[Voiceover]: The dopamine hit is so big that you want that thing so badly that when you see other people get it and you think it's been dodgy, you just want to scream. Our world is chase the fad, chase the fashion, and then chase the bau. Did you capture them? Did they just drop off a cliff? Did you never actually get their details? Are they your next candidates for the next iteration of what you're selling? Welcome to add to cart, Australia's leading
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[Voiceover]: you need to know in the fast
Nathan Bush: moving world of online retail.
[Voiceover]: Every week, Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that
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Nathan Bush: Today's guest actually got introduced to me through a PR relix about the recent Nike and Tiffany's collaboration. You probably saw the shoe or or at least heard about it from one of your friends who are still cool. But regardless of what you thought about the design, and there were many mixed opinions, to say it nicely, the hype was very real, with online customers virtually queuing and refreshing web pages all over the world to get their hands on one of these very special release drops. Anyway, the PR piece said that there was a company behind this release which promised a way to beat the bots and make sure that hype drops are executed flawlessly and fearlessly. I don't even know if that's a word. Anyway, so at first I was a bit skeptical because hype drops, especially in the world of sneakers, have been a source of frustration for so many retailers for such a long time. I mean, how do you beat the bots and the fraudsters who want to snap up huge collections and sell them at inflated prices? So I was a bit excited when I started digging into this company to find that not only is it legit, it is used by some of the biggest retailers and also founded right here in Australia. My guest today is Andrew Lipp, CEO and co founder of Equal. That's EQL pronounced Equal. Andrew is a former sneaker head who felt the pain of missing out more than once and with the help of two former Google colleagues decided to create a solution. Equal is an end to end platform built for retailers to reliably sell the most in demand products to more customers and get more value out of every launch by facilitating site reliability, accurate payments, scam prevention and helping to ensure a level playing field for customers. Equal have clients such as Sullivan's, Cove Whiskey, Footlocker, and Culture Kings and were named as one of Fast Company's most innovative companies of 2023. In this chat, Andrew shares his insights on how to manage the chaotic conditions of an E Commerce hype drop. He also shares the telltale signs of retailers that are in need of launch support. And he gives us a look inside his wardrobe and shares the special sneakers that have formed his business Milestones. So let's get into it. Thanks to our partners, Shopify plus and Paclio. Here's our conversation with Andrew Lipp, CEO and co founder of Equal. Andrew, welcome to ADD to cart.
[Voiceover]: Thank you for having me. It's awesome to be here.
Nathan Bush: Pleasure. I saw you guys in the news and I was like, I've got to get some time with you. I've got to dig on this. It was such an amazing story to
[Voiceover]: me and one that I felt.
Nathan Bush: I don't know about you, but it went under my radar. But let's kick off way back. One of the things that I read is that you started with a cold email to Nike. Not many stories start like that.
[Voiceover]: Is that true? It is true. So some background on how we kicked off. I'm a miserable sneaker fan and I'm probably too old, to be honest with you. I have three little kids. I'm not lining up late at night. Yep, you're probably in on this with me. When I was a kid, though, you know, I was really into it. I get my new pair of sneakers. Back in my day, I sound like a grandfather. You know, you had to have a friend or a parent's friend that went to the US to get their hands on a pair of sneakers you wanted. And, you know, my dad would know someone and they'd get me a pair. And then, you know, when I'd go to bed, I had like a nightlife that I would set the sneakers up on the ground, like, really nice. They had the nightlight shining and I'd look at them while I went to sleep. Right. That was my, like, I love them. And I, I grew up in the era of, you know, Jordan Plank, Shago Bulls. I collected NBA cards. You know, I liked collectibles. I got a bunch of comics. So I was a little bit kind of in the collectibles outgasty kind of straight culture and, and that world. And it carried on, you know, as I got older. And when I say older, you know, in my. Call it five or so years ago, I was, I was still in that sneak world and trying to get my hands on things. But I was starting to become pretty disenfranchised by what was going on. Right? You would go online, sites would crash, bots and scammers would clear out stock. You try to line up, you'd have to line up all day only to be the last one in the line that didn't get the thing because everyone in front of you is getting the product, taking a photo, putting it on ebay and you know, and reselling it. And so I was getting really, really frustrated.
Nathan Bush: Did you ever like do a social media post, get to the point where you're like, damn kids, like one of those old men shouting at Cloud?
[Voiceover]: You know, I like to think that I'm still quite youthful, so I kind of steer clear of those types of symbolic moments that my age. But in my head I was definitely thinking about it. What I found was that these commerce retail partners were struggling with this wedge of commerce. And it's very different and unique to standard commerce called inline commerce. It's chaotic, it's a frenzy. You get all your sight load. At the same time, there's a lucrative resale market. So people are trying to do really crafty things to get a whole bunch of stock. And then ultimately real fans don't get handsome products. And I was one of those real fans. And I had this experience with a retailer in Australia, in Melbourne, where I jumped online. It was a collaboration with Nike and Stranger Things, the Netflix show. Oh yeah. I wanted a pair, pair of these sneakers and I got them right. It was in my car, transaction was done and it said come into the store to pick them up. Awesome. Go into the store to pick them up. No sign of my transaction, no record of a product unit allocated to me, no way to return the stock. Even so, my credit card had been debited because what had happened was cart went out of sync with all the traffic. Right. Order management system, infantry all went out of sync. As I got transacted for the product, someone else obviously had taken the unbeknownst to them had taken the product out of my cart and it's gone into their cart, right? And so everything fell over and I thought, there's got to be a better way here. Also, sneakers are a proxy for all things hype. I think that they are kind of in the press at the moment, but there's a whole bunch of other kind of categories I can talk about. Where this problem is is the same. I was in a marketing role. I was a brand marketer and performance marketer at Google. I've been there for nine years. I know how to make a pretty looking deck. That's probably about it at the time. It's not a bad background. I can make a nice looking deck. My two founders are from Google, so three of us in total. And I put together this knife deck and I said, hey, there is this problem that retail partners are experiencing where they're not getting products if they have real fans and it's rewarding cheats and scammers basically, and how do we reward real fans? And we sent a cold LinkedIn to a crew of the Nike folks in Emea and they responded, they said, come and, come and pitch this idea to us, you know, and we were elated. You know, we were shocked that we even got a response.
Nathan Bush: And at this point, did you actually have the technical solution or you're like, we just need to make it happen.
[Voiceover]: We had this idea of Hype infrastructure as a service that could sit on top of your e comm stack and allow for managing like massive scale of traffic. We had some ideas about bot and scammer prevention and we knew that there was a way to run payments in a very accurate way. We had dodgy wireframes that I put together and conceptually the idea without any technical discovery, right? And they said to us, interesting idea. Like, we think that's really interesting. Go and float it around to a few retailers, right, and see if you can get some traction. And we did. We floated it around to this retailer called Maison Chateau Rouge in Paris in France, who was about to do a Jordan collaboration for this collection. And they were worried that their site was going to crash, what's going to clear out stock. So they said to us, hey, we use your product. And we're like, fuck it, we don't. This is great, but we don't have that product. So we sprinted, right? And we brought on a few engineers as freelancers. My co founder Patrick was a principal engineer at Google, so he's kind of very deep in the tech. He's our CTO today. And James, our other third co founder, he's a sales in retail and sales for Google. So perfect experience. And we sprinted on building what was our first version. And we got it up for this launch, right? It scaled for the load, it did some bot and scammer signals. I mean, it swayed in the wind with the traffic. Like we used a lot of tech debt and sticky tape, but we got through it. We ended up facilitating a lot of transactions for this retailer. Yeah. And as I said before, we thought like, sneakers are a proxy for hype. Yep, there's a lot of sneaker retailers out there, but there's a lot of apparel, luxury goods, travel, alcohol, collectibles, tickets. All have the same problem. High demand, low supply, kind of an influx and frenzy of traffic and a lucrative resale market that presents the same problem. And so we thought it's time to rebuild, it's time to go on the hunt. We had a few other retailers that were passed our way. We piloted some of the tech again and again with three retailers. So it was one in Paris, we did patrol in London, and we worked with another retailer called Maha in Amsterdam. And then we went and rebuilt the tech. We raised some money. Our first round of capital with Airtree out of Australia, we brought on a bunch of angels who were like, my socks were knocked off of the quality of angels we were able to land. We had Harry Stebbing, you know, the 20 minute VC out of the UK, prolific investor. We have a whole bunch of, you know, other really interesting online founder of checkout.com out of Europe, we have the founders of Linktree. What a brains trust to have around you as well. Incredible skills. The ex CEO of Hulu, who's our manager of Minot and who's now the CEO of Peacock, Kelly Campbell. So all these fascinating folks we want to pick that had done it before, right? We brought them on, we rebuilt. Then we started actually acquiring customers locally. Footlocker out of Australia, New Zealand, and then we acquired Culture Kings Australia and New Zealand. Fast times retailer Australia, and then kind of grew from there.
Nathan Bush: Did that list include your Melbourne retailer who you had your stranger things experience with?
[Voiceover]: We've had some chats, but they're not a customer today, damn it. But, you know, and then, and then the book of business grew because we saw the problems really kind of presenting itself. So now we do global launches for Crocs. So Crocs is high heat, you know, scarce. They do a lot of collaborators with rappers and artists. They're amazing. We do all their launches across all their markets. Us, Europe and Asia and Australia. Footlocker, we run all their launches globally other than the US so we're live in about 12 markets. We work with LVMH and Tiffany's for their recent drop, Mr. Winston Sullivan's Curve alcohol brand. We work with Undefeated out of California, Atmos out of the U.S. extra butter out of the U.S. we've got collectible companies coming on board, so MLB, NBA cards, figurines that they'll actually be live in about a week or two. So we've kind of gone from the Humble email cold to Nike to We've won probably 3,000 launches globally across 14 markets, around seven languages and we've probably analyzed about 50 million signals across a whole bunch of users.
Nathan Bush: Amazing. And what about Nike? They on board?
[Voiceover]: So Nike, we do a lot of stuff with their retail partners and so we help out indirectly that way and I think there will be some fun and interesting things in the future.
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[Voiceover]: Think.
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[Voiceover]: Yeah.
Nathan Bush: So let's talk it through. We're going to have a lot of people who are listening to this who know that rarity and hype drops have been tricky in E commerce for such a long time.
[Voiceover]: Yeah.
Nathan Bush: And I think it almost got to the point, especially over Covid where there was a lot around that, especially around the NFTs and all that sort of stuff where people are like, I don't think it's a problem we're ever going to be able to fix. We're never going to be able to beat the bots and for them to come out and hear that, you know there is a solution out there. Can you share more around how the actual solution works, what kind of signals it uses and the processes to make sure that this is a fair process.
[Voiceover]: Yeah, totally. So from the retailer side, so our value prop is that we solve for infrastructure that scales so site load, you know, when it all hits the site at the one time, we solve for Botan's gamut detection. And I can dig into that a little bit further. But it is as it sounds like, getting products into the hands of real fans. And we solve for accurate payments, meaning we want high throughput of payments in a very accurate way. So you don't oversell or undersell. All kind of automated. So you remove the operational pain, right? Historically, when retailers run these launches and as I gave the example earlier, they pick through the rubble of this chaos for weeks or months afterwards, right? Sites crash, they don't know who got product, did they oversell or undersell? Are they undersold? Where do you put the stock? Does it go back on the shelf? How do we manage it? With warehousing, our customers didn't have a great brand experience. Our customer success team got so many tickets like it is just operational pain. And I can imagine a lot of
Nathan Bush: these products, there's not a huge amount of margin too. So a lot of the pain that is caused, you're not making much money at the end of these huge drops as a retailer.
[Voiceover]: Well, that's right. That's one thing. And the other thing is like a lot of these launches are a small facet or a small wedge of their overall commerce, right? So you have retailers that, you know, they sell these high heat Nike products or Crocs or Adidas or whatever else, and that's call it, you know, 10%, let's say, of their commerce and 90% is of standard retail. They need to make sure their e commerce site's working, they need to make sure their bricks and mortar are in order. They need to make sure supply chain operations are working, they make sure that staffing is working, right? But this wedge of commerce takes up all their mindshare when they've actually got to run retail, right? So it actually becomes massive load for what is a small wedge, right? And it causes more pain than it actually contributes to revenue and upside. But the thing about these launches is it's a honeypot, right? Because the launch, you get so much demand for not many products. How do you maximize that experience? How do you actually capitalize not on just delivering the operational benefit, but giving the product the ceremony it deserves, giving the brand that the experience it deserves, making the customers feel amazing, making your loyal customers really better, right? It's a real opportunity for customer acquisition and for insights and for being strategic. And at the moment it's not being done that way. So your question to how does it work? So a retailer gets access to a portal like kind of like a content management system to some degree. They pop in the details of the launch and that might be everything from product images, product name, product description, and they click publish and it spins up A launch page that looks like a product landing page. It lives on their custom domain, so it can be launches.footlocker.com, you know, launches.crocs.com or you can live on our domain that we provide them, which would be like Tiffany's.RunFair.com RunFair as a certification around fairness that we've trademarked. That page gets spun up and it looks like their brand experience, but it's enabled by our tech and in doing so it can manage the scale and volume of traffic load. The retailer then captures all the entries and interests in that, in that product there is a timer. So it might be a five minute drop, it might be a 15 minute drop. Sometimes we have a time accounting up. So it's just like get your, get your entries in. Because this is open for a limited time. Once the draw finishes, the retailer can then update its inventory just to make sure, you know, the tree has been delivered to store, you know the inventory has been allocated correctly. Because the biggest challenge you have is, you know, when inventory isn't allocated, they double check that and then they click run payments and run payments to give you the inverse. So you understand how these intersect you as a consumer. Nathan goes in and goes, I want a pair of Crocs Lightning McQueen's or I want a pair of Jordan Fours.
Nathan Bush: Exactly what I would order.
[Voiceover]: Well, there you go. You enter your details on that page, you put your credit card details in, you put your shipping details, or you can choose to pick up in store, we did postage or pickup. You submit, you get a confirmation email that looks like it's come from the retailer that says, hey Nathan, thanks for your entry from Footlocker. And then as you've selected your size as well. So what we're doing in the midst of all that, we're doing a whole bunch of signaling, right? So we're looking at down the browser, what does it look like? We're looking at payment types you're using. We're looking at does your address look like someone else's? We're looking at cohort analysis, we're looking at longitudinal data points when you previously used our platform. We're looking at live learning models that are looking at our trends coming from a suburb, estate, an area, other sequencings that are happening that should be weighted down. And we're starting to uplight you for doing great things and down weight you for looking like you're trying to scam, you're trying to buy, you're using automation techniques, etc. And then when footlocker choose to then run the payment when that draw closes or crocs or whoever tries to choose that fast times they run payments. And what we basically do, it's automated. It goes, Nathan is a size. I haven't seen your feet, mate. So I'm going to guess a size. A size 11 put on. There you go. So Nathan is a size 11. Do we have one available? How does he look like? He's got a risk profile. Is it good or bad? Right. And they're shades of gray. Yep, he looks great. Okay, let's auto debit his card. Because an intent to purchase from this car, we debit him. The money lands in footlocker's account or it lands in fast times. Can whoever the retailer is and then we go to the next person, Andrew, size 10. Is there a size 10 available? Yes. Let's debit him. Until the inventory is gone and sold through debited in in random order based on the risk profiling. You or I will receive a winner confirmation that says or a success confirmation. Hey, Nathan, congrats. You've just been debited for this product. Here is your invoice. It'll be sent to you here. Or here are your pickup details to go, you know, in store and grab it. That's basically the sequence. Keeping in mind that wins are scarce because products are scarce. So there is a bit of luck on side, but there also is a bit of like, play fairly and your chances ultimately will be greater. And then we have a thing called the equalizer, which is ultimately the more you engage with our platform, so the more you lose, your chances increase each time until you actually win to kind of, you know, ensure that the love is being spread, you know, really nicely
Nathan Bush: around and on that equalizer as well. Obviously you're gathering intelligence from a number of retailers who deal in scarcity.
[Voiceover]: That's exactly right.
Nathan Bush: Do you also then have like a black book of, you know, IP addresses and things like that where you go, hey, we're we're calculating our learnings over time.
[Voiceover]: Yeah, we absolutely do. So the benefit for, for a retailer out there is we have this amazing vantage point, right. We've got retailers on our platform. We see what people are doing where they're getting crafty and like, keep in mind, I'm actually not against resell or anything like that. I'm against bots clearing out volumes of stock. Right. I want everyone to get one pair. I think that, you know, if you got a pair and you don't like and it's Got lucrative resale value. And you're wanting to sell it, go for it. Like that's the world we're in. We're just more against like people clearing out hundreds of pairs, you know, tens of pairs and kind of gaming the system in that way. But yes, retailers, it's all automated, right? So basically retail spin up a page and that's the end of it. Don't have to touch it. No operational pain, no resource management. It sells through debits are made, invoicing is automated. At the end of that process, we have an order file that gets ingested into their backend. Depending on what it is shopify, there's an auto ingestion, you might want a CSV file, you might want something to be uploaded into an sftp, there's a piece of middleware that might pull it into their back end. But really it triggers in their backend E commerce if it was a standard order. But it can be tagged as equal launch or it can be tagged as a launch. So it's kind of different and reconciled for finance against launch business versus your standard ecom retail or bricks and mortar. But really it start to end. So you can have it where it triggers your warehousing to actually ship, or you can have it where it's, you know, ingested into your back end. Order management system is, is kind of triggered with an order, but then you have to manually trigger the warehousing so retailers can choose how they want that endpoint to exist.
Nathan Bush: So if you are on a shop for or a BigCommerce or Salesforce or whatever, you wouldn't list the product as a normal product. You would list it separately through equal. But then once the equal process has completed, that can then come back into the platform and into your fulfillment process.
[Voiceover]: That's correct.
Nathan Bush: Okay, that's really interesting. And is it just a simple plugin?
[Voiceover]: It's very easy. I mean it takes us a few minutes to set up on our end where you have to get a Shopify key and we just set up. So the order ingestion works and it kind of, it appears in your system in the right way. So we make sure the export file kind of matches your data fields. Gotcha.
Nathan Bush: And from a commercial model, how does that work with your retailers?
[Voiceover]: It's a really great question. Today we clip the ticket on the gmb. So we clip the ticket on the transaction usually sits around three and a half percent that we take on the transaction clip. That's excluded from the payment processing fee. Okay, so it's a payment Processing fee, what they pay for their standard inline commerce anyway. And then our three and a half cents. It's not cheaper.
Nathan Bush: Yeah. Okay, cool. Nice and simple. You mentioned in there that you had the certification.
[Voiceover]: Yes.
Nathan Bush: What does this certification look like?
[Voiceover]: So we have this thing called Runfare, right. So Runfare is a certification that lives on our pages on any retailer who uses us. It lives on their launch page. And it's really a moral code of conduct not dissimilar to a B corp or a heart foundation where the retailer has committed to delivering the launch in the fairest possible way. Right. To reward real fans to ensure they've got some rigor around not rewarding bad actors and bots. And they kind of sign up to the pledge and then the. On the consumer side, the idea is that if consumer sees a run fair certification, it means they're going to kind of play by the rules to some degree. Right. And try to play fairly with the idea that if they don't duplicates, automation, bots, et cetera, they'll be clipped, you know, they won't win. That trademark is really fantastic for a whole bunch of reasons. Right. One is it's a stamp of quality that retailers really see value in. Because what's often happened with our retailers is they've had a really hard time running these launches and they've got consumer backlash. Not because they're not trying the best, but because commerce tools aren't built to manage this type of in demand commerce. And so naturally just there, they can't work out how to reward real fans.
Nathan Bush: And I don't think you'll find a customer in a worse state of mind than an emotional purchase, something they're so passionate about at a highly time critical limited edition. I couldn't think of a worse customer mindset to be dealing with.
[Voiceover]: That's exactly right. They're angry and they're in a frenzy and it's kind of fair. Like they've got. We do a lot of stuff around the psychology of hype. Like what's the state that users get into in these moments where blinkers are on? You just want that thing and that thing is the most important thing in the world. Just for a few minutes, right? And you nearly kind of come out of your own skin. The dopamine hit is so big that you want that thing so badly that when you see other people get it and you think it's been dodgy, you just want to, you just want to scream, right? You get up on your socials and you said, have I done it before. I haven't, but people do. It's so unfair and this and that. Now retailers have a hard time like because this wedge of commerce has not been serviced yet. Right. They use standard ecom tools, they use standard web product pages, they use standard, you know, first come, first serve commerce tools to sell these products. And it's, it crashes. Right. Bad things happen. So this Runfest certification is nearly like a signal to the market that they're trying to do something different and put that consumer first. And it's becoming a little bit of a rallying cry for the end consumer. Like we see on launches that we haven't run that maybe haven't done so well, we do see these consumers saying, hey, make the launches run fair. Right. Use equal. Right. Put your customers first. We love that.
Nathan Bush: Oh, it's the afterpay strategy of getting your customers to ask for the solution before it's implemented.
[Voiceover]: That's exactly right. You know, and like our mission, get products in the hands of real fans. Like that's what we want. Obviously there's operational plan is sold for retailers. There's a whole bunch of stuff that goes on under the hood. But ultimately it's like we want you, who's the biggest fan to get your hands or at least feel like you've got fair access.
Nathan Bush: Yeah. And I can imagine that you've seen by now your fair share of crazy hype events. Is there one that stood out for you?
[Voiceover]: Great question. We've seen a lot and we keep on resetting the watermark. I mean, we were so fortunate we got to work with LVMH to run the Tiffany's and Air Force One drop out of the US So directly with Tiffany's. And that was just for me, a brilliant intersection of two brands. One, premium heritage and luxury meets Nike, who really knows how to play in that space. Combined with the marketing efforts around it and the target towards, you know, this new shopper, we saw a real kind of passion and excitement around that product launch and it was, I mean, we did it in just recently and arguably it'll be the biggest launch of the year, I'd say, you know, on the calendar for anyone. That was amazing, insightful and interesting. With demand through the roof, did you get yourself prepared? I did not. I did not, unfortunately. But like the nature of running a fair launch platform is that I get nothing. True. So that was pretty good. I mean, we do launches for, you know, for the likes of crops who are a fantastic brand, really understand their user base, know what they like, you know, and do collaborations. Like I said, like lightning McQueen collaboration. Like it's, it's a really fascinating product. Right. It's like the car from the Pixar movie Lightning McQueen from the movie Car. The Pixar movie. And when you walk, it flashes. There's a lot in it. Right. And it's. And it's red, but it goes like. People crawl over each other to get their hands on it. It's got a lucrative resale value and people go wild for it. Right. We've done that drop twice and that was like, it was, it was kind of organized chaos. But wow. Like they've really landed that consumer insight around, you know, who wants their products and, and what the demand is for it. And it's, it's super fascinating.
Nathan Bush: Crocs have done just the most amazing job of going from being like the gardening laughing stock to being this hyper collectible product.
[Voiceover]: Right. That business is amazing. Yeah. You know, it is genuine. I think it's like shoe of the year for 2022 from memory or maybe I got the year wrong, but I'm pretty sure it is. I think it's. It's broad reach becoming outside of call it the, the funky looking shoe to like mainstream is really interesting. I never thought I would have a pair and now I've got a few and they're super duper comfortable. But more so is the. Their collaborations are off the charts. Right. And we've worked on 40 or 50 odd, everything from rapper collaborations with SZA to as I said, Lightning McQueen to really famous designers like Slahi Bambri to like TV personalities, serials we do collaborations for. And they go really wild because they hit this amazing zeitgeist cultural insight that really draws on people in a fascinating way that brings this desire out of them. Like hats off to an ambitious business who continues to recreate itself.
Nathan Bush: Amazing. And you mentioned obviously sneakers is at the heart of this and the most obvious use case.
[Voiceover]: Yeah.
Nathan Bush: Or at least the starting point.
[Voiceover]: Yeah.
Nathan Bush: What kind of products have you seen Hypedrops expand into that maybe you weren't expecting.
[Voiceover]: Great. So, you know, we started with sneakers. We now do sneakers, apparel, collectibles, alcohol, and we've done some tickets to retreats. Right. The world that we. So. So some fascinating hype that I think is interesting. You know, like Messina ice cream cakes. Right. They sell out. There is high heat for them. Really interesting. I met a company that does native animal brooches. Right. And they do something like 85% of their revenue in three minutes a month. And it's like Demographics skewed higher. Right. But like, it goes nuts. Tickets are a category that I think is ripe for the taking. It's a very interesting category of players that have cemented themselves in this. In this world. But you would argue, you know, the kind of appetite for fairness is really there from the consumer side. We've seen a lot of moments in the last six months where ticketing is probably the value of ticketing and its delivery mechanic has fallen over. Look at Taylor Swift launches, Drake launches, Glastonbury sites crashing. It's a world that I think consumers are really driving some change for, and there's some policies that are being implemented too. But I think our kind of fairness engine and how we upweight and down weight and give access to real fans based on inputs and signals and the like could be a real value add to those types of. Those types of businesses. I also think we can help ticketing increase yields because we can capture interest for certain types of product skus, ticketing, skus and understand the demand before they actually release tickets. So there's ways to kind of, like, increase volumes the same. So, yeah, I think there's, you know, scarcity lives in weird and wonderful corners of the world that, like, when you dig into it, you realize, like, it goes everywhere from ticketing and collectibles, which is like the OG of like, scarcity, to then, like, funky passion enthusiasts like manual keyboards and gaming mouses and Barbies, you know, Mattel creations, a whole bunch of really fascinating toys, like 100 Years of Barbie books and, you know, WrestleMania characters. Then we also track, like, a lot of the resale sites and groups and communities to see where, you know, botting is coming next. Like, the Australian Mint just got botted for a collectible coin. Right. You know, we see Australia Post getting bought up their stamp collection. We see, gosh, like, just there was this, like, Amazon was selling this thing in the US which is you can turn Cheetos into dust that you could sprinkle, right? And that was getting botted and resold. Prime drinks are getting botted and resold. Like, there is just this world of, you know, our world is chase the fad.
Nathan Bush: Yeah.
[Voiceover]: Chase the fashion and then chase the bau. And as I said, you got tickets and collectibles in the bau. You got fashion, where brands are in and out of vogue. Like they have their day in the sun and then they move on. And then you've got your sugar here, right? Like something that really goes big, really quick. One drop and then they. They move on. And so we do get to see this diverse kind of end to end of how these, these products go in
Nathan Bush: market and obviously the Cheetos dust one. That's a long term trend.
[Voiceover]: That's, that's not. Well, I mean when I said it I saw your eyes light up mate. I feel like there was some interest in it. So you were as curious as I was.
Nathan Bush: Exactly.
[Voiceover]: Foreign
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[Voiceover]: Yeah.
Nathan Bush: At a time when things like NFTs, blockchain. What we're seeing around AI at the moment is there's a lot of investment, a lot of advancement in that technology. You've essentially created a technology that said we're going to take on the bots. It's a brave position. How do you stay ahead of the bots?
[Voiceover]: Yeah, exactly. Bot creators are hyper intelligent and they're very smart folks and it is a cat and mouse game to which like we're winning most of the time. We discover parts where we've seen some, some things happen. It's funny because we kind of like still use and are ambitiously using, you know, AI and ML and live learning models and a lot to solve for these, for these problems. So we're kind of like we're on the same slipstream when it comes to technology. You know the way that we do a lot of our preventing is really interesting. It's not hey consumer or hey fan, draw a picture of an orange or pick the cat which right it's under the hood. Like you have no idea what we are signaling but there is a whole bunch of signals that combined with other inputs have meaning to us and therefore help us make educated choices around who to sell to and who not to sell to. And when you combine that with learning models that look at trends in real time and learn we are playing with, call it like arguably the cutting edge of tech is allowing us to do this. So we are very much kind of capitalizing on the trends that are out in market to solve for this. But it's a, as I said, it's a bit of a cat and mouse game. But that's kind of why we're in business, right? Like, like it's, it's why we're in business. That's an evolving state to which like retailers don't have the time or capacity to solve for. Right? Yeah, big ones don't, you know, mid tier don't, and certainly small retailers do not.
Nathan Bush: On the advanced technology piece, are you planning on incorporating blockchain into your solution at all or do you see yourself as an alternative to what has been kind of dreamt up around, the opportunity of blockchain as a aspect ownership mechanism?
[Voiceover]: Yeah, I mean I wish Patrick, our CTO was on this call. A very passionate, passionate opinion on this, which I think you folks could go toe to toe on. The concept of blockchain is kind of like, is interesting to apply to the world that we play in, but potentially is unnecessary. And we're in this really interesting position where we can already track primary market sale. Who's getting access to what. Is it real or is it fake? Because we can sort out the primary market sale for retailers, we don't need blockchain to do it. You know, it's kind of user account based and we look at interactions and stuff. Do we ambitiously need to go there? Not if it's unnecessary. I think is the point. Like I think the biggest challenge that you have as a startup or in e commerce is choosing the right tech based on whether it helps you versus whether it's the right. It's the tech being spoken the most about. And you know, it's fascinating. Like if you chatted to us 12 months ago, the amount of people that were telling us to do NFT drops, right, was out of this world. Like, hey, you do high heat drops, you solve bots and scammers, you can do accurate payments, you must be able to do digital wallets and you must be able to do ownership and mint things and all this kind of stuff. And the beauty of having a startup is your resource constrained and so you can only focus on the most important things. And for us we were like, we could, we've got all the stuff in front of us, so let's go with that. And thankfully we didn't focus on all those things and the markets changed significantly and there's still value somewhere along the way for some Parts of that. But today the markets change for that. And likewise, when you talk about ledgers and blockchains, you really need to be kind of conscious and curious, but you also need to be really laser focused on where the value is. For us, our value is helping the world's biggest business sell their most in demand products. If we blur the edges of that, I think we become less focused and then. And we start to stray. Right. And then there's billions of other opportunities we could work on. But I don't know if we'd have a business if we did that.
Nathan Bush: That takes a lot of discipline, especially when you're at a stage of still raising capital. And those sneaky headlines around using blockchain and AI and all those kind of things can light up some eyes. Would have taken some discipline to stay focused.
[Voiceover]: Certainly.
Nathan Bush: Simple.
[Voiceover]: Yeah, that's exactly. I mean, but we actually raised another round about 12 months ago. So we raised inside partners out of New York and then brought on a whole bunch of other really fascinating angels. It's funny because, like, with less money, you're conscious of not working on all these kind of odd things and rather getting really focused. With more money, you're actually so paranoid about spending that money. Well, because you would have to justify the expenditure to your board or to your investors if you started to stray. It kind of works both ways. Right. Like money is a blessing, money is a curse. And we're very privileged and very honored to have investment that allows us to do what we want to do. But also, having people's money makes you very conscious about how deep you go in certain areas and how much you kind of avoid the noise.
Nathan Bush: Absolutely. So if we've got retailers listening to our conversation going well, I think we're on the borderline of whether we would need a scarcity solution or a hype drop solution like equal. What are the signs for you that you need something above and beyond the standard platform to handle drops?
[Voiceover]: Yeah. So first and foremost, there's a little bit of a product strategy that comes into play. If you're spending a lot of time on product launches and product experience, customer experience, innovation teams, marketing teams, product teams, e commerce teams, are all rallying around these, like innovation streams. Try to launch the thing, and then when you launch the thing, it doesn't get a ceremony it deserves. Right. Where you know, you've done all this effort on marketing and all this investment and you get to the website experience and all of a sudden it falls off a cliff. You're using the wrong tools. If your site is crashing. If your customers are yelling from the treetops and have backlash on how they weren't able to get access fairly to the product they like. If you're seeing your product on resale sites, which is actually really fun and actually kind of a proof point, you probably got a thing that's scarce. You probably, you probably need help. And then also if you're feeling like you're not maximizing the moment. Right. Like, so, you know, the biggest thing that we help retailers with is that they might have a scarce product, but they've got infinite, not infinite, but high amount of demand. They could have 500 units. And again, we've seen drawers with 600,000. Yeah, 800,000 people trying to get their hands on things. Now, those 800,000 they have, they were ready to transact with your brand and they weren't able to, but they were putting their credit card down. Talk about intent to purchase, that was like, I was ready to pay in this very second. Right. They weren't just clicking, I'm interested. They were like, debit me as soon as you get that thing right. Now, if you only sell the 500 you had, I'm not going to do the math quickly, but a lot of like 790,900, whatever amount of people almost got it. I know. Wanting to buy your thing.
Nathan Bush: Yeah.
[Voiceover]: So what are you going to do with them? Did you capture them? Do they just drop off a cliff? Did you never actually get their details right? Did you never understand what it is they wanted? And could you have cross sell, sold, could you have upsold, or are they your next candidates for the next iteration of what you're selling? Could you have actually looked at that demand and worked out, you know, what? 500 was silly? Our actual demand, like the hype equation, we could have actually created 100,000, serviced, call it 8% of the demand, whatever, 12% of the demand, and then worked out commercially what the next upside was for us. Right. You're losing. You're missing out on maximizing the moment. You are not capitalizing on the interest, and you're not acquiring customers in a way that you should be. Right? And so that's where we come into play. Like, we are a platform and we're kind of operationally driven and automated, but we capture demand. We're a great customer acquisition tool. You can reward loyalty with us. You can think about what you do next. We've got live launch insights that tell you, like, who wanted what, when and what sizes were the most popular, and at what point did they want it and then did they drop off and when did bots kick in and all this kind of stuff. We also can look at cross category interests. Like people wanted this product over here, but that product over there. Should you be thinking a little bit differently about how you create products? Should you be thinking differently about inventory? Right. You put all this inventory over here when it should have been actually in that market. Right. Or you created for the wrong size skew. Right. The demand is actually in smaller sizes. So to answer your question of when should someone think about us, it's when the demand exceeds supply, when there is backlash from your customers, when your current tools aren't delivering to this new edge of commerce, when your team are resource constrained and they're getting smashed by the operational pain and the fallout of these types of launches and when you want to maximize the moments and deliver for a fair experience.
Nathan Bush: Makes a lot of sense. Now with equal it sounds like you've had amazing journey so far. Global investors, global retailers and brands on board. You're still based in Australia, so we've
[Voiceover]: got majority of our staff in Australia. We have one person in France, another in Amsterdam, one in Utah and then across mainly in Melbourne. But Sydney
Nathan Bush: plans on expanding.
[Voiceover]: We have plans to expand in the US Our revenue concentration is now largely out of the US and we're bringing on in the next four weeks you'll see us bring on probably six new US retailers. And so I think our business will reorientate around the US a bit more.
Nathan Bush: Amazing. What an amazing Australian story. So far, so much to go.
[Voiceover]: Thank you.
Nathan Bush: Andrew, I've got to ask you, you've mentioned a couple already, but what's your dream pair of sneakers for the collection? If you get your hands on anything, what would it be?
[Voiceover]: People ask me this a lot. I've become a sneaker boy rest these days. So like I look from the outskirts. But you know, it's funny, the first shoe we ever launched was this Jordan, this Jordan sneaker, which I couldn't get right. I ended up going on Facebook Marketplace and I bought it for an exorbitant amount of money from a very young kid who actually tried to legit check me like, like, because he didn't know if I was authentic or not. I had nothing to show him other than a LinkedIn profile. I was like, here's my LinkedIn. Does that, does that help you legitimize me? I don't know. And it sits in my, in my room as the milestone shoe that kicked off our adventure. The next milestone shoe for Me was the Tiffany's Air Force One because it symbolized far more than that. It symbolized far more for us, which was we plan luxury, we work with high value brands and they trusted us to deliver the experience because we showed we could. And that like as a founder in commerce, like, it's a validation that you don't come across often and then when you do, you're like just filled with joy that the thing you're doing is helping retailers and they're prepared to put value on it. And so for me, that's the symbolic next shoe that I need. Would I ever wear it? I'm unsure. Would I want it for staff to hang, you know, like to like celebrate over, like. Absolutely. It's the one that symbolizes our next chapter of many, but there's few of those in our world and it's one of them.
Nathan Bush: It was such a divisive design in terms of so much hype around it. But you had your fanboys, fan girls, either side either loving or hating it. Didn't seem to be many people in the middle of that one.
[Voiceover]: Totally, totally great stuff.
Nathan Bush: Andrew, what is next for yourself and the equal team? I know that you mentioned international expansion from a technology customer, everything else perspective. Where's your focus?
[Voiceover]: Yes. You know, at the moment it's really interesting. So, you know, we were a Covid born startup in the midst of lockdowns and people sitting at home transacting online. What we're finding with retailers is they want to change that back to, you know, in store experiences or omnichannel, which is a very buzzword, but call it, you know, online to in store and the experience in different ways. We're looking at a lot of ways to actually drive foot traffic back in store and run these launches in a hybrid fashion like solve the demand kind of online or at least contain the chaos still in store with interactive things. So we're working a lot on that. The other part we're doing is about locals and communities. So this big thing around hobbies and enthusiasts and passionate folks is they all interact with each other and they thrive amongst people they can jam on their passions with. And retailers also like to reward locals and communities and fans first in the local areas. So we're looking at a lot of stuff around how do you deliver a product that's like catering to locals first and building community, which I think a lot of people have forgotten about as kind of, well, as Covid eased up, but in the thick of COVID So looking at a lot of that stuff, membership Integration. So loyalty and membership integration. So how does your loyalty program kind of intersect with our platform to deliver kind of tiers of access, which is really interesting given, as I said, like, you know, these launches are a really interesting way to acquire customers. So that's a part for us. And then just like, you know, we want every retailer and every brand that sells the most highest demand products to use it through our platform. Not not only because it saves them so much operational pain and it's such a value add, but also because we want real fans to, to get access. Sneakers around Jection Point Apparel, as I said, we do it Sullivan's Cove Whiskey we work with on the alcohol side but you know, we're collectibles. As I said, we're launching in some high profile collectibles but it's not just about sneakers. It's about getting any type of high demand product into the hands of real fans. And so we'll be expanding our categories pretty quickly with kind of lighthouse accounts across each category too.
Nathan Bush: Love it. I reckon you should put your focus on Facebook Marketplaces as well. Get some validation happening there.
[Voiceover]: Yeah, yeah, I think there's some interesting things we can do there. We often, yeah, there's some really interesting places we can meet our consumer and if transactions are happening on Facebook Marketplace, so be it. How can we be there? Love it. So I think there's interesting things we can do.
Nathan Bush: Great stuff. Now, Andrew, if we've got retailers listening to this or even potential partners, what's the best way for them to get in touch?
[Voiceover]: Yeah, you know, I've actually been trying my hand at Twitter recently. Again, I'm going to sound old, but I don't think it's old. I just think I'm just a capacity with what I can manage. So I'm not going to say Twitter hit me on LinkedIn. Like you can find my profile very easily. Just DM me. I check it all the time. Please reach out that way if you've got any questions. If you've got an ambition to kind of size up whether this is right for you or if you just want to kind of think about insights, we've got a whole bunch of category and consumer insights on the back of all the launches we've run. And if you're looking at kind of how to, how to think about Gen Z in an interesting way and it's kind of shopping themes, hit me. We've got a whole bunch of insights that we'd be, you know, glad to share within reason for the right folks.
Nathan Bush: Amazing. You're not still doing the PowerPoints for those insights, are you?
[Voiceover]: Well you know what mate? Sometimes you can't take a deck out of a guy, right?
Nathan Bush: Like once a slide deck monkey always.
[Voiceover]: I can't escape it, mate. It's a funny one, but I don't mind it every now and then getting back on the tools and making things look pretty. But yeah, I do sometimes.
Nathan Bush: Awesome. Andrew, thank you so much for sharing the Equal stories. So far so exciting and love that you're taking on the world and can't wait to see what you do. Thank you.
[Voiceover]: Awesome. Yeah, thanks so much for having me. Love chatting. Reach out anytime if you want to jam on some other things.
Nathan Bush: I hope you found that one as fascinating as I did. Like I said, I've spoken to many retailers over the years who almost saw Hype Drops as a lost cause, an unavoidable source of problems and frustrations. So it's great to hear of what Equal have already achieved and some of the retailers that they're helping. Even better that it's a solution created right here in Australia and ready for the world. Here are the top three lessons I took from my conversation with Andrew. 1. Hype is sales on steroids. But we all know the negative side effects of steroids, right? Andrew gave plenty of sneaker examples, but how about that animal brooch retailer that does 85% of their sales in just three minutes every month? Sounds like the dream, right? It puts the four hour workweek to shame. And while we all want high demand and instant purchase, the downsides of not doing it right are absolutely massive Frustrated customers, weeks of admin cleanup, processing refunds, tech crashing, inventory, getting out of whack. It can get real messy real quick. If you want the benefits of hype, you need to make sure the operations are ready not to turn those three minutes into three years of cleanup. Number two the Hype cycle. Andrew painted the picture that hype drops are not just about the product, it's about the build up. The anticipation, the bragging rights, the collection, the emotional attachment. It's a huge thing, right? This means that when you are considering the hype job, you don't need to just plan the moment of the drop, but the lead up to the drop and the post drop communications to make sure it's a truly social and dare I say it, emotional social moment. And you need to then build hype for the next hypedrop. It's a hype cycle, as some might say. Number three, don't split your focus. When I first started researching Equal I got so excited about the opportunities with technology such as blockchain and live commerce especially. I secretly loved and loathed Andrew's response that they are letting those things stay on the sideline at the moment to find focus on the core solution that they think will work and it makes total sense and it's allowed them to scale and test the solution with confidence. If only I had that discipline to get the highlights of today's episode, head on over to add to cart.com and sign up for our free newsletter each Tuesday. We will send Monday's episode summary links and discount codes for you to go next level on. And if you're looking to explore your next e commerce opportunity, come and visit us at E Suite. We're a dedicated e commerce talent agency connecting the best e commerce talent with the fastest growing brands in Australia. Head on over to esweettalent.com where you can download the free e Commerce Salary Guide and sign up to our weekly e commerce job emails. Thanks for listening listening and until next time, keep those customers adding to cartoon.
