Harry Dixon: So that's really where like TechMate kind of comes into its own compared to the other incumbents. Because we actually want to provide that personalized deal which is relevant to you.
Rory Garten Smith: It seemed to us like the whole world was looking at Web3 and AI as like the big thing right now. And we were like, holy shit, you can build extensions on mobile. This is where we need to focus.
Elliot Rompano: I had a little freak out. I was like, oh my God, the guy who likes my doc Martens played Splendor. This is crazy.
[Voiceover]: Welcome to ADD to cart, Australia's leading e commerce podcast that Express delivers all you need to know in the fast moving world of online retail. Every week, Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course, keep your customers adding to Cart.
Nathan Bush: Hello, Add to Carters. So I lined today's interview up with one of the founders of the company that we're speaking to and we lined it up and it was all looking great. And then I jumped on the Zoom call and there wasn't just the one founder, there was the three founders staring back at me and it was a lovely surprise. It was a bit daunting at first because I hadn't had questions lined up for all three, but it was so good because what you're going to hear today is a team of founders in E commerce that really do work as a team and I think you get an idea of where they're coming from by having all three come together. So I'm really excited about this. So today we have three mates from Western Australia originally, Harry Dixon, Rory Garten Smith and Elliot Rompano. And they are now located all over the world. Elliot was coming to us from Perth, but then we had Harry and Rory from the us. They are co founders of Checkmate, an app that plugs into Safari on your mobile on Apple to automatically provide savings while you shop. Now, you might have thought that you've heard this solution before and we addressed this in the chat, but they've got a slightly different take on it and it is very interesting. Now this team, as I alluded to, they've got an eclectic mix of talents and backgrounds. One is an entrepreneur and partnerships expert, another a trend setting data scientist, and the third is a former musician who's played Splendor and competed in Ninja Warrior. So that's a first for this show. In this chat, the three founders share why they swapped traditional marketing for a different approach and Hint. We talk a lot about TikTok and the exact tactics that they've used to have breakthrough customer acquisition there. We talk about how Checkmate reached number one in the US global app charts over Christmas and how the dream team started taking shape thanks to a pair of red Doc Martens. Now, if you're listening to this in early February, we've got some really cool E suite social events coming up in Melbourne, Sydney and Brisbane. It's that second week of February from the 6th of February at a few local pubs and breweries around the place. Make sure you check out the E suite socials, especially Instagram. They've got all the details of those events, so register. I'd love to see you there if you can. We're just trying to bring together the E commerce community in a really fun and casual way. But let's get into today's episode thanks to our partners, Shopify plus and Paclio. Here's our conversation with Harry Dixon, Rory Garten Smith and Elliot Rompano, co founders of Checkmate. Harry, Elliot and Rory, welcome to ADD to cart.
Harry Dixon: Thank you. Appreciate it. Thanks for having us.
Rory Garten Smith: Thank you. So good to be here.
Elliot Rompano: Good to be here.
Nathan Bush: The three of you on here, how good is this? And I understand that you're joining us from all over the place. I might quickly, if we can just
Nathan Bush: quickly do around the grounds because we
Nathan Bush: don't normally have this format. Let's do an around the grounds of who you are and where you're coming to us from.
Harry Dixon: So my name's Harry, CEO of Checkmate and yeah, founded the company with these two lovely legends. Originally from Perth, spent the last seven years in the us. So calling in from la, currently just moved from New York, so yeah, in a bit of an empty home, but thanks for having us.
Nathan Bush: Moving boxes in the background. That's right, startup life. How good's that?
Harry Dixon: Yeah, I'll kick it to raw.
Nathan Bush: Elliot.
Elliot Rompano: Yeah, my name is Elliot, Also originally from Perth, sort of, I guess since COVID I've spent my time between Australia and America, but currently in Perth. Yeah, just enjoying the summer.
Rory Garten Smith: I'm Rory, I'm currently in Santa Monica, which I just found out is actually technically not la. This blue. I found this out like this morning. It's actually its own place. And then previously to that I was in San Francisco for three years where I actually hung out with both Harry and Elliot a lot. Elliot and I were roommates in fact, and then prior to that, also a Perth boy. So we all come from really like a very small area in Perth. That's all near each other.
Nathan Bush: So you knew each other from Perth?
Rory Garten Smith: Yeah.
Harry Dixon: So Elliot and I actually went to high school together. So we were put in the same house at Christchurch where we went to school, and we hung out a bunch. Elliot was way cool and I. He played bass guitar and hung out and went on. We all went to the same university. We went to uwa. And that's where Elliot, Rory, I think, linked up. And I will let Rory finish that story.
Rory Garten Smith: Elliot was wearing really bright red Doc Martens in a lecture, and I don't know why, but I was just drawn to sit next to him. And that's the honest truth. There's no other facet to that story. Started talking and that was that.
Elliot Rompano: I think Rory added me on Facebook afterwards. And I think I looked through his profile and realized he was this famous Australian artist called Elk Road. And I had a little freak out. I was like, oh, my God, the guy who likes my Doc Martens played this blender. This is crazy.
Nathan Bush: Red Doc Martins is the secret to everything that's come from here, right?
Elliot Rompano: That's it. We all own in black T shirts and red dot martins. That's the secret to our success.
Nathan Bush: How good now, okay, so let's get into business. Let's talk about Checkmate. It's what we're here to talk about,
Nathan Bush: and it's what you guys have founded.
Nathan Bush: Can you explain to us what is Checkmate?
Harry Dixon: Yeah. So Checkmate, I'll call it Ever Evolving as startup life is where we found product market fit is automatic savings on iPhone is the tagline. What that really means is we have a hero product in market that is an extension. And mobile extensions are extremely new. So if you're shopping on Safari on your phone, we automatically apply value. So our kind of secret sources that we connect into your inbox, email, inbox, whether that's Gmail, Yahoo, Microsoft, whatever, we pull out value and then apply it. So think about coupons. We notify you of deals, gift cards, loyalty, and all the rest. So the hero is the extension where we add, where we apply the value. We also have an app that's in tandem that displays it. So that's really where we're seeing traction in the market. But we're doing cool stuff to hopefully be the destination for shopping.
Rory Garten Smith: Gotcha.
Nathan Bush: So talk me through it from a customer's perspective. I'm assuming they're browsing a website and they're. Is it always popping up on websites that they've subscribed to in their inbox, or is it independent of what they've subscribed to.
Rory Garten Smith: It's independent. We support 40,000 sites with what we would call public deals. So like a deal that's found its way onto the Internet that we've pulled from a various location and then we have like a mechanism that infers what that deal probably does. So like 20% off jeans, adjust jeans, for instance. Right. And those are automatically applied for the user at checkout. But what Harry was alluding to before is where we're the first tool in the market that has adapted to where we think marketing for online stores is going and that is personalized. So users in like basically 2020 onwards started getting sent these personalized deals from stores where it's like, Nathan, you haven't shopped at ASOS in six months. Here's $50. If you come back and like return or hey, you just arrived on this website, give us your email and we'll give you 20% off the first purchase. There's a lot of money in those savings and like a lot of the industry is being driven there. So what our users do is they link their inbox while they sign up and we pull all of that value out of their inbox and apply it for them on the store. So whether it's the public deal or the personalized deal, we kind of recently changed our headline. But it used to be never miss a deal. It was this idea of like you have total assurance. Either you save a lot of money or you're getting the best price. And that was the main hook. And now we're automatic savings on iPhone because it actually says what the product does, but kind of a back and forth darts.
Nathan Bush: Okay, so you guys aren't the first to kind of with the old tagline, not the new tagline, to kind of go out with that message. We've had organizations like Honey pop up amongst others. How does Checkmate differ to what's traditionally been in market?
Harry Dixon: There's a couple of things and we're very fortunate. We'll get to the capital raise. But we have first employee at Honey on our cap table we have the XC of Ebace Rakuten, which is another savings tool. So really where we find ourselves kind of rubber hitting the road and getting good savings and where we see ourselves being different is that personalization factor. So when you think about your email as a place to talk to people, collect different data, it's actually a really poor e commerce experience. But it is a centralized place. So if you ever think thought about how when you interact with a brand. That's where your receipt goes, that's where your orders come from, that's where you can initiate returns, that's where you get promotions. And so there's an aspect of what we do in terms of Honey and Rakuten and things like that with like coupons and savings, which we just, in my opinion, a little bit of a better aggregator because it's more relevant, it's more personalized. It's these deals that, because of the market shifts that Rory alluded to was that brands want to prevent margin erosion. And so we actually subscribe to that as well. We really want to be using single use personalized codes. And so that's what we're building towards in terms of like a Shopify integration where we want to partner with brands to then inject them into wallets so we can actually have this kind of dynamic code generation that will go into people's inboxes so we're not hurting brands. So that's kind of a fundamental, I think like philosophy difference. Honey was a little bit more brutal in that respect. And secondly, I think the wider vision is because your inbox is such, you know, a clutter and like I said, it's. You treat it. Why treat it as messaging people that it's not a great e commerce visualization tool. And so just pulling out value from like if there's a deal, it would be hugely, I think beneficial, at least to me to know that in a timely manner. Like when I buy Converse shoes, for instance, I know that they send me deals for various different times. They're actually one of the more sophisticated retailers and I never remembered to do it. And so that promotions tab in Gmail has really kind of eroded that. And this is a bit of a long winded answer, but just given the Australian audience potentially, Justin Hilberg, the president of Surf Stitch or Ex President, was actually a guy who we talked to really early on and he was describing the impact of separation from Gmail of the promotions tab, how a lot of their revenue was normally generated from existing user bases and they just couldn't get
Rory Garten Smith: sales towards their audience.
Harry Dixon: So that's really where like TechMate kind of comes into its own compared to the other incumbents because we actually want to provide that personalized deal which is relevant to you.
Nathan Bush: Ready to go back and flip burgers for a living?
Nathan Bush: Nah, me neither.
Nathan Bush: But one of the most surprising results that came out of Shopify's recent global survey was that despite the cost of living pressures on customers, 2/3 of customers are still open to splurging on themselves at least monthly. The most common splurge, takeaway food. But even if you aren't in the grease game, it is promising. Because no matter how price orientated the market is, customers will find opportunities to treat themselves. You've just got to find the right moment to wave the smell of that juicy burger under their noses. Something to think about as you're planning 2023. To view more resources to help with your 2023 planning and see how Shopify can take your e commerce business to the next level, visit shopify.com au today.
Nathan Bush: So you've built this product around connecting into inboxes. Do you see inboxes going away as an important medium for customers?
Rory Garten Smith: So the way that we think about the inbox, this is a. I'll try to answer this briefly. We have so many thoughts on this. The way that we think about the inbox right now is it's. It's a cluttered gold mine, right? So in terms of like actual data, that's very useful to you. It contains all of your gift cards, it contains the promotional emails, but also contains your order tracking. It even contains, like when a store is having a sale, like all that e commerce information. That's where it lives. But manually searching through an inbox is pretty terrible. And so part of the wider vision is actually really creating this centralized source of your e commerce, like a dashboard for your shopping, which has kind of been attempted by other parties, but never with an inbox integration. And to us, that's really the logical way of doing it. Where it got really interesting when you raise other, like sort of the previous generation of tools like Honey. We won't mention his name. I don't think he want to be mentioned on this call. But there's the guy who led the deal from PayPal to acquire Honey about four or five years ago. We spoke to him on a fundraising call about a year ago and he actually said like, this kind of like centralized e commerce is basically a large part of what they originally intended to build. And then PayPal were like, we're going to run with the savings application part of this. And so a lot of people have kind of been waiting for someone to attempt it. It's just, it's technically very tricky. It's a very wide vision. And so it sort of comes back to where we originally started, which is where do you start? You have to win something at seed stage and series A stage. Like where does that vision begin? And we think of savings as a good wedge into that for it like that is a great place to begin with a consumer application. Win that and then slowly branch out. So we've kind of got like a 10 year goal here and it begins with winning savings.
Nathan Bush: Oh, I've got so many questions about the 10 year goal, but let's come back to that. So when we were talking, we were talking late last year and the main mechanism then was the Chrome extension. And we've seen the shift towards the Apple App Store now as your primary use case for the customer. Why have you gone in that direction?
Rory Garten Smith: It's driven by the market and the consumers, as I think all consumer products should be. We saw a massive uplift in shopping on mobile and when we would talk to users, they would say, oh, I get a year on Chrome, I didn't even own a laptop anymore. I've just got a phone and an iPad with a keyboard. And we thought, Christ, there's got to be a way to get into this platform. And then almost like on cue, Apple were the first big tech company in the market to release this ability to build an extension on mobile. And it seemed to us like the whole world was looking at Web3 and AI as like the big thing right now. And we were like, holy shit, you can build extensions on mobile. This is where we need to focus.
Nathan Bush: So for our listeners who may not have come across extensions on mobile, what do you mean by that?
Harry Dixon: Yeah, what we mean by that is an extension lives in your browser. So if you imagine like Safari or Chrome, there are two applications that are called browsers. So for your mobile, Safari is the native one. It's created by Apple. And so with that they've released this product which it's very new to market, so it was only released last year. And so the way that it actually functionally works is you install the app which gives you the ability to have an extension. We build this extension and then you have to activate it. And so that gives you permissions. And so what it does is when you're browsing on any website, Patagonia, you know, Sephora, whatever you want to want to browse on, we just pop up in flow. So you don't need to go to a dedicated native app on your phone, you just go to your regular browsing, which we, you know, through customer surveys realize most people shop through a browser rather than native application.
Nathan Bush: Wow, that gives you guys a huge advantage to be one of the first movers on that feature, right?
Rory Garten Smith: Yeah, definitely. And it's interesting because I almost feel like developers that we speak to don't know this exists. They don't know the ability to build in this ecosystem exists. I spoke with a lot of large, much larger than us tech companies last week while negotiating contracts for our internal billing.
Elliot Rompano: Right.
Rory Garten Smith: And I'm speaking to like segment century amplitude. They don't know this exists. And these are like top tier Silicon Valley companies.
Nathan Bush: I feel it's gone under the radar.
Rory Garten Smith: It's totally gone under the radar. It's going to explode, I think over the next two years it's going to explode because mobile traffic just continues to go up and like there's a massive market to be captured there. All these tools that basically can lean into existing consumer behavior can exist in this ecosystem. And I think we're going to see a rise of essentially like a new medium which is always very exciting. But people just need to know what exists first.
Nathan Bush: Isn't it amazing that what you've built here is going back into some very traditional forms of digital in email and web browsers and enhancing the experience for both.
Rory Garten Smith: We're very excited about it.
Nathan Bush: So as like pioneers in building that mobile extension, like we said, not many people have done it before. What were the biggest challenges that you had in building it out?
Rory Garten Smith: First of all, it's an awful ecosystem and this is coming from somebody who used to work at Apple. So I take some blame. Apple is notoriously difficult for developers. It's a tough development environment. Then you add the fact that it's mobile on top of that makes it tougher and then you add the fact that it's mobile browser extension on top of that and you basically there's almost no documentation. Every problem you run into has not been solved by someone before because you're the first person in the world to run into it. So there's no stack overflow for this. Anyway, I built for the first like three, four months on it. I'll maybe pass over to Elliot who's been working on it more recently.
Elliot Rompano: But yeah, basically it is a complete nightmare. I was actually working on a bug before this call and the round trip time for like you write some code and you want to test it is three or four minutes at this stage. And I write a lot of buggy code now. Users will know. It's just these things do take a long time. We're also just sort of beholden to the usual things that App Store developers are beholden to. Like you've got to wait for Apple to approve your next release, every release. So it's definitely been challenging. But like I think we all are much more familiar with like really scalable software where you can just write a change and in five minutes the whole world has it. But you know, new levels, new devils, it's just what you got to do. Yeah.
Nathan Bush: And obviously you're still in the code, writing the code. While you're figuring it out. How long, how long do you give yourself as the code writer before you pass it on and go, yep, cool, we understand it, we know it. Now everyone else get your thumbs dirty and just get into it because I've had enough.
Elliot Rompano: It's been really interesting. I think we've, our hiring strategy has been great so far. We have like the engineering team. We all just really, really collaborate strongly. We all sort of have our own areas that we specialize in, but we all make sure we can do everyone's job in case someone's sick. So I'm, I think we're pretty fortunate. We can just jump on a long zoom call a long sort of eight hour tear and just try to figure something out as a team.
Rory Garten Smith: That sounds like a lot of fun. What a party.
Nathan Bush: All right, let's bring it back. I think that's really fascinating around the mobile extension because I don't think it will be on the radars of a lot of listeners. So that's, that's fantastic. Thank you for those insights. I'd like to take it back to the promotion side. You mentioned that you've got 40,000 retailers on board now. Are they retailers who have opted in or retailers who you've brought their discounts in?
Rory Garten Smith: We build over the top, so it's kind of like a step function.
Harry Dixon: Right.
Rory Garten Smith: At this point in time a large amount of our infrastructure is built over the top. So there's no opt in from the retailer. There doesn't have to be. But Harry is pioneering the partnerships front. So yeah, if you want to talk.
Elliot Rompano: Harry.
Harry Dixon: Yeah. So like, I guess just like the logic of how we think about building, we need to add value because we're, you know, a consumer and B2B kind of software. So the consumer value is when we say we support them, we support the auto injection. So that's kind of the magic is when you're an extension, you're in flow and then we click one button and we apply various deals. So that's, that's the magic of what supporting means when you want to unpack. Like, you know, do we have one to one relationships? We aim to and that's what I'm actively doing. So if there's listeners in, you know, Australian market that are brands that want to Chat. We have, yeah, a lot of learning to do and, you know, I just want to listen and solve people's problems because I think we have some potential to do that. But, yeah, we're going from the support level. We're working with like 30 brands at the moment where we're testing some different stuff. We're actually headed to Vegas next week to go to the affiliate conference, which is a function of partnering that's right now. A lot of networking. Getting me in my specialty. A couple beers and give me the mic. No,
Nathan Bush: it sounds like, you know, just the formula for new business. And one of the stats that I read, Harry, was that traditional savings apps give about, you know, unearth about 15% of savings for customers, whereas what you found is that your customers are saving, or users, sorry, are saving around 27% on average when buying.
Nathan Bush: When you are taking those stats to
Nathan Bush: retailers who you are looking to come on as official partners, what is their reaction? Do they see that as a positive?
Harry Dixon: Yeah, it's a good question because again, to reiterate, we want to be a friend to brands and consumers. And I think there is a disconnect in the current ecosystem about providing, say, timely deals. So to just give an example, when you abandon a cart, why are you getting a deal? You should actually have it with intent. So say I'm searching for black T shirts, and I know you've shopped at Cuts, which is a T shirt brand. That's when cut should be pushing ads or pushing deals to you. So that's the way the ecosystem isn't working. When we ran that beta cohort of extreme savings, that was largely because these brands had to kind of compete. So they're providing these larger deals to inboxes. So they're the ones writing the deals. So we're not really dictating it. So when we say we have these larger savings, if we're giving the deal to the intended user, which was a lot of these personalized codes, like, they're generally happy about it. But a couple of early conversations is we're actually not that smart about giving deals out. And so that's where we. Well, I'm fortunate to work with Rory and Elliot, who have their masters in machine learning, that we actually have created and patented some dynamic pricing. So when we say dynamic pricing, it is really born about a model where we can start pushing those codes, which ultimately affects the price of an end good, which is why it's called dynamic pricing in our internal, internal chat. So that's where I think, well, that's Where I get excited about these partnerships is like, how do we push that along? How do we get that into more brands? How do we actually build the infrastructure for it?
Rory Garten Smith: Yeah.
Nathan Bush: So it's not necessarily about unearthing bigger discounts, it's unearthing more relevant discounts for more people.
Harry Dixon: I think so, I mean, like from the consumer point, it's, it's really like what will get you to convert and what are you super happy with? And, you know, treating you either as a loyal user or a new user. You know, you should be rewarded as a loyal user, you should also be rewarded to try a new brand. So, yeah, I think obviously everyone wants bigger savings, which we're happy to provide, but there's a fine line between what's too much and too margin eroding.
Nathan Bush: Yeah. All right, so if I take a retailer, let's say Doc Martens on top of my head and thumbs up from Elliot, if we take them and we go, great, we are pulling in discounts from them. They've already got them out there in inboxes. We're pulling them in and Harry, you're going to talk to them and say, hey, do you want to actually come on board and partner with us? What's the benefit for Doc Martin in actually being a partner, as in over and above just pulling in discounts?
Harry Dixon: Yes. There's two sides of the coin. One is net new. Every brand wants a new customer. So we have some kind of. Well, when I say we have some kind of, we do have this powerful data set where again, we're highly data conscious and sensitive, but we have a pretty good understanding of our users and so we know where they've shopped, what on average they spend. And so we can start doing this analysis where people who have bought a Doc mines might also buy it somewhere else. So with the reverse you can go, hey, you bought from Surf Stitch. This is another brand. You might be likely to buy Doc Martens in this example. So we know that you're not a current customer based off, you know, at least your inbox. So let's give you a deal. Let's load a big deal. So that gets the net new side on the reverse side on the, I guess, existing customer base, we can start directly inserting codes into their wallets. So if they go, great, like we know Elliot shopped at Doc Martens six times in the last year and we might be able to get him to buy again if we give him the custom deal. And so ultimately you want to increase that LTV or lifetime value. Of the customer. So there's those kind of two sides which kind of marry well to our data sets, which is historical and intent.
Elliot Rompano: Yeah.
Nathan Bush: Are you generating any of those?
Nathan Bush: I know you talked about single use coupon codes.
Nathan Bush: Are you generating codes or are you
Nathan Bush: just relying on what retailers are generating?
Rory Garten Smith: Not at this point in time, but actually building into that space is something we're looking into in the next few months. So we're looking to build Shopify integrations, Woocommerce integrations, Magento that actually allow us to do that for the store using our past data of the customer and their current data. Combine those two sets, you can build a really eloquent way of supplying custom deals. So it's at this second? No, but hopefully in three, four months. Yes. Yeah. Great.
Nathan Bush: I can imagine the data that you're collecting would be really interesting. As you alluded to Harry, if we take Checkmate out of the pitch and we just talk about promotions and discounting for a little bit. From what you've seen, where are you seeing retailers get really great cut through in different types of promotions? Are there any types of promotions that you go, this always nails it. And some which you think would be really great but are actually stinkers.
Rory Garten Smith: Well, I think like wide ranging clearance sales generally hit whereas I feel like individual skus being discounted never hits as much. Something that we've learned about our user base is they a feature that they all are heavily requesting is this ability to track sales. They want to know when their favorite, like their favorite 10 stores are having a sale as opposed to like is this particular item on sale? Because they want that experience of like going through and browsing and seeing what's actually being discounted at that time. So that's been quite interesting. It's more like these like general like hey, we're having a full clearance. Here's a code for you. Because you're a loyal customer, 20% off, whatever you want, go for it. As opposed to like that dress that you looked at once months ago, now it's like 5% cheaper. I've seen that tend to be heavier hitting with the current user base.
Nathan Bush: Makes sense. And in terms of customer behavior, are there any points in the shopping journey that have surprised you in terms of discounts are working really well at this stage.
Rory Garten Smith: I think Etsy, we see a lot of volume on Etsy and Etsy is interesting because it's kind of like an indie Amazon. Right? But Amazon doesn't do discounts. But Etsy, it's like it's handmade stuff. And it's one to one, like seller to buyer ratio basically where like you just have all these individual stores and almost no aggregation on the part of Etsy and yet they facilitate and allow those stores to start running discounts. And I think it's our second highest discount platform currently. Right now I have to put the stats, but it's like really, really high. So I was very surprised about that. I thought it would be like a major retailer like Fashion Nova for instance, but it's actually like this individual non aggregated stores.
Nathan Bush: What's number one?
Rory Garten Smith: It kind of goes back and forth. In Australia it was the iconic for ages. In the US it's a lot of big makeup brands and also yoga pants brands. So like Aloe Yoga, Sephora, other beauty set. Active is where we see the most traffic in the us.
Nathan Bush: Okay. And obviously you need to make sure for a good customer experience that the discount codes that do pop up in the extension are actually accurate and up to date. How do you make sure that is the case?
Harry Dixon: The short answer is it's a very hard problem to solve. Extremely hard.
Rory Garten Smith: So yeah, we actually solve it in another way right now, which is we try to speed up the application of the deals so that even if there's like five crap ones, it doesn't matter because they go through very quickly until we find like the one that's right for it. But it is really technically hard because like a deal may apply to only an individual item that someone hasn't added to cart in like months and then we'll think it's worth nothing. Right. So it's kind of like a fine line.
Harry Dixon: Yeah. When we start generating, well, hopefully when we start partnering with more brands and generating codes, I think that's where hopefully that, you know, success rate will increase. But yeah, generally these kind of inbox ones have a high success rate. The public ones are bit of a crapshoot at this point. So yeah, we're working on it.
Nathan Bush: Promise you we won't call this episode the crapshoot.
Harry Dixon: Good, good.
Nathan Bush: All right, so let's talk about the growth story because you've given us great insight in how it works. But obviously, you know, Perth boys taking it to LA Now, Global Visions, 10 Year Visions. You've got 245,000 active users at the last update and I know that you've had phenomenal growth over Christmas. Tell me about what the last few months have been like in terms of user acquisition.
Rory Garten Smith: It was really straightforward. We just paid Kylie Jenner $2 million for a Snapchat story.
Nathan Bush: Just out of your back pocket?
Rory Garten Smith: No, I mean, who wants to tell it?
Nathan Bush: Did you really have Kylie Jenner promote?
Rory Garten Smith: No, no, no, no. I was like, I'm absolutely.
Nathan Bush: I was like, oh, this could actually
Rory Garten Smith: be a true story. I better ask the question at least. Yeah. So we. Marketing's top of mind for every consumer startup, right? It's like, where do you find user base? How do you talk to them? We had a hypothesis that our user base was in two places. TikTok, that's kind of like this greenfields market for, like, college students who are interested in savings. And then outside of that, Harry uncovered these, like, super saver groups that exist online. And man, they are densely populated. Like, some of these groups have half a million people in them and the whole group is one woman posting deals that she finds to, like, the other people in this group saying, like, this is a crazy sale on this thing. This store's having a mega deal on this thing, right? There are hundreds of these groups. The same week that our TikTok started really popping off, these groups started posting about us. And it was kind of this network effect where it started in one or two. There was a group called Save with Naylor that has like 50,000 or maybe half a million Instagram followers or something. She started posting it and then from there it just spreads like all the others. And while that was happening, we had a couple of videos go viral on TikTok at the same time. And then I think those two events being the postulate, we then had this sort of like catalytic event where it was just by chance, like the week between Christmas and, well, the week between, sorry, Black Friday and Christmas sales. And so everyone had time for discounting. Yeah, exactly. Like, it was very relevant and top of mind. It just started popping off like crazy amazing.
Harry Dixon: And then we, I think that Nexus, I mean, with virality, you start climbing the app charts. And so we were sitting there watching these kind of charts. I actually didn't even realize until I think someone sent it to us. And it was like, oh, you're number eight on the, like, us on the shopping charts. And then it's like, oh, great, you, like, hit second on the shopping charts. It's like, oh, now you're number one on the shopping charts. And then it goes, oh, actually now you're 20 on the US global charts. And your number, like, it's six or something on the US global charts. Then we hit number one and then the extension charts as well, which is like, when you talk about, like, what are the competitive competition in mobile extensions we're competing with Grammarly and one password, like a password manager, so that's kind of more green fields. But we just watched this thing and then we were there for almost a week, which was kind of wild. And so it's based off user acquisition and we've just, yeah, all that kind of flywheel of TikTok and the super saver groups just held us there. Then you obviously started pouring the top of the funnel, which was just these people that found you via, you know, organic app searching.
Nathan Bush: So you don't get like a bottle of champagne and some flowers from Apple when you reach number one.
Rory Garten Smith: No, you get a longer app review. Actually you submit the app for review and before it used to take five minutes and now it takes a day. That's what you get.
Harry Dixon: Do they get in touch with you?
Nathan Bush: Like the rules change at all so
Rory Garten Smith: you don't get like a formal email being like congratulations, you hit them on the global chart. But I'm in some kind of shadowy slack groups with people who like moderate the app Store and I talk to them and stuff and I reached out and really all you get is high regulation. Like you get high scrutiny and regulation. That's, that's pretty much what. Yeah, they, they don't mind. What's number one? Something's always going to be number one and you need to be like, like I had a lot of insight into how they work with apps that have like a billion daily active users like WhatsApp and stuff like that. They basically, and this may surprise people, they basically work with them exactly the same way that they work with an app that has like 10 users. They're same rules, same regulation. They're maybe even harder on Facebook than they are on other companies. So like being number one gets you no special privilege at all. Absolutely.
Nathan Bush: Especially if you're not making them any money with paid downloads.
Rory Garten Smith: Yeah, they hate free apps with no subscription stuff.
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Nathan Bush: L. Can we just go back? I was really interested when you said about the viral TikTok videos. Can you describe what they were and whether that was in a deliberate ploy that you thought those two would go viral or whether it was kind of a luck of the draw thing?
Harry Dixon: Yeah, our TikTok actually we're getting decent traction and wish we could take all the credit. Shakir and Sai, who are part of the wider team, they're individually kind of famous TikTokers. So they kind of had this recipe which is, I think it was more around like dedicating like a financial advice slash, like general life hack type. So we're not just banging the drum of like, this is what Checkmate does. But they were very thoughtful in the way they created our videos that were up to date with different trends and different markets. So when we break down the demographic, I think we have 150, 60,000 TikTok followers and most of them are female between 18 and I think 24 or something like that, which is a highly sought after market. And so we're very fortunate that they just hit some viral videos and they consistently do it every week or two weeks, which I don't know how the TikTok algorithm works, but yeah, it's picking these ones up, so we're pretty, pretty thankful for them.
Nathan Bush: And did you know those guys right from the start or did you see their stuff on TikTok and go, we need to bring them into the fold.
Rory Garten Smith: I know this guy Conrad, who went to Berkeley with Strakar and we were starting this company and he said, yo, you got to hire my friend. He's really good at this. We basically reached out and kind of interviewed them and I was like, yeah, they just came across so well. They were like, here's what we do. We just make content and 1 in 30 goes viral and we just keep going and then you get more and more going viral. We were like, this seems plausible. Seem very confident in this. And. And they were. And it worked. So, yeah, full credit to them.
Nathan Bush: Oh, well done. And you mentioned the demo that you're going after, the younger demo. I noticed that it's very specific that you're talking especially to us colleges and getting students on board as ambassadors. Can you tell us about how you arrived at that insight and what the strategy is around that?
Harry Dixon: Yeah, I think it's no secret to anyone that like Facebook and Instagram and traditional digital marketing is quite expensive. I also like, because we, we Built this company with probably like a wider thesis and we have a pretty heavy feature set that we didn't really know which one was going to take off. For instance, like the order tracking could be a big part of the feature set that people really resonate with. So when we found automatic settings on iPhone that was really born about by talking to people and I thought, you know, we want to go after the next generation. When you talk about incumbents, honey, really owned I guess our age where you know, millennials and Gen X and things like that. So we just didn't really see them playing in the younger field. And so what better way it is to communicate on campuses? And it's a kind of tried and true method which is also kind of nice and it's also kind of cost effective. I mean we pay each of the ambassadors for activations and things. But you know, relatively it's a good way to survey different markets, get a bit of word of mouth. And I think it has like the halo effect. So if you like boil it down to pure cac, maybe not necessarily the best payoff, but I think just like there is some presence of being physical, I think there is some halo effective, you know, non calculated CAC of like having people with pens and tote bags and things like that. And then even there's a halo effect in an investor community because we are a venture backed business that if you're perceived to be seen then you know you're doing more things. And so I have no doubt that digital companies doing no physical work and working as hard as we are, but we're just bringing it to the physical world. So yeah, they're kind of the overarching reasons why we're doubling down on it this year as well or this semester.
Nathan Bush: I just assumed there was no students on campuses anymore.
Harry Dixon: They're all back. They're back and forth. Yeah, they're back and forth. Yeah.
Rory Garten Smith: That's awesome.
Nathan Bush: Well done, well done. And you mentioned that you are venture backed and recently raised $5 million in funding.
Harry Dixon: I'd love if.
Nathan Bush: Are you able to take us behind the scenes on what you pitched to unlock that funding? Because everything we've talked about so far is new.
Elliot Rompano: Right.
Nathan Bush: And I could imagine that a lot
Nathan Bush: of investors may not understand the ecosystem, especially the extension world. And also because we're talking to a younger demographic, it's a total different mind shift. Right. And there are competitors in the space already. How did you pitch Checkmate to that venture capital world?
Harry Dixon: Yeah, maybe. Yeah, maybe I'll kick it off and I'LL give it to you raw, but more of a shout out. I think actually having these two guys in the room makes me look, I guess makes me look worse because they're such legends. But I think individually we feel very different shoes and so having kind of the, the three legs to a stool definitely helps in those conversations. Elliot is, you know, looking back at an engineer. Rory you know, really astute both on the technical and business side. So I think that you know, phrasing is, was quite helpful. But in the wider vision, my background I was director of partnerships at easypost which is a multi carrier shipping API. So what that means if you want to buy something from a store you would have to choose between, you know, one day shipping of, you know, seven day shipping. And doing that you would have to communicate with carriers and they're usually done by an API. So that's the kind of long winded way. But I would deal at the infrastructure level. So there was a bunch of things that we, that I took away from my role and then Rory took away from his job at Apple and we kind of combined it into what we described as the three pillars of commerce which is unifying, discovery, purchase and post purchase. So we see value created either bundling or unbundling. And we think that in E Comm there needs to be a re bundling of commerce because all these multi billion dollar companies like Afterpay, the Australian company or Route or things that do tracking or extended just warranties don't haven't really been unified. And the biggest success of that is really Amazon. They've created a very seamless experience between their discovery purchase and post purchase which creates this kind of flywheel of shopping. So that's the kind of 10 year goal that we alluded to. And I think that's really where you know, we frame that and then we don't part to get there, which is obviously being in current behavior, which is why we think extension is so exciting and then slowly moving to a destination.
Nathan Bush: You basically pitch yourselves as a team.
Harry Dixon: Oh absolutely.
Nathan Bush: And the product is just the sides that I have the feeling that what we're seeing here is just a tiny speck of what's on that roadmap.
Harry Dixon: Right.
Nathan Bush: And you've pitched yourselves as the team that can bring it all together.
Rory Garten Smith: Well, we consider like what they're taking a bet on at seed stage. It's often not the actual like company you're putting in front of them because they assume this is seed stage. They may well pivot direction even like even the product sometimes like, completely pivots, right? They're taking essentially a bet that the founders have the ability to rapidly iterate and find what works and therefore they're taking a bit on the founders. So it's. It was kind of a fascinating, really fascinating fundraiser round to do because they're far less interested in metrics at that round. And even though we did have a beta out in market, it was like, cool, you've got a beta that just shows us you can build something. Who are you guys? People. Like, we actually had personal reference checks, our seed round, by one of the first checks into the round, because they were. It seems like it's such a crucial element of the seed round. And then subsequent fundraising rounds like Series A, Series B, it almost no longer matters. Now it's just like, is the product working? Are you making money like it. Do people sign up? Do they stick around? And it's such a different round. So it was honestly a pleasure to get to the privilege of participating in, like, seed capital fundraising because it's such a unique and kind of at times catastrophically stressful and at times, like, amazing experience I could imagine.
Nathan Bush: And what struck me when I was doing the research and we mentioned it earlier, is that, Rory, you know, you've got your side projects, your. Well, I don't even know if it's a side project. It might be an insult for me to say that, but obviously, you know, well established artists in Elk Road and being on the Hottest 100, done the, like a version, all that sort of stuff.
Nathan Bush: Elliot mentioned that we've done the masters
Nathan Bush: in machine learning and, you know, it feels like there's so much more going on with you guys outside of just the product and what you do day to day. How do you keep your interests and your kind of work life in balance?
Rory Garten Smith: I have a theory on this, actually, but first of all, I appreciate the compliment. Thank you. It's largely a world that I left behind, but I have many fond memories of the Australian music scene and shout outs to Triple J and Sony. Many awesome people there. I have a theory on this, which I've seen. I've got a lot of friends who have been founders and some have. Have been very successful and some have very much not. And the common trait amongst the people who seem to break through and find subsequent rounds and find product market fit is that they're leading very balanced lives. They never forfeit exercise and never forfeit their personal and social life. They harbor good relationships with their significant others and their friends and family. And the people that I see really fall apart and not make it with the company are the ones where it's like 24. Seven grind, wake up 4am for the cold shower and work until midnight every night and just do that for a year and they just burn out and they're done and they lose perspective of why the problem is interesting. And so I look at Harry and Elliot, it's kind of like just a plethora of successes outside of work and just about everything they do. Elliot just ran a marathon a couple of weeks ago, for instance, and it's almost like because of that he's able to put in long hours and stay focused on problems because there is a balance there as opposed to in spite of it.
Nathan Bush: Yeah, stay an interesting person, not a Twitter bro. Oh, that's awesome. Elliot, Harry, any secrets that we need to know about you and your personal endeavors?
Harry Dixon: No, not really secrets. No. I mean, I think like with Rory's perspective, like life happens as well. For instance, I was in Mexico last week for a wedding and so it's not a great week. It's the second week of January to be doing that. But you know, I said to the guys, I was like, but I look back at the second week of January in 2023, I'm probably not going to remember, you know, answering support emails and kind of grinding. It's like that wedding I'll remember with mates. So I think we'll have.
Nathan Bush: Sure. You might not remember a wedding in Mexico
Rory Garten Smith: parties.
Harry Dixon: Yeah, that's truly sick because we're not going in there. But yeah, I was thinking, I think just. Yeah, healthy work, life balance.
Rory Garten Smith: I think.
Nathan Bush: No, I love that perspective, guys.
Nathan Bush: Thank you.
Nathan Bush: You've shared so much today and really appreciate the insights on Checkmate and also how you got to this point. You mentioned the ten year plan. If we bring it back to the next 12 months, what's the focus for yourselves and Checkmate?
Harry Dixon: I think there's, I mean, I think we're at a more of a stable place. We didn't talk about in the virality, all the scaling, the heartaches and learnings and all the rest. So we're really kind of poised to be in a position to talk to more brands, hire more users, really start building out the feature set. We just had another engineer, actually, his brother Brod, who's incredible guy, start on the team the start of this year. So freeing up bandwidth, hopefully a couple more hires I think will really get us into a nice place to start realizing that kind of ten year plan.
Rory Garten Smith: Great.
Nathan Bush: And if we have retailers who want to reach out and get in touch and see how they can partner.
Rory Garten Smith: What's the best way to do so?
Harry Dixon: Harry A joint Checkmate. I don't know if I want to regret putting that out there, but no, feel free to do that or LinkedIn. I'm pretty accessible and happy to chat.
Elliot Rompano: Beautiful.
Nathan Bush: Harry Elliot, Rory, thank you so much for taking time out of your schedule to join us on Add to Cart. You've really shared what Checkmate is and it's really exciting what you're building. So I will be keeping a very close eye out.
Harry Dixon: Thank you. Really appreciate it.
Rory Garten Smith: Thank you Nathan. Appreciate it. It
Nathan Bush: so it's obviously very early days for Checkmate, but I was impressed by some of the impact that they've made in such a short amount of time. I mean, getting to number one on the global App Store on the Apple charts is no small feat. So we can take a lot from that conversation. But what I really enjoyed was the dynamic between the three co founders and it was something that really shone through through for me from both how they build the product, how they split responsibilities and how they raise funds. That was something that really stood out for me. On top of that, the three things that I took away Number one Browser extensions available on mobile. Now I read a hell of a lot of e commerce news, but this is one feature that I feel has gone under the radar and I haven't heard a lot about and that's the ability to create apps, apps that integrate with Apple Safari on the mobile. Now we know that Apple and the Apple ecosystem is very dominant here in Australia and the ability then to not just have your own app that is gated into the app, but also to be able to interact with the Safari browser and work across websites on that browser is pretty interesting, especially for those service or tech based businesses. So. So if you haven't looked at that, have a look at that new feature. Number two TikTok skills, value and volume. Now it wasn't surprising to hear that TikTok is a key channel for new customer acquisition on Checkmate, given that their demographic is younger university students, that's the people they're chasing. So TikTok's perfect. But the tactics that they let us in on was really interesting and three things that stood out for me there is that they sourced TikTok creators who had an established audience and skills. They didn't just try and get their existing marketing department to take videos they'd already done and put them on TikTok. They went to TikTok creators. The second part is is that they didn't focus on what messages they wanted to get out from Checkmate. They focused on what the audience wanted and where they can add valuable content in their sphere of promotions and discounts. And the third thing was that they, they produce 30 videos with the idea that one might be successful so it becomes a volume game. So I thought those three insights into getting traction on TikTok were really valuable and I hope you can include them in your TikTok strategy. And the third piece, funds for teams. Now it's almost a cliche to say this, but we've heard so many investors say that they invest in teams, not products. And I think we all go, yeah, yeah, yeah, that's nice but I really need to have a product to be
Nathan Bush: able to pitch something.
Nathan Bush: But literally these three co founders, they had a loose idea of what they were creating but they were pitching themselves as the one to change the e commerce landscape. So it was nice to hear it from their side that investors actually are investing in people and teams. And as we heard they raised $5 million. So I think what Checkmate looks like today as a startup will be so different to what it looks like 12 months. It may not even be the same product, but what you're looking at is a team that has a vision to change the whole landscape of e commerce. So it'll be interesting to see where it goes, backed by the right people. So if you're looking to raise funds, don't be put off by thinking you've got to have the perfect product. Think about how you're going to pitch yourselves and your team. To get the highlights of today's episode, head on over to Add to Cart 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 E Suite Talent where you can download the free E Commerce Salary guide and sign up to
Nathan Bush: our weekly e commerce job emails.
Nathan Bush: Thanks for listening and until next time, keep those customers adding to card.
