sara Rodell: Yes. Such a great coach. That ecosystem is massive and you definitely need a coach.
Kara Goldin: Yes.
Sara Rodell: So I’ve been very fortunate.
Kara Goldin: How many people were in the audience when you were pitching?
Sara Rodell: So, they said the auditorium fit 4,000, it was pretty close to full, I’m not sure.
Kara Goldin: Wow.
Sara Rodell: But yes. And there were these famous judges, and the part that was really scary was I didn’t realize it was in the round, because I had not seen the auditorium. And I walked up and I was like, “I don’t know where to look. Okay, I’m just going to not think about that.”
Kara Goldin: That’s so Crazy. Was that the biggest… I guess the biggest pitch you’ve ever done?
Sara Rodell: Oh absolutely.
Kara Goldin: Yes. So fun.
Sara Rodell: And then too, it’s broadcast. And also, it’s on YouTube, so it’s definitely the most watched anything. But it’s fun. Whenever I go to talks, there’s always a person who’s said that they’ve seen the pitch-
Kara Goldin: That’s so fun.
Sara Rodell: It’s my little touch with-
Kara Goldin: And once you’ve done that, everything else is easy. Right?
Sara Rodell: It’s interesting when you hear people say it’s no different speaking to a hundred or a thousand people, and I’ve always been like, “Yeah, right.” There is a big difference, and it’s 10X.
Kara Goldin: Yes.
Sara Rodell: But I understand now it’s the same amount of preparation really.
Kara Goldin: Totally.
Sara Rodell: And it’s the same thing with fundraising. There’s the same amount of effort whether you’re raising a hundred thousand or a million… or [inaudible 00:20:13].
Kara Goldin: It is the same amount, yes. The Same amount of effort either way in preparation et cetera. That’s very, very true. But that’s exciting. It’s super, super fun.
So, enjoys meditation. That’s something that Sarah really likes, I was reading. So, have you brought that into your culture and your community at Loop & Tie as well?
Sara Rodell: Yes. One of the things that I’ve been toying with a lot this year is thinking about how just this conversation on infusing that mindset into a company in a way that you are supporting and not competing with really delivering goals.
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: And so, something that we’ve been having a conversation about this year is how do we really invest in our process and trust that the outcome will come. And so, one of the things that a meditation teacher of mine taught me that has been just a really profound construct for me to think in is, what happens on an organic farm or a biodynamic farm where the farmer’s goal is to invest in the soil.
And when you invest in the soil, the food grows and then it tends to be really good.
Kara Goldin: I like that.
Sara Rodell: But the goal is the soil. The goal isn’t in the food. And, in factory farming it’s all about the food. And in five years, your soil is shot, you’re burnt out and you got to move on to the next.
And I think, if you take that construct and apply it to team building, how do you invest in a process that is regenerative and is sustainable over time? And when you do that, the profit, the outcomes, the success tends to come, but it comes in a way that doesn’t feel as exhausting.
And, I can’t say that I figured out the process yet, but that’s the conversation that we have, and really empowering people to say what they need, and know that they’re supported in a way that feels like work is working for them, but it’s still work.
Kara Goldin: Yes.
Sara Rodell: There’s still hard things that we have to do. There’s still late nights, there’s still the stress. But I think if you’re supported in that way, you as an employee go about it differently, I know I do.
So that’s something that… I’ll tell you more is that it [crosstalk 00:22:33].
Kara Goldin: I love it. That’s great. So what makes you unstoppable? You’ve said a few things, but I always ask everybody.
Sara Rodell: I think it’s my curiosity.
Kara Goldin: Mm-hmm (affirmative).
Sara Rodell: I’ve realized at the beginning of my entrepreneurial journey, I came in with a lot more conclusions than questions. And as I progressed, I realized that there’ll be a thing that I believe, and I believe it in a big way now, but it’s probably going to change. And it’s based off of what my understanding is right now and what my context is right now.
And I think when you have that mindset, you make changes faster, and you’re also more aware. And when you have conclusions, there’s a lot of confirmation bias. It goes into your outlook on the world. And when you come in with curiosity, you can be disrupted.
And I think that the value of a startup is how nimble it can be-
Kara Goldin: Totally.
Sara Rodell: … and how we can make those shifts. And so over time, I’ve seen that in myself, when paying attention to that.
Kara Goldin: Well, and I also just think… a lot of what you talked about too is just your journey, and you talked about some of your failures, and how that made you stronger and smarter about moving it forward, I think it’s super awesome.
Kara Goldin: So, this is amazing, and congratulations on Loop & Tie, and just building this, and you’re doing awesome.
Sara Rodell: Thank you.
Kara Goldin: That’s super, super great. So where do people find you?
Sara Rodell: So, loopandtie.com is our website. I’m personally at Sara, without an H, Rodell on Instagram where I-
Kara Goldin: Forget that H, yes.
Sara Rodell: Forget that H. Yes. I’ve spent my whole life saying Sara without an H.
Kara Goldin: Bring it over to Hint and that’s it-
Sara Rodell: Exactly.
Kara Goldin: Yes. No, I hear you. I mean, ever since I got married, I mean, Kara Goldin with an I. It’s like I spend my life like, “With an I, with an I, with an I. Yes.
Sara Rodell: [crosstalk 00:24:26] autopilot, they say it.
Kara Goldin: Yes. No, exactly. Well, thank you so much.
Sara Rodell: Thank you for having me.
Kara Goldin: Yes, it’s been super fun.
