S6E2: Julie Bornstein of Nordstrom, Sephora, and Stitch Fix Revolutionzlied Personalized Online Shopping with Her Own Startup, THE YES

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Welcome back to The Room podcast. Last week, to kick off season 6, Claudia and I sat down with Shuo Wang of Deal to discuss the future of international hiring and HR. Today, we sit down with Julie Bornstein, CEO and founder of The Yes, to explore the future of shopping. Julie's story began in the early days of the internet when companies like PayPal were first starting to make it possible to transact online. Julie joined Nordstrom in 2000 as VP of e-commerce to do just that. From there, she spent time at Urban Outfitters and Sephora to help bring these retail titans online. After 7 years at Sephora, Julie joined Stitch Fix as COO. Bringing her institutional retail knowledge to the startup world. Without a doubt, Julie is a thought leader in the future of consumer, where she has vantage points across CPG, real estate, and retail. After nearly 20 years of building brands and e-commerce giants, Julie launched The Yes in 2018 to reimagine shopping online. She also currently sits on the board of Redfin and Sweetgreen. In today's episode, we explore insights and themes such as The Power of Personalization, Tactical Advice for Startup Founders in These Increasingly Challenging Times, and Ecommerce 3.0. Let's open the door.

Julie, thank you so much for joining us in the podcast today.

My pleasure.

We would love to start in the beginning before we dive into your founding journey of starting The Yes. You went to Harvard for undergrad, go Crimson, and went into investment banking business development, and then just a few years after college, joined Nordstrom, eventually became their VP of e-commerce, which is incredibly cool. This was the early 2000s during the early birth of e-com. Tell us, what was the space like then?

When I graduated from business school, it was 1997, and Amazon launched in 1996. So I remember where I was sitting, working for a summer between my first two years of business school at a PE firm. And everyone was looking around a single computer and we were looking at, oh my God, look, you can buy something online. And for people who were very early internet people, AOL went public in the '80s. There were some people who were already figuring this stuff out, but for the mass consumer and the average person, the Amazon site launch was a huge deal because it suddenly made you realize that there was this whole world of possibilities that was about to happen. And I remember at that moment, my brain exploded with all the things that we could do with other categories, like fashion, with e-commerce. And so I followed them really closely. And my husband ended up going to join Amazon right out of business school. So I sort of had the benefit of learning vicariously through him what they were doing. And then I was in Seattle working for Starbucks, actually, and Nordstrom announced that they were going to launch e-commerce. I spent about 6 months trying to convince them to hire me. The truth was, there's no expertise in e-commerce, and so they didn't even really know what they needed. They had a catalog division and they had morphed that into e-commerce. It was very early days. I came and I sold myself and pitched a position which was product development, which they didn't know what it meant, so I described it to them. Eventually, after a couple of turns at it, convinced them to hire me.

I was just going to say, what a time in the world where Product development is a question mark career. What is that role and what is e-com today? That is such a core part of every D2C brand, this new generation of brands that are up and coming. And so to be at the start of really shaping what e-commerce looked like and what that means for brands, I think is incredibly— A few years later, you joined Sephora as their chief marketing officer and chief digital officer. Could you tell us a little bit more about some of the digital innovations at the time that really helped Sephora become the cutting-edge brand that it is today?

When I joined Sephora, I joined as head of digital to relaunch e-com because they had outsourced it and they wanted to bring it back in-house and grow it and also to launch a loyalty program. So when I got there, we launched Beauty Insider and we replatformed e-commerce so we could bring it in-house and then build a team around it. During the years that I was at Sephora, which was 2007 to 2015, the world changed dramatically. And so it was super fun to be at a brand where, number one, customers already loved it and were willing to try anything that we did. And number two, having the support of the CEO and the owners, LVMH, to really invest and try things. And so it was a really exciting time. I would say some of the things that I remember very well, one of the memories I have is my assistant at the time, Candice Payne, who is now a director at Sephora and has done terrifically well there and grown her career, and I were talking about how we would love to be able to walk into a Sephora store and just be able to find what was the shade of the lipstick or the foundation we had bought. And we started to think about, as we got our smartphones, what we could do with it and how much better it could make us. Shopping in store to shopping online. It was very early days of mobile. And I remember I set up a meeting with the executives at Sephora to explain what mobile web was and to explain what apps were. And at the time we called them apps and WAP. I next had to pitch to LVMH mid-year because we had passed the budget cycle to let us invest in building mobile properties. The CEO of LVMH came and met with us and was really supportive. And then there was no one to build it because there were no experts around who knew how to develop these things. So we found an app we liked, and we found out that the developers were a group of young students who had just graduated from Carnegie Mellon. And we asked them if they would work with us, and they came in-house to help us build our first app and mobile website. We had a great technology leader named Savio Tatil, who was really open to bringing in outsiders to help us complement the skills we had. And so we built the first version of the website on a mobile device and also an app, and it was integrated with Beauty Insider, and it did all these things that just were very logical. It wasn't very flashy, but it was very practical and also had commerce. That really allowed us to start to really learn. And I would say we were probably one of the very early retailers to have a decent-sized mobile commerce business. And that little group of graduates from Carnegie Mellon went on to run an agency that became one of the most popular mobile building agencies. They got hundreds of clients because they launched Sephora's product. It's called Branding Brand. I would say the next thing that happened, which was really interesting, and my favorite experience, was Facebook had launched and we were seeing a lot of conversation. At first we thought, Oh, we need someone to moderate the page. If someone asks a question, we need to answer it. If someone says something, you know, needs help or says something wrong, we need to clarify it. But what we found with the very early community is they were moderating it themselves. There was a woman who was our first unofficial moderator who had a day job in biotech and just loved answering people's beauty questions at night. And so there was all this really interesting, rich dialogue happening on our Facebook page. But it was here today, gone tomorrow. And I actually approached Sheryl Sandberg at a conference and tried to convince her to talk about how we could build pages for retail that could be more effective, and nothing actually came of that attempt. But what ended up happening is we realized that this sort of robust conversation could now exist on a website and in an app, and we wanted to take advantage of it. And we actually reached out to Bazaarvoice, who was our— ratings and reviews provider. And we said, you guys have a product that's ask and answer. Can you make it real time so we can actually put it on the site and let people ask questions real time about products? And they said, no, that technology doesn't exist. We said, no, it does. It does. And they said, we're not there. So we ended up finding a company that is called Lithium that was doing early gaming communities. So usually gaming is first in these spaces. So they had a community for Atari and, you know, there was all this conversation back and forth and, and it was very early days of cloud, but it was real-time conversation. And so we ended up building Beauty Talk, which became the largest beauty community. And we integrated discussion around a specific product onto the product page so you could see any discussion around it, but you could go and ask any question you want. And it didn't need to be even a product that we carried at Sephora. It was really just a forum. If you had a question, you could see if someone had already asked it. You could benefit from the archives of the question, or you could pose it and ask it to someone new.

It is so cool to hear 10+ years ago, the themes around community and UGC, which is so critical to commerce today from live shopping, social shopping, was at its core, like a key part of the early digital strategy then.

One of the interesting things is one of my coworkers, Bridget Dolan, who now is running Google Shopping, she and I were doing a lot of research around the new platforms that were emerging. Emerging. At this point, Instagram had just emerged, Facebook existed, YouTube existed, and we were trying to understand how the different generations shopped and used these platforms differently. What we found is really the only big difference was that millennials were actually using YouTube as a place to go for information much more commonly than the older generations. And so what we ended up doing was integrating videos right onto the product page so customers didn't have to leave to go look it up and leave the site, but rather they can get the information right there with the videos. So that was really interesting.

I hear the theme of discovery over and over, whether it's looking at comments to figure out what your next favorite product is, to seeing a video to make sure that you're buying what you think you're buying. It seems like that's been a theme that has persisted, and I think very relevant to your time at Stitch Fix, helping folks discover clothing clothes that actually fit them and clothes that they actually want to keep, as opposed to going to a department store and getting lost in thousands of SKUs. I'd love to zoom in a little bit more on your time there. In 2012, you joined Stitch Fix as a board member and then became COO. Tell us a little bit more about that moment when you decided that, okay, we've done Nordstrom, we've done Sephora, you're going to lead a high-growth and category-defining startup in the e-commerce space. Space.

I met Katrina Lake pretty early on. She's the founder of Stitch Fix. And when I met her and we started talking, there was so much that she was trying that I had been thinking about. And so I was actually working in beauty but had always loved fashion and spent a lot of time in it in my past. And so I was immediately intrigued by what she was working on and really enjoyed the first couple of years on the board, learning about the business and seeing the opportunity, really seeing next level application of data science to the experience of shopping. And so at Sephora, we would manually tag every product with all of its attributes, and it just took forever. And starting to think about AI in this space was really exciting to me. And then what happened actually was interesting. So at the time that the CEO of Sephora left, I had been promoted to, in addition to head of digital, also head of marketing. And they had brought on a new CEO. And kind of a year into that, I had hit a bit of a plateau and felt like I'm ready for my next thing and the CEO job's not available. So I was starting to think about what I was gonna do next, talking to LVMH. But as I was talking to Katrina, she said, "How can you do anything but come here?" And it's true, I was very invested in that, literally as an investor, but also as a board member and just really interested in it. I decided to join full-time. I saw so much opportunity. For growth in that business. And it was a great learning experience. And my thought going into it was I've had ideas a couple times along the way, along my journey to start my own thing. I hadn't done it yet. Going to a startup would be a great way for me to confirm if I wanted to do it myself. Plus, I thought Katrina was terrific and I really loved the business and thought it was super interesting. And so really for me, it was both a learning experience and also a great way to take all the things I had learned and apply them to this young business and be able to help it grow and scale. So it was a great experience. I loved working with Eric Colson, who was the head of algorithms and the data science team, and realizing how much opportunity there is. We ended up building the segmentation around consumers. So there's the disinterested and there's this group of consumers in the middle who are easygoing. They don't love shopping. They don't really know brands, but they wanna look great. And that was really who the Stitch Fix customer was, but less so towards the fashion enthusiast and the more brand-oriented consumer. So it was a different customer segment that I was used to working with, but a really interesting service we were building. And one of the things I loved most about it was actually working with the stylists because this was this sort of large workforce who we were building tools for to help provide them with recommendations of what to put in customers' boxes. So that was a really fun part of it for me.

I love this segmentation of the customer base. I think Claudia and I resonate more so on the brand enthusiast side, but have been shoppers our whole lives in a quite digitally native sense and have watched this ecosystem of digital and physical consumer moments evolve. And Stitch Fix has always been and will continue to be a pioneer in bringing together the digital and the physical. And you really did see Stitch Fix through their huge hypergrowth phase through IPO, I believe. What was it like helping to take a company public that you'd been with for over 5 years?

It was interesting. I actually left before the IPO, but I helped the company prep for the IPO. So there was a lot of work that we needed to do the year leading up to it. We needed to hire a GC, we needed to bring on a head of communications, we needed to start to write the narrative for all of the filings. And so we needed to get all of our financial systems in shape. So it was super interesting. And I had the fortune of also being on two boards during the time of going from a private company to a public company. I sit on the boards of Redfin and also Sweetgreen and joined before they went public and then watched them go through. And the IPO process is pretty grueling and forces a company to focus on different aspects of their business than just pure growth. A really interesting experience and one that probably I would say has its pros and cons.

I didn't realize on that preparation side, and I might have this wrong by a year or two, but something like you need 3 years of officially audited financials to be able to file to go public. And most startups, especially in their early days, are not having audited financials. So that is just one small piece of this mountain of process that you have to go through to go public.

That's right. And the financial systems piece is probably the most laborious part of getting a private company ready to go public. And it depends how long the company has been running, but you're right. Most private companies, especially startups, don't have audited financials. So you really need to go back a couple years and recreate everything and move into a more modern financial system. That is no small feat, as the team who worked on that would tell you, in any of these companies.

I think Claudia and I could spend much more time talking about your experiences from Nordstrom to Sephora to Stitch Fix, but we'd really love to talk about what you're doing now, which is The Yes, your company that you founded. We're curious about these other ideas that you had and the one that ultimately led to this aha moment, which was starting The Yes.

When I was 10, walking around the mall and looking for specific things I had seen in fashion magazines and couldn't find them and just frustrated by how inefficient physical shopping was. Although, to be clear, it's my favorite pastime. So I still am a huge fan of physical shopping and believe it will always be around. The journey of making shopping efficient and helping people find what they're looking for has been something I've worked on my whole life. I've always helped my friends shop and my sister shop. When I then was at Nordstrom, there were all these ideas that I and my team had that we couldn't yet do because technology wasn't there yet. And so we knew in theory it was possible, but some of the examples of that are we had to buy all the inventory, we had to get all the samples and photograph them to post them on the site. We had to write all the copy. Even going back further, we had to go to the showroom and look at what each brand was carrying and choose off of a line what we thought would sell. So there's all these pieces to it. And then what everybody saw on the website was the same. So Claudia and Madison and your moms were all seeing the exact same things when you go to the website. So I would say a lot of the ideas around The Yes really germinated from my time at Nordstrom with the things that I wished we could do, but technology couldn't yet do. And then by the time that I was ready to start my own business, I was very clear where I thought the big opportunity was. I had a lot of small ideas, but this was really the biggest idea. And the one that I thought was the most game-changing and needed technology to do it. So I was less interested in building a business that required all the physical labor with traditional retail. It wasn't the pieces that I loved, but I loved being able to solve problems with technology. And I knew that technology was ready to do a couple things that were required to build a future superstore for shopping fashion, which is what we're trying to do. One is we needed to be able to integrate with a brand without the brand themselves having to do much work because no brand has extra resources. And we needed to be able to set up a massive dropship operation that was highly scalable. And then the second piece, which is really around the personalization, is if you're going to have a huge assortment with every brand under the sun, you need a way for each customer to have a great experience and find the things that she's looking for. And there's no need for me as a shopper to have to go through 12 pages of dresses to find the one I'm looking for. And so I think it's how we all spend our nights shopping is we open so many tabs, so many pages deep into a shopping experience. The truth is that we now have the intelligence to just be much smarter about that. And so the concept in my mind was if we really understand the category, we understand how to dimensionalize fashion, and we understand what consumers' preferences are and what the right questions are to ask, we can create a much more customized experience for every user and create it in a way that's adaptive so that as your life changes and fashion changes, it will continue to learn more about you and get better over time and adapt to your life over time. And so that was the premise of the S.

That's incredible. And I definitely could use TikTok-style algorithms that know me so intimately to almost a creepy degree sometimes about what I'm looking for and helping on my shopping journey, which I do more than I'd like to admit. And as you're talking, I'm hearing a couple different stakeholders be mentioned, the end consumer, the yous and Is of the world who are shopping, the retailers, as well as the distributors who have helped to build out the supply chain that actually supports the integration from digital shopping. To physically arriving at your doorstep.

We work directly with brands, so everyone we work with is the brand. And then we basically built the technology that allows us to ingest the catalog of a brand and then understand what it is and normalize the data, crop images so we don't have to reshoot anything. We can leverage the images from the brand but make it look harmonious in the shopping experience. And then what we do is we put every product in a brand's catalog through our tagging system that automatically can look at all the text as well as the image itself of a product and identify across about 1,000 dimensions a score relative to that product. So if I'm wearing a gray crewneck, this would have a very low to zero score for V-neck because it's not a V-neck. It would have a score of 1 for a crewneck. And we would understand not just dimensions that are silhouette-based, but color and all the objective features of the product, as well as even the subjective features. So it's casual, it's good for work, it's good for spring or summer. So we have trained models to understand all of these elements of a product so that as we start to understand what a user prefers and then what the search that they may be looking for is, we're able to really identify which products in this catalog of hundreds of thousands of products matches this search and this customer.

That is a huge undertaking. And when you were getting started, we're curious, who were your early partners to say yes to joining you on this journey?

Well, the first one was Kirsten Green from Forerunner, and I had heard her name and seen all the companies she was associated with and had met her once very briefly at an event and always really admired her and felt like to find a woman investor who understands the category and understands the opportunity would be really exciting. And then I reached out to her and she replied immediately and she claims she actually reached out to me when she heard I was leaving Stitch Fix, but she didn't. I reached out to her, but she did respond right away. And then we met and she ended up becoming not just my first investor, but also a thought partner. She and Nicole Johnson both were really amazing in helping me explore ideas and think about the business. The other people that were really great and helpful, even though they ended up not becoming investors, was Jeremy Liu and Nikki Quinn from Lightspeed Ventures. And so I had a couple of people on the VC side who were just really helpful in thinking through early. And then my other early investor was Tony Florence from NEA, who was really terrific too. And then of course on the internal company side, there were a few people who were early believers. There was a woman who I had befriended when she was at Anthropologie and I worked for Urban Outfitters named Carla Funari, who was really helpful to me in putting together the board deck. And then I met my co-founder Amit Agarwal, which was really the linchpin to building the technology. And He is our CTO. He was an entrepreneur in residence at Bain Capital, and they introduced me to him. Then I spent about 3 months wooing him and eventually convinced him to join just as we were able to raise our seed round. And so obviously having Amit to work with, we were able to hire the team and start to get both the product built as well as through an introduction to Taylor Tomasi Hill, who became our fashion director. She She helped introduce me to the brands that I didn't know. And then eventually Lisa Green, who runs brand partnerships today, had additional connections and we started to go out and pitch to and talk to all of the brands. And to Taylor's credit, she made it really clear to us, not only did we need to tell them about the idea, but we needed to visually show them. So we prototyped what we were building and we did it for each and every brand that we met with, which just gave them the chance to both see to see how, what our concept was, but how it relates to them in the personalization mode. And so those were really some of the critical people, and there were many others.

You had so many incredible individuals who were in the room with you when the Yes was getting started. And no doubt, having seen some of the fundraising journeys at Stitch Fix and other companies you'd worked at, going into this was something that you came in with some tools, but learned along the way. For our listeners who maybe are embarking on their journey for raising for their retail or e-commerce, startup or any startup truly, what advice would you give?

First of all, spend a lot of time on your pitch deck. Make it really clear. Make your goals really clear. You have to have the full story, even if the full story isn't going to play out for another 5 years, so that the vision is really clear. But you need to also show the first year and how you're gonna spend your time and your money and what you're gonna need. So I think being able to show the vision but gain the confidence. And also, I think a second point is, why are you the right person to do this? So part of my eventual decision to do this was I kept thinking, there's no one in the world better to do this specific idea than me. There are 5 billion ideas that I would not be qualified to do, let's be clear, but this one, I am probably the most qualified person. And so that was the one that gave me the confidence to go out. You really need to believe in yourself if you're going to convince others to believe in you. So until you're there and you are convinced like no other thing that has been in your life, don't waste your time. So those are a couple things I would say. The last thing is the use of capital is so important. And I think the one thing that surprised me is it took us probably 6 to 12 months longer to build what we set out to build. And, you know, we had experienced people, but none of the people on the team had built something from scratch. And the zero-to-one phase I knew would be very hard for me. We did it at Nordstrom and it was really hard then. And we had a lot of financial support back then. And so it's very different when you have a very small team. And I think that being really clear on how you're gonna spend your money, how long it's gonna take you, get the estimates from the people who really know who are gonna build it, talk to people. And that's how I figured out how much money to raise was basically by going to a few different engineers, describing what we needed to build, and getting them to give me an estimate of how many engineers and how many hours it would take. Because that's really how you back into how much money you need to raise to get to your next point. And I would say the last point is, so many startups fail because they don't raise enough upfront, and then they're not able to get to a proof point to raise again. And they run out of money too soon. And so being really clear on what you need to achieve to be able to raise your next round and working backwards from that is an important way to think about fundraising.

As a founder in the room, I think all of your points really resonate, especially the point around building things from scratch and how it's really a different skill set, at least with us. Like we brought a bunch of engineers, but when it comes to actually building something from nothing, no lines in of code to making it something that's reliable, it's like a different beast of its own. You chatted a little bit about pitching and how important the vision is. Even if it's 5 years away, 10 years away, it's important to orient everyone around what the ultimate goal is, especially if there's pivots or shifts in strategy or roadblocks, people are convicted that you're building towards that vision. So with The Yes, I would love to ask, what is the vision for The Yes?

The vision is leveraging advancement in AI to be able to build an intelligent shopping platform that can be applied to any style-based category. So if you look at what Amazon has done, and God bless Amazon, they are unbelievable and an inspiration to all of us. I think that they have nailed the mechanics of getting commodities, and we're not trying to compete with that. But there are a lot of categories that Amazon does not do well and is not really set up to do. And that's because you need to understand the nuances of the category and the consumer in order to serve up the right content. The future of shopping, it could be in fashion, it could be not just for women but for men, and it could be in home, and it could be in beauty, and frankly, it could be in travel and food and other verticals, really require a depth of understanding of that category and training models to understand the nuances that matter both for that category as well as for the consumer making purchases in that category. But ultimately, we should have a shopping experience that adapts to us and understands our preferences. And if it doesn't understand something about us, it asks us. My favorite part of the Yes is when I'm on the app and I say no to something a couple of times, and then it says, "Do you just not want to see string bikinis?" And I say, "Yes!" And then I feel like someone's listening to me. My team knows how much I love that feature. And ultimately, what we're building is something that can work across different verticals, but the spirit of it is the same, which is it makes shopping much more delightful and personal and gets you the right thing so you're not spending all your time trying to just sort through a catalog of products that is not relevant to you.

A really computationally difficult problem to solve, right? Because your style is something that is so personal and so inherent, and as you change, your style changes. In many ways, Spotify Spotify's done a really good job at surfacing the correct songs for you. TikToks are doing really well in terms of surfacing little video tidbits that get you addicted and keep you swiping. And with style and with clothes, I imagine there's so many dimensions that factor into, is this relevant? Is this really speaking to the identity and the style of the user? And I'm almost convinced that we're gonna end up in a world where style recommendation becomes as natural of a shopping experience as getting a song recommendation. So I'm curious what your thoughts are in terms of how far away are we for having that fully personalized shopping experience and have it be a bit more widespread?

One of the things I think about is we don't have to get it right 100% of the time. And in fact, that's not even the goal. I think the goal is to serve you up the things that help you make the choice of what you want. It's so much about having enough choice and seeing the range of what's there so that you understand, "This is the one I want." One of the challenges with Stitch Fix for someone who is more on the fashion enthusiast side is they're picky and they have a lot of opinions, and it's very hard to get the right 5 products in a box. If you're less picky and it's in your price point and it fits you well, It's a different kind of customer for whom that service works. The reason why I was so excited to do this directly with a consumer as opposed to having a stylist layer is because the idea is, okay, this is your general style, this is generally what you like. We're going to show you a range of choices and then you can find the one that you like the most of it. So there's always going to be the part of you that needs to choose which of these things do I want? And there's some really fun features around that. So one of the things we've done is we've built in this list share feature where you can share your list with your friends and then they can react to it. And so as soon as you're deciding between 3 dresses and like 4 of your friends are all like, "Oh, definitely get this one," you're like, "Done, got it." Shopping is one of those things where you just see it in a picture, you're not exactly sure how it's gonna look on. Even if you try it on, you still may be like, "I don't know, should I get it, should I not?" So it's not like a song, I'll listen to it if I like it, I'll skip through it if I don't like it. It has this whole different, dimension to it. And so our goal is really to clear away all the noise so that you can focus on the stuff that's relevant for you and have tools to help you make choices about what to buy.

I love that definition and how you're thinking about that, Julie. And one thing that's always struck me as it relates to recommendation algorithms, the ones that I've tried besides The Yes are forefront with their style quiz to the point where you provide recommendations. But I realize as a consumer, I'm less binary than a quiz would come across. It might ask me which colors are no-goes for me, Yellow is always on that list for me. But every once in a while, I like to be surprised and delighted with a yellow. And so it becomes this challenging thing because I'm fickle and I know that. And how is the algorithm gonna know that I'm fickle when it comes to my style?

And there's a concept in machine learning that's sort of explore and exploit. The concept is we always wanna put new things in front of you because you never know if someone's gonna like it, either because it's a new thing that we haven't shown you shown this customer before, or because, you know, it's starting to trend, or people who we see that are doing similar things are starting to like this, or there's lots of indicators why. So it's really important in anything that's kind of style-based to be able to always put a little bit of the wildcard ideas. And also, no one wants to see the most boring version of themself. And we have that problem. We're testing a whole bunch of new things in our algorithm to make sure we're not just so you that you're like, I already own everything there. I still want to be inspired by new ideas and different things. And yes, sometimes I'll buy another black thing, but I also would like to see ideas that excite me. And I have— I, I've found some things in my feed that I wouldn't have looked for, but because it was surfaced to me, I was excited and I ended up buying it and loving it.

One really important piece to being able to surface more and more new discoveries and keeping your consumers surprised and engaged is the, the brands that you're hosting on your platform and making sure that there is enough range, at least from a brand perspective, in order to touch on many different style profiles. So the Yes to Date has, you know, almost over 300 brands, which certainly captures the range of what folks would like to wear. But I'm sure that was definitely not the case during the first few months of the YES! So I'm curious, who was the first brand to say yes to joining the YES! platform?

The first brand was KÜHL. They have those really cute striped tees and sweaters. It was through their CEO, Jim Kirschner. He believed in the idea and was totally game to try it out. We bought a KÜHL t-shirt for everyone on the staff and took a picture of everyone in them just to honor and celebrate them. But yes, it has been a journey to get the brands on board and obviously You can't really have a business that does a good job of personalization if you don't have a huge assortment. So there was a minimum number of brands we had to have just to even launch the business. And we still have hundreds, if not thousands more brands just alone in this category that we will bring on. There's so many wonderful brands and it's such a great discovery vehicle. In fact, about half of our customers surveyed who have made a purchase have said that they have bought something from a brand they didn't know. What we've seen is we really wanted a mix of established brands, so It builds trust and your go-tos are there, but it also is a great way to help you discover new brands because we understand which brands are relevant to you. And it's funny because I always know and feel better that this concept is working when I look at my daughter's app versus mine. She's 19, and if I saw anything that's in her feed in my own feed, I would be offended, you know, and vice versa. It's like a totally different set of brands and a totally different set products that show for each of us very much reflecting what we care about.

From your first brand to now hundreds that service both yourself and your daughter and me and Madison and basically every shopper you could think of, you guys have grown so much, like, over the past 3 years and have really entered into that next stage of product and company building. But sometimes it's not always a straight line, and as an early-stage founder, I'm feeling that. I would love to get a sense of a time in the journey of The Yes where things didn't go quite as planned and what you've learned from those experiences.

The scariest time universally for founders is when they're not sure they're going to be able to raise their next round. After we had done our first round, we were doing well, and then it was time to raise our next round and I had a couple days where I wasn't sure if the money was going to come through. We had a lot of VCs reach out to us proactively and we weren't even in the market, but it ended up spurring us to think about what was the responsible time to raise the next round. And then we actively went out and there were like some promises that people pulled back on. There were just a few dicey days where you're kind of like, oh my God, is is this thing going to survive or not? I mean, it's terrifying. Fortunately, we got past that, but I, I will never forget that feeling because it's really a terrifying feeling and you feel so responsible for everyone who signed up to work with you and any brand that signed on with you. And so you just have the weight of the world on your shoulder. I would say the other real challenge for us and mistake we made was we launched app first and app is very hard to grow a commerce business. Business through. So if you're building an app because that's how the product works, it's an Uber or, you know, an Instagram, that's one thing. But if you're building an e-commerce business, you really need the benefit of web-based links to be able to grow. We launched app first for a couple reasons. They weren't bad reasons. One was we ended up launching in May of 2020. But obviously, when everyone was stuck at home and on their laptops, we obviously didn't know that was going to happen when we were starting building the product. It was 2018. And mobile was just rising so quickly. We also thought forcing ourselves to design for the size and scale of an app would force decisions that would be hard. And we wanted to make the product feel app native as opposed to most sites that just feel like a website ported over to an app. But the truth was we launched with app and our growth was somewhat limited based on press and sharing. We couldn't actually spend money cost-effectively to acquire customers. And we knew we needed to build web. And so we always were planning to, but we just ended up doing it even sooner. About 6 months in, we started working on web. And then once we launched web, our business really took off. We've had enormous growth every single month since launching web in May of 2021.

Those are some big lessons to learn, and I think will provide a lot of comfort to our listeners who are going through these different cycles of product market fit and fundraising and so on to build a business that you've so successfully built over the past 3 years. I think it's safe for us to call you a visionary in e-commerce and what's to come in consuming online. Harkening back to a brief conversation we had a few years back through a mutual friend introduction, I personally remember so distinctly you framing these phases of e-com as e-com 1.0, Nordstrom just deciding to put their catalog online, e-com 2.0, shopping lightly through content and UGC that you were doing in the Sephora and Stitch Fix days to what in 2017 you called e-commerce 3.0. Since then, a lot of 3.0s have been batted around with Web3, but you were really early to thinking about where this next decade is going to bring and put us for consumerization online. So with the accelerant of COVID-19, conversations around Web3, et cetera, I'm curious, what do you believe today is the future of e-commerce 3.0?

My definition was not what Web3.0 is now being defined as, as the metaverse. And I am not very bullish on the metaverse in terms of commerce. I don't think the consumers that we're serving are particularly interested or trying to buy avatars with clothes. Yeah, I think that will happen, but I am not particularly interested in it, and I don't think that it is where the majority of the market's going to be in the next 5 years. E-commerce 3.0 is really much more about understanding the user and being responsive to the user and leveraging AI in a way that allows each consumer's experience to be personal and relevant. It was so exciting to go from the early days of just taking a store and putting it online, literally, to at least being able, as I think we talked about, have a conversation back and forth with your customer online. And I think this third phase is really, why does technology exist if it's literally just taking the physical store and recreating it online? We need now some way to filter and find the things that are relevant to us. That plays across content and information as well as product and commerce. And I do think that is going to be the next wave of what happens with e-commerce.

I'm reminded of the Steve Jobs quote that the internet may be a bicycle for your mind. And what I'm hearing is The Yes is a bicycle for power shoppers and casual shoppers alike. You still have to push the pedals, but there is a lot of goodness that comes from getting on the bike.

I like it.

We talked a bit about personalization in the context of shopping, your feed, your user, but we'd love to ask what's next for Julie?

I mean, I couldn't love what I'm doing anymore. I think it's what I was built for. It really feels like the culmination of all the things I've done in my career before. I'm definitely a workaholic. My hobby is working and shopping, which is also working, and they go hand in hand. We are in the first inning of what we're working on at the Yes, and we have so much more. We have so many more ideas, and I'm really focused on bringing all of these ideas to life and learning what works and doesn't and making the experience better for consumers and better for brands. Pretty focused right now.

It's great when you can shop and shopping is work. As a kid, I always wanted to, like, become a buyer, go into fashion for that. But now it seems that maybe hiring at The S, working in e-com, working in technology is the better way to go about that. For our listener base who are also excited about the intersection intersection of shopping, fashion, and tech. And we chatted a lot about your career. We always ask a hero question on this podcast, and that question is, who is a woman in your life that has had a profound impact on yourself and your career?

My mom. She was a psychiatric social worker, and I have two sisters. And growing up, she not only worked, which was fairly unusual for my generation, she was also on the school board. She sang with the symphony. She was like a gourmet baker and completely involved in all of our lives. My husband has always called her a whirling dervish. She basically just taught me the way of whatever it is that's interesting to you, go for it, and don't be afraid. There are no limits. She feels like I've taken that to a whole new level But she really has been my role model in being able to feel like you can have a really fulfilling career, you can be ambitious about all the things you want to do, and you can be a great mom.

That's awesome. I think for Madison and I, both with very strong, powerful moms, they have certainly shaped our career.

Yeah. For any guilty working mom, what I would say is the role model aspect of what you're doing is pretty powerful.

Thank you so much for taking the time to share your story and wisdom on this episode.

Episode.

We loved having you.

My pleasure. It was really fun to talk to you both.

Thanks, Julie.

Thank you so much for joining us this week on The Room Podcast. If you're new here, please follow us and subscribe to our newsletter at theroompodcast.com/newsletter. If you've listened to us before, please consider writing us a review. It's extremely helpful as we continue to amplify stories. Join us next week at Tuesday, May 31st, 10:00 AM Eastern, 7:00 AM Pacific. See you in the room.

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All opinions expressed by Claudia and Madison and podcast guests are solely their own opinions and do not reflect the opinion of DefyVC. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.