Ringo Chan: I want customer to pay their money for the product, not for the delivery cost or storage cost. If we only think about how we convince customer to sell, that's marketing and that's wrong. So our vision is to build a brand that actually help people sleep better. You know, because a lot of mattresses brands are there to sell you a piece of furniture, right? When you work in a work that you, you always serve other people, you know, you yourself needed to, to enjoy your work as well.
Nathan Bush: Hey, it's Nathan Bush or Bushy joining you from the land of the terrible people here in Brisbane, Australia.
[Voiceover]: What would you do if you spent 15 months developing a brand new product that you're really excited to launch, that
Nathan Bush: the team had worked super hard on, only to scrap the entire thing just before launch? That's exactly what today's guest did. And it is one of the reasons that Ecosa has become one of Australia's most trusted sleep brands. And you're gonna hear all about today. Ringo Chan is the founder and the CEO of Acosa, the Aussie sleep company that's delivering comfort to over 40,000 bedrooms every year and is now expanding beyond mattresses into everything else that helps people sleep better. Since launching in 2015, Ringo has built a Cosa into a lean multi warehouse operation with same day or next day delivery, a 100 night trial and now three physical stores. The first of many to let customers try before they buy. In this chat you're going to hear from Ringo how he and the team at ACOSA have built trust in a high consideration and it must be said, a low trust category even before they had a single showroom. We talk about how he turns customer feedback and returns into product development fuel. Ringo is all about product development. If you're product development, you are going to want to listen to this. And he talks about creating a key high performance culture by protecting the happiness of his team just as fiercely as he protects customer satisfaction so important to him.
[Voiceover]: As always, Add to Cart is brought
Nathan Bush: to you by our friends at Klaviyo and Shopify. They are the ones that make Add to Cart happen every week. So thank you so much to the teams for supporting us. Ongoing. Without further ado, let's get into it. Today it's a product development masterclass with Ringo Chan, co founder and CEO of acosa. Ringo, welcome to Add to Cart.
Ringo Chan: Thank you.
Nathan Bush: Awesome to have you here. I've been following Acosa for a long time now, so it's brilliant to have yourself as the founder here to tell us the story. Obviously a lot has changed in the furniture market. When you first started Acosa, how do you today describe a non copyable edge that your competitors can't match?
Ringo Chan: Okay, I think to be very honest, everything can be copy. Right. For us, is that the product that are the core of the business? Right. Because we sell product and customer buy, yes, they buy the service as well. But product is the most important. Especially our products are mattresses that will stay in your house for the next five, 10 years. So product is the core and you'll hear me say a lot about product as well. So then on top of that, of course is the supply chain, you know, getting to people's house, you know, as fast as possible as, you know, frictionless as possible. But then also underneath that is the way of how we operate is that we always embrace challenge. So we never stop. We just go like chase, chase, chase for better. And I think that makes us different because you know, by the time we stop, people will just, you know, push you and you know, we'll be either be gone or we just have to do better.
Nathan Bush: When you're embracing challenge, what challenge are you embracing at the moment?
Ringo Chan: Good question. Well, we see so many challenges every day, but just mention of a few, you know, like from a product level, you know, just a few months ago, took us 15 months to release a epoch that helps you to, to cancel all the noise when you sleep. And you know, from the data point of view, you know, we did a lot of lab testing, you know, and supposed to be one of the best CA out there. But when we try to release this product online and give to a limited number of consumer to test out the product, it's just not as good as the database. And then we just have to write off, you know, 15 months of work and also like, you know, something like 10, 15 thousands of product. Right. We just have to write it off
Nathan Bush: because it just didn't make customer standards. Yeah, yeah, yeah. Wow.
Ringo Chan: Yeah. So that's the, that's the challenge that we have to decision that we have to make was like, okay, does it mean that we are happy to waste employees 15 months of time, you know, and also wasting the product cost and everything? And you know, we also, we talk the photos, everything, photo shoot and everything is just ready to release. So yeah, that's challenge on the product level.
Nathan Bush: And on that, do you see that as a failure or do you see it as kind of a learning experience? Will you reiterate that product again or will you park it and put it aside and go, we tried it.
Ringo Chan: Failure is A learning experience.
Nathan Bush: Yeah, yeah. And is that the end for that product or do you go again in a different form?
Ringo Chan: Yeah, we are going again.
Nathan Bush: Nice. Okay. All right. That's a really great challenge. And I love your angle of product because I wasn't expecting you to say earplugs because most people will know cosa from mattresses and furniture. When you say product is at the forefront, do you put it with the lens of everything to do with sleep and the bedroom, or how do you define where you can go with product? Where do you have permission to play?
Ringo Chan: You're right by sleep and bedroom. So our vision is to build a brand that actually help people sleep better. You know, because a lot of mattresses, brands are there to sell you a piece of furniture. Right. So eventually we want a customer to come to us and go, okay, I can't sleep well. I only sleep, you know, four hours a day because of this disease. And then we have either a product or service, you know, also could be in our AI app. The goal is to help this person sleep better.
Nathan Bush: Yep. And when you're coming up with product ideas on how to help customers sleep better, how much are you copying what's already out there and putting it in the ecosystem style first? How much are you trying to innovate and create brand new products that no one's ever seen?
Ringo Chan: Oh, yeah, good question. You know, there are solutions to certain problems already in the market, but then, you know, as a brand, we simply just copy a product and release the same product. Customer are not getting any value out of it. But then it's important also to know that we can't just not understand the market and just think that whatever we release are the best ones out there. It doesn't happen. So, so the first step to do is to understand what's out there and then what they are lacking. Right. So they got to be something that you can do better and then just. Just do better.
Nathan Bush: I love it. And in terms of your customer life cycle, I'm really interested there because that was going to be one of my questions around. When you're talking mattresses, you alluded to it right at the start is that they do have a long life cycle. And you hope that they do have a long life cycle. Life cycle. How do you build out a customer life cycle where you can continually be part of their lives in between those big product purchases?
Ringo Chan: So because we are in not just the mattress industry, we're in sleep. So we, we also sell pajama, you know, bed frame bedding and, and A lot of other small parts. So we are not limited to sell just one thing, you know, that lasts for 10 years. But even with mattresses, we find that, you know, when a person buy a mattress from us, this person also seems to be liking to buy another one within the next one or two years because, you know, they also have a second room or, you know, they may be buying one for their parents because they like it. Yeah. So this happened. So I wouldn't say we are in the game of getting customer to buy from us every month. So what we have to build is also be quality enough for good word of mouth.
Nathan Bush: How do you amplify that word of mouth? Because obviously the game has changed a lot from when you started. I think it was still pretty novel when you started to be able to get mattresses delivered via online. That's probably broken a little bit now. People are open to it, and it's almost become a bit normal. How do you generate now that word of mouth to stand you out from those competitors?
Ringo Chan: Okay, short answer is we don't. So we don't actively look to go to our customer and go, can you tell other people that these are good products? We don't do that because what we believe is that, you know, if we do a referral, a lot of brands do referral codes. But in my experience, if my friend is giving me a code so that he can make $50 out of that code, I'm like, okay, is this generous?
Nathan Bush: Yeah, I just. I actually just worked on a loyalty program that had referral as part of it, and it just was not used because I think customers feel icky about even referring for a discount rather than out of genuine goodwill and advocacy. Right?
Ringo Chan: Yeah. So for us, it's like, how do we make. Again, going back to product? How do we make a product that people are generally happy about? And of course, the whole shopping experience is like, okay, give them surprise. Like, you know, a lot of people don't know that when you buy an ecosystem mattress, it will be able to arrive to your door same day or next day. And also the same shopping experience is like, we try to convince our driver to help customer lifted to their room of choice most of the time. And there are, you know, things that we try to do better so that customer expect because they already have high expectation of what we'll get from us. But how can we get better at that?
Nathan Bush: So do you publicize that? So same day or next day, do customers know that at purchase, or do you extend out the promise a little bit? So that they're surprised when it arrives early.
Ringo Chan: Oh, no, they know. They know.
Nathan Bush: They know.
Ringo Chan: On trackout, you can choose the time and date for. For your delivery. Matches show up at your door, you know, for, you know, all of the sudden.
Nathan Bush: How important is speed when it comes to mattresses? Or is it just the fact that customers are like, oh, no, you've got your shit together. You know, what's going on? I don't have to chase you. I don't have to worry about it. It's an item ticked off my list. You know what I mean? Because I can imagine with fashion, then, yes, I might need it for an event or something. But I can imagine most times with a mattress, it's not an urgent urgent, but customers appreciate it because they go, hey, I've been trying to. I've been meaning to do that mattress for months now. It's just nice to have it ticked off my list. And I get on with my life.
Ringo Chan: It's not. Well, I'm sure some people would need it a mattress on the same day. Because, you know, mattress shopping is not something that people buy every day. So a lot of people don't know that if you go to a traditional mattress store, they may give you a mattress in amount of time after you bought it. Yeah. You know that grab and go is like, oh, well, what I can't get it today is this something that surprised people? So for people that who, you know, literally just moved house and needed something urgently, that that happens, majority of other people is like, because we can deliver this mattress fast, we can also allow the customer to. To choose date and time. And that's more important because if, like, a lot of people have scheduled to move house on a certain date, so they know that I need this to arrive on that date. Yeah.
Nathan Bush: I remember we talked to Drew from Tile Cloud about this, and that was one of his things. When you're renovating a house, you've got so many different deliveries and things coming in and out that actually having certainty over the delivery time was more important than fast because they actually just needed it to fit into the puzzle of what they're doing and have some certainty over it.
Ringo Chan: Yeah. But these two things goes together because if you promise someone to have something delivered, say, a week later, but then a lot of courier in Australia is that they only give you a range. It's not like this particular day, they will give you a range of two to seven days. Now, two days and seven days are very different.
Nathan Bush: Very different.
Ringo Chan: Yeah. So being able to do it within the day, then we can just do the particular day a lot faster, a lot more accurate. We still miss say 1 or 2% of it, but it's because of the nature that we don't own those truck and truck drivers.
Nathan Bush: Okay, and so have you partnered with a courier delivery company that specializes in time booked deliveries?
Ringo Chan: No, for us it's more of a Uber model. Package picked, packed, you know, and we just booked a courier like it's this, it's the destination, like the one directly to you. Almost like Uber. Yeah.
Nathan Bush: Okay. And are you shipping them all out of different warehouses? Have you got warehouses all over Australia?
Ringo Chan: And we have a warehouse in each state.
Nathan Bush: Okay. Okay. So you can do that proximity to capital cities and then book on demand, essentially.
Ringo Chan: Yeah, almost. Almost like that, yeah.
[Voiceover]: Okay.
Nathan Bush: Now one of the things that I read about you, which was fascinating, is that when you started a cosa, it was all about championing a lean model for E commerce. Being able to do single person delivery for mattresses, having remote teams for support, eliminating middlemen, which I think is the nirvana of E commerce. As you move into these kind of offerings with multi warehouses and you trying to surprise and delight customers to go above and beyond, I can imagine that's not always the cheapest or the leanest route. How do you manage staying lean as a business but also going above and beyond for your customers?
Ringo Chan: Okay. Staying lean is still principle. So the first principle about it is that I want customer to pay their money for the product, not for the delivery cost or storage cost. Right. If you buy a say $1,000 mattress, I want at least, you know, six, way more. Maybe 80% of it goes to the product itself. But the mattress industry is like, because it's needed really big warehouse and a really big showroom and two people doing the delivery, your true value of the product costs could only be 20% and you know, 30% goes to the delivery driver and 30% goes. Imagine buying a thousand dollars product and you're only buying the 20% of it like that what customer want. So we as, because businesses is about serving customer, it's about delivering what customer want. So to me it's like customer want good product. That's the core. Right. A good service, of course, like, but then that's secondary. They don't want to pay triple the price just to get the product faster. But the product is shit.
Nathan Bush: Yeah, yeah, yeah.
Ringo Chan: So we are lucky that because we sell a lot of one type of product. So actually help doing the per warehouse model and shipping it directly to customer. For us, it's cheaper than sending it two to seven days using Hunter Express or Ally Express, like those bigger courier. Because then you don't have to send a big truck to come pick up, say 20 mattresses to that DAPL. And then from the Dapple, they distribute. Yeah, so we are the dapl. We distribute directly.
Nathan Bush: Okay.
Ringo Chan: Yeah. So we want cheaper but better.
Nathan Bush: Can you give us some insight in how you're running that operation? Because obviously you've got to choose the right courier partners. But there'd also be a technology piece to make sure that those orders are processed quickly and prioritize it in the right way. And then there's also the operations piece where you need to make sure that you're dispatching really quickly as well. What kind of systems or technology have you got to make sure that all of that works quickly? Because there's one thing saying, yeah, we can uberize it and get, you know, deliveries one on one, direct out, but there's a whole lot of work that needs to be done or process that needs to be done before that to make sure that that works.
Ringo Chan: Yeah, yeah, you're right. Because if we talk about. So. So it's easy to send an order from website to say, the warehousing system using API. And just so that part, it's very standard. So what businesses needs to look into is the pick and pack routine. So because you can't just have a person sitting in front of a computer in the warehouse and just wait for order. Right. So you need to do a routine of maybe every hour, every two hours, every maybe every three hours for business. Some businesses that they will go print and dispatch a batch of orders and you'll be surprised because a lot of say the free PR will only do one batch a day. So maybe like before 9am they print all the orders and that's it. The cutoff, maybe 10, 11. That's it.
Nathan Bush: And that's not going to work in a world of Amazon anymore, is it?
Ringo Chan: No, no.
Nathan Bush: What kind of hours are you keeping your warehouse open now?
Ringo Chan: I think they close by 5pm if I'm.
Nathan Bush: Yep. But just maintaining it regularly throughout.
Ringo Chan: Yes. Yeah.
Nathan Bush: I'm keen to pick up on your comment around making sure the majority of what a customer pays goes into a quality mattress. I think it's fair to say that customers might be skeptical of the mattress industry because we all go and try mattresses or buy mattresses and we have no idea what's in the mattress really. Like, we rely on these springs that are drawn in, you know, diagrams and we believe what's there? And there's a whole lot of mystery behind how actually a mattress is made and what's inside and whether it works. How do you convince customers that what they're buying is quality when they're in that decision making process?
Ringo Chan: I think that's the wrong approach. You know, like the goal is we want to sell, but like, if we only think about how we convince customer to sell, that's marketing and that's wrong. Like, I'm not saying marketing itself is wrong.
Nathan Bush: No, I like this angle.
Ringo Chan: Yeah, but if you look at how to sell a mattress to a customer, it's like, what, what do the customer want or need? Like, what's the problem? Is this product solving the customer's problem? Right. If it solves the problem, we just have to say that, okay, this product solves this problem. That's it. Rather than selling someone a pen that they don't need.
Nathan Bush: Yes, yes, yes. The old trick but in saying that. So say you've got your competitors out there. You've got everyone from your koalas to your snoozers to Harvey Norman for for example. I can imagine that most people will come in and say, I want a better night's sleep, I want a more comfortable sleep. If you're all solving the same problem, how do you convince people that yours is going to do it better than others? Especially when they might not understand the product that you're selling?
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Ringo Chan: Okay, I think it goes back to the percentage of money goes into the product because fundamentally that's what makes the difference and we are winning by supply chain efficiency and all that. So I think it will be easy for a customer to go to snooze and find a good mattress that they like. But the problem Is that when they look at the price tag, you know, usually they are two or three times higher than after discount if they, they will throw out something like $8000. But now it's $3000, you know.
Nathan Bush: Bargain.
Ringo Chan: Yeah, it's a bargain. But fundamentally, because you know, our mattresses are in a box, you know, so it doesn't cost two very strong people to lift up the mattress and, and deliver it to you. It doesn't waste a lot of storage in the car. And you know, all that supply chain thing is the fundamental. So naturally our costs are way, way, way cheaper than this because we make our own mattress. They will have to buy it from someone else. You know, we sell up to, you know like 3, 500 mattresses per day of only a few times and they will have to sell maybe more, but then they will have to sell kind of like 30, 40 different variations.
Nathan Bush: So cutting out the middleman is still really important for you in being able to give that value offering to the customer.
Ringo Chan: Yeah, yeah. Because when we sell a lot of one type of things, the turn turnover rate is a lot better, you know, so then that turnover rate cost doesn't have to pass on to customer. Where if I would have this stock a mattress but only sell one per month, you know, that storage cost for one per month will pass on to customer, which makes the product expensive, which makes it harder to sell.
Nathan Bush: Yeah, yeah. So it's all. It's having the model right to start with before scaling.
Ringo Chan: Yes.
Nathan Bush: Yeah. I've noticed that on your website you don't go hugely technical in your product details. You give enough information for people to make a decision and know exactly what the product is and the quality is. But it seems to me that you put a lot more emphasis on sharing real customer stories, whether that be through reviews or user generated content and make sure they're seen. And you alluded to it earlier with how important word of mouth is for you. Have you got any tips around how to generate more customer reviews that you can use to showcase that word of mouth?
Ringo Chan: Okay. If you have a good product, then naturally you're getting a good number of review when you ask. Because it's always a just a proportion. Like if you sell 10 product, you ask every one of them for review, maybe one of them or five of them. You know, that's the percentage of how many you sell versus how many reviews you get. So you can also monitor how good your product is by how much willingness people are willing to leave a review for you. Mm. Plus if you also offer return you know, return guarantee, then you can also look at that. But it goes back to what I said about you don't want to sell product to customer that aren't good.
Nathan Bush: Yeah.
Ringo Chan: You know, so rather than work on chasing for more people giving you review, the root cost is the product. You know, if you're only getting 1 out of 10 review where other products are getting 3 out of 10 review. When you ask people the other ones are better, just sell the other ones and drop, drop the 1 out of 10 and just don't sell that.
Nathan Bush: I love it. So your review rate is actually one of your key metrics in understanding the goodwill and how much your customers actually value your product.
Ringo Chan: Yes. Yeah. Because what else can you do? Like either, you know, ask people and send more emails. That's not going to work. That's just what if you've got a
Nathan Bush: high review rate but the reviews aren't great?
Ringo Chan: Well also yeah. Then shows that you know, people are angry about your product. So you should, you know, discontinue and optimize your product first before you, you know, you spend on marketing.
Nathan Bush: Yeah, yeah, yeah. I've got a feeling that you don't enjoy spending a lot on marketing and that you see marketing as almost like an add on to delivering a really great quality product and experience for your customers. Are there any marketing channels that you really think move the needle for acosa?
Ringo Chan: Yes, yes, yes. Well despite I, I am a product person but I'm also because I, I find that the business and then I've been through in every position in the business like customer service, procurement, also marketing. So from you know, say SEO, Google, Facebook, they, they work. But then okay, we sell a lot of products, we find that some product works way better than other products. So hence I always go back to the root cause of like okay, don't sell a product that has a bad roas. But you can optimize Roas. Like okay, out of the 10 product, you know, some may be getting a five ROAS, some only have one ROAS. Drop the one ROAS, don't try to optimize it and get free. You know, it's not you as a marketer that has that make it one ros, it's the product itself. And when you get free ros, try to optimize it to 3.3. And of course and buy targeted to more precise, more quality, qualified traffic. A more qualified customer.
Nathan Bush: Is 3.3 the magic number for you when it comes to roas.
Ringo Chan: No, it's just random.
Nathan Bush: I thought we got a little Insight there. What about those situations though where you may have a really good product but you just haven't nailed positioning it to solve a customer's need? Are there times where you like, oh, this, this marketing isn't performing, but I'm not sure whether it's the product or the way we've positioned it.
Ringo Chan: It's always the product.
Nathan Bush: Always the product. Wow. What if people haven't had a chance to try or use the product? What if it's a hidden sleeper?
Ringo Chan: Well then you marketing the product in the wrong channel.
[Voiceover]: Mm.
Ringo Chan: Then you know, do a pop up shop and try to sell it offline.
Nathan Bush: Yeah. Speaking of offline, you've just opened how many stores have you got now?
Ringo Chan: Three.
Nathan Bush: Three. Okay. And what was the rationale, what was the thinking behind going from purely online to now going to physical retail?
Ringo Chan: It's because customer has been asking for the last 10 years and we knew that this is important, but back then we didn't have enough variations or enough capital to go down to these routes. But yeah, now we're ready.
Nathan Bush: Awesome. What's been your biggest lesson or biggest learning in going from an online environment to a physical environment? What have you had to really do differently?
Ringo Chan: I think you have a lot of stopper, like people like just like starting up a business. People would tell you that this is not the right thing to do. But you know, like, yeah, listen to yourself, listen to your customer. You know, make sure that, you know, if the customer want this, then this is the right thing to do.
Nathan Bush: Do you find it's easier to convert people in person?
Ringo Chan: Yeah, yeah, much easier because people can now try the product and you don't have to explain to them that yeah, this is comfortable, you know, they can actually lay on it and. Yeah. And feel it themselves.
Nathan Bush: And are you bucking the trend in that if customers come into store and try the product and they go, I love it, I want to take it. Can they take it there and then that day as opposed to some of those examples that you said before where they might have to wait a month or two.
Ringo Chan: Yeah, they can take it that day, same, same time, just put it in their car because it's, it's in a box. So most of our mattresses fit in even a small mini coupon.
Nathan Bush: Yeah. Amazing how good. And what's been your thinking around where you position your stores? Because we've got some very large retail and furniture chains who are known for kind of homemaker centers. Have you gone down that approach or have you thought about it a little bit differently?
Ringo Chan: Yeah, we're just sleep only, like, you know, eventually we can help. Because when people don't sleep well, they currently have to think of their own solution. It's like, oh, maybe I need a new mattress, maybe I need a new pillow. Maybe I go and see a doctor. You know, like I would say the doctor one is like the very last thing people want think of. You know, I have like my parents having struggle with sleep for the last five years and they were afraid to see a doctor because they don't want to take sleep pill and all those other reasons. But we want to be, of course, you know, if you see a doctor, very important. But we want to have some sort of centralized location where you go, you know, if I go to Ecosa and pick up some Polar, I will definitely sleep better tomorrow. You know, this is our promise. And yeah, hence we're different to the traditional mattress stores.
Nathan Bush: Yeah. And you've got a hundred day guarantee to help people feel comfortable with that.
Ringo Chan: Yes.
Nathan Bush: Do you find many people take you up or is it coming back to what you were saying before is about making sure that you've got the right customers at the outset so that they have the right intentions and you're solving the right problems rather than trying to spray everywhere and get all customers. Like, do you find that many people actually take you up on that a hundred day guarantee? Is it used often?
Ringo Chan: It's definitely being used. And we are. These are very valuable data for us to understand. If a product is good, then, you know, of course, and it has some incentives for us as well because, you know, the less return we get for a product, the higher profitability we are as a company. So hence, you know, even when we release, give you an example, the first Sickosa mattress, you know, the return rate is close to 10% and now we have nailed it down to, you know, just around three.
Nathan Bush: Wow.
Ringo Chan: Yeah. So. So by actively listening to customers. Oh, is it too firm? You know, is this holding enough and all that? So it helps us with, you know, optimizing the product better each year and it evolves. So yeah, the less so return, the higher margin, higher profit we make. And it means that the more happy customer we get.
Nathan Bush: Yeah, yeah. How do you collect and distribute that information that you get from returns to all teams? Because I could imagine sometimes it might be product specific, sometimes it might be marketing specific. Like how do you make sure that all teams can learn from that feedback?
Ringo Chan: So I think as a CEO, you can trust your team, you know, doing most things well. But it is also important for you to Know, you know, but sometimes you need to get down to the ground and understand things. So first you need to trust your team and make sure that they do the right thing. But don't forget that to listen to customer yourself. So I do that like, you know, I would personally, you know, spend a few hours in a month and just look at every review. You know, what customer have to say, why did they return the product? And there are decision that only you, you can make. Because a lot of the times those decisions are very contradictive. Like, you know, oh, you have a really good product that's doing maybe a million dollar a year, but the reviews are bad. Do you want to drop it? You know, only you can make that decision.
Nathan Bush: And you gave a great example straight up in the podcast around the product that you've just launched or you tested that you were like, it's not passing customer feedback, so we won't go ahead on that. Have you had the reverse where reviewing that customer feedback regularly has opened up brand new ideas or opportunities that you might not have thought of previous previously?
Ringo Chan: Oh, yeah, many times. Yeah, yeah. Customer will ask us, oh, I wish you have that. And you know, they're like, oh, good idea, let's do that.
Nathan Bush: Yeah. And with customers coming to you for better sleep, do you bundle items up? Because I could imagine, like there's a bit of excitement when you get a new mattress. It's like, oh, this is going to change my life. Have you ever like bundled up, say pajamas and a new pillow all together to go, welcome to your new sleep?
Ringo Chan: We try, but it's very difficult doing this online where, you know, because in customer mind, they were just here to buy a mattress. So when you sell them a pajama, like, yeah, try, yeah, yeah, that's cool.
Nathan Bush: Okay.
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Nathan Bush: I noticed your website, it's not necessarily templated. Your range is growing and it seems like you've got some pretty unique requirements. What's your approach to developing your tech stack? Are you a custom builder? Are you taking things off shelf? What's most important to you?
Ringo Chan: Yeah, we're a custom builder. It goes back to the value that I want to pass on to, to the customer. I don't want to pay, you know, Shopify. I'm stingy, I don't want to pay them, you know, so, you know, we just do it ourself. We find way, way, way cheaper to do it ourselves.
Nathan Bush: And have you got developers in house?
Ringo Chan: Yes.
Nathan Bush: Okay. And a lot of people are scared of custom development, especially if they've grown up in a Shopify world. And the thought of custom development is scary because there is legacy and there's maintenance to that. How do you make sure that what you're building is future proofed?
Ringo Chan: Well, I don't think this any platform at the moment is future proof.
Nathan Bush: Yeah.
Ringo Chan: Because technology is just growing so fast, you know, nothing is future proof. And especially with technology we can't build a perfect platform because by the time we think this is perfect, there are, you know, 10 other things that come out. Even Amazon did this one day, set this as well, right when they first started. Just build the website and release and optimize it along the way rather than just trying to build something perfect. Then by the time you'll be running out of budget. So yeah.
Nathan Bush: How do you manage a features roadmap? Because I could imagine that when you've got an in house team, there's no shortage of new ideas and new functionality that they want to implement. How do you prioritize what's most important to your customer online?
Ringo Chan: Yeah, I think as we grow, we
Nathan Bush: just keep on hiring, just throw more resources at it.
Ringo Chan: Yeah, yeah. If we want anything, we'll build everything.
Nathan Bush: Yeah. What's your vision around how AI could improve Acosa? Do you see it more from a helping you be more lean in terms of your operations or do you see it in terms of being more creative and potentially helping generate more product? Like where does AI play for a
Ringo Chan: Cosa AI makes things faster. Yeah. So in a lot of ways, you know, even writing emails, I used to, you know, like, as you can hear, I'm, you know, not a native English speaker, so. So even with writing emails, you know, it helps me write three times faster. And, you know, editing photo, you know, like, used to take an hour to do something, now is five minutes. Right. But then doesn't mean that to me. It's like we're not replacing people's job because it does that. Like, we still need someone to do editing and we still need someone to do certain jobs. They just became faster. So it's just that we can do more. But then because the whole industry is also using the same tool and doing more. So, yeah, it just expediate everyone's work. So we're just catching up to the standard, not even like killing the industry or anything. So I think as you will see then, you know, like before, it takes us like 15 to 18 months to develop one product, hopefully with AI and it helps, we can develop better product faster. Maybe shorten it to eight months. I hope, you know.
Nathan Bush: How would you use AI in product development to make it faster?
Ringo Chan: Well, like, it's so much easier to get AI to research customer feedback through like forums and stuff like that and you know, to prove some of the concept and you know, do a lot of that and you know, done to even like product design to photo shoot to, you know, concept. You know, we sell sofa bats. And before doing all the prototype and getting the product ready and take some photos and ask customer, do you like this product? We can, we can use AI to do a lot of different design. I choose kind of a direction for us first and then we'll go down and do that.
Nathan Bush: So, yeah, I was at NRF APAC earlier in the year and the most impressive thing that I saw was this new tech stack. And it's what Shein uses actually to produce their clothing. And it was using AI at its core. And it was about allowing designers to go in there and go, hey, tell us your idea. What do you want to create? So, hey, I want some white Lotus swimwear range, for example. And it would just throw up a whole bunch of mood boards. Designer goes something like this, this and this.
Ringo Chan: And.
Nathan Bush: And then it'll come down to, all right, what products do we need? Of course, we need a shirt, we need board shorts, blah, blah, blah, blah, blah. And it would just take them down this aisle so that they could potentially create a new range within an hour using inspiration from around the web. And then get that all the way through to production, including, like you said, photo shoots, which actually aren't photo shoots, but they look like they're on models and et cetera, to be in market within weeks, not months. You know what I mean? Like, talking about fashion is that we're often designing fashion for the season ahead in 12 months time. But they're like, well, what do we need next season? Let's design it now. So it's going to be incredible from a product perspective where we can shortcut the process.
Ringo Chan: Yeah, yeah. So the trick is understand that this is a new ability, not just a brand, like not just you have or any person have, but it's tool that everyone has. So there's still an element of like, where do we want to spend more time in to make things better.
Nathan Bush: Yeah. One of the things that I read about you, which I think was brilliant and I'm keen to hear more about, was that you're passionate about building a nurturing, human and caring company culture. And that's really important to you. What does that look like at Acosa?
Ringo Chan: So I believe, because every day we're talking about how do we help customers. Right. It's about serving people. And, you know, when you work in a work that you always serve other people, you know, you yourself needed to enjoy your work as well. So this is very important. So, like, you know, in a physical world, you know, you can't see a salesperson who have smiley face when this person is not actually happy. So that plays a very important role of like, okay. Businesses is not, you know, there are plenty of money to make, but, you know, enjoy your work.
Nathan Bush: And how do you bring that to life for your team? What makes them enjoy working at Acosa?
Ringo Chan: Okay. So it's not just one thing, you know, of course, good pay, but then, you know, flexible working time. Also that knowing the vision of the company, you know, why you are at work.
Nathan Bush: Yeah. Okay.
Ringo Chan: Yeah. Because in any company, we, of course we want to hire all the good people, but in reality, 1 out of 10 may not be as good. You know, or maybe really bad. You know, that impacts everyone.
Nathan Bush: Yeah.
Ringo Chan: So, yeah, there are people that other people don't want to see. Iran and yeah. That we have to make tough decision sometimes as well. But it's about the core thing. It's about protecting our community of employees and making sure that everyone works in an environment that they really love.
Nathan Bush: One of the things I've really enjoyed about our conversation today is you have challenged me on some of my opinions and directions and you know, where you go. Look, I think it's more about product than it is about marketing. And I feel like you're really clear on your vision and your mission and how you're going to get there. How do you educate and take others on that journey? Especially like you said, some of the newer or the younger talent. How do you take your experience and share that with them?
Ringo Chan: Well, experience, you have to learn from failure, unfortunately. So don't be afraid to fail, you know, just do whatever is in your mind and in a good way. And don't be afraid to fail and don't try to trick customer, you know, because that's not going to last long. So be authentic and try to solve a real problem. And patience is about, you know, setting a goal where other have the same goal and follows you. Right. So that goal cannot be selfish. It has to be. Yeah. It has to be meaningful.
Nathan Bush: So with that in mind, the next 12 months for Acosa, what are your priorities? What are the most important things for you for Acosa to be successful over the next 12 months?
Ringo Chan: Because we want to build a sleep company. There are so many other sleep products that we haven't done and we want to do them well. So product number one, second, we are opening stores, so we only have three, but we are definitely opening more next year. So it's to allow people to experience Ecosa in store nationally and then we are building a sleep AI app that helps people sleep faster.
Nathan Bush: Oh, what? Get to sleep faster?
Ringo Chan: Yeah, get to sleep faster. Okay, so. So we're working hard on that one because, yeah, it all comes from the vision.
Nathan Bush: If you can solve the problem of waking up at 2 o' clock and not being able to get back to sleep, I would be there for that.
Ringo Chan: Yeah, that's part of the sleep faster because we realize people who woke up needed a way to help them sleep back. Like sleep fast again.
Nathan Bush: Yeah, yeah. You could always put the Add to Cart podcast on. You go straight back to sleep listening to my voice. I love that, Ringo. They're big priorities for the next 12 months. Thank you so much. Now, if people want to learn more about Acosa and see more of what you're doing, what's the best place for them to go?
Ringo Chan: Follow us on LinkedIn, Instagram, TikTok. You know, we have what good content that you can get inspired from.
Nathan Bush: I love it. I love. I did enjoy looking at your TikTok and especially the employee generated content that's on there. Like you said, it looks like you've created an atmosphere where everyone's having fun, they're achieving, and it looks like a great culture that you've created there. So congratulations and thank you so much for sharing your story on Add to Cart.
Ringo Chan: Thank you. Thanks for inviting
Nathan Bush: as we were getting
[Voiceover]: off that call and Ringo just said that this was his first podcast that he's ever done. So hugely humbled that Ringo chose to come and tell the icosa story on Add to Cart. The other thing that I really loved in that conversation, and I alluded to it, was that Ringo just didn't follow my thoughts along and tell me what I wanted to hear. He really challenged me to think differently around my approach to marketing and to returns and delivery and with his experience.
Nathan Bush: Experience.
[Voiceover]: That's how we learn. So I really love that approach from Ringo and enjoyed our conversation immensely. Now, as always, I want to pick out three bits of new ideas or innovation that came from Ringo that anyone in E commerce can learn from. The first one that came up was
Nathan Bush: around Killing the Product.
[Voiceover]: I wasn't expecting this story to come up. I hadn't even heard of it before. But when Ringo Ringo told us about the earbuds that they just developed in the interest of sleep. It was a new product for them, but didn't meet customer standards. After 15 months of development, he made the call to kill it because it
Nathan Bush: didn't meet the customer success.
[Voiceover]: So even though everything we heard today from Ringo was about product development and the importance of product, that comes down to whether a customer connects with that product. And he wasn't afraid to make the hard calls. He even said that he spends hours every month going through customer feedback so that he understands what products are working, what products aren't, where the opportunities are, and that it's his job as the CEO to make the call based on customer feedback at a product level. He's not asking the team to go through that feedback and make recommendations to him. Product is at the heart of everything, but the only way the product works
Nathan Bush: is if customers love it and he's
[Voiceover]: not afraid to make those hard decisions. That's how he's developed Trust Number two was the Uber for Mattresses model. It doesn't go hand in hand. It's not natural. Can you imagine your Uber driver rocking up with a mattress? It doesn't make sense, especially when you
Nathan Bush: take into account the lean model.
[Voiceover]: Most people will think about this way of delivering product and think that it's just not sustainable from a cost perspective. Ringo emphasized that the reason it does work is because they can be lean. Yes, they have warehouses set up in all capital cities around Australia, which makes it possible. But by delivering when needed rather than relying on big shipments going out, he's actually been able to make it really sustainable for a COSA and surprise and delight the customer which has a flywheel effect of then being able to generate more word of mouth and return purchase. So make make sure when you're looking at your delivery options, if you are settling for vague two to seven day windows just because you think anything else is going to be more costly or inefficient, use Ringo as an example. Maybe it's not as expensive or intensive as you think. And number three, I want to put out there review rate as a success metric. It's not something that we put up
Nathan Bush: in lights that often what percentage of
[Voiceover]: order are actually leaving a review, but it's something that Ringo called out is
Nathan Bush: really important to him because it's a
[Voiceover]: metric that tells us yes, people are really surprised and feel that you've gone above and beyond and want to leave you a really great review which is awesome. Or on the other scale people aren't happy and they might be a little bit angry, they might be a little bit disappointed and you need to take that feedback and action it. The danger is when you're getting no feedback at all which means you're just meeting the mark market. So if you're not tracking your review rate over time, knowing whether you're getting really happy or really upset customers and then taking action from that, if your review rate is just sitting really low, almost in a pool of apathy, then that's a dangerous sign as well. Probably worse than just getting negative reviews. Again, super privileged that Ringo has chosen to come on to add to CART to tell his story with the cosa.
Nathan Bush: Exceptionally well toned.
[Voiceover]: I love his approach approach and really enjoyed our conversation. Now if you want to discuss anything that Ringo brought up today, maybe review rates, maybe custom build stacks, maybe even how to create a caring culture in E commerce. Head on over to the add to CART community. It's free to join. We have over 500 e commerce professionals in there asking everything from what tech
Nathan Bush: stack should I use to has anyone got recommendations for people who could help
[Voiceover]: me with this or even just sharing
Nathan Bush: their own experiences and and knowledge.
[Voiceover]: It's free to join.
Nathan Bush: Head on over to add to cart.com
[Voiceover]: we would love to have you in there and get involved. That's it for this week. Thank you again for joining us. If you haven't already, hit that subscribe button on Apple or Spotify or YouTube wherever you are joining us from. We would love to bring you more e Commerce stories and lessons in the future. Until next week.
Ringo Chan: See you then.
