March 6, 2019
Joining us on the Marketing Mix Podcast with Jeff Ragovin are both Terry Lin, Co-Founder and Chief Design Officer and Jiake Liu, Co-Founder and CEO at Outer. Terry and Jiake discuss launching a mission-based company, re-imagining the Patagonia model and the demand for community building through crowdsourcing. In describing the power of social proof and the spectrum of trust with consumers, Terry and Jiake explore the importance of authentic experiences in the buying process.Listen to "Terry Lin and Jiake Liu, Co-Founders, Outer" on Spreaker.
Jeff Ragovin: Can you tell our listeners little bit about Outer?
Jiake Liu: We’re a direct consumer furniture brand on a mission to inspire people to spend more time outside. We're starting on our mission with the perfect outdoor sofa. We’re quite different from a typical direct-to-consumer company in that we’re pioneering a decentralized retail model with our neighborhood showroom platform. This allows our customers to visit a home in a neighborhood nearby that actually features our furniture- to see and sit on in person. You even meet a neighbor in the process!
Terry Lin: We’re really focused on being a mission-based company. As we were thinking about the design of the product, we discovered that today, we spend about 93 percent of our lives indoors and only 7 percent outside. That's just not a really good statistic. When I was a kid I spent a lot more time outside and that’s dropped by around 50 percent. In general, we all know the health benefits to being outside. Although we’re a furniture company, we’re really hoping to build a movement of getting people outside.
Jeff Ragovin: Have you ruled out the idea around actual physical brick and mortar stores or is that something you're thinking down the line?
Jiake Liu: We wouldn't rule out physical brick and mortar completely. The impetus for the neighborhood showroom model is that we're trying to fix what's broken about offline retail, especially when it comes to furniture shopping. I still believe that brick and mortar retail has a very important place in today's day and age- but when it comes to furniture, the experience typically isn’t a great one. You drive down to a showroom and you're faced with pushy salespeople. You’re seeing the products in a pristine air conditioned room. Furniture should be showcased in a natural environment where it's actually exposed to the elements, be it to the sun, dust or wind. That’s what we're really focused on right now, but down the line we want to think of creative ways to showcase in other unique settings.
Jeff Ragovin: Terry, given your diverse background in the sphere of retail, from Walmart to Casper to Pottery Barn, how are you positioning yourself in the market against competitors?
Terry Lin: I've been in mass retailers, I've been in specialty, and I've been in DTC, so I feel like I have a pretty good perspective of what works and what doesn't. With Outer, we’re trying to take the best of all of those elements. One of the first things we talked about when starting the company is this idea of trust with customers and retail. The spectrum of trust usually goes like this: friends, families, strangers, and then retailers. And then you think about how retail operates, It's the exact opposite of that cycle. The entire concept of social proof in UGC is now inextricably linked to purchasing, but reviews are usually found at the bottom of the page. So a lot of what we're trying to do is flip the whole idea of retail on its head. We as a brand believe in the product that we've designed and we've made a lot of claims. What we care most about is that you go visit one of our showrooms and talk to one of our customers that has become a host. And we're not going to give them any guidelines of what to say. It really is a person - a neighbor or a stranger - talking to another person about what they like or what they don't like about it. That’s at the forefront of the entire idea of what Outer is doing.
Jeff Ragovin: Can you talk us through how you would select the host?
Terry Lin: There's a couple of things that we are also focused on in terms of trends. Firstly, the rise of social media. Typically, when you look for inspiration for home or apparel you go to Pinterest or Instagram, but we realized no one was really capitalizing on the outdoor furniture space. As we continue to build our platform, we want to eventually become a source book of inspiration by showcasing our hosts in all different spaces and different lifestyles. For instance, in San Francisco I have a very small backyard and it doesn't make sense for me to look at your place in the Hamptons. Or what if I'm more interested in a bohemian eclectic style? Our platform will allow people to start filtering down to what they like and the people that they like. So as we think about the entire like neighborhood showroom network it's about finding a range of ideas. It’s like a canvas that you can decorate any way you want, with different patterns or accessories to change the look.
Jeff Ragovin: How do you incentivize your hosts?
Jiake Liu: The compensation is done on a per-visit basis, so it’s not tied to a commission. Every time somebody books a visit through our website, the host gets a flat fee. That fee varies based on their location and the frequency of visits. We built a proprietary backend dashboard- that's similar to Airbnb- where they can set their own schedule etc. and then get a good sense of their rates. The whole concept behind this is that we’re really paying for their time and their space.
Jeff Ragovin: How are you guys planning on building out this network of ambassadors?
Jiake Liu: Our priority is looking for the best fit. We've tested ads on Facebook which led to a huge influx of applicants in Los Angeles as our launch market. We were also featured on some pretty prominent front pages and received applications from all over the country. We may be in the middle of winter right now, but still people are interested!
Terry Lin: We’re kind of going through a sociology experiment right now. There's a number of motivations for people to sign up as hosts, and I don't even think we've covered all of them! At the most basic level, they get paid. But they also want to be involved in a brand that they're excited about because we're doing something different. One of our current hosts told us how they appreciated their kids being able to interact with these visitors. We spend so much of our lives buried in our screens, and it’s almost like we've forgotten how to actually talk to people in real life.
We're still trying to uncover some other motivations. The latest one we’ve been talking about is the idea of a design lab. We want to have our host network be our product testers, so before we actually go into full scale production they have early access to the new product and they can give us feedback on what they like what they don't. And then we can use that to refine what that product is when we actually go to a full launch.
Jiake Liu: Our pool of applicants has a lot of consultants and contractors who are working from home and this is a good way for them to actually build their own network, because people who are in the market to buy high end furniture are generally homeowners with disposable income. They really enjoy meeting people who are in their extended network to expand their own network.
Jeff Ragovin: What are some brands that you look up to most and why?
Terry Lin: As Jiake and I were dreaming up the company, we decided to model our company off Patagonia, since we really respect their message. They talk about building the best product. There’s also a piece of what we’re doing that fits into the sustainability cause, and Patagonia is all about not causing unnecessary harm with what they do, and inspiring solutions for the environmental crisis.
Jeff Ragovin: If you had an unlimited marketing budget, what’s the first thing you would do with it?
Jiake Liu: I’d focus on the neighborhood showroom model where we can actually showcase and leverage the customer’s five senses to really see and touch and see the difference in the materials and everything that we're doing in our product. That would really amplify the outreach.
Terry Lin: I’d funnel that money towards getting our hosts to throw events. We've talked about the idea of an “Outer-cue” which is essentially our barbecue branded as an “Outer-cue” where we pay for barbeques. At parties, people don’t remember the furniture. If I asked you where were you July 4th of 2018, you might know who you were with and what you were eating. But if I were to ask you what furniture you sat on, you might see it as irrelevant. That goes back to our premise; it's really not the furniture that we care the most about but it's about those experiences that we enable, such as getting outside. We want people to have a good time and realize the benefits of building communities. If we can actually host more of these events and get people together, that’s what you would remember- the experience, not the furniture. That’s something I would be interested in exploring.
Jeff Ragovin: What’s a valuable insight that you’ve learned since you launched Outer?
Jiake Liu: Nobody really enjoys buying outdoor furniture, and I don't really blame them. You really just have two very poor options. One is to go to the Home Depot and buy low quality furniture that falls apart after one season of use. The other option is to go to a high end retailer that would cost upwards of ten thousand dollars for an outdoor sofa. I think people are really craving an alternative to this brick and mortar furniture shopping experience. There is also a real desire to connect with others in an authentic way that builds a community, and I think that's very exciting to us.
Terry Lin: On the product side, we had a revelation when designing the Outer shell. This essentially is an integrated cover that you roll on to protect, roll off to uncover, and then you can actually transport it if the weather turns bad. As we were designing it, we realized it was a good idea since we know that a big reason people don't spend more time outside is the furniture- either because it’s dirty, covered with an unattractive rain cover or stored inside. Once we started sharing this idea, everyone thought it was genius. At this point, we realized we had something to work with. After researching the patents, we found out no one's ever done anything like this. There's so much innovation that hasn’t happened in this space, and it’s innovation that people often miss. We’re trying to get at the details that lie between the lines, and we’re going to continue to do that to build our brand.
Jeff Ragovin: Thank you for joining the Marketing Mix Podcast.
Please note, the above has been paraphrased for editorial purposes