S3E8: Heidi Zak of ThirdLove on fundraising, finding product-market fit, and the future of eCommerce and D2C

Welcome to The Room Podcast. My name is Madison McIlwain and I'm a partner for seed stage investments at DefyVC.

And I'm Claudia Laurie, a co-founder of Pryve. We're a founder and funder who are in the room where it happens. If you're a first-time founder or an emerging venture capitalist, we're glad you found us. We share inspiring, authentic, and insightful stories from founders, funders, and operators who have been in the room and provide tactical feedback on their early aha moments and learnings along the way. Before we dive into this week's episode, we have a short message from our partners.

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Cooley is a global law firm built around startups and venture capital. The firm has been devoted to entrepreneurs and investors, partnering with both to transform breakthrough ideas into successful companies. Cooley works with thousands of entrepreneurs and newly formed companies to ensure that they are structured for growth and long-term success. Since 2005, Cooley has been ranked the number 1 most active law firm. Representing VC-backed companies going public. Learn more about the firm at cooley.com and also at cooleygo.com, Cooley's award-winning free legal resource for startups. This week on the season 3 finale of The Room podcast, we are excited to share our conversation with Heidi Zak, co-founder and CEO of ThirdLove. ThirdLove is a multi-generational women's lifestyle brand focused on elevated essentials across bras, underwear, loungewear, and much more, which are designed to support women feeling effortlessly comfortable and confident. ThirdLove is the third largest underwear and bra retailer in the US, which is a testament to how the unique ThirdLove model truly disrupted how consumers shop for bras and essentials. On this episode, Heidi chats about her early founder journey and what it took to find product market fit, which has multiple meanings in this context. Given ThirdLove's innovation on fit technology. Prior to launching ThirdLove, Heidi was at Google, Aeropostale, McKinsey, and Bank of America. Today, Heidi chats about her fundraising journey and fundraising for non-software businesses, finding product-market fit, innovating on distribution, and of course, the future of e-commerce. Let's open the door. Thank you so much, Heidi, for joining us in The Room today.

Happy to be here.

We'd love to start at the beginning before we dig into your founding story of ThirdLove and really get to know you before you started your brand and your business. You went to Duke for undergrad and then onto MIT for your MBA. Tell us about your early career in retail banking and consulting.

Yeah. So I started after college, I went to New York City and worked as an investment banking analyst working with retail and consumer companies. And that's where I really fell in love with brands and tangible product and experiences. I also worked on restaurants and did some IPOs with some other companies based on the West Coast. And so that was really awesome. And then 2001 happened and it was hard to find jobs. There was a lot of people who were unemployed and I ended up going to McKinsey for a few years, but I was in an operational kind of role and I really missed that retail connection. And that's really why I chose to go to business school. I really wanted to move into operations at a retail company and So I went to MIT. That's what I wrote my business school essay on. And anybody out there who's either applying to business school or has applied to business school at some point knows you generally piece together some, some story for your essay to make it work and make you sound compelling. And it's usually not what you want to do. I actually did write mine. Mine was truthful. I was like, I'm coming back to business school because I want to work at a retail company. And so it's funny because when I was at MIT, it's not like the big retail companies were coming to recruit. It's like banks and consulting firms that are coming to campus. I was like one of the last people in my business school class to get a summer internship. Literally, like my parents were like, you're going to business school and it's May and you don't have an internship? And I was like, nope. And I held out and I cold called and emailed all these retail companies, basically saying like, from Coach, from like more of the luxury brands all the way down the spectrum. And Aeropostale, I had worked on their IPO as an analyst investment banker. So they were on my list and I randomly reached out. I cold called, called on a phone. And was like, hey, I'm an MBA at MIT, like any chance I could find a summer job? And the guy was like, yeah, actually I think somebody's hiring here. Our head of business development is, I think, looking for his first summer intern. So I got connected. I took the train down from MIT to New York and I, and I interviewed and I got my summer internship there. And the reason I'm telling you this long-winded story is because that's actually where I went full-time after business school. So that was my summer internship. And then I went there after business school and I was there for 4 or 5 years and I launched and ran new businesses. So their tween brand, I launched international and then started owning that P&L. And really, so it was like having a more startup role in a bigger retail company. And that's where I cut my teeth on retail and product and production and just really learning as a generalist across the board.

I think Madison McIlwain and I resonate pretty strongly, I think, with your cold calling anecdote, because I was at Harvard and was desperate to find an internship in retail as well. And so did a bunch of cold emails and then eventually found myself at Calvin Klein while all my friends were doing their consulting, banking internships. And then Madison actually, for full-time, joined Gap as a product manager, looking to find that intersection between technology and retail. So it's always exciting to hear stories from folks who have that similar early interest. Before ThirdLove, did you ever think you were going to start a business?

No, never. I wouldn't have said that. So basically I was at Aeropostale, got married, My husband ended up getting a job at a VC firm out here and we're like, oh, San Francisco is going to be super cool for a few years. We'll probably go back to New York. So we moved out here. Being out here in living in SoMa, right? The heart of all the tech startups. I remember going to a holiday party that Zimride was hosting, which was the precursor to Lyft. That's what it was called back in the day in like 2012 or something. And I got, I started meeting all these founders who were building really cool companies. And then all of a sudden I was like, hey, if all these people are doing it, like why mostly men, all these guys are doing this. I feel like I finally have the experience and confidence, I think, to start a company. And yeah, so really it was, the inspiration was just being surrounded by people doing really cool things and wondering what was I gonna do the rest of my life. And at the time when I moved out here, I was at Google and I love Google, but I was like, if I didn't show up at Google the next day, like Google's gonna be fine. And that was a real turning point in my career to say like, how do I wanna spend the next 10 years or maybe 20 years of my life? What do I want to be doing? How do I want to be impacting the world? And that opened my mind to the idea of quitting and starting something.

Which is always such a pivotal and scary, but incredibly exciting moment in any founder's journey. What were a couple of lessons that you had taken from your time at Aeropostale and also your time at Google, which then helped inform your early founder journey?

Yeah, so Aeropostale was merchant-driven. As a typical retail company. Gap is another great example. And all of— almost all retail companies are very merchant-driven. And so there's the perspective of like product first, right? It's who's the customer, what's the product, what's that match? And then everything builds up to support that. And so that was definitely a learning. And I think a big one also was where I saw opportunity at Arrow. It was like data was a big thing where as the one and only— I did all the board decks there, so I was probably the most— the one who was in all the weeds on competitive analysis and what was going on at the company. And when I would need to pull data, I would email somebody, and then 3 days later the data would come back and it wasn't exactly what I was looking for. And to me, that was like a huge opportunity for a retail company to say, like, I have customers, I have data, and I should have it at my fingertips. And not just me, meaning the person doing strategy work, but Actually, like, everybody else needs that data to be making decisions. And so, if you think about ThirdLove and what we built, it was really obviously a product-driven company with a much better product, but also with this data component that I thought was really lacking. Google, on the other hand, was a flip where I never worked at a tech company in my career, and that's part of why I took the role there because I could have gone to— I was talking to Stella and Dot and Levi's and a lot of other companies in the— at that point in time when I moved out here, and I was like, no, I think I really need this tech experience. And I learned a lot of things at Google, but I would say one of the biggest things was just the risk-taking and the encouragement of the risk-taking. It's a pretty amazing place that it's like the bigger and crazier the idea is, like almost the more welcomed it is at Google. And there's something really special about that, about the ability to think big, dream big, take risks. I knew that with a lot of Google's successful and not successful crazy product launches, but I, I think those two came together to really set the foundation for ThirdLove.

We're coalescing around this point on finding the right product to sell to customers that gets them to become long-lasting customers, either in your retail business or in other concepts. And we like to joke a lot about the idea of product-market fit on this podcast because when we talk to retailers like ThirdLove, product-market fit means two different things. It means finding a physical fit and it also means finding the right product and right experience to be selling to your customers. And that was the genesis of ThirdLove as we understand it, where you had a personal experience not being able to find a bra that fit and felt like it was authentic to who you were as an individual. Can you maybe talk us through the aha moment and the time it was in e-commerce when you first thought, I think there's a better way to buy a bra?

Let's rewind in time to 2012. D2C wasn't a term. Nobody was selling pretty much anything online. Everyone was talking about digital and e-commerce, but it wasn't prevalent. It wasn't the main channel, nor it was unthinkable that you would actually start a brand and launch it just online. And, and so I think there we saw a big opportunity with the shift that was starting to occur. But it's funny, I think about pitching investors in 2013 when we raised our seed, and one of the first questions every— all of them asked was, how and why would a woman ever buy a bra online? It was like a radical idea. Because the category is so hard, to your point, so hard to fit that it almost seemed to be like a total leap of faith that you'd make that jump. Anyway, I digress. So yeah, really the, the aha moment was I was bra shopping and I was working at Google and I went to the mall and I drove my car to a mall and went into a mall to a Victoria's Secret store as I had done since I was, I don't know, 13, 14 years old. And I did what I normally did, which was wander around the store, avoid making eye contact with the sales associates, grab a bunch of bras, run to the dressing room, try them all on, settle for a bra that doesn't really fit. I'm also a half cup, I came to realize, so there's a reason why like traditional bra sizing just didn't work for me because I'm in between sizes. And just the whole experience— I took that bag, I stuffed it into the bag I was carrying, I ran out to my car, and the whole experience took an hour and a half. I'm thinking to myself like, why am I doing this? I don't like bra shopping, I don't like this brand, I don't like the product, I don't want to go to the store. And I started doing research and there was nothing available. There was no online bra brands. There was zero actually at the time, really. There was on. And we launched around the same time as two others in 2013, 2014. But this is 2012 and there was nothing. So that to me was like, did the market research to say VS owns this market and they've been doing the same thing literally since I was probably 13, pretty much. And just seems to be a big market with one large player who's not servicing the needs of what I would call like an adult woman who like is expecting a certain experience and quality and brand. And that was the impetus.

I love how you orient us around what was normalized for shopping in 2012 when this was coming online, because I was working at Theory that summer in their e-commerce division in New York, and it was the division, right? Like it was a separate entity. We had our own warehouse and it was a big deal because the e-commerce store had just started almost surpassing their physical flagship Gansvoort store, but they were not selling more than a physical location. And if you were to ask any brick-and-mortar plus e-commerce retailer today, like a Gap, I would imagine that all of their online sales combined are greater than any one store. And so thinking through in less than 10 years how much that shift has happened in terms of where revenue is driven through for these brands, you were at the right place at the right time to help unlock better bras online for women. So orient us around that decision to go from, okay, clearly this needs to be done better, but hopefully someone else is gonna solve it. To actually, I'm gonna be the one to solve it?

Specifically, one, like I said, nobody was doing anything in this area at the time, so it did really feel like white space. I wouldn't say that today. There's D2C everything, and there's so many players across all kinds of categories that it's a very different market than it used to be then. But I really had this moment where I was like, I hadn't had kids yet and had enough savings that I felt like I could take a year and not take a salary and be okay if it didn't work out. And so if you go through the checklist of all the reasons you wouldn't start a company, I didn't have a ton on that side of the, these are all the reasons why I shouldn't do this. And then on the other side, it was like, if I don't do this, it feels like someone else will. And then am I gonna regret it? And so that's what I always say to somebody. If you really feel like there's a big opportunity and you are okay with whatever the risks are, which you have to literally write them down, like, I'm not gonna make money for a year if this fails XYZ. And like you start writing it down and you're like, Can I accept these things? Am I okay with it? And then if I don't do this and somebody else literally starts the company that I will probably start, which happens all the time, you hear founders say this all the time. I had that idea, but I didn't do it. And I'm like, yeah, you, you didn't do it. Yes, that's right. You didn't do it. Somebody else did, but somebody will do it. And how will that make you feel about that choice? And so look, it's certainly not for everyone. And I think, yeah, being a founder is really hard and it's not for everyone. But I think if you really can look at that really objectively, I think it helps you make a decision. You got to figure out what your risk tolerance is too.

That's such helpful advice. I feel like if someone sat me down and said, are you really willing to go to the mat for this idea and for all of these risks and rewards? I'm a pro/con list maker myself, so that relates for me. I don't know if I'd get there. And I was so impressed when I watched Claudia go on her journey to say, okay, I'm going to take this leap of faith and here we go. I'm gearing up. Well, you have geared up and today ThirdLove has raised over $70 million or a little under $70 million from really a range of legendary investors and incredible angel investors from NEA on the, on the fund side. And, uh, even Katie Couric as an angel investor, which is quite a fun group. Talk us through a bit of your fundraising journey.

Fundraising's never been easy for us. And I always say, because I've angel invested in some companies and I actually just not, I was talking to a woman today who's raising her seed round. And, and she was saying how hard it was. And I was like, look, here's the thing is you may get 100 nos, but you only need one yes. It's a funnel. It's a sales funnel for the entrepreneur. And you hear about these people who like founders who like close their round in 2 weeks and it's fully oversubscribed. And you're like, okay, they probably were a prior founder. They're definitely male. There's a few people you could name who that's like the experience. So I think people start to get down on themselves when they're like, well, this is taking a really long time and I'm hearing a lot of nos. And you're like, yeah, totally. Like we all have just par for the course. So yeah, I think the seed round, in a seed, will invest in the seed. You're investing in the founders and the idea. And I, and personally, when I angel invest, it's not like I'm doing a ton of research, but I'm like, does this person have the passion and the energy to when this isn't working, which is with 100% certainty in the first few years, some stuff is not gonna work. What are they gonna do? And I'm backing that. I'm backing that ability to like persevere. Somebody who has grit. And is gonna make that happen through whatever valley of death that they're going through at any moment in time, which is gonna happen. And so the seed, and then I would say, I guess it gets a little easier to raise money. I think this, once you've done it, you get a little better at it and you get thicker skin and you sort of know the process. And then I think it becomes more about the data and finding the right match. I think the early days is more of, it's a feeling and there's, it's a little harder because there isn't data. And then As I always also say, like, data kills companies too. So it's, that's the other issue is once you start your company, if the data's great, that's awesome. If the data's not so great, that's really hard. So you, it's just raising money is just not, is not easy. It's just not. And it, it is distracting and time-consuming and all the things that everyone always talks about.

And it's tricky cuz it's not really your day job. You're like, hello, I'd like to be building my business please, but I also need to do this other thing. So you talked about hearing a lot of nos, which is a common thread we hear on this podcast. People are very generous in sharing that it wasn't always up and to the right. Who was the first yes for you?

Actually, Felicis was the first, I think, seed check we got. And Renata was there at the time, and Aydan. And I think that was before we had our lead. And then NEA, actually, pretty quickly after that, had come in as our lead. So those were— and then after that, everything falls into place. Once you have the lead, it's like everything, you snap your fingers, and it all happens within, literally within a week, and it's done. But it's like leading up to getting the check, the lead in, is That's where all the work and the time happens.

Once you got that round together, what was the first step for you and ThirdLove in starting to build your business?

I think it was hiring. Up until that point, we were like a few people, maybe 4 of us, something like that. And so a bunch of it is just, especially with a physical product company like ours, it was more hiring the right people, getting the manufacturer on board, placing the first purchase orders. And developing the tech. So at the time in 2013, 2014, we were developing an app for sizing. So we were doing that. So we had the tech piece and then we had the product piece and those were both working in tandem and we actually launched. So we launched— most people don't even remember, would know. It's like we launched without a website. This is— we launched in 2014 with an app, 2013, 2014 with an app, no website. ThirdLove.com said, go download our app. It was like the heyday of the iOS app. That's really how we originally built the business. Obviously within 6 months we had an e-commerce site, but different moment in time. So yeah, just the investment and really just getting product to market and getting it out there in the world.

Let's take a step back for our listeners, of which are half male, half female. What does ThirdLove do?

So ThirdLove is a lifestyle brand that sells elevated essentials. So we started for the modern woman, right? And so we started with bras and underwear. Now we sell sleep and pajamas, and we are entering other categories over the next year. So really expanding our reach and going off of what our customers are asking us for.

I think of ThirdLove as having the best sizing for bras online, and that feels core to your ethos that you've built this in-house sizing technology, which is critical in helping customers who you alluded to had potentially never been able to shop for bras online and Figure out fit at home. What was so challenging about creating digital-first sizing?

So when we started and we had the app, like I was saying, what we found that was really interesting, and this is in the early days, like we hadn't launched, we were like beta testing, we found that women, the app couldn't place women in certain sizes because it would get confused. So it wouldn't know, for example, if you were a 34B or a 34C, it'd have an error message. Well, we realized that women were so split in between that size that there was— it was like almost like the tech wasn't working. And that's when Raelle, who was our one of our original co-founders, who's our chief creative officer, we— her and I got together and we're like, it feels like there should be an in-between cup size. And so we sampled those out and that's how we came up with the half cups, which ended up— I ended up being one. And then you put on the half cup and you're like, oh my God, it's like the Goldilocks, right? Moment where you're like, this actually is what I— is just what I needed. And So that was a big unlock for us in the early days, was this idea of creating different sizes. And I believe today we're the only brand in the world that offers half cup sizes. And then in addition to that, it was just growing our sizes over time. So today we have from a 30 band to a 44, from a AA through a K cup. So we have over 80 bra sizes, which is most retailers' worst nightmare. But when you're online, obviously it is easier. To have that many sizes. But certainly, yeah, we invest a lot in sizing and inventory.

Curious about your expert opinion on where fit online is going in the next 5 years.

You have to be able to solve the fit question because you don't want to have the 30 to 50% return rate that some brands and categories have. So if you sell socks, God bless you. Bombas, I was just talking to the CEO, is like, someday I won't have the— like, it's just different. But most— for most apparel, that isn't— that does not hold true. So I think being able to offer targeted ways to solve the fit issue, in essence, that was core to what we did at ThirdLove, right? We were like, we are never gonna be successful unless we can solve the issue. And specifically bras is, is an area where 80% of women are wearing the wrong size. So other areas, if you're selling denim and things like that, there is that challenge, but you have to solve the fit issue for your category. Because the customer experience depends on it. And then everything in your business becomes better if you can deliver on fit and your fit promise and the expectation the customer is going to have.

You chatted about driving to Victoria's Secret and doing the mall fit try-on, which I think everyone on this call has definitely done a few times. And then there was the phase of the mobile app and mobile app shopping. And now everything is online, especially in 2020, 2021. You are now the third largest underwear brand in the US. How did you innovate on distribution and how did you think about distribution during those early days?

Today we're 100% D2C, so the only place you can buy ThirdLove is thirdlove.com. I think we're the lar— one of the largest revenue D2C brands that doesn't have either wholesale partners or other methods of distribution. In the early days of ThirdLove, we did sell at Bloomingdale's as we were building our brand, and it wasn't a very high volume partnership, But I do think it helped us just build the brand through that partnership. And people obviously know and trust Bloomingdale's. But specifically, we went through a moment in time where, speaking of product market fit, we had figured out the first part of product market fit, which was the product and the product fitting really well and women really liking it. But we hadn't really figured out the how do you actually sell it, the other part of product market fit, which is the marketing and the distribution coming together to acquire the right customers. And so I would say the biggest unlock for us in the early days, probably 2015, we launched the program, was this program called Try Before You Buy. And in this program, we sent a bra to you for free. And so basically we just said, pay for shipping, $2.99, $3.99, whatever it was, we'll send you the bra and you can actually take the tags off and wash it and wear it for 30 days. And if you love it, you keep it and you pay for it. And if you don't love it, we pay for return shipping. You just send it back. So that. Program really de-risked the situation for the customer who wasn't accustomed to buying a bra online, right? Because most women weren't buying bras online for the most part. And so there was a real hurdle in just getting the trial of the product in a way today that seems like funny to me even to hear myself talk about it, because you're like, really? Like, people wouldn't buy— people buy everything online. But again, it was a different moment. And so that was the most crucial kind of marketing distribution decision we made in the early days that allowed us to scale.

Hearing that, I'm, I'm sure as any founder would, there's probably a set of nerves around, hey, we're basically giving our product away just to get it in the hands of people to try. What advice do you have for founders, especially non-software founders who are trying to think through distribution in this very crowded D2C landscape?

Yeah, I think what we did was incredibly risky because the keep rate of the people who actually keep the product had to be quite high to actually make it work. And so we knew it was really risky going into it. We're like, if this doesn't work, it could literally bankrupt the company really quickly if the metrics aren't where we want them to be. And we were fortunate to know we had such a high quality product that I felt very confident that if somebody just put the bra on, they'd be like, oh my God, this is more comfortable. Yes, it does fit better. But there's absolutely a risk in that. But I think really what you need to do as an early-stage founder who's trying to address these questions is, what are you trying to solve? What's the core problem? Because I think people get into this notion of, let's look at what other people are doing and copy that. And it's, hold up, my issue is not the same as somebody else's issue in a different category at a different moment in time. And so if you can't clearly articulate like what is What do you want to be happening that's not? Then you're never gonna pick the right program distribution, whatever you wanna call it. And so it really goes down to what's the issue and being able to articulate that in a sentence. And then if you can actually do that well, then you can brainstorm and solve it.

There are some simple truths that even if you hear them over and over, they're actually really difficult to latch onto and translate into a plan and strategy. So it's always helpful to hear that sometimes The simplest pieces of wisdom are often the correct ones. You mentioned periods in a founder's journey of these valley of death moments where things are not what they seem and not what was expected, but really having grit and resilience to get through those periods of time is really what makes a founder and ultimately makes the business. Could you tell us about a time where things didn't go as planned for ThirdLove?

Yeah. So an example in the early days was manufacturing. So we, started with a partner in Mexico. Another untold story, or that nobody knows, is we were producing our product on demand. So we had this grandiose vision because we were having so many sizes and inventory's obviously very risky. We had this idea, it'd be so much more efficient and cost-effective to just, as the orders come in, we produce the bra. And so we had this, like, these custom pads, these orders flowing in, and we had all the parts and components lined up. Now, mind you, a bra has 30 components, so there's a lot of components across a lot of sizes. It's not just like a t-shirt. And it's all staged. And all the bras coming off the line were like Frankenstein bras, right? Because they'd be like, they'd mix up a wire and it'd be like a B and a half and a B, and it was supposed to be two B and a halves. And or the strap would get mixed. And basically, in essence, there's a reason Henry Ford invented the assembly line. It actually works. He was very smart. It brings costs down when you do the same thing over and over again and you have a repeated process. Quality goes up, you do it more quickly, it's more efficient. There's all these reasons why. Now, again, there's certain things made on demand does work for. Apparel is hard— is harder with that. In particular, it's very hard. So basically that happened and we had just set this plant up, this factory up in a way that just— we were just losing money and not delivering on our fit promise and everything was basically a nightmare. And so we just And again, this was a lesson learned. It took months to figure out, it took months to make the decision to like say it wasn't working. And this is another piece of advice or learning is that I think especially when you're starting out, you're so tied to what you think, what you said you were going to do and what you think could be great that a lot of times you don't cut it early enough. And then you regret that because you waste a lot of time and money. Doing something and cycling on it, trying to get it to a place that it'll never get to. So you have to have grit and persevere, but you also have to be able to let things go really quickly when they're not working. And so like, it's different moments for both things. Yeah, so we lost hundreds of thousands of dollars on materials. We shifted factories and moved to Asia, and it was a whole thing. And it was really in the early days of the company where it was really disruptive. So yeah, just tough moments like that where you're like, I had this idea and it's totally failing. And then you go to your board and you're like, oh, that thing we thought we were gonna do, like the made on demand's not working and it's fine. And everyone's great. Yeah. Move on to the next thing. And you're like so caught up in it. You think it's gonna be a huge deal. And they're like, great. Okay. Yeah, sure. Next thing. And you're like, oh, I should have done this 3 months ago.

And that's the benefit of having like incredible advisors and investors around the table to get sometimes those like losing the forest from the trees. Actually, no, like this is totally fine. This is where we should be going. So we've chatted a little bit about where ThirdLove has come from, some of the struggles, some of the wins. Let's chat a little bit more about the future for ThirdLove. Earlier last month, you announced a new model search initiative, which doubles down on your commitment to diversity and inclusion. Tell us a little bit more about this new initiative.

Yeah, so we've always leveraged or tried to find models who are very real and from the very early days. And I could name multiple examples of even customers that have written us that have become models over the past 8 years. And yeah, we got approached by Nigel Barker of thinking through, could we do this in a more digital way and really leverage ThirdLove's audience to become ThirdLove's next featured model? And so this interesting, like, melding of the world, some things we've done, some things he's done. And yeah, it's just hugely exciting. And so we have a lot of women who are applying basically through social platforms, submitting photos and basically like auditioning in this way. And then we have a judging pool that includes our head of marketing and our chief creative officer and Nigel, and they'll pick one woman and she'll be featured in our fall campaign. So it's just another way to, to bring our community along for the ride and to participate actively. And it's just so cool to see all the submissions coming in.

That is such a cool initiative, and I love when brands bring in their consumers to be their number one fans and number one marketers because in this kind of social-first world, I think consumers have such a closer resonance with brands and brand identity, and I love that you're empowering your ThirdLove community to literally be the face of what ThirdLove is and what they stand for. It's so easy for us to look and say, you are a powerhouse direct-to-consumer brand. Like, of course it always was, it always will be, but not necessarily is true. And it's been 8, almost 9 years since you started ThirdLove. What do you think are nascent things happening in the e-commerce space today that in 8 or 9 years we might be considering D2C or commonplace terms? What are you seeing on the ground that is coming up and coming in the space?

Yeah, I think two things that you're seeing more and more of. One is a bit more— well, a few things. One is how you connect with your customers. So I think Obviously text versus email and having that one-to-one relationship and dialogue with a customer and how that will continue to evolve is one big trend that we're already seeing. But I think it remains to be seen of how you actually build out the one-to-one relationship. Like in actuality, like if I'm texting you, Madison McIlwain, like what does that look like versus Claudia? Am I saying the right things to you knowing that you're individuals and maybe not just like a segment? Like when people are thinking about email, I think it's more segmented. So I think that's point 1. Point 2 is video chat. So not just, obviously everyone has live chat on their websites, but more and more these days, I think the idea of live chats, video chats with customers, because that really does bring, again, it's all of my points are more about like this, like one-to-one, it's a more personal relationship, similar to what you would get in a store, which is why sometimes shopping in a store is great. And then the third I'd say is like live selling. So I think it's really interesting what some companies are doing around like these launches that tend to be more like live, so QVC-ish, but on their own platforms. So I think there's some interesting things there. Again, like not sure what that'll end up looking like over time, but I think that's again, interesting and engaging in a different way to present to your community.

We're definitely watching personalization closely as well as the social shopping and live social experiences that you alluded to. So We'll have to have you back on in 9 years to discuss some of these and how they panned out. But speaking of the individual, we'd love to just share a little bit more about or hear more about what's next for Heidi and what do you have coming up for you personally?

Yeah, I think for us it's more about, like I said, more launches this year. I'm really excited and have a lot of— we have a lot of momentum behind our new categories. And so I'm just really excited to see that come to life and also new partnerships. And we're really thinking again beyond like What is it beyond thirdlove.com? What are other ways to connect and reach customers? And so a lot more to come that I can't really talk about right now. Big, bigger initiatives that are just very different than anything we've done in the past. So it's like the name of the game, constantly be innovating. And to your point, like, we're the one who started it, and now we're at this very unique place where it's— you've got to continue to experiment and innovate to continue to capture the customers today in a very competitive landscape.

So yeah, Claudia and I are so impressed and in awe of you. You are so many things, a CEO, a mother of two, an angel investor, and I'm sure other titles that we can't find on LinkedIn. And we wanted to ask, how do you think about prioritizing your time and figuring out the balance between, might it be work, might it be life, or really just understanding like what brings you energy every day? Do you have advice for founders or operators or funders alike on how to think about prioritization personally?

Yeah, I was actually just talking about this topic at one of our leadership meetings recently, and I was talking about like the personal flywheel effect. So we all know, right, you don't sleep well, you don't work out, whatever it is, your kid kept you up all night. Some things are more preventable than others, but if you're tired or you aren't feeling your best, like you just don't bring your best yourself to work, and you're not efficient, you're not as inspiring, you're probably shorter. And I think it all goes back to like health and wellness and really figuring out— like, everybody's different— what that means for you. So like, things about me that people are always surprised at: I always get 8 hours of sleep a night. Like, I prioritize sleep almost above all else because I just know I function better, and that's like really important to me and my health, and then I get sick It's the whole thing. And I work out every, almost every morning, even for 20 minutes. It does not have to be long, but I think these moments of just having boundaries, personal boundaries, allows you to be more effective as a leader, as a business person, and you do more. You're just more efficient. And so I always say working moms are like, there's no one more efficient than a working mom because you have to be super efficient. Like every minute matters, every hour matters. And if I'm spending time here, like at ThirdLove, as I sit in my office today, like I want every minute to be as effective as it possibly can be because that means I get home earlier with my kids and have to do less tonight after they go to bed. So to me it's all a balance, but I think it all goes back to, it's not, it doesn't start with your, what you do as your business. I think it's what you do as a person to energize yourself. And then that all feeds back into making you awesome at what you do every day. I don't know if that answered your prioritization question, but—

It definitely does. I often feel guilty around, well, like I need to sleep in an extra hour and I have to work out because I just have to. And that means I'm starting my day a little bit later than I would like to, but I know I'm just going to be much more effective throughout the day. So maybe I shouldn't feel guilty about it. So it's good to hear your framework for how you think about things. As we come up on time, we have our hero question for the podcast that we ask all of our guests. Who is a woman in your life that has had a profound impact on you and your career?

Yeah, so I would say when I was an analyst in banking, going— circling back to the very beginning of this podcast, the associate in my group was a woman named Lisa Kaplowitz. So she was— had just graduated business school and I had just graduated undergrad, and she really became a mentor for me. And she was always like one step ahead of me. Like she was getting married and, and that seemed like a big deal to me. And then she was having kids and that seemed like a big deal to me. She went on and she worked as a controller and treasurer at like Bed Bath Beyond. So she went and worked at a retail company in New York. And so why I think she was so inspiring, and she's a friend, still a very close friend today, is that she just always provided really real advice. So she was the person I called her when I was starting ThirdLove and I was like 30, thinking about getting pregnant. And I was just like, should I do it now? Should I wait? I feel like I should wait. Starting a company and then having a kid isn't this like a terrible idea? And she like, you need to like get pregnant now. You will be fine. Everybody does it. You're going to be okay. You can work and have a kid and you can have, you can be a founder and have a kid. It's funny. That's like real talk of just, you just sometimes need somebody to be like, it's going to be all right. Like you're going to do this. And so whether it was more related to personal decisions or professional, like she, and she's gone on to teach at Rutgers and she does a lot about women's empowerment and trying to make the workforce more equal and helping educate men and women about what that means. And so I just always, if I need a bit of inspiration, like, she's always there. And yeah, she's just someone I really value her feedback, and I think she's just done really cool things with her life. And she's a mom too and working. And so it's just, I think finding those kind of people who can really— you can share with them and it's a very open conversation— is really important. Not just like a work mentor, like a business mentor. I think there's that overlap of personal and professional that makes the mentorship really strong.

Thank you for sharing that. And I think having people you can talk to and talk about not only like work issues, but how that bleeds into your personal life and how you're just thinking about what you're spending your time on is so helpful. And one of our goals with this podcast is to encourage people to seek out those people and really go after what they're excited to do on a daily basis. So, thank you so much, Heidi, for joining us on the podcast today. This was An awesome conversation. We really appreciate it.

Thank you. So much fun chatting with you guys.

Thank you for listening to this episode of The Room Podcast, which is actually our season 3 finale. We hope you enjoyed our conversation with Heidi Zak of ThirdLove. You can get a special 20% off your first ThirdLove purchase with code TheRoomPod. T-H-E-R-O-O-M-P-O-D.

MD.

Please reach out to us via Twitter, LinkedIn, Instagram, Clubhouse, any social channel. We would love to hear from you. We will be taking a break for the next couple of weeks, but join us back in July for an exciting new season. See you soon. All opinions expressed by Claudia Madison and podcast guests are solely their own opinions and do not reflect the opinion of the 5EC. This podcast is for informational purposes only and should not be relied upon as a as a basis for investment decisions.

Support for The Room comes from Silicon Valley Bank.

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