Nick Allen of Geologie: The Importance of Product-Market-Founder-Fit for DTC Brands
The Profit Forecast: The eComm CEO's Podcast
Nick Allen of Geologie
Ben Tregoe: Nick, welcome to the Bainbridge podcast.
Nick Allen: Glad to be here, Ben. Thanks for having me.
Ben Tregoe: So Nick Allen is the founder, CEO of Geologie. Nick, you have an incredible backstory because you've had a lot of different experiences. I would love for you to go into more detail, but just to quickly summarize it, you started as an investment banking.
Switched to research equity, then got into the ride share business with three different experiences in the ride share business, which is really cool. And then got into skincare with Geologie. Wild ride. If you could just . Yeah. How did yeah. Take us through like how you got started and you moved into startups and out of finance and then how you chose student care.
Nick Allen: After ride. , The finance part is you get outta school, you're not really sure what to do. You're like I can, I'm gonna go do something hard where I'm gonna learn a lot. That's like finance, that's investment banking. I definitely learned a lot. The culture was, not my fit.
But I really did enjoy, banking was brutal. Equity research was actually really I covered clean tech and in the sort of first boom of the like green tech days and, I had my own team and did my own coverage and it was wild stocks moved all over the place. I had the, I was at Morgan Stanley, I had the biggest banking pipeline.
There was wow. I was a top performing analyst just basically cuz stocks moved so much. So I had lots of opportunity to make calls and it was super fun. But, post crash of 2008 Cleantech was dead and Wall Street wasn't a place that I wanted to hang out at anymore. It was time to move on.
And ended up at a small venture fund and we did a bunch of incubation efforts there. And that's where I got like my taste of, early stage being a founder. .
Ben Tregoe: So at the VC fund, were you doing clean tech or green tech there or
Nick Allen: Yeah, a mix of stuff. It was there were no, there was no gps.
There was just 1, 1, 1 partner basically in his money and me and him. And so we, carte blanche to do whatever we wanted. So that was a mix of like early stage stuff. Very like late stage pre IPO o stuff into the public markets and a bunch of incubation efforts.
Ben Tregoe: That's cool. That's awesome.
That was cool cause you saw the stages. Yeah. That's fun.
Nick Allen: Yeah, the early stage the early stage thing, it was a real eyeopener for me, right? Like I was a public markets guy. So here I am getting, pitched. on seed stage stuff, and I was wait a second.
This is how this works, like what?
Ben Tregoe: You're just like, this is ridiculous.
Nick Allen: You, yeah. I was like, this is ridiculous. You come up with an idea, you go around town and you have your PowerPoint and you're like, Hey, I need $2 million for this idea. We haven't done. At all with it yet? It's nothing. It's just brewing in here.
And then people write checks. I was like, huh. Okay. you those
Ben Tregoe: first, those first like dozen pitch meetings to you must have been awful. .
Nick Allen: It's just funny. I just didn't,
Ben Tregoe: I don't know. You haven't figured out any of this ,
Nick Allen: I just , I didn't really quite understand that's how it worked.
And listen, I should give a caveat here. This was like, this is, San Francisco in 2010 to 2012, a privileged place to be. We'll put it that way. Yeah. Not everybody has that kind of access, but I found it to be, I was like, oh okay. If I wanted to start a company there's definitely a path to do this.
come up with a great idea that you have, ideas are a dime a dozen. But I think the thing that like dawned on me was like the product market founder fit kind of concept, which I think I had in my first company, did not have in my second company. And I think having my third, but it's a, it's an important concept.
What does it mean to you? , it means like you gotta have a pretty good idea. , you gotta have a market that's worth going after and then you gotta be the guy or gal to, to do it, to have the, whether it's the little bit of insight, whether it's the, like the will to keep going and fight through adversity or what have you, yeah. But like the middle, my middle company. A ride share company for kids, and I don't have any kids. And I just wasn't the right founder for that and it didn't work out well. Let's go to
Ben Tregoe: the one right before that to, to set the, so the one right before was sidecar, right?
Nick Allen: Yeah. Yeah. It was sidecar.
So it was like, a lot of the story behind, it's funny. Basically. Uber had started, it was a black car service and we basically we, meaning me and my co-founders got Jahan Kana and Sunil Paul, and we were thinking maybe we should just go rip off Uber, right? Let's just make a clone of Uber and we'll go attack them.
But at the time it was you. To post 1%, wall Street, 1% kind of thing. And it was like, who, who can pay, 60 bucks for a three block ride across the town? And a black car service. There's not a, there's not a market for that, right? Okay, cool, great for guys in New York and Silicon Valley, but let's get real, it's not a, it's not a big market.
And so I was like, okay, how can you make this a big market and. . I was reading a blog post about Uber, and the last line of the blog post said the cat's really gonna be out of the bag when someone builds an Uber that lets people pick people up in their own cars. Whoa. And I was like, some random blog post.
Ran a blog post, and Johan with one of our other engineers was there. And I was like guys, we, this is what we should do. And Johan was, so that said something like how are we gonna get around the taxi laws? I was like remember the Radiohead album in rainbows where you actually didn't pay for it.
You could pay whatever you want. It was a donation. I was like, that's how we'll get around the commercial laws. We'll give it away and we'll just suggest what people pay. Yeah. Now it's basically the start. , we launched that. Then Lyft, which was a company called Zim Rodd, launched pretty quickly after that.
Uber came down market with their UberX. We battled it out and um, Uber's capital beat us and Lyft's pink mustache beat us. And we were third. And history is history. What
Ben Tregoe: I mean that that's a very painful experience. I. experienced that myself. What do you think in reflection, is it capital?
It's obviously execution and capital and a combination of things, but I when you're in that situation as a founder or a team Yeah. What do you do? Or do you have any insights? I'm not sure I do from my time through. Raise more money faster, I guess, .
Nick Allen: Yeah, there were things that are obvious at the time and like it's, playing armchair quarterback, if that's the term.
Looking back Uber and Lyft were very focused and we lacked some focus in a couple critical areas and once. Once the, we were neck and neck for a while and once, one of the other guys started to pull away, Uber became like a clear front runner and then it was us and Lyft battling it out.
And I see, it did come down to like capital, right? Like we should have raised more faster I think at the time. , people never, we didn't all quite realize like how much money it was gonna take to do these kind of things, right? Yeah. At the time I think Uber had raised 60 million in that, or a hundred million maybe.
And that was like, whoa. Yeah. . Yeah. Yeah. We should have. And what did you Faster and really gone after it. What are you gonna do? Yeah.
Ben Tregoe: Okay. So you then you went to shuddle you said your next startup, this is the ride share for kids, right?
Nick Allen: Yeah. Yeah. That was it was a great business model.
I'm not sorry. Not a great business model, great product. It really solved the pain points. But it was super difficult to. Super difficult skill, right? We are picking kids up and the safety features and all of that, and it just required a lot of capital. We raised a series A but when it was time to raise a series B, the amount needed and the appetite from the venture community for, gig work business models at the time was fading.
There was some, high profile busts in the category. and we weren't able to raise the funds to continue it.
Ben Tregoe: Yeah. And then it, yeah, like a brief stint at gm, was that sort of the finishing of your auto?
Nick Allen: Yeah, I'd say so. G gm I bought companies. . Yeah. GM had bought sidecar. They had bought sidecar, they had made investment in Lyft.
They had made a big investment in cruise and they were just trying to figure out like, Hey, what do we do with all this stuff? I spent a little bit of time there trying to guide some of that strategy. Ultimately, I was working on autonomous vehicle sort of commercialization strategy and that all went under Yeah.
Kyle and Cruz. Got it. I got laid off. Time to go do something else.
Ben Tregoe: All right. So fi now we're at the birth of Geologie, which
Nick Allen: I'm Yeah. Excited to hear. Yeah. When I was working for gm, I was in Korea and I bought my girlfriend a fancy set of Korean skincare pro products, and I was.
Close to turning 40 or getting closer to turning 40. And I was one of those guys who had literally never washed his face in his whole life. And so I, I did her whole like, routine and I was like, whoa. I was like, why have I been denying myself this pleasure? That is so nice. Yeah. . And as I was look looking for something to do, I was like, do I start another company?
Do I get a job? What do I do? I didn't really want to get a job. But I didn't really have, I had been working on a bunch of different startup ideas, but like nothing was quite clicking and I of dove into the, personal care market and there was a lot of exciting. Things to go after there.
And it's a big business growing a lot. It's it's a very high margin. It's a very high repeat usage rate. So a lot of attractive characteristics from like a business perspective. And then, I was like, you know what? I'd been building apps and doing all this kind of thing.
Like maybe it'd be fun to create a real product. Yeah. I saw the, your Geologie started out as a men's skincare brand. We're much more than that now, but saw that like product market founder fit potential just went for it. Nice. Yeah. Were you
Ben Tregoe: thinking at the time about the replenishment and the consumable nature and the margins or, oh, you were, so that's Oh,
Nick Allen: absolutely.
Yeah. That was like step one. I put my Morgan Stanley equity analyst hat on and it was like, what is this? What, how do these businesses work? Yeah. Like I knew direct to consumer was hard. , it was already in its kind of later stage of development and to start a direct to consumer company, I think I needed it, needed to check certain check boxes from like a business model.
Perspective, right? Very high gross margins and repeat purchase lends itself to Hey, you're gonna need marketing dollars. So if you have a high gross margin, there's your marketing dollars and repeat per repeat purchase you can lend itself to a subscription business. I'm not sure how people start, Apparel brands.
I don't know how they do it. . Yeah.
Ben Tregoe: I was just thinking as you were going through that I wish more founders did that. Equity analysts hard look at their business before totally falling in love and
Nick Allen: yeah. It's a little bit like, I think. . I think there's two types of entrepreneurs.
Maybe there's more, but if you bucket them up, there's like ones who fall in love with this idea and they're like born to do this particular thing. , right? And they just kinda have to do that. And then there's another breed that's I'm gonna try this thing, I'm gonna try this thing, I'm gonna try this thing, I'm gonna try this thing.
And that's what I do. . . I think I'd gotten to the point where I realized that, like that's what, what I did. Like I wasn't ripe for the job market anymore. So when you're choosing things to work on, it's man, especially as you get older, right? I was approaching 40, I wasn't 25.
If I'm gonna work on something, it's should have a, hopefully a good chance of success. . Yeah.
Ben Tregoe: Yeah. and this is so this 2018. So yeah, you were it wasn't that kind of the super shiny D to C market but it was still frothy yet no. Or not really
Nick Allen: God, probably, but like I also didn't want to go play the frothy game.
Yeah. Like I. Raise money, growth at all costs, lose control of the business, like all that kind of stuff. I'd played that game and lost yeah, a couple times and didn't really wanna do that again. Part of the attraction was like, oh, this is a business with clear positive unit economics.
Yeah. I can just build a very good business here without like insane amounts of capital. I'd say we've probably raised a little bit more than I thought we would probably need out of the get-go. , do you mind sharing with that amount? We've raised north of 5 million. At that stage?
No. When I started it, we raised tiny amounts of money. It was like friends and family. Then I did some, oh, like hundreds. Hundreds of thousands. Hundreds of thousands. Yeah. Okay. Yeah. It was like, but I treated it. It was, I went about it. Like a app. Yeah. And a software product. Not like a physical goods product.
which had its pluses and minuses, right? Like I didn't flush out a brand I didn't like, like we basically I met this dermatologist, he helped with the formulations, his named Dr. Zoo. He is still part of the team, like he's core to, our success. But after, we started iterating on formulas.
We put it out there in a big beta test and we just kept iterating and changing. Which is with physical product, it can be a little bit challenging. I think I, if I redid it again, I probably would've spent maybe more, not more time, but I don't know more of a point of view.
I don't know, it's hard to say, right? You of gotta get things out there and see how people react to them. How,
Ben Tregoe: how do you, I it's when you're building software apps like you. Feedback so quickly. Or even pre that, right? Like a false landing page or one of those, right? Yeah. What do you do for skin cream, or a cleanser like you're waiting for, like it takes a while to formulate it, make it get in people's,
Nick Allen: waiting those kinds of things, you have to just, those take a little bit longer, right? Yeah. Especially packaging. Packaging takes forever. It's like the most frustrating part. This process, like you could make the goop that goes in the bottle pretty quickly. Yeah. Packaging takes forever.
Interesting. Yeah, so you can't really iterate on that too much, but take like little elements of the business model. You can totally iterate on pricing, you can iterate on marketing channels. You can iterate on who's your customer, who's buying it, we collected a lot of data of. Our product was personalized.
So we asked you a lot of questions. Who are you? How old are you? What are your skin needs? Did any of that surprise you? Like you,
Ben Tregoe: that? Did any of that data surprise you? Like you thought you had a different type of customer than you
Nick Allen: actually did? Yeah. I was shocked at how young the customer base was really? because like you assumed that people were gonna be more like you. Yeah. Or interested starting to get, starting to look a little older. A little tired.
Ben Tregoe: It's not true. So you were like attracting 20 year olds and stuff and you're, and whoa, where'd this come from?
Nick Allen: Yeah. That's cool. Yeah, it's been interesting. It's this balance of , the older customer is less price sensitive versus the younger customer. So it's like this balance of who are you marketing to and where are you spending your dollars and how you're monetizing your customer base and thinking about lifetime value and all that kind of stuff.
Ben Tregoe: Okay, so you're iterating, you're starting to get feedback, you're starting to tweak the business models. I think you guys have done a, an awesome job on the subscription, and apparently that was already you'd thought about that from launch. Did you?
Nick Allen: It was subscription from the beginning.
From the beginning, okay. Yeah. When we first launched, you couldn't even buy a la carte. Wow. Like you had to buy some, yeah. And I'm very glad that we made those kind of hard decisions off the bat. Cuz I think it's really tough without subscription economics, we're moving more and more away from that.
It's funny one time purchase, and as I think there's some, probably some subscription fatigue out there to some degree. , and you do have to meet your customers where it's at, but where they're at. But you also have to make decisions that are hopefully really good for your business.
Ben Tregoe: Yeah. So the val, the, so the value of the subscription right off the bat is that you. I guess you, you've dramatically increased your repeat purchase rates as a result. Like you weren't constantly trying to resell somebody every time
Nick Allen: To buy more. Buy more. Yeah. Basically a lot of our business model was one, most.
as a men's focus brand, like most guys didn't have a skincare routine of any kind. Uhhuh . 70, 80% of our customer base had never even tried it before. So the business model was, look, we're gonna give you a trial in some cases free, just pay shipping or whatever, and. So it's not a big cash outlay up front.
It's Hey, you give us a try. Sampling is so big in the cosmetics business. Okay. This is like our version of sampling. So it's, we would lose money up front and we need this, needed, this subscription at least to get to the second or third purchase. We do have a bit of a fall off after that, but if you can get, 50% of the cohort to the second purchase while you're breaking even right there, and that's a pretty fast return on.
Ben Tregoe: Interesting. And so then, yeah, it, it adds a, like a layer of complexity to the business cuz you have these like mechanics that you're now, or these levers that you have to figure out how to, how they work. Like how did you, were you just constantly experimenting with prices and discounts and Yeah.
Nick Allen: Shipping time. A ton of that by channel. a lot by channel, right? Some discount works better in a particular channel, like paid social versus search. And it's a constant like balance of cac, a o v, repeat purchase rate. It's always moving around on you. Yeah.
Ben Tregoe: And you said there's subscription fatigue.
Like what does that mean to you?
Nick Allen: Now, people have, so everyone wants to have a subscription business. Yeah. So I think consumers are like, look at like apps like Truebill and things like that. They're like, Hey you have all these things that. Paying for just over and over.
And a lot of it's, digital subscriptions, for lack of a better word, right? It's oh, I have this New York Times, Netflix. Spotify, this three workout apps babble, dual lingo, I'm just of listing off most of mine, but yeah. So I think a lot of the subscription fatigue is there.
And then you have like with real world goods, it's like buildup, right? Oh, am I getting the right cadence here? Am I using this product? , in the right way That I don't have
Ben Tregoe: that. How you dealt with that. You guys have done some really interesting changes there, but like how did like the buildup, you're like, people aren't using it as quickly as you had thought or they want to pause, like how do
Nick Allen: you handle all that?
Yeah, it's really tricky. You give people, the easiest thing to do is give people the tools. , make the changes themselves. And hopefully the consumer likes your brand and your product enough to go through the effort. Yeah. For us it's a little tricky, right?
Because we, most people start on like a full set. So it's a bunch of different products. It's a cleanser, a morning cream, a night cream, an eye cream, and then they use those things at a different. And some people will not realize oh, you can crack open this bundle and you can order whatever you want and whatever frequency you want, but you gotta educate your consumer on that.
Ben Tregoe: That's yeah, I've been doing the same bundle the whole time. I'm like, oh, . I go through the cleanser it's like in a week or two, ,
Nick Allen: like rest. Oh really? You're using too much. You're using too much. You guys
Ben Tregoe: do this it's like, it's, I love when you're talking about the the routine because I didn't know any of this.
and your instructions on the packaging were so clear. Yeah. You down to the little circle oh, here's how much you should put
Nick Allen: in your hand. I was like, oh yeah. This is great.
Ben Tregoe: I can do this.
Nick Allen: The whole idea is like, how do you build a habit where a habit doesn't exist so the easier we can make it, like our, the fav, one of my favorite things that we do, , we ship you two bottles of cleanser.
One for the sink and one for the shower. So you're not like going in and out between the sink and the shower when your night and your morning routine. Yeah,
Ben Tregoe: that's, people love that. I had no idea that's what you're doing, . Yeah. That's great. I love that. I was like, why are there two of these things I'm, I guess they know I'm using a lot
Nick Allen: Yeah. So you do your.
Ben Tregoe: How did, I've always, as you, going back to the sort of the ride share thing, right? So like you guys started men's skincare, you've expanded now you're, you call it
Nick Allen: or what do you call it? Yeah, unisex. Unisex. Gender neutral. Gender neutral. There,
Ben Tregoe: there's, more brands have entered the market.
So now, like, how do. What kind of data or tracking do you have of like people testing you and coming back, or do you, can you see any of that or Yeah. How do you understand those patterns?
Nick Allen: It's a lot of work. Data collection is super important. What are people doing? How are they doing it?
It's what led us to, transition from a men's brand. Unisex. We started to see more and more women using our products organically. Wow. Yeah. From, largely from like their male partners. Oh, hey, we start to see, hey, my wife, girlfriend, partner is stealing my eye cream or stealing my night cream, or it was usually around the night cream product.
Interesting. And yeah, the feedback was like, oh, these are very efficacious, well-developed products at a price point that's very approachable compared to the, competing women's brand. I see. And we started seeing that more and, as you look like.
The male purchaser in this category is this big, or, 10th of the female audience. And just more opportunities to like, deliver on this value proposition, right? Like our, like shtick is we make very good product in a sea of a lot of garbage out there at a very approachable price point.
And we keep things super simple, right? It. , there's not, we don't launch tons of products at you. We get you in a simple routine that you can stick to where you can see the difference at a cost that's like not crushing your wallet. Yeah. Pocketbook,
Ben Tregoe: yeah. Yeah. I think you guys are nailing that, that's for sure.
Nick Allen: That value prop. Yeah. And I think we can tell the story better, honestly. Take this sort of iteration concept we talked about before you. We launched a lot of products, new products in the, in q4. So we expanded our skincare line, we launched a haircare line and got into body care as well.
But we just said, Hey, let's, we worked at, we working on these products in the lab for a long time. And traditionally I think brands just launch 'em one at a time. Oh, hey, we're gonna do this product launch. Hey, we're gonna do this product launch. And I was like, let's just get it all out.
Let's get it all out and then we can figure out, hey, how do we cross sell this? Do we add this in the first time purchase? Do we use it as gifts for people to coming back? Like now we have all these new tools that are just really like awesome product and oh, cool. Hey, you got introduced to us as a skincare brand.
You. If the skincare is not working for you, try the scents on our body wash. Yeah. Yeah. Brighten up your morning in the shower there. Get the trio pack.
Ben Tregoe: you like, so if with the efficacy, are women just like far more. Educated and discerning consumers then, so they can immediately, just like you mentioned, like the wife or the girlfriend, like liking the night cream. Yeah. How did you just know, because she tried it a couple times oh, this thing's working or cuz she's
Nick Allen: tried some yeah.
Far more educated in the space and also just like a level of curiosity I think that's above the male consumer in this regard. The male consumer just gimme something like, fine, I'll do it, and gets in the habit where the female customer is knowledgeable about ingredients, what's safe, what's not.
They're knowledge about what's effective. They're knowledge about packaging. They're knowledgeable about like other brands and that are out there and what they're doing and price points and it's a very different consumer. Yeah. Obvious, but we see it. Yeah, it's interesting.
It's really interesting. You,
Ben Tregoe: Yeah. Cause like you start with the dumb guys. Okay. Yeah. How much did I put in my hand? Like I
Nick Allen: was one of the reasons, one of the other reasons, like we transitioned away from just being a men's brand was most of our direct competitors.
it doesn't make good product. They make garbage. And so like we didn't really want to be lumped in with that group of companies who were literally just trying to take, drugstore product, put like a D T C brand on it and hawk it via Facebook. And we were like, this is not us.
Like we've outgrown this. Like we make really good product that produces amazing. we're just not, this is not who we are. Yeah. So we just set our sights to bigger and better things and Yeah.
Ben Tregoe: And where, and now you're, your competitive set is changing pretty dramatically. If you were started in the men's skincare, now you're gender neutral or
Nick Allen: unisex.
Ben Tregoe: you've expanded into. Cleansing products and deodorants and scented things like
Nick Allen: Yeah.
Ben Tregoe: How do you think about that? Cuz
Nick Allen: You it's tricky, we have other brands out there that we like and that are, we think do a really great job. Other direct to consumer brands, in the unisex category.
It's like necessary and melanin goats and in hair care, like we have a co-wash product that there's another brand out there called Hair Story that we like and they've done a great job in there. And we've set our sights on these just higher quality, higher perceived brand value.
as our com newer competitive set versus just the hey guys, only D T c brands, which many of them have struggled, in the last year, like a lot of digital brands. Yeah.
Ben Tregoe: Yeah. I love that though, because I think o oftentimes like how you think about yourself and your competitors and as these almost subconscious implications for the decisions you make.
And you can make that true, right? You can move we're like these brands and you steadily become more and more like those brands. Not saying that you aren't, you really start creating these distinctions that
Nick Allen: yeah. And it's work. It's definitely work, right?
Like the biggest fear that I have as we've launched more products and, gone into. a more competitive space in many regards. It's just being like spread thin. , it's really easy to just, Hey, talk to a guy about skincare. It's a lot harder to talk to everybody about everything.
Ben Tregoe: Yeah.
That brings me to another thing that you guys, I think do exceptionally well is your marketing and customer acquisition. You've been remarkably consistent about that. Time as well as all these product launches and changing audiences, was that something that you understood prior to starting Geologie or h how did you set that up and how did you manage it?
Nick Allen: It's just unit economics, discipline, right? It's like it's really easy to spend a ton of money to buy customers and then you lose money. That's, ask Uber about that. Yeah. But in a consumer brand, you really gotta build like a foundation, so if you go in too hot and you spend too much money in a channel, the low hanging fruit customers are very easy to acquire and cheap, but you have this reverse scale effect that everybody knows about.
And as you get more customers, it's, they're more expensive. Yeah. And when you do that fast, it's, you can blow a lot of money and we didn't have the balance sheet to do that, so it's, Hey, it's it's just old fashioned brand building then . Yeah. It takes time. Takes time. Yeah.
Ben Tregoe: I that's such a great point too, cuz I, I think one of the misconceptions of D two C was that you could build these massive, legendary brands, That shouldn't take five decades.
I should be able to do that in five years. Which you, yeah, it's probably somewhere in between, but it's not five years. I That's it's just so hard to get there and can't super hard throw money at it, obviously, as
Nick Allen: 11, I you can just throw money at it until you run outta money.
Ben Tregoe: like it or the crop of 2022 IPOs. Like the ,
Nick Allen: the cautionary tale there. , I mean what, like how far down is all bird stock? How far down is, did Warby Parker go public? How, yeah. Did they, yeah. How far down is their stock? How far down is maybe another one. Yeah,
Ben Tregoe: I don't, yeah. So we, you, you had this okay, so I've got to be careful, I'm gonna focus on the union economics, but up until don't know, a year or so ago there's still all this pressure to grow like crazy.
So you were h how did you balance those
Nick Allen: things? Yeah. Honestly, you start to focus on like the less sexy areas of the business. Shipping returns, chargebacks, like annoying stuff. Yeah. And it's tough. We do a lot of things that make some consumers upset. We don't take returns anymore.
Because it was like out of control. And you, it's a hundred
Ben Tregoe: percent lost to you. You can't
Nick Allen: resell the damn thing. Yeah. We can't resell it. Yeah. So it's hey, it's a basically an ingestible con product that you put on your face. Can't Yeah. Even if it's not open, we can't resell it.
Yeah. And I think for a long time, consumers. Got used to this Amazon effect of oh, whatever, I could do anything. And we're small brand. It's hey, when people are returning product, it's very difficult for us. And know, we made these changes and it's some people don't like it.
And the key is being very clear and transparent about those policy. , being fair and then also delivering on our promise. Yeah. When we don't deliver like we have shipping hiccups or things like that, it makes, it's a lot harder to, maintain these more strict policies because hey, we're not living up to our end of the bargain.
I think I, you're seeing more and more brick and mortar are changing their return policies. Big brands, e-commerce brands are changing their return policies. Yeah. And like it's just a function of the economics. Like we, the amount of don't know how many people like know this term, but friendly fraud that we experience is insane when someone orders the product.
Whether it's late at night or whatever and they decide they just didn't want it. And let's see, they'll just go on their app and be like, charge back. I didn't order this. Yeah. That costs, it's crazy cuz they, it's crazy. It's crazy. It's basically it's shoplifting. Yeah.
Ben Tregoe: So the term is friendly fraud because, why
What's the friendly part?
Nick Allen: They're friendly in that they're your actual customer. They made the purchase. I see. Okay. It's fraud because they actually got it. Yeah. It wasn't a fraudulent purchase. Yeah. So I don't know why they call it that, but that's the term. Yeah.
Ben Tregoe: And it's unique to e-com because the way that the card processing companies are, it's like the fault of the merchant.
Everything's the fault of the merchant. Whereas if it was like brick and mortar.
Nick Allen: Yeah, they and everybody's in on it. Yeah. Because the banks get their fee for the chargeback. Stripe gets their fee. Yeah. Shopify gets their fee like no one's incentivized to like, stop it. Yeah. It's a hundred billion a year problem.
Billion. A hundred billion.
Ben Tregoe: And is that, is it gone up with the, like a con economic. . Yeah. Are you seeing it in, are you hearing about it increasing like month over month for everybody or,
Nick Allen: I don't have any data that's that granular, but it's definitely a problem.
Ben Tregoe: Like when you talk to other founders are we, you guys are talking about that?
Yeah. Do blacklists exist?
Nick Allen: That's a good question.
Ben Tregoe: I, is this the blog post that launches the next Uber
Nick Allen: here? Yeah. I, I think there are blacklists and I know companies are working on this, like Yeah. We've reached out to all of our partners on this and people are aware of it, right?
Visa's got a new program, they're looking at it. Yeah, there's gotta be some like AI software out there that's oh, this particular consumer is, have chargebacks across different brands like Shopify and stuff should be doing this, should be paying more attention.
They might be in on it though, . They might be in on it too. Yeah,
Ben Tregoe: yeah. All right. Nick I know we're almost out of time. What do you have in store for 2023? You I bet you have some big plans.
Nick Allen: Yeah, we we are wrapping up some clinical trials on a very awesome acne solution that's gentle on the skin and really highly effective.
And a lot of people struggle with treating acne. And one of the issues is the common ingredients that you use to tackle acne are pretty harsh on the. Okay. And that leads to just low adherence. People start it and then they can't get through cuz their skin's on fire and ugh, that's no good point.
So we developed a, unique patent pending process that uses a couple different ingredients and it starts gentle and then we crank up the strength of the ingredients over time once your skin is acclimated. So that's, oh that's cool. That's sounds awesome. Yeah, it's cool. It's cool. It's really the before and afters are absolutely amazing people going through the system.
Wow. So that's cool. We're in some conversations to bring that product into some big retailers into 2024, and then the rest of the year is yeah, developing more omnichannel opportunities and, learning how to be unisex brand, multi-product, multi-category. , not just a men's skincare brand anymore.
Ben Tregoe: I think it's an amazing product. I have products. I've enjoyed it. I'm your classic, didn't know anything about it. And it's become part of my daily, my morning in evening routine, which I never thought I'd have. But thanks to you, I do. Thrilled to your head and you sh I encourage everybody to go check it out@atGeologie.com.
Do the trial, write the quiz figure, figure yourself out, get the trial and get going. Yep,
Nick Allen: that's it.
Ben Tregoe: All right. Thanks
Nick Allen: man. Thanks for having me, Ben. Appreciate it. Good talking to you.