On February 24, 2020, The Nelson Center for Entrepreneurship and Brown EP hosted Terri Cohen Alpert ‘85 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21. Alpert shared lessons learned through the process building Professional Cutlery Direct and Uno Alla Volta, in particular the importance of creating a brand that connects emotionally with customers.
From Morgan Stanley to Starting a Business on $8,000
Going back to her time at Brown, Alpert has been willing to go off the beaten path. At Brown, she was one of few female concentrators in Physics.
Alpert began her career after Brown at Morgan Stanley. While she helped Morgan Stanley in building out software, she missed not having the opportunity to help make decisions that would drive the business. She decided to use the safe cover of maternity leave to begin a company.
She asked herself: “What niche could I offer better selection and inventory than anyone else?”
At the time, her husband was looking for his first great chef’s knife, prompting her to look into the kitchenware space. The efficiency of ordering and shipping kitchenware tools was not efficient at the time, presenting an opportunity to Alpert. She had a vision: if someone could place an order by phone by noon, they could get it shipped that day.
Putting $8000 into the business, Professional Cutlery Direct was born. The company began to grow significantly.
From Initial Success to Significant Challenges
Professional Cutlery Direct doubled year over year and Alpert felt that it was too easy. She thought that if she could do it, so could other people. Along these lines, Alpert cautioned entrepreneurs that financial statements are the rear-view mirror; they don’t represent what’s ahead. She realized that it was costing her more and more to acquire customers worth less and less, prompting her to do significant thinking about the company’s CAC (customer acquisition cost) and LTV (lifetime value).
Alpert admitted that the business came to the point that they were proving markets for the competition, including giants such as Williams Sonoma. “We were their R&D department, at no cost to them, and handed them the results on a silver platter.” After realizing that she was essentially building other people’s brands for them, she knew that they needed to develop proprietary brands. Some people began to see the company as the “Consumer Reports” of kitchen tools.
Building Uno Alla Volta with a Focus on Differentiation and Branding
While Alpert continued to run Professional Cutlery Direct, she launched Uno Alla Volta with the hopes of overcoming the obstacles that Professional Cutlery Direct was facing.
Alpert realized that a proprietary product would be instrumental to allow Uno Alla Volta to differentiate itself and gain pricing power. As customers became more expensive to acquire, she realized that they would need to maximize the lifetime value of their customers.
To increase customer lifetime value, Alpert discerned that they needed to be able to go to different aspects of their customers’ lives. In particular, they needed to create an emotionally meaningful brand that wasn’t restricted by product category. They needed barriers to entry, and in order to maximize the customer lifetime value they would need to have a nearly infinite supply of new products.
A Big Lesson for Alpert in Management
As Uno Alla Volta was working towards these goals, Alpert made one of the biggest mistakes in her entrepreneurial career: bringing in a professional management team. While she was optimistic that doing so would change the issues at the top of the company, she realized that was not the case.
She did this at the same time as her company was hit with a 35% increase in its biggest cost, catalog postage (due to an act of Congress) and the great recession. This team was not only expensive, but they built silos in a company of just 65 people and created brand destruction. Fundamentally, Alpert recognized however, that this was less the fault of the team than the CEO who hired and empowered them. Alpert, while transitioning from the role of entrepreneur to CEO was focused on what not to do, micromanage, as opposed to what she must do: lead a team with a common vision.
One by one, she got rid of the executives, worked to change the culture, and to get the brand right. It was a six to seven year process, during which the company’s revenues shrunk from $14 million to $8 million, the customer base shrunk, and the company built up over $4 million in debt. During this time, there were several things she had to figure out: how to dramatically increase gross margins, developing more proprietary products, and creating a greater story around the product.
Uno Alla Volta’s Growth
With many questions to solve, Uno Alla Volta figured things out in a big way. The company introduced one thousand SKUs per year, but still needed to flesh out the artisan stories behind the product. In an effort to create an emotional connection with the customer, they started to create personalized certificates corresponding to the items a customer purchases. They also worked hard to increase the company’s brand, in particular its name recognition.
Alpert shared that “retention is most important of all.” In a matter of a few years, they brought the 12 month retention of a newly acquired customer from 23% to over 50% retention. The first year value of a new customer rose from $20 to $56, thus allowing the company to spend significantly more money to acquire new customers. Alpert taught every member of her team how to interpret the company’s key metrics and financial results and the team celebrated each small win and learned how the math would compound. The team delivered on their brand promise to every customer every day, growing Uno Alla Volta to a $20 million top line with a 10% EBITDA margin.
Alpert encouraged entrepreneurs to look at customers, not channels. While customers who engage on multiple channels are often the most valuable, Alpert focused on asking herself: “how do we make each group of customers the most valuable?” She stressed that at the end of the day, relationships with customers need to be human.
Focus on learning how to interact in organizational environments
Alpert has done a lot in her career: she was one of few females in her time to study Physics, she went from Morgan Stanley to launching her own business as a project on maternity leave. She realized that hiring a management team won’t solve problems. And, of course, she also built a company with over a $20 million top line and a healthy bottom line. With all these experiences, the students in the room were curious about her recommendations for their continued journey at Brown and beyond.
She said that if she could go back, she would have studied leadership and organizational behavior much earlier. Over time, she learned that a leader’s job is to help people get emotionally attached to the goal.
While the corporate environment at Morgan Stanley wasn’t right for Alpert, she learned about how to get things done, and she also learned how to engage in a large organization. Along these lines, Alpert emphasized the significance of understanding how big companies operate. She suggested the importance of routinely looking for ways to move laterally to get more breadth with the goal of creating new mental pictures.
Treat every experience as valuable
Alpert left students with a few parting words which might help take the pressure off of those worrying about what’s next: she believes that all experience is relevant. Being out in the world helps you see where there is white space. With a reference back to her scientific background, she shared that everything is a hypothesis; she suggested treating what you’re thinking about as an experiment.
Despite the challenges she had to overcome, Alpert shared that she wouldn’t change the way she did things. Within that sentiment might lie the greatest lesson that Alpert shared with the group of students, albeit indirectly: everything you go on to do will be a part of your collection of experiences and learnings that will allow you to succeed in the future.
On February 7, 2020, The Nelson Center for Entrepreneurship and Brown EP hosted Charlie Kroll ‘01 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21. Kroll shared stories and lessons learned from the process of founding and building Andera and Ellevest, companies focused on financial technology.
Beginning Andera as a student at Brown
Kroll attended Brown in the late 90’s, around the time of the dot com bubble. He was on his way to Wall Street, but a unique situation set him onto another track. As a student, Kroll had been running his own web design business. He entered a business plan competition, and while he didn’t win, his mentor, Steve Siegel, ScM ‘83, PhD ‘85 offered to be an investor. Kroll said “let’s do it.”
The web design business pivoted into Andera which provided an instant solution for banks to allow customers to fill out forms when opening checking accounts. Technology like this was very new to banks at the time. Kroll described the interesting process of selling this new concept: “nobody bought it, but everyone wanted to talk about it.”
Capturing a timely opportunity in the financial services industry
Kroll admitted that much of the success of Andera stemmed from the unique timing at which the business was expanding. Leading up to 2008, there was lots of excess in the financial system, and since banks needed deposits to fund loans, Andera was uniquely positioned to help the banks quickly open accounts for customers.
Andera survived the financial crisis fairly well and the growth continued. After expanding to over 100 employees, 3 offices, and 600 financial institution customers, Andera was acquired by Bottomline Technologies (NASDAQ: EPAY) in April 2014 for $48 million.
The inspiration for Ellevest
Kroll took some time off after the acquisition of Andera, but he knew he wanted to start something new in fintech. He shared with our group of students that as he was trying to determine what his next venture would be, he was asking himself: “what is the next 10 year shift and what role can I play in it?”
He saw financial advising as having been the same for many years, and he wanted to be around people innovating in investing. Charlie came to know Sallie Krawcheck, previously CEO of Smith Barney, CFO of Citigroup, global head of wealth management for Citigroup, President of Merrill Lynch, and considered one of the most successful women in Wall Street history.
Both having extensive experience in the financial industry, they started Ellevest with a question: why is it that men and women have different behaviors in investing? Most notably, they knew that women don’t invest as much as men, and they saw an opportunity to help women.
The emphasis on thorough testing when building Ellevest
Before beginning to actually build Ellevest, Kroll and Krawcheck had lots of hypotheses to test. After six months of diving deep into research and customer testing, they began to narrow in on who exactly their target users would be. Their initial target was mid-career professional women aged 28 to 35. To this day, they continue to focus on a target persona, which they call Elle.
There were tens of thousands of women interested in Ellevest before the launch. According to Kroll, they spent nine months just going through the waitlist, a time during which they would test out features with different segments of users.
Growing Ellevest: a continued focus on females
Ellevest officially launched in November of 2016. The company initially was pulled up market, but they are now going down market and figuring out how to best serve a wider audience.
In terms of the competitive landscape, Kroll shared that Ellevest competes with many other platforms, but also none at the same time since no one else is focused exclusively on women. When asked whether Ellevest would ever expand into the male audience, Kroll was clear to say that their focus is women.
There is strong reason to think that the focus is working. Ellevest has has been named on CNBC’s Top 50 “Disruptor” List, #14 on LinkedIn’s 50 “Hottest Startups To Work For” (and #2 in New York), and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas.
Going forward, Ellevest is aiming to be more involved in banking. Their vision is that you start banking with Ellevest, and then realize that you can invest sooner than you thought.
The importance of diversity at Ellevest
Diversity is very important at Ellevest. The company places an emphasis on diversity of thought and point of view. The team is diverse, but they are all bound around Ellevest’s core mission of helping women invest. Kroll shared that having a team motivated by the company’s mission is such an important asset to the company.
Kroll’s advice for students on their journey in entrepreneurship
For the student entrepreneurs in the room, Kroll provided advice about the research phases of beginning a startup. He encouraged the student entrepreneurs in the room to focus on doing hands-on prototyping and user research. Kroll emphasized the importance of conducting your own user research as opposed to reading research reports.
Students at our discussion were curious to hear Kroll’s advice about what to look for when thinking about interning or working at a startup. He provided two core questions to consider as you think about joining a startup: Are you inspired by the people at the company? Importantly, do you respect the people with whom you would be working? In addition, he recommended seeing if you have an interest in the subject matter or industry of the startup.
Kroll left students not just with specific advice, but also inspiration. The inspiration that someone who lost a pitch competition could go on to turn an idea into a $48 million business. Inspiration about how to think about the future of an industry. Inspiration about how to use detailed research to create the best product for people. And importantly, inspiration about how a company can focus on a specific market in order to make people’s lives better.
On November 7, 2019, The Nelson Center for Entrepreneurship and Brown EP proudly hosted Tom First ‘89 and Tom Scott ‘89 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21. First and Scott shared lessons learned from founding and developing Nantucket Nectars, ranging from managing partnerships to navigating challenging times.
A mindset to making the most of partnerships
First and Scott went through their fair share of challenges in building Nantucket Nectars, a premium juice beverage company. Along these lines, Scott stressed the importance of learning through moments of pain. He emphasized that your career is going to have great and bad times, and it is in the bad times that you have the opportunity to learn a lot.
First and Scott are a one-of-a-kind partnership. They acknowledged that there is luck to partnerships. Scott shared that he has only one person in his life who can finish his sentences: Tom First. While both Scott and First deeply appreciate their partnership, they do not recommend trying to find the perfect co-founder.
They shared that there is a 100% chance of disagreement with your partner and 100% chance of crucial, anxiety-ridden situations. Tensions will run high, and it will be important to determine how you resolve conflict. First shared that whenever he disagreed with Scott, he wanted to know about why they were disagreeing.
The importance of letting your product work harder than you
First and Scott revealed details about a pivotal moment in the process of trying to grow Nantucket Nectars. In 1995, they were getting outsold by AriZona Iced Tea like crazy. As explained by First and Scott, the two of them were working much harder than Nantucket Nectar’s packaging and bottling were working for the brand. First and Scott knew they needed to flip this. Over the course of the next six to eight months, they were really focused on getting things right.
After deciding to revise their packaging strategy, they received quotes from approximately eleven packaging firms. They ended up taking a crazy high quote from one of the firms, but didn’t regret the decision.
Over the following years, the company experienced tremendous growth. Nantucket Nectars was included on Inc. Magazine’s “Inc. 500” list of fastest-growing U.S. companies for five years in a row. In 2002, Nantucket Nectars was acquired by Cadbury Schweppes, now Dr. Pepper Snapple (NYSE: DPS).
First’s view on investing in the food and beverage industry and Scott’s passion for the neighborhood
Following the sale of Nantucket Nectars, First founded and developed a number of startups, including Owater and Eleven Technologies, which was purchased by Trimble (NASDAQ: TRMB) in 2005. First is currently an Operating Partner at Castanea Partners and the Founding Partner at TF Ventures, a venture firm concentrated on food and beverage.
Several venture capital-minded students at the discussion were curious to hear First’s perspective on the food and beverage investing landscape. He explained that it is not too difficult to receive money these days to start a company in the food and beverage business, which has resulted in crowded shelves. First shared that nowadays younger people are making purchasing decisions with the intent of remaking stores so that they feature products with simple ingredients.
First explained his main criteria when evaluating emerging companies: 1. Are you creating a product in a large category? 2. Are you human beings that First wants to bet on? He made it clear that he values competitive founders with immense passion for what they are building.
Since selling Nantucket Nectars, Scott has focused his time on developing films and exploring the neighborhood. He is the founder and visionary of Neighborhood, which was developed from the nine-year-long Nantucket Project. His award-winning films have previously been shown at Cannes and Sundance.
Keys to success: setting benchmarks extremely high and creating products that appeal to many people
Scott and First discussed what it takes to be successful. They shared that winning requires 97 (on a theoretical 0 to 100 scale). 94 gets you nothing, thus increasing the importance of getting to 97. In terms of how to get to 97, they recommended reminding people what a 97 is: to Scott and First, a 97 means that you have created a differentiated business with impressive growth.
To all of the aspiring entrepreneurs in the room, First and Scott shared yet another important piece of advice: “if you want to make something of scale, you have to make something average.” As explained by First and Scott, a lot of people want apple juice, but not as many people want to buy pianos. Safe to say, First and Scott not only created something for a lot of people through Nantucket Nectars, but they also helped to reinvent the food and beverage business.
Aulestia spoke to students about major changes underway in the media and entertainment industries, focusing particularly on the shrinking size of audiences and the ensuing “streaming wars” playing out in today’s market.
After studying economics at Brown and working in finance, Aulestia maintained a 22-year tenure at HBO, helping to transform the company from its television heyday of the 90’s to the digital powerhouse that it is today. Most recently serving as HBO’s president of global distribution until March, Aulestia spoke extensively about her love for strategy and the importance of trying as many roles as possible while young.
In response to questions regarding career advice, Aulestia told those in attendance that today is the era of the generalist, and that students would do best picking up as many skills as they can. She said that the key to becoming an executive is to always be learning, and to get as broad of experiences as possible.
In terms of the changing landscape of the entertainment business, Aulestia spoke to the benefits of subscription models over advertising. She also commented that with every company making content today, media companies must set themselves apart to get the attention of competitors’ users and find their adjacencies within the industry. Although this greatly benefits creators, who have far more avenues than ever to showcase their work, it also means that companies must have a long-term view of the industry and how the landscape will continue to shift even further from television screens.
On September 27, 2019, The Nelson Center for Entrepreneurship and Brown EP proudly hosted Riche Holmes Grant ‘99 (pictured above center) for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21 (center in, from the right). In the first roundtable hosted in the new Nelson Center for Entrepreneurship Building on Thayer Street, Grant discussed her experiences and key takeaways from building various entrepreneurial ventures, including BambiniWareand “The Riche Life” web series.
From Columbia Law School to starting an education venture
Following her time at Brown, Grant attended Columbia Law School. She came to the realization that the traditional corporate lawyer track might not be right for her after not receiving an offer from her summer firm to return after graduation. As a result, Grant was pointed in another direction: entrepreneurship. In the grand scheme of things, Grant recognizes that this worked out great as it not only launched her on an exciting path, but also allowed her to establish her resilience of dealing with rejection. In the discussion, Grant stressed the importance of fighting through failure.
Back when Grant was doing test prep while waiting for her bar exam results, she realized it could be done better. She also saw that test prep players, such as Kaplan, weren’t competing in markets such as her hometown of Prince George’s County, Maryland–the most affluent African-American county in the country. There was an opportunity in Grant’s head. In 2003, Grant founded Innovative Study Techniques, an education company focused on test preparation and education counseling. This venture was just the start of Grant’s entrepreneurial career.
Understanding your strengths and identifying who can help you
In 2013, Grant launchedBambiniWare, an innovative baby and mommy accessories brand with patented designs and fun and unique prints, inspired by her experience as a new mom. When developing BambiniWare, Grant was aware that she didn’t know everything that it would take to grow the business. Along these lines, Grant shared with the discussion participants the importance of finding experts and making them your mentors.
As Grant worked on BambiniWare, she learned a major lesson: whoever you go into business with, make sure they are committed. Along these lines, Grant advised the participants to not be afraid to start as a solo founder.
Within one year of launching BambiniWare, Grant had established a partnership with Martha Stewart. Since 2015, she has been a writer forMarthaStewart.com. In addition, she is a Culinary Expert for Williams Sonoma, Inc., writes for Subaru, and serves as a Digital Ambassador for St. Jude Children’s Research Hospital – ALSAC.
Starting “The Riche Life:” a lesson in the importance of listening to those around you
At Grant’s core has always been the desire to help people. Over time, Grant heard from multiple people that they thought she should consider sharing some of her thoughts and advice on a video platform. Along these lines, Grant shared an important lesson for the aspiring entrepreneurs in the room: when multiple people tell you the same thing, you need to start thinking about it.
Without even knowing where the record button was on the camera, Grant began her series“The Riche Life.” As usual, Grant was willing to seek advice along the way. Grant shared some advice that was given and believes is important to keep in mind when establishing a media platform: don’t worry about your early numbers, likes, etc. Rather, Grant stressed the importance of creating great content, a principle that has driven her work with “The Riche Life.”
Given that she is not just the show’s host, but also her own makeup artist, production assistant, and more, she has been very careful about the message she is sending. Grant has has placed an emphasis on exploring what makes a person’s life rich — not just money, but also happiness.
Utilizing your resources and advice for the journey ahead
You know the phrase “how can I help you” that you might hear from mentors, peers, and others? Grant has heard it many times before, and you might have also. She encourages people to take advantage of this offer.
Grant remarked that at the end of the day, no matter how well-known someone is, people are just people. There’s no harm in asking for help; the worst-case scenario is someone says “no.”
In the spirit of Grant’s emphasis on continued learning and mentorship, she recommended that you find the best people in your industry and see how you can learn from them, whether through books or other means.
Grant provided many pieces of advice for participants who want to pursue entrepreneurial ventures: you have to have tough skin as most days aren’t rosy and you have to be prepared for bumps in the road.
Another takeaway really stands out: if you’re not afraid, it’s not enough of a challenge for you.
On March 6, 2019, The Nelson Center for Entrepreneurship and Brown EP proudly hosted Laura Thompson ‘09 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ‘20.5. Thompson shared lessons learned through her journey leading the growth of Google X.
An early non-engineering hire at Google X
When Thompson first came to Brown, she thought she would concentrate in applied mathematics. She approached her time at Brown as a way to take engaging classes, and many of these courses lay in the realm of entrepreneurship. She ultimately graduated with a degree in public policy, but not before successfully launching Runa, a tea company with a social mission of providing opportunities for Amazonian farmers.
After doing some work in London with Google’s budding consumer electronics group, Thompson joined Google X, Google’s “moonshot factory”. Thompson was a unique addition to Google X as she represented an early non-engineering hire for the team. When she joined, there were four projects in the works under the Google X umbrella: one being self-driving cars. And you’re probably wondering about those other three? Well, as much of her work at Google X, it was secretive.
So, what was a public policy major doing as one of the few non-engineers on a team trying to solve complex technical problems, ranging from combating climate change to the future of robots? Thompson shared that the fact she wasn’t an engineer is actually what made her so valuable at Google X. For example, Thompson helped teams think about the human consequences of their work and what it would take for projects to land successfully in the real world.
Leading Google X through the years
There is a growing need in technology to prioritize human-centered design and Thompson is pleased to see this movement progressing. Along these lines, Thompson explained that they thought about sustainability at every level of the project and ideation process in her time at Google X.
The goal at Google X is to create a culture of innovation that leads to development of ideas for the future. At first, Google X thought that the way to achieve the most success would be to have everyone together. Over time, they realized that this model wasn’t sustainable. Thompson was part of the transformation from the ‘everyone-in-a-garage-mentality’ to a more sustainable model where each project gets spun off and has its own business model, while still being under the Google X umbrella.
Analyzing ideas at Google X
To the budding venture capitalists in the room, Thompson shared a framework that they commonly utilized at Google X when deciding which new projects to undertake. For each potential project, they would make a list of all the reasons the project would be an epic failure. As the team worked on the project and overcame the challenges, they would cross them off the list. If a project could overcome one quarter of their challenges, the project would likely be a go, as the team had proven they have the ability to overcome the difficulties that will surely present themselves along the way.
Thompson explained another rule of thumb used at Google X when evaluating new projects: “is this going to affect one billion people in a meaningful way?” This message resonates closely with the Nelson Center for Entrepreneurship’s mantra: create solution with impact.
Despite the best intentions, many successful innovations come from random, happy experiments. It is for this reason that while they had rubrics in place, they also saw it was important to let teams run loose.
The innovators in the room were curious to get Thompson’s thoughts on what’s next in terms of innovative technology. Thompson explained that, for one, it is good to see a growing skepticism surrounding technology. She is excited that the next generation appears to be focused on technology being good for humanity.
Thompson thinks there are opportunities for disruption in the fields of personal finance, logistics of shipping and transportation, and sustainability. And her personal favorite, dog-related startups, too.
As the discussion neared an end, Thompson left students with some words of wisdom: “you’re only going to be great at something if you’re excited about it.” Along these lines, Thompson stressed the importance of pursuing things you’re excited about with people you respect and who you have shared values with and enjoy working with.