Building the Future for TikTok Shops and Video Commerce with David Grant

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts, uh, to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10x ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. All right, well, thanks everyone. I'm really excited to share some, some really interesting insights today. My guest today is David Grant. David has had a really illustrious career and has a lot of interesting experience to draw from for our conversation today. So he was the founder and former president of Fox TV Studios in the late '90s. He spent more than 10 years as president of PopSugar Studios. His current project, he's co-founder of Favored.live, which is a video commerce company and TikTok shop service provider. They're an agency and production house. So they enable merchants and then they also invest in entrepreneurial creators to launch and grow sales on TikTok Shops, leveraging video, customized curated online boutiques to really monetize product recommendation power. And they've worked with household names in the beauty and lifestyle space, including Sephora, Fenty by Rihanna, Rare Beauty by Selena Gomez, The Honest Company, L'Oréal, and Estée Lauder. So David, working with such marquee brands and providing these, you know, B2B marketing services with a really emerging and sort of exciting platform like TikTok Shops, I'm sure you've dealt with, you know, some really interesting dynamics and potentially some long sales cycles as you're working with larger companies and potentially some complex buying committees where there's lots of different people that are sort of stakeholders as they're evaluating these types of services. since it can be so crucial to their success in the business. Tell us a little bit about the dynamics of Favored.live and how, you know, sort of you have experienced the B2B business landscape today.

Well, one thing that's really colored my approach is I worked inside a large company and ran a division of a large company that was Fox TV Studios. And I realized, for example, my staff, which is very young, many of them have never worked in a large company. And so it's very hard for them to picture what the politics may be like and what is success for a particular executive. And so the first thing I try to teach everybody is to identify who's got what dog in the fight. So for example, you may be talking to a group of people at a large enterprise brand, And in our case, there's maybe a social media manager who's in charge of the account, the particular social media account. Their KPI will be just how many views they generate and how many engagements they generate and what the reach is. You then have on the same call an e-commerce manager, excuse me, and the e-commerce manager's KPI is 100%. What are your sales? And the e-commerce manager may or not be empowered to touch that social media account. And now we're telling them the way that you're gonna generate revenue is on that social media account.

Right.

And then you've got a brand manager and the brand manager's KPI is to maintain and grow the quality of the brand. And so they are very concerned, rightly so, is this content that's gonna generate sales going to help the brand or ding the brand? Who are these people talking? What are these creators gonna say about me? What are you, what is your company gonna say about me? And will I hate that or love that? And it's, you have to get to the point where you can get them to navigate among themselves. On the other side of that, and this is a kind of a new complexity, which is the platform. So we sit between, in this case, between TikTok and let's say an enterprise company. Everybody's trying to do the right thing. The platform has its own teams and TikTok to their credit is launching something very new and aggressive in a very short amount of time. I think TikTok Shop went official in August. And so they've got global account teams, they've got verticalized teams like a fashion team, a beauty team. Today we talked to the outdoor sports team. I think it was, they've got teams that manage us. So they got the TikTok Shop provider teams. And you have to be sensitive to the fact that they each have different KPIs. So the people that manage us, they're judged by how well we do, which is great. But the people who manage fashion accounts could care less about this, us, rightly so, because they only care about how their fashion accounts are doing. And so it gets very, very complicated and you have to just take a deep breath, look at everybody, try to listen to them, which is hard to do when you're trying to pitch and see how they're reacting and try to address their concerns so that you can move forward. And it sounds impossible when I lay it out like that. It actually is possible to move forward. But there's a lot of pieces that have to fall into line.

So that's, that's a really interesting and complex dynamic. I know a lot of companies that are dealing with sort of that level of complexity will will do things like building out, you know, an avatar or persona of sort of these different stakeholders that they might work with. So there might be sort of the mindset of the social media manager within a brand that you're working with or the e-commerce manager within a brand. Has your company gone that formalized with it or is it more of the people that are dealing with it are just that good at sort of, you know, being empathetic to the different decision makers and understanding the business context?

We're definitely not formalized along the lines you said it. You know, we're building, we're actually using AI in other parts of our business, but we haven't cracked this code yet for AI. This is very much just being able to size up the situation. I, you know, one of the, there's a lot of downsides of doing this for too long, but one of the upsides is I've just done it a lot. So I'm kind of used to seeing people or, and I'm an introvert. So being an introvert, actually, I think is very helpful in this case because it makes me a hyper good listener. So I'm, and, you know, one of the interesting things is I think, you know, how much information I used to miss in a phone call. A person, an in-person meeting was great. I used to miss a lot of information in a phone call because I couldn't really gauge reactions of people. Never really loved that. I hate talking on the phone. So video calling has been a real Aha thing for me because I get enough information from assuming people go on camera, right? I get enough visual information to really read a face and say, I think we are scaring this person or threatening this person, or I see these other people nodding and I go like, okay, they've been waiting for someone to come on and say, yes, this is what I've been trying to tell you, that kind of thing.

That's interesting. That's really interesting. So this is such an exciting space that you're, that you're working in. And a lot of, you know, companies sort of, they might have deep expertise in a particular area where, you know, you had such deep expertise in video production and having worked in the TV space. And, you know, there's this sort of emerging technology around TikTok. So a lot of companies will sort of struggle to how to zero in on, you know, the right solution to offer and to the right type of company. How did you go about sort of finding You know, TikTok Shops and working with influencers and brands to straddle that ecosystem. How did you land on that as sort of the right—

Yeah, I wish I could say it was methodical, but this is how it went. I would, so back after I left Fox TV Studios, I started a company called ShopFlick and raised venture capital for it. And it was the first video commerce company. My, the guy who ran Fox at the time, Barry Diller, who's chairman of Interactive Corp, he walked into a meeting I was in with a number of executives and he said, I'm leaving. I bought QVC. And we were like, what? You did what? Like, it was just so bizarre to us. And I started thinking about like, well, that's really interesting, you know, the connection between TV at the time, TV and commerce or video and commerce.

Yeah.

And I was thinking like, well, who's gonna do that for younger demographics, they're not gonna watch QVC. And so I thought, okay, I'm gonna do that. So I got together with a friend of mine and we started this company called Shopflick and it was really, really cool. We had all 3 Kardashians were like involved with it. It was, it was great. I, you know, but it was way, way too early. I sold the company to PopSugar and that became PopSugar Studios, rightly so. They were interested in advertising, not so much in direct commerce. So I kind of had to pivot what we were doing. But I always like felt like I was unfinished business on this, on the side of the video commerce piece. I then was studying kind of obsessively what was going on in China. And in China, livestream shopping became an enormous bit, is today, it's just an enormous business. The sister company of TikTok was owned by ByteDance called Douyin. does, I think we'll do about $230 billion this year in video commerce. And so I was looking at that and I didn't know what TikTok was gonna do or what anybody was gonna do, but I was going like, well, who's doing this in the United States? Nobody. So I got together with a very good friend of mine who I worked with at PopSugar, a guy named Jordan Allen, who had then gone on to Participant Media, was in a fancy movie company. But I said, hey dude, you gotta come back. Look what's going on in China. Like, no one's doing this here. So we started this company and we, we just started working directly with brands and doing commerce on their website. But it really was hard to scale. And then TikTok came along and someone said, hey, I wanted to do— and TikTok was saying it's really important for me to build in the US what I was so successful at in China. And in China, they have this ecosystem of companies that are, they call, Douyin service providers or DSPs. And TikTok understands that having a platform alone is not enough. You need a combination of creativity, technology, and support and expertise to make it go for most brands and creators. So they have an ecosystem of companies very successful there, and some of them have grown quite large. And so they found us, somebody recommended us to them. And so oddly, we were there before TikTok was there. But when TikTok came around and said we want to create a similar ecosystem, we were like, perfect. That's exactly, we didn't know if you were gonna do this, but that's what we've always wanted to do. So it was instantly a good partnership.

That's really interesting. So you had the vision, you were ahead of the curve there and then the world caught up to you. But even still, when you're especially on sort of like, you in the innovative or sort of cutting edge of things, sometimes it can be hard to find, you know, sort of a steady flow of opportunities and clients. How, you know, as the company was really getting going and trying to find efficient channels to acquire new customers and to really grow, how did, you know, what were some of those early channels, those early sources of leads that, you know, actually turned into opportunities that actually turned into revenues and how did you scale those as you, you know, sort of grew?

Yeah. So I'd still say we're at the early stages of it. It's still a new company. You know, I like to think that I learned from my mistakes and one constant criticism of me that's valid is, and I remember as I was going up through the ranks, bosses saying, you're just too early, you're too early. Or one said, probably the most critical thing ever said to me, but one of the most important things was you got the million-dollar ideas and the 10-cent execution, which is a very mean thing to say, but true at the time, at the time. And so I'm cautious, like very conscious now of like being early and the perils of being too early. And so clearly the first company I started in the space, Shopflick, was too early. I mean, there wasn't any video on social at the time. There was probably only like 100 iPhone apps. And people who found it, the company, they loved it. They loved the content. That's how PopSugar found it. The women who worked at PopSugar as editors love the content. So I, we have been worried that we're too early. However, TikTok is moving very quickly. And we haven't really, I would say it's too early to say that we can easily project. And right now we're going into 2024 planning a little late in the game, but we've been very busy. And I would say that we, we can see where the business is coming from. And, you know, and clearly TikTok's been very helpful because They are very motivated to grow their business. And once they have faith that we can deliver for them, they have clients to send us, a lot of clients to send us who need the help. And some clients, and I had this same experience at PopSugar when we were making video for clients. Some of them believe they can do it and have— some of them can do it very well themselves. Some of them think they can and can't, and some of them know they can't. And so we wanna quickly triage and say, look, you're fine, you don't need us, or you need us for out of the 5 services we offer, you need us for these 2. And for other ones to say, you know, you don't excel at this, or this would be a pain point for you so we can help you right away and be kind of wary of the ones in the middle, the ones that think they can do it. Mm-hmm. And it really We feel they will struggle and we will not be valued enough in the process or it will be, you know, it could be contentious. And so we try to stay away from those.

So I'll ask a question. Maybe I know the answer, but some companies would, you know, use that as an opportunity to again get a little formal and build out like a tier 1 ideal customer profile, a tier 2. Have you guys done that to that extent? Have you found that to be helpful?

We have a, I wouldn't say it's super formalized, but as we go along again, this is very new. This is, you know, TikTok Shop has been officially happening since August.

Right.

So no, so what, what I see is no one can say, I could safely say no one has more expertise than us and we're super data oriented. So we, we're collecting data across many clients, not sharing it, but getting a sort of a collective, you know, view of like things that work and things that don't. And by, with that data and just with the results we've had, we're starting to formulate in our mind, we're getting a very quick sense of like, not necessarily who's a good client or a bad client, but like how we can help you or if we can't help you not to spend a lot of time trying to make it and we're just not that into each other.

Sure. And you also raised something else earlier that I thought was really interesting. So A lot of B2B services, service providers work within ecosystems and I'll give a sort of a side example, but, and I'll also bring it back to you. So, you know, there are companies that do sort of implementations of Salesforce or implementations of other large software where they, you know, to be really dominant in the space, they have to get a significant portion of their revenues, you know, from that big provider that is sort of serving as a source to funnel the best big opportunities. And then, so there are some companies in that space that all they do is focus on deepening their relationship, you know, with the provider. So in your example, they would just deepen their relationship with TikTok and focus all of their kind of business development efforts on deepening that relationship and proving to TikTok that you're the best for your niche. Whereas other companies would, you know, sort of see it as I want to go out and build my own pipeline and source of business. And then whatever I get from that sort of keystone player that, you know, the one that builds and maintains the ecosystem, I'll see that as sort of gravy on my growth, but I'm gonna focus my energies elsewhere. Where do you see in your experience, and you can speak to this Specifically or more broadly, what have you seen be the most successful strategy between those 2 for companies that work in those types of ecosystems?

Well, there's a maxim, there's a pattern, let's say, and I'm very aware of the pattern. And that is when a platform launches a new line of business and the more important it is to them, the more they do this is they subsidize and push a lot of the activity. And then later when the thing is going, they stop doing that.

Yeah.

And I don't, you know, and, and some of my colleagues in the business who've gone through this get very angry about that. And I go, there's nothing to get angry about. It's just the process. You know, it's like, I mean, it's not like someone said like, I'm cutting off your Social Security or, you know, your parents saying, hey, I think you're old enough to support yourself now. It's just how life works. And so we've, we are appreciating the sort of jumpstart that TikTok is helping us with. But we know that if we're not the best, you know, or among the best in this business as well as constantly prospecting for new clients as we then get, you know, better at like identifying the types of companies. Now it's really helpful for us that companies are more and more aware of TikTok Shop as an avenue, just like the very— so it kind of reminds me of the very beginning of Amazon or Amazon FBA, Amazon.

That's right.

Where, you know, more like today, it's like there's a billion stores on Amazon. But at some point somebody had to say like, is this worth my time? And so TikTok has had to overcome that and there's a lot of skepticism. And so, and, you know, all the politics involved with the Chinese connection, all that, that that's sort of like quiet down right now, but it was noisy for a while. And so companies are, you know, rightly so wondering, is this worth my time? Or they may wonder, is this gonna cannibalize my Amazon sales? Or there's a million questions.

Right.

As they, as TikTok is proving itself as a potent commerce channel, then our sales cycle is easier because it's something that more people in more companies believe they should be doing.

Yeah.

And so, but then it's up to us at some point, obviously, to go and get that business and not rely on TikTok to always match us with people.

So if I can say that back, your advice would be it depends more on sort of the life cycle of the ecosystem as to which is the right strategy and early on focusing on the sort of, you know, the keystone player in that ecosystem Might be a more successful strategy, but then later on you need to have a strategy for expanding.

Yeah, I think that, I think one advantage I have maybe, and there's many disadvantages of being older, but one advantage I have is I can see and I love to see patterns. And so, you know, this sort of pattern of how things are at the beginning, the platform help that you get there, they love you, they spend all kinds of time with you, they will subsidize things and so on. And then moving away from that again, it's the Like I said, it's like the kid turns 18 and now they need to support themselves and they gotta be ready to do that. That is a pattern I see. And so I consciously preparing for that all the time.

That's really interesting. So as you've been scaling the company or other companies that you've worked with, I'm sure you've had the experience of, you know, there's only so many hours in the day. And so what a lot of founders and early stage leaders within companies struggle to do is To standardize systems and processes for, you know, attracting more of the right prospects, accelerating opportunities through the sales pipeline, activating your clients for renewals, upsells. What have been successful sort of strategies that you've seen as a leader for implementing those systems that and processes that can really help you scale?

Yeah, they've been. You know, they've been different at every company I've started or worked at. I do remember points at the large, the companies that grew larger. I mean, Fox was a, you know, multi-billion dollar company and PopSugar was a multi-hundred million dollar company. But at some point, I got to a point where I could walk in and I'm a kind of an OCD person and I love, I'm a writer and I'm hands-on and I'm, I could drive people crazy, but I like try to learn, like walk in and I could say like, okay, everybody here knows what they're supposed to be doing and I can just make decisions.

Yeah.

I could say yes, no, you know, and sometimes I, at first I would, because I wasn't used to that, I would feel like, oh, I'm useless. I don't need me. And I go, wait a minute, wait a minute. That's what I'm supposed to. And I think I watched a video about Jeff Bezos and he was saying like, I just make decisions. I go like, oh yeah, that's actually a job and an important job. When you start a company, you have to tear that all up and go back. So at PopSugar, I was at a point where like I was making a lot of decisions and I had very talented people, you know, acquired over time and at every department and other parts of the company that were really good and everybody knew what they were supposed to do. And then you go into a startup and it's utter chaos. People have 15 jobs and I'm doing, I mean, I'm an ex-corporate lawyer. So like, I'll do the contracts. I go like, I'm setting myself back 25 years doing that. Doesn't matter. Like, you just gotta do it. And there's a part of that I really love. And there's a part of that I'm always struggling to then say, how do I get to this point where I was before where I'm just thinking big thoughts and making decisions? I know every, you know, person who starts a company or leads a company, has a similar feeling. And so, you know, I'm right now I'm at the point where I'm, where I'm trying to bolt together enough of the pieces where I can just take a breath and say, okay, I think I get what we need. And now, like, I can, I gotta fill in the spaces that I need so that everybody knows what they're supposed to be doing and everybody falls across. One thing that's made a lot easier is just the better collaboration tools that exist today that make it way— if I had these collaboration tools back in the Fox TV Studios day, I could have gone home like before lunch. It's so, so I'm really adamant on like hyper transparency. Every Google Doc is shareable by everybody in the company. Everybody is like, gets on the same page, everybody can contribute. And then eventually you get people sorted out into the places where they have strength. And that's something I've had to learn over time, which is to try to, not to try to, to try to identify early on who's good at something. It's like coaching, you know, it's like coaching sports. Like this person is good at this, put them in a place where they're gonna succeed. Don't try to put them in a place where they're gonna fail. And then, you know, fill in what pieces you need around that person. And at a small company, it's all chaos. And, you know, the art of the stage that we're at is We're still, it's complete chaos. Yeah, it's organized chaos, but it's chaos.

When do you, do you sort of like have your own timetable of when you think it will evolve, you know, from this current stage to the next stage or?

Yeah, I mean, I've done this enough. It's very easy for me to picture in my head and I could describe it and I could draw it out on an org chart. I could do all of that. Because I've done it, you know, many times before. I've seen other people do it and I've gotten exposure to many other companies who are very well run and see how they do it. It's knowing that it's like you have the— there's the instruction book is in my head and it's looking at this jumble of Lego pieces and going like, okay, how do I do it with these Lego pieces while we're running at a million miles an hour, you know, trying to, you know, prosecute the business we have in front of us.

So you have a really unique perspective having done this so many times through some sort of different, you know, courses of history. And, you know, there's a lot more data and technology. You talked a little bit about the sort of the collaboration tools that exist today that didn't exist when you were building, you know, Fox TV Studios. What has been sort of a big aha moment And, you know, kind of achieving this, you know, this first stage of growth with this most recent venture that maybe is an indication of how things are different, you know, even within the last 3 to 5 years. And there's a lot of people that talk about, you know, since the COVID lockdowns, there have been a lot of changes in the B2B landscape that accelerated by, you know, 10 years within 10 months, they say at McKinsey. Are there things like that that you've seen or do you feel like it's a lot of the same? Maybe it moves a little faster because we've got better tools or, you know, how would you say it's different this time around? Have there been any big aha moments for you?

So one thing is the pandemic clearly put into full motion video calling. And so when life consisted of emails and phone calls and video calling was kind of an esoteric thing. And I remember even at POPSUGAR, which was, you know, had lots of engineers and the IT guy put the video calling screen, you have to, it was like a Google thing and it was on a big TV monitor and he put it up like 8 feet up on the wall. And I go like, dude, that's not how people talk to each other. You gotta make it face to face. Like, you know, and you still see conference rooms in some of these big companies where it's like these little people sitting around a table.

Yeah.

And you're supposed to be talking to them and they're actually just facing each other and you're in some other view. What, what I'm constantly wondering about is, so I don't even think about it anymore. I can be in face-to-face contact with my staff and people at other companies and TikTok and whoever it is we talk to all day, all the time, which is really remarkable. I don't, and living in Los Angeles, as you know, like if I, I mean, I used to do, let's say, a lot of business with Disney, I sold programming to Disney. I was at Fox, I was in Century City, Disney at Burbank. The drive to Burbank, I mean, that would eat up 2.5 hours out of a day. Like, oh, let's have a meeting because we don't just want to talk on the phone, but I actually want to see you.

Yeah.

Like, that's a huge difference in life. On the other hand, I don't know how if I'm a 27-year-old or 26-year-old and we have young staff and really talented people, how they pick up the stuff that happens all in between. I don't know the answer to that. I know, like, in my past, I got huge breaks, lucky breaks, by just physically being in the same place. I got one giant break where I was in New York, and I was just a junior, the most junior of junior, like 1 inch above a paralegal. And I was in a— it was like midnight in a copy room. at our Fox offices in New York and the president of this division who was going to do this big deal and he was trying to make a copy of something. It was like a huge deal that they were gonna go negotiate with the network the next day and he didn't know how to do it. And I just happened to be there and I go, I'll make the copies for you. So like I made the copies and he took me to the meeting and that was a giant change. We talked while we were making copies and I got to know him and then like, where is that gonna happen if you're just on video. So while, so I think it's like got incredible potential. It's changed. I don't even think about it anymore. Like I'm talking to you, I don't even think that you're not really here.

Right.

I'm seeing enough information about you and all that. And, you know, you've got a real background. I've got a real background. It's not some goofy artificial background. Like I feel like it's a real conversation. We could be at a coffee shop.

Yeah.

But, but on the other hand, I'm the piece that I was just talking about, which is I don't have all the cues. If I'm a kid, I didn't have all the cues. So I don't, I don't know how, so I, so I'm curious to see in the future that could be an aha 2 ways, which is you, you get a lot more exposure to everybody. Like, you know, I didn't, maybe when I first started at Fox, I don't think I saw the chairman of the company for quite a while. Like, didn't even know who it was. It wasn't a face I know except if I read Variety or Hollywood Reporter. On the other hand, you know, so now that would be instantly, we were just on a call a couple of hours ago with like a very successful company and the founders and the CEO are on and they're, you know, why not? They're in their house and just turn on the camera. So that's the positive, the negative or the unknown, let's say, is the other piece, which is the little things, the little kismet things that happen to you in life, I think are reduced.

Interesting. That is really interesting and certainly a dynamic that a lot of companies are dealing with. I think, you know, that's more of sort of the people within those companies. How do they overcome that, which would be an interesting dynamic? So we've talked a lot about sort of your journey with this, you know, current project, and you've kind of identified that niche of, you know, the service that you're offering and the types of companies that you're dealing, working with and the sources of leads and opportunities and how you're developing that. You've gotten to this, you know, sort of this first layer of success here really quickly considering the TikTok Shops just sort of launched, you know, within, you know, the last couple of quarters. What is gonna be, and, you know, obviously don't reveal anything that you consider to be secret. What do you think is gonna be that key to success for propelling that next phase of growth?

We really look at video commerce as something that's gonna be pervasive across all platforms and websites. On company sites, we see it as a way to convert existing customers at a higher rate. And on platforms, obviously, it's a way to find new customers and convert new customers. And as long as TikTok is way ahead of the game is you make it friction-free or low friction.

Right.

Right now on other social media platforms, the friction is relatively high. And as you know, from e-commerce, any friction You know, takes the plane down. So, so TikTok Shop's actually doing a terrific job at eliminating that friction. So when once you get to a point where we have learned a lot about what type of video drives conversion, there's really no limit to where and how that goes and what platforms that may end up on, including your own. And learning how to scale that because right now it's for, for many companies. And we learned this at PopSugar, always surprised me what a pain point doing good video was for companies that have seemingly endless resources. And you go like, well, is, why is that so hard? But, you know, companies have DNA and they're good at something. And no matter how much money they have, it doesn't mean that they're good at something else. You would not want me to make a product. It would not be very good. But we just got off a call with some ex-Apple people, who designed a product called BlenderCap. And I mean, it's the founders and we're gonna do something with them and it's awesome. Like they made this beautifully designed product. I could never do that in a million years. So I know what I can do and I know what I can't do and what we do is something that is difficult for companies to do.

That's really interesting. Well, thank you so much for taking the time to join me. I've really enjoyed the conversation and thanks for sharing those insights.

Yeah, me too. Me too. Thanks for having me.

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