💰 Get Funded! Founder Interviews by Serac Ventures w/ Todd Baldwin, CEO at Crafted 🚀 (07-12-2024)

Okay, we are now live on all platforms— LinkedIn, Twitter, Facebook, YouTube. And I think I'm even getting an IG here. Maybe, maybe we'll see afterwards. But nonetheless, thank you all for being here for another week of our Get Funded Office Hours. Every Friday we take some time to interview a promising early-stage founder, and we're super excited to have Todd here today. For those that do not know me, my name is Darrel Frater. I am senior associate at Sirach Ventures. We're a seed-stage venture capital firm based here in Oklahoma, investing across the US. We invest in fintech, B2B and SMB SaaS, commerce enablement, future of work, creator economy, and the gig economy, all with the underlying impact of increasing access to economic mobility and wealth building. We're super excited today for our Get Funded interview with Todd Baldwin, who is the co-founder and CEO of Crafted. I'm super excited to have you here today, Todd. Please, let's jump right into this interview. So tell us a little bit about yourself and Crafted. What is Crafted?

Yeah, 100%. I'm happy to chat about my background maybe a little later on, but would love to just maybe give you an overview of kind of what Crafted is and what we're, what we're doing today. So Crafted, at Crafted, we're building the most efficient drive-to-retail platform that enables brands to drive in-store sales. through any digital marketing channel, right? And to tell you a little bit about the story and how we kind of came across this problem space and, you know, how we ultimately decided how to solve it. We kind of started out in consumer building like a Twitch for cooking platform. And then from there, we kind of quickly realized that brands were actually more interested in like short-form video, like the recorded live streams and the live shopping placements we were doing. And so this is in 2022 when TikTok and Reels were really becoming you know, they're evolving from just being an entertainment platform to kind of being like the go-to platform for getting your product in front of consumer brand, consumer customers, right? And kind of despite the effectiveness of this marketing channel, it was still off limits to a lot of people because of the friction in generating high quality content for those, for those particular platforms. And so we built this marketing automation tool that essentially enabled brands to kind of remove all those frictions and get high quality content at scale out on those platforms, right? And because we had our start in food and beverage, because of the cooking days and live streaming, we kind of came across this much larger problem, right? And that's driving sales, you know, from digital marketing channels online to like offline, like, you know, sales points, right? And we learned about all the frictions and the pain points that kind of like, you know, go with that, right, across the funnel. And so other players in the market today have kind of focused on retail conversion through discounts and like, you know, attribution through receipt capture. But, you know, after having spent like 4 years in the space, we realized that the stage with the highest level of impact on this entire funnel is the very top, right? So being able to identify several target customer personas and then develop content at scale to reach those customer personas is the most impactful, but also the most time-consuming step and the most difficult to do. at scale. And so we kind of spent the last 2 years building this automated solution that does exactly that, right? And effectively, that has led to our customers, you know, seeing 70% sales lift, doubling their ROAS, cutting turnaround times in half for their campaigns, all while, you know, reaching 20 million potential customers for our clients. And this approach has kind of gotten us some big-name customers like Cinnabon, Trader Joe's, Entenmann's, and Jack Daniel's. And Got us to a little under half a million in revenue in 2023, which we're really excited about. And so the kind of the full vision of what we're trying to do is we're trying to build this full funnel solution that allows, you know, any CPG brand or any brand that's selling brick and mortar, right, to be able to drive sales with market-leading efficiency, speed, and scale. So I'm happy to kind of dive into anything that might be of interest, but that's a little bit about the company.

Wow, that's super exciting. So you did a little under $500K in revenue last year. Uh, we'd love to hear, you know, how exactly the customers are using it. How's the platform work? Walk us through like step by step, um, how potential customers use it. So that way, if anyone that's listening today that might want to use it, they can have a sense of how Crafted works and how they can use it to help drive sales within their CPG company.

Yeah. So the overall goal is for us to be channel agnostic, right? To be able to produce content that, you know, is versatile and can be posted on any, you know, display network or things like that. But for the time being, we are focusing on influencer and paid social as the first 2 digital marketing channels we're supporting, right? And so the way that it works is that effectively brands come onto the platform and they tell us a little bit about, you know, their product, what product category they're in, what retailers they're trying to sell into. And effectively, we then send a blast to our network of creators and influencers That match those criteria, or whose audiences match those criteria. They come, they apply to Debris. So you have like, you know, very low lift on the brand side in terms of getting in front of the right creators. And then we've done a lot to do to offer additional information about the audience of those creators and influencers. And also, you know, their audience demographics and psychographics and things like that. So that brands can make an educated decision on which creators they want to work with. And then we built some automation tools to effectively help them, you know, all the way through the content automation process. And then after, like, kind of like the videos have been distributed, whether that be on, you know, TikTok ads or influencer marketing, we effectively have integrated with some retail conversion tools that drive those viewers to a landing page where they can give a phone number or, you know, an asset like a or email where they can be nurtured over time. And then we also have integrated with players that have allowed us to do some form of attribution, right, through receipt capture, as I was mentioning a little earlier. So that is kind of like what the experience is like today. And, you know, over time as we collect more and more customer engagement data and we're able to kind of like hone down on, you know, which customers and which audiences like have high purchase intent for which product categories at which retailers, We essentially expect to do a lot, you know, to build a lot more in terms of tooling around audience targeting and specialized content over time.

That's amazing. And you said something about on average, your customers are seeing a 70% bump on their return on ad spend or ROAS. Tell me a little bit more about what they were doing before working with Crastit and how that ROI is being seen within the companies. You talked about Cinnabon, Jack Daniel's, give us some of those case studies of some of these great customers you're having and how they're seeing a benefit from Crafted.

Yeah, just to clarify, that was a single case study of a company hitting like a 70% like sales lift after using our platform. But effectively, there's a few things that we do to promote that. And the 3 categories I mentioned, right? Efficiency, speed, and scale. So in terms of efficiency, right? I mentioned that we effectively have created this network of ratings and reviews of creators. that produce high-quality content, right? I think that that has done a lot to help us achieve videos that are, you know, getting 200% more viewers than other content providers or content produced in-house, and also 35% higher CTRs, right? The second thing is the way that we price in terms of our influencer marketing offering. The way that we price our influencers is very unique, and it model— it looks more like media buying than it does like traditional, like, brand awareness marketing for influencers. And so by taking, you know, the historical performance of these influencers and giving an estimated reach, you know, for the campaign and then charging a CPM based off of that, we ensure that, you know, brands are effectively paying for like what they're going to get in return, right? At least the top of the funnel in terms of viewership. And then the third thing is our focus on retail, as I mentioned, right? So it's not even just, you know, can we get you eyeballs at the top of the funnel on like these platforms that I mentioned before? But also being able to, as I mentioned, build and like leverage some of these like retail conversion tools that actually get them into a storefront. And then also to attribute, you know, like, you know, that sale back to an individual piece of content to an individual influencer.

Phenomenal, man. And we talked a little bit about the, you know, the customer side of the like Cinnabons and Jack Daniel's, the brand side. Tell us a little bit about the influencer or the creator side. We'd love to hear, you know, how it works on their end.

Yeah. So as I mentioned, you know, everyone on the platform has a set rate based on past performance, right? And so effectively, when a new brief is posted, we have several people that are— have already been onboarded onto the platform and already have a rate. But we also have an extended network of like, you know, 200 million creators that brands can also reach out to and invite them to join the Crafted network, you know, get priced and get activated into the campaign, right? So what the typical experience looks like is that they would, like, as I mentioned, they receive an email in their inbox and they're able to log into the platform, connect their TikTok and Instagram profiles, upload any past work so that brands can see that before selection, and then they apply to the task.

That's phenomenal. Like I said in the beginning, at Sirach, we invest in the creator economy amongst other things. And one thing I love about the creator economy, it gives people a new unique way to earn income through being a creator and creating content, which is super exciting in terms of the future of work. Do you have any case studies or stories of a creator that came onto your platform and how your platform has improved their life or their, you know, micro business as a creator?

Yeah, we've definitely, we've been in the, we've been around this space for quite some time, right? And so there are many creators that, you know, are contracted quite a bit, you know, on our platform and are super highly rated by the brands that they work with. And effectively, like what we're doing to improve that over time and to even, you know, improve their outcomes is, like I said, working to get that attribution down the funnel so that we can not only say that this creator drove this many views or this many engagements, but actually being able to tell how many sales like in-store this particular creator did. And so that's something that's very unique to Markit and that's something that other influencer marketing platforms, other UGC platforms aren't doing at the top of the funnel. And then the retail conversion tools that I mentioned before, they essentially are looking to scale their efforts with the content and the influencers that we have at the top of the funnels.

Cool. Tell us a little bit about how you make money.

Yeah, so we essentially charge on an annual contract basis. So we charge, you know, a software fee. And then presently we charge a usage fee as well, depending on how many creators you're looking to activate. And essentially, you know, kind of as we go along, a lot more of the deals we are signing are longer-term deals and are more software licensing focused than what we've done previously.

That's awesome, man. Super excited about what you built and how you're helping both the brands and the creators. Let's take a step back. I want to learn more about your origin story and how you got to this place of being the co-founder and CEO of Crafted. So tell us a little bit about kind of where you started and Walk us through your journey of getting to where you're at today.

Yeah, 100%. So effectively, I was really excited about, you know, like new forms of media for like niche communities, right? And I've always been passionate about food and beverage. And so I had the idea to, you know, develop a livestreaming platform that would build a community around food and beverage in the same way that Twitch had done for gaming, right? Around that same time, I met my co-founder, who was awesome, and she also had a very similar vision for like the future of, you know, content and like social commerce around food and beverage. And so we kind of combined our efforts and built that initial live shopping platform, which I mentioned to you before. And then, you know, from there we kind of realized that a lot of the customers that we had at the time were actually more interested in the recordings of the live streams we were doing for them because they were chopping them up and like kind of putting them on TikTok and Reels and like using them for like marketing. And so we decided to just start focusing on removing frictions for them. We put up like a landing page, you know, on like a Thursday with like this new marketing automation tool we're gonna build. And, you know, within like a couple of days, we had a couple thousand dollars in like, you know, like preorders before we even built anything, right? So that's kind of got us started down this funnel of like, you know, supporting these particular retail marketers. And then from there, as I mentioned, we kind of discovered, you know, this entire online to offline funnel where You know, it kind of mirrors the experience, the funnel for e-commerce brands, but there's a lot more support and like, you know, products that are being built for that online-to-online funnel. Whereas like there's this completely underserved like market for people that are trying to drive in-store sales from digital marketing.

Awesome, man. Well, congrats on the progress you took. I feel like myself similarly, I started a live streaming platform for entrepreneurs and DJs because I saw the need as well. That was my startup back in 2020. So glad to hear, you know, transitioning and pivoting from that platform to now this platform that you're giving creators an opportunity to make money by connecting them with really amazing brands like the Scent of Bonds and Jack Daniel's. So congratulations to you. That's super exciting. I would love to now be forward-looking. Tell me about kind of where you see Crafted going from here.

Yeah, absolutely. So I think that we, we kind of envision our trajectory similarly to Shopify, right? So Shopify effectively started with, you know, some really great commerce tools, right, for checkout and like, you know, products like inventory management, things like that. And then they kind of evolved to being like this suite of tools that, you know, supported brands in a multitude of ways, right? Whether it be product fulfillment, logistics, marketing, you know, sales, that sort of thing. But every single tool they built out from the beginning, like, leveraged the data and like the customer base they got before to add more and more value. Similarly, we kind of see a very similar thing. And this is what we've already kind of started to do, right? We started at the top of the funnel, right? Started automating content creation for high performance conversions. And then we essentially started moving down the funnel, right? So integrating with retail conversion tools to start collecting email and SMS things, allowing brands to do some customer lifecycle management from there. And then also doing, you know, forms of attribution to receipt capture, right? We see that process essentially continuing like over time. As I mentioned, we're looking to improve our audience targeting like tools at the top of the funnel to predictively tell which audiences are going to be high intent for certain brands before creating the content and before connecting with the influencers. And then effectively going using the attribution and the marketing data that we have, right, at a granular level to essentially inform, you know, which channels and which pieces of content and which audiences brands should be spending money on, right? And so going from there to kind of leveraging that data for demand forecasting, maybe also, you know, educating brands on, you know, inventory, like, management now that we also have an idea of demand forecasting in certain geographic areas and kind of going from there to building a platform that supports, you know, any omnichannel brand as they launch and grow over time.

That's phenomenal. So do you see yourself going more vertical or more horizontal in terms of, like, going to different channels, or do you see yourself going deeper within serving this specific creator and brand type that you're currently serving?

Yeah. So like I said, I think that, you know, as in terms of platform, we aim to be agnostic, right? We know that the most effective form of content right now is video, as video content, specifically like user-generated video content. I know that there's a lot of, there's been a lot of conversation and hype around, you know, GenAI tools and what that can do in ad content. But Effectively nothing replaces like, you know, someone that has authority in the space and is an actual customer of the product, you know, speaking about it like on a former video, right? And so making sure that those videos are versatile enough to go across different like platforms, right? Like to be implemented into the retail media networks, to be implemented into, you know, display networks and things like that is something that we think a lot about in terms of expansion.

Yeah.

And the depth into which that we've kind of gone, right? As I mentioned, we have, you know, built some tools of our own in terms of retail conversion and attribution. We've leveraged, you know, like partnerships with other companies that have done the same things to kind of give a ROAS, right? You know, for the content that we're generating at the top of the funnel. And I think that that's what's really important here.

That's phenomenal, man. That's super exciting and proud of the progress you made and kind of where the vision of Crafted is going. I would love to talk about your founder journey in terms of Lessons learned. You know, we have a lot of founders that also listen to these every week. We'd love to hear, you know, what's something that you know now, being a few years in and, you know, getting all this traction and progress that you wish you knew when you were first getting started?

Yeah, I mean, I think that the biggest takeaway I've had from, you know, this experience as a founder is really the importance of listening to your customer and iterating. And so like, I think that, you know, in every phase of our product or of our journey overall, right, anything we've built has been in direct response to, you know, a piece of customer feedback, right? You know, the initial pivot from like live streaming to short-form video marketing automation tools was purely driven by conversations with customers that we had at the time, pushing further down the funnel and integrating with these retail conversion tools and focusing on attribution. Also resulted from, you know, our customers saying, okay, this is really great. You can drive eyeballs with efficiency at the top of the funnel. But, you know, what is the actual down funnel performance, you know, of the videos you guys are generating, right? And kind of going forward, right? Like we have prospective customers that, you know, want to be able to use content to market on things that aren't paid social, right? Or that aren't influencers. And so being able to support any marketing channel that they want to, you know, distribute content on. is something that, you know, came directly from customers. So I think that at every stage in the journey, as long as you are, you know, connected to a real problem and connected to your customer, I think that you're going down the right path.

Great advice, man. You know, I listen to a lot of founders and, you know, hear their stories. And sometimes, you know, when founders are pitching me, I can hear it in their voice when customer— when they're customer-centric or they're like investor-centric. And like, The founders that tend to not really think about every detail of their actions and gearing it towards serving the customer, and they start appeasing, you know, to say and do things that they think the investors want to hear.

Mm-hmm.

Those are the ones that I feel like don't do as well. When you really have an ear and a heart and empathy for your customer, understand their pain points, understand their goals, and you're building your company to aid and help them reach their goals, Those are the people that win. Those are the people that I am super excited about to invest in and to partner with. And that's a great lesson that you learned. It's clear based on the traction that you're receiving that you have a heart and empathy for your customer, and that's why they keep coming back both on the brand side and on the creator side. So congratulations to you and your team for the great work that you're doing driving impact for both of those customer segments.

Yeah, absolutely.

Yeah, man, would love to hear, you know, in regards to your history, you know, in terms of raising capital, etc. Where have you been so far? Have you raised capital? Are you bootstrapped? Give us some insight on that. You know, I have a little bit of insight as well as I was involved when you were in the BKXL program when I worked at Visible Hands. So I know a little bit, but let's hear from you in terms of like your journey. Fundraising and kind of the things that you did to get started and where you're at today with fundraising, et cetera?

Yeah, 100%. So to date, we've raised just under $1 million for the business. And so I think something that we're really proud of internally is how capital efficient we've been able to be, you know, with that. You know, we're now just over, you know, $500,000 in ARR. And being able to do that with less than $1 million raised is something that we definitely pride ourselves on. Had a couple of profitable months last year. And so really doing good from a runway perspective, and we aim to continue that over time. And so that's kind of where we are in our fundraising journey. We've started to take some introductory calls with investors. And so I'm always happy to connect, you know, with people that, you know, really understand, you know, the problem that we're trying to solve and connecting the online to offline funnel. And understanding that, you know, we've spent time really digesting each step in the funnel, and we ultimately realized that the most impactful way that we can, you know, provide efficiency, speed, and scale for this process is by attacking the step that is the most impactful and the most time-consuming, most difficult to do. And that's something that, you know, a lot of other retail, direct-to-retail platforms don't have that approach. So That's kind of like our unique wedge into market.

That's exciting, man. Super capital efficient. You've been very thoughtful about the way you've been building your company, raising less than $1 million, but already at $500K in annual revenue, recurring revenue. That's impressive, man. Congratulations to you and the team. Any prospects in the future of fundraising, or are you fundraising now? Give us some insight on future fundraising goals.

Yeah, as I was mentioning, we are, you know, taking some introductory calls with people that we feel align with our company and the problem space that we're working on. And so we are more than open to, you know, speaking to investors on that front. And yeah, maybe there is a raise in our near future. Who knows?

Awesome, man. Well, y'all heard him. If you are an investor and want to learn more about Crafted, please reach out to Todd Baldwin and, you know, set up an introduction call, learn more about what he's building. Thank you, man. This has been an incredible interview. What I'd love to do is to, you know, hear about who should get in touch with you. You know, what's the best way that people should stay in touch and follow your journey, both on the creator side, the brand side, investor side? Please give us some insight on who should reach out to you and how people should reach out to you.

Yeah, so there's 2 different, you know, kind of customers that we aim— we're serving right now. So if there's— if you're an agency and you have a lot of brands that are trying to drive you know, foot traffic, you know, through digital marketing, then once again, get in contact with us, me and my co-founder on LinkedIn. I would say that we also have some lead, like some lead magnets and retail, like readiness checklists and guides to check out on our website as well. That's usecrafted.com. Creators, we are always getting inbound creator applications on our website. There's a page dedicated to creators there. And then for investors, just contact me at todd@usecrafted.com. Best way to get in contact with me on that front.

Awesome, man. Well, this has been an incredible interview with Todd, CEO and co-founder of Crafted. We're super excited to have Todd speaking to you today, man. You are doing an incredible job with growing and building your company. I'm excited for what's to come for you. So thank you so much.

Thank you.

Thank you so much for taking time to chat with us today. At this time, we're going to transition over to Twitter X Spaces for our office hours. This— today we have actually 2 sessions, one with Stephanie Rich, who is the head of partnerships— sorry, head of platform at Bread and Butter Ventures, as well as our second session with Justice Mendez, who is the managing partner at 161 Ventures. So join us on Twitter X Spaces for office hours. We'll love to have you tune in and pitch and, you know, get to know these investors that are speaking on our sessions today. But without further ado, thank you so much, Todd. We appreciate you and we look forward to staying in touch with your journey.

Absolutely.

Take care.

Awesome. Thanks for having me.