Kevin Strawbridge on Entrepreneurship and Business Development #9

spk_0:   0:02
Welcome to the My Amazon Guy podcast. This is your host, Stephen Pope. Today we'll be talking to Kevin Strawbridge and experienced CEO and entrepreneur. Kevin was the manager of J. C. Penney's business development. He's been the CEO of Click Banks and is a leader of many other companies in his past. I'm now joined by Kevin. Thanks for joining me. So So, Kevin, for our listeners sake. How walking through how we met up?

spk_1:   0:31
Sure. So about four years ago, I was appointed as the president for a division of a company called Mag Motor Sport Aftermarket Group, and we had a retail division. There was the president of that division we sold after market dear parts and accessories from motorcycles on the two brands that were under our name or motorcycle superstore and J C cycles. And we had a pretty good job of getting out into the Amazon States because our sister company was a distributor. We were the resale dates. We also had a brand group that was within the family of companies, and we knew that we needed to break somebody onto our team that had a lot of experience. And so, as most people know Harry Joyner's pretty connected person in the States, and you

spk_0:   1:17
and

spk_1:   1:17
I were introduced through. Yeah, you and I were introduced through Harry and you came in and so good amount of time talking with us, consulting with us on what we were doing from not only an Amazon perspective but an overall digital marketing perspective and that customer experience piece of survival. So you and I saw a lot of things the same way. Not that anything ever came about that relationship directly through MAG, but we continued to be business colleagues and friends. For now, better part of four years getting a chance to sort of live, learn from one another and share with one another, advised one another. And it's only been one of the most beneficial relationships I've had in my experience.

spk_0:   1:55
I could say the same thing Kevin has referred. Countless clients are away, and I really appreciate that. Thank you, Kevin. You're definitely a very well networked individual on have a good business sense, and I think a lot of people come to you and ask for advice all the time because of it. But you've been doing Amazon for a long time, you know, dating back to you. What, your J. C. Penney time.

spk_1:   2:18
That's correct, Stephen. Back in 2001 I'm joined J. C. Penney and early part of 2000 won. The any direct group is a matter of fact, where j. C. Penney dot com resided. At that time, the company had done around $200 million in what was really catalog sales, through an online website on a new group of leaders were brought into J. C. Penny of which I was one toe look at ways that we could develop more of a true online experience for j. C. Penney dot com. That's getting people away from the old notion of pulling out accounting log. Looking up a lot number typing and into a screen and getting order

spk_0:   2:50
brings a ways.

spk_1:   2:53
Yeah, exactly. We try to find more ways that we could help adult that true shopping experience online for people. But what was interesting is that that same time, here's this little company out of Seattle called Amazon. It was way more debt laden than it was equity laden at the time on, and they were quickly developing an online presence and any commerce presence. In fact, they had just recently launched the target website, where Amazon fully employed Howard Target's website. Most people don't know that it was part of it was part of their business model. They were day they were selling. Their service is much like some other companies do today where they were gonna power people's back in on and really create the whole and commerce experience. And Target was a great name to start with. Well, as J. C. Penney coming upon 100 years old,

spk_0:   3:38
we definitely

spk_1:   3:39
were leaders in the space in terms of direct consumer catalog and then also directly to Marie commerce. And we felt, you know, from a from ah Sun Szu art of war perspective it was to keep our friends close to keep our enemies closer. So we knew we had to go play in that Amazon pool and learned how what the program was at the time called merchants at Platform work. And I was responsible for developing the entire strategy and then tactical implementation of getting J. C. Penney onto the merchants at platform with Amazon between 2000 to 2003.

spk_0:   4:13
So what was that like in the early days of Amazon.

spk_1:   4:18
It was really interesting. So again they were running at 100 million miles an hour, much like they do today. But they weren't the leader they were. They were the learner. Now they're the leader. But back then, a lot of what we did as a company from a marketing perspective and a merchandising perspective, really, even, you know, our ability to understand our customers from a catalog perspective. And now this emerging on life states. We did a lot of teaching to them in terms of how a lot of those things work and so coarse Amazon wanted to build out their catalog, India's biggest. They could and have as much alive if they possibly could. They wanted our entire assortment excuse on their website. We actually chose to only do R. J C. Penney brands on the on the Amazon site to be able to produce a better experience for Customers. Way ran our pile up against their file, and it was interesting to find out that there's only a 5% overlap between their customer base in our customer base. And so it was a unique lead generation tool for us we were able to develop Aly Gentle that basically got new customers to the J. C. Penney House. Filed for less than $18 per customer. We're sending over $2023 per customer, even through J. C. Penney and give us the ability to get R J C. Penney product in front of a lot of people that didn't necessarily know that it existed. So those things like J. C. Penney Towel Personal Classics in Arizona, brand jeans, those types of things and we had a meeting. About 72,000 skews out on Amazon, attracting a lot of new customers over the course of the two and 1/2 years. And it was there any generated about 80,000 new customers to file for j. C. Penney dot com.

spk_0:   5:51
So one thing that I think you could articulate and speak to that many other businesses can't is high catalog count skew businesses. Even Mag retail group was north of 100 K. If I remember correctly so you don't have

spk_1:   6:05
a 1,000,000.

spk_0:   6:06
Oh my goodness, I remember 100 k for Amazon specifically, um, So what? What's the difference between running, say, a 10 skew brand versus 100 k plus brand. In your opinion,

spk_1:   6:21
well, with 100 K plus brave, you get the opportunity. Oh, sort of have more of a shotgun approach because you can capture a lot more key words from an SDO perspective. You can target a lot more customers from a paid search perspective, but really being able to have that rest of assortment out there that really there's a chance anybody will buy. What you have is extremely interesting and viable. Now. On the flip side, I also work for a company called Collectibles Today up in Chicago, and we sold collectible items. We had 3200 skews it. They were all limited edition items on what it's taught us and the colleagues that I worked with their WAAS with these very surgical and very segmented and how we went after customers, we couldn't go spend countless dollars on paid surge or email sprays or any other things just to try to hopefully get a customer. You know, very, very targeted fashion. How to go find a very specific customer to sell that very small set of Season two.

spk_0:   7:17
So that's that's pretty interesting. What do you think it's harder or easier low skewer. Hi, skew. No,

spk_1:   7:27
I would say hi excuse easier and again because you've got a lot broader customer base and the opportunity of casting your net And finding a fish is much greater than the target in one. But what? She's fine. Look at evidence. What? You find a segment of people that are my small skew base. Once you get in there and you get the right message and you apply that message correctly, the return on investment is extremely bid.

spk_0:   7:56
So if you were going to start an Amazon business today, what would be the strategy that you would you would implement? Would you go out and buy a brand? Would you start with five skews and just go manufacture yourself? What would you d'oh,

spk_1:   8:09
that's interesting. You ask if I've actually been looking in both opportunities and I know you have the things that you've done as well. I have been spending a lot of time looking at a lot of both f b a cos of what I call Mitch, e commerce businesses, companies that have low skew count type interesting products that have a meaningful value to our current economy in our current society, um, that I'm also looked at What are some products that I could develop and or sell? I tend to beam or on the side of wanting to be inventive on things. So I want to go find the next pet rock,

spk_0:   8:43
and I want a

spk_1:   8:45
supposed to the next Apple phone case. Right? So, like, I see a lot of Apple phone case businesses go by or, you know, outerwear or glassware, all these different things. Okay, what's the point of differentiation there? There's not much so sure. I think they'll make sort of my one t two Z dollars here and there. But what's that thing that I could develop that would be sort of life changing? At least get out ahead of the curve until you know somebody like an Amazon or somebody else comes out. Knock it off trying to make that money on it. So I haven't committed to even one of those yet, but I am sending a lot of time looking as deep as I can on those things.

spk_0:   9:19
Yeah, and I think there's two types of products on Amazon to kind of bucket things. I think there's co opting demand. That's where you're going out for the Apple phone case and creating demand, which is the next pet rock. And I think you articulated that quite well. It's much harder to build the pet rock business, but I think you're right. It's absolutely way more lucrative if done correctly.

spk_1:   9:43
Yeah, that's what I said. What? I have to be really careful of not being a focus group of one. So just because I found something that changed my life and I think, Oh, my gosh, everybody in the world must want this. I really have to step back and pull a lot of people there. You know, if I look at my weight, there are, you know, probably a couple of dozen product ideas and or service ideas that never came to permission. At least I think because I was good enough and smart enough to talk to enough people to get a broader view on it, to say, Maybe there isn't a solution here. That makes a lot of sense now. Don't want somebody to say, Hey, this is the one in a 1,000,000 idea. We could sell a 1,000,000 of them, absolutely, But I'm also I think smart enough Improvement up not to go out and and kill my life savings or investors Saving started investors investment on trying something that doesn't have a lot of my ability to it.

spk_0:   10:32
So for those that already have an Amazon business, what kind of advice would you give them to improve sales right now

spk_1:   10:40
hire my and some guy

spk_0:   10:42
from

spk_1:   10:42
that? Uh, no, I'm being dead serious about that. It's funny. Why do I have a lot of people that cross my path that either have an Amazon business or they want to get into an Amazon business or there are admitting their business with with an Amazon approach, using it as a channel on? Do you know the first thing I was telling is you can spend all the time you want learning all that time you spend learning is dollar Spence and time spent, and you're not gonna get far down the road as you can. So what I spent, I do tell people, is is that I do is for Miami's on guy. I make no bones about that, but the opportunity to have a smart person your quarter to understand the ends and outs is extremely valuable. And I say that from the perspective of just like what? E commerce. I advise a company here in Dallas, the salt trying home goods. And I got hooked up with them before they even had a Web site, and I was able to sit down with them and tell them there's a land mine right there. And there's a land mine right there. There's a land mine right there. Don't step on those right, Go around them and they hear it away so you can avoid that. And so because of that saving that time, saving that money get you to a faster return on the investment that you're looking for.

spk_0:   11:50
And and so right now we're gonna turn our attention over to kind of Corona and Cove in 19 with all the news and impact with that. Um, so we you know, I've got I've got a client that sells toilet paper in the last 24 hours. They sold about, you know, 100 grand and toilet paper. They completely sold out. Ah, we're seeing a lot of random things happening right now, and And, um So what? What are your thoughts on the current situation with Corona. And let's tie it in the e commerce and kind of what you think the impact might be.

spk_1:   12:23
Well, it's interesting. So I mean, I could use a new example here at our house. We're not. We're not extremists in any way, shape or form. I do. I believe that every life is valuable and precious, and any time there's a loss of life, there's something that has to be thought of their. I do think that there's gonna be the full spectrum of things. My daughter. You've said that today there's you go sort of from the irrational to the rational. And, you know, I would say the majority of us hopefully fall in that center band of a belter, the irrational or out probably my, you know, thousands of rolls of toilet paper. Not sure why that that's what their mind. And then there's a rational there. There are saying, You know what? You probably got a little bit to our stock, and we need to make sure that we're smart about that. So my wife went to the store yesterday and shells were cleared of canned goods and all these different products and so my immediate response was, well, online. Let's go buy from some companies that are selling online. Let's have it delivered to us. It's always a couple of problems. One. Everybody's gonna go to the store cause it's right down the street and they're gonna clear it out, too, if somebody's bringing it to your house and dropping in your doorstep, don't have that interaction with people that we can. That's probably a smart way to avoid doing that, being around a lot of people right now. And so, with things like e commerce, much like, um, you know, we talked about when gas prices were $4.5 dollars a gallon, that ability to not go out and drive around a parking lot and look for a parking spot and drive to the next or the next or the next door go online. You can be smart and brooding about the things that you're looking for. Surgical in the discovery that you're making, buying the products that you need and frankly, having the ability to price check things right there, so as well you see that ability to make smart, smart purchases that air delivered to your home that solves the problem that you have had. We have a problem at hand with Corona Virus and Kobe 19. It's something that I do believe we'll pass over a period of time and being able to use a channel like an online channel to make prudent purchase decisions. It's certainly helpful.

spk_0:   14:19
So there's obviously a lot of uncertainty, and a lot of people are uncomfortable. But I guess what I've seen, you know, 10 10 accounts that I currently run. Right now, I've had record weeks two out of the last three weeks. And so I think right now we're going to see a spike in E commerce, and Amazon is gonna be really benefited by this. So if I was, you know, uh, gonna go start a new business right now? Obviously, I'm not gonna suggest go do hand sanitizer and toilet paper. But it's a pretty good time to be selling online right now, don't you think?

spk_1:   14:57
I agree. And again, you've also got a situation where people are sort of building up demand because they're sitting at home and that got time in front of a computer screen on they're able to act on that. And so to your point. Yeah, I wish I could figure out what the business is to start. Or the product that is there is to sell on. I probably will spend more time being about that in the coming days. You know, the typical of that is true. I mean, for all the toilet paper miss being sold right now. I joked with a friend of mine yesterday. I said, I think in about two months I'm gonna go short, Kimberly Clark, because they're gonna be They're gonna solve this toilet paper and all those people are gonna have in their houses. And in Q two and Q. Three of this year.

spk_0:   15:32
Being a

spk_1:   15:33
lion.

spk_0:   15:34
Yeah. Nobody needs it. Um, so I think that's entirely possible to, um So I look at Corona and I say this is feeling like a once in a 100 year event. I mean, when was the last time you ever heard of schools across the country closing and everything shutting down the MBA shuts down everything going on. So, um, you probably is a business entrepreneur and business leader have probably been through black swans events like this before. Highly improbable, unpredictable events that happen. So is there another black swan that you can think of? And it could be a small scale event. But like, what have you been through? And how did you How did you steer your business through that?

spk_1:   16:20
Well, you know, it's interesting and hate reference this one but 9 11 was definitely a black swan event. And there were some very interesting things that I think we still see today that are cascading from that s O you know. September 11 2001. I was working a, J c Penney dot com, and I'll never forget that day. I'll never forget looking out the window from our 11 storey building and not seeing a single plane in the sky and realizing that something there there was a a big ship that happened in the world. And so, from an online perspective, way got into the whole notion of understanding that people were gonna move from this sort of being out, doing a lot of things to more of this nesting approach, And J. C. Penney happened to benefit from that and the fact that we saw a lot of home goods. We sold a lot of soft goods. We saw a lot of basics. And so the ability for people to get the things that they needed, having them delivered to their home and sort of stay home state safe was very important to them. I think we're gonna see a little bit of that happen here again. I think this would probably go away in a lot faster in terms of how people are reacting to it just because it is a cycle in a season and, you know, and you brought this up to me, I think that we could go when we were talking is we're gonna see sort of, ah, wave of this kind of come down on the other side. But it's gonna come back up again next year. Just like happened with stars, just like happened with swine flu. You're gonna see the next tail on this come. And I think what's gonna happen from an online perspective, you're going to see people becoming more beholden to utilizing that that data specific tool and the ability to buy something and have it delivered in front of them as a viable way to stick it, to keep them in their lives forward

spk_0:   17:55
So you started talking about the business cycle. Um, business cycles definitely ebb and flow quite a bit. So what do you think the impact to the current business cycle is gonna look like? What? What do you What do you strategize that you should be doing right now is a CZ. You run a business.

spk_1:   18:15
You know, I think this is kind of my running way of running a business, and I always tend to be more conservative from a pistol nature. I'm a big fan of how Southwest Airlines has always run their business. They run their businesses year in and year out. Though things were gonna be bad the next year. They don't run their business, you're in and you're out. So everything's gonna be up, up, up to the right forever. And so you know, the whole notion of being smart about what you're spending money on having the right people in the right seats to do the job that's required as you're developing a revenue stream in cash flow from that, making sure that you're proving about how that money is either being reinvested in your business to create more value or it's being put into savings so that you can benefit from it at a later time. And I think it's important that Maur, especially small companies, look at that. You mean I'm on leaked in every day on Twitter every day. I'm seeing these stories of people who are being laid off from their jobs already because of what's going on covered 19. And they're literally saying I need help. I can't make it two weeks without a job.

spk_0:   19:16
And my son

spk_1:   19:17
is right And my thought is, you know, again, proper planning. You tell the plan plan fell. And so if you're a point where you're living on that edge, figure out a way to come back slightly from the edge you may have. You may have to give up a little bit of revenue are a little bit of profit here and there. But by doing that and reinvesting properly or saving properly, you're gonna see a magnified value that goes on down the road. The companies aren't suffering that you won't hear much from they're gonna be the ones they're, you know, they're they're feeling they just don't have to say anything because they don't have to show that they're feeling because they've got the reserves in place to take care of the situation. When you hear about the airlines are gonna suffer because of the shutdown on dhe. What's happening from a child's perspective? You know, Southwest Airlines is the one, the one that's talking about it. It's Delta Airlines, American Airlines, United Airlines, because they're living on the edge of whether or not they're profitable or not.

spk_0:   20:09
I really wish more of the economy and more of our American culture would would plan for the worst. Kind of like you mentioned would be a really big shift, and, you know, we wouldn't have as much blowback. Or crisis is when the next bubble gets the pin that pops it right, cause like clearly, we're in a bubble. Um, you know, it's getting increasingly obvious. The cove it 19 was just the pin that pops it, but all right, so we'll leave the Corona conversation behind. Let's go just a little bit more flour early or generic here. So what excites you about being an entrepreneur these days?

spk_1:   20:45
You think I think that it's between most about being entrepreneur is the ability to create something, too, to create value to find the ability to save time to save people money, Thio, build an item or to build a service. They get people out of there, norm and again. Anything I could do to help support the ability of people to save time and money. I'm going to do all day, every day. One of the jobs we didn't talk about that I have is that the president of dealbreaker dot com, which was one of the leading online deals and coupons websites in the country, were the 15th floor. Just as a matter of fact, when I ran it and we pride ourselves on the fact of being will save people time and money as an entrepreneur, anything that I can do ti do, that would be great. The second thing is, Is this between a little bit of a generational impact for me? You know, I've gotten older. I've been I've been working in the e commerce digital marketing operational activities for 25 years of my career, and I'm now realizing that there's another generation that's coming in behind me, that I get to impart knowledge to that. I get the opportunity to say there's a land mine. Don't step on it. And so, from an austere aerial perspective, the coaching and mentoring that I could bring to that and and the ability to, you know, find the a way to help people that are super smart or gifted in finding that next service or product, I want to be there to help, you know, support for them to go forth and be very positive and beneficial in that area.

spk_0:   22:09
It's definitely rewarding Teoh to be a mentor, and that's that's really awesome of you. All right, so last question for you, Kevin, What book have you recently read? Or a reading right now that you think everybody should go out and buy?

spk_1:   22:21
You know, I just read it again for the third time and I'm reading Built to Last by Jim Collins and built the last one of those books. It's like a movie that comes out on a Saturday afternoon. I I'll slip by and go up. You know what? I'm gonna watch that movie again already. Now it in, and I already know what with the beneficial high points of it are. But when I think about built to last the ability to work on building a company and again having that mentality of. We're not just building it for today and tomorrow we're building it for tomorrow and next week and next month and next decade and next millennium. That's that's the book that it always comes back to me. It's the thing I loved. Thio read.

spk_0:   22:58
That's a great tie in. Well, thank you guys, for listening to the my Amazon guy podcast. Please make sure you subscribe to our podcast and tell three other people about it. We would very much appreciate that. Thanks so much.