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EP 271 - Fran Maier | Otter.ai

EP 271 - Fran Maier

Ellen Yin46min

Fran Maier

00:00

You're listening to cubicle to CEO episode 271, reducing risk is a huge lever scaling startups can use to their advantage. This was a big theme in my conversation with match.com co-founder and current CEO of Babyquip, Fran Maier. Babyquip is the world's largest baby gear rental marketplace, empowering 1000s of independent contractors around the country to build successful side hustles while helping families travel more easily.

Ellen Yin

00:26

In today's case study, Fran details how they were able to grow their network of these independent contractors, also known as quality providers, internally, by 60% in one year by alleviating as much risk as possible for their providers, from streamlined tech infrastructure to added insurance coverage to offering trainings and negotiating discounts with partners on their behalf, Fran has made it a no brainer for motivated mothers to partner with baby quip in this gig economy business model, keep listening to get creative ideas on how to prioritize lowering risk in your own business to drive growth.

Ellen Yin

01:04

Welcome to cubicle, to CEO, the podcast where we ask successful founders and CEOs the business questions you can't google. I'm your host. Ellen Yin, every Monday, go behind the business in a case study style interview with a leading entrepreneur who shares one specific growth strategy they've tested in their own business, exactly how they implemented it and what the results and revenue were. You'll also hear financially transparent insights from my own journey bootstrapping our media company from a $300 freelance project into millions in revenue.

Ellen Yin

01:47

Hi everyone. Welcome back to the show. Today, we have joining us. Fran Meyer, who originally was one of the co founders of match.com and now is the CEO of baby quip, which I'm very excited for us to dig deeper into how they're growing this two sided marketplace of baby gear rentals for traveling parents and families and all the things. So we'll get into the details of that case study in just a moment. But first, Fran, welcome to our show.

Fran Maier

02:11

So glad to be here. Thank you for having me, Ellen.

Ellen Yin

02:14

Absolutely. It's an honor to interview someone who is really so history, right in in terms of.

Fran Maier

02:22

Old, old you mean.

Ellen Yin

02:23

No, not old. Just like to have the the depth of the experience that you have across building brands that are household names. I mean, I've never personally been on match.com but I know many of people who have, and who have even found spouses through you know, through the work that you've done. So thank you so much for that. I guess, to start off our interview, I usually ask our guests what their cubicle the CEO story is.

Ellen Yin

02:45

But for you, I would love to know the initial catalyst that led you into entrepreneurship in general, but then also, kind of how you ended up at baby quit, because, to my understanding, there was already some momentum there, right? And then you ended up coming on board.

Fran Maier

03:00

Sure, you know, to some extent, I was always a little bit business focused. My dad would drive me to school and talk about he was in financial services. So he would talk about maybe a deal he closed, or something like that. I went to college, initially starting to study English, but before you know it, I was taking all kinds of business classes, and in my senior year in college, I opened up a frozen yogurt stand, which was brand new to have frozen yogurt.

Fran Maier

03:32

I mean, this is how old I am. We're talking 1983 or so. Okay, so a long time ago, but then I did do the corporate thing. And after business school, I worked at the Clorox company in brand management. And then, as I I've told my sons, then the internet happened, and at that point, I had left Clorox, and I was working at AAA, the auto membership program.

Ellen Yin

04:02

Yes.

Fran Maier

04:02

And I'm in San Francisco, and it's happening, and the first time I saw the internet, I said to myself, or maybe I said it out loud, this is going to change everything you know. And for younger people, they don't know that it happened okay, and it was around that time, in fact, as I mentioned to you earlier, I'm in the Stanford area for my business school and undergraduate reunion weekend.

Fran Maier

04:31

And it was at one of my reunion weekends at my business school that I ran into Gary Kremen, and he was starting this company called Electric classifieds, and let's just put newspaper classifieds online. But we were going to introduce match.com as online dating. And Gary wanted somebody with marketing experience. He wanted a woman. He thought having a woman would bring a good perspective to this category. And, you know, I pretty much went after that position right away, because I just want to be in it. I want to do something in the internet. And this seemed as good of one as any other at that point in time, and it was crazy.

Ellen Yin

05:13

I'm so thankful that you, you know, saw the vision for it before you saw what was possible, right? And that really is the pioneering of so much of what's been created from that, but it took early believers like you to to see the potential in it. So I know we're all grateful for that, but continue with how they measure. Made the Babyquip,

Fran Maier

05:32

So I was at match for about three years. We sold it for less than $8 million so sometimes being a pioneer and being early, is not good because you don't know how good you had it okay. I mean that that was travesty. And then I did a few other startups, mostly in marketing and business development roles. I spent 10 years at a company called trustee, now called trust arc. It's best known for its privacy certification, and I was there for over 10 years, and I turned it from a nonprofit industry association to a for profit company and raise some capital, mostly because the issues of privacy and security were just getting bigger.

Fran Maier

06:18

And of course, that hasn't changed. And I'd say that at this point, is getting me into the 2010s I was very dedicated to building trusted brands, but I wasn't into privacy anymore, and I left Trust Ark and post divorce, moved across the bay from Alameda to San Francisco, bought a house on Potrero Hill, three story house, two really nice bedrooms on the top floor. And I say this because within months, I was renting rooms in my house on Airbnb. Wow.

Fran Maier

06:53

Now Airbnbs headquarters were down the street. This is 2012 I didn't buy the house thinking I would do that, but it was kind of like in the air, and I was curious, and so I thought, Okay, I'm going to rent a room and see how it goes. Well, before, you know, Ellen, I'm making, you know, renting these two rooms for 150 bucks a night each, and having people in and out of my house all the time. A lot of them worked at Airbnb, for that matter, and because I was so close to the headquarters, and then I bought a house in Santa Fe, New Mexico, which is my hometown, where I live now, for a rental property.

Fran Maier

07:33

Then I bought another one, and all of a sudden I'm in hospitality, and I'm in the gig economy, and it gets me thinking about, well, what's going to change? Because whenever there's a massive change, and right now, I'd say we're the massive change of AI, you know, but there's the internet, then there's mobile, and then there's, you know, social media and gig economy, or sharing economy, or marketplaces, and now, now it's, it's a lot of AI, I think that's happening.

Fran Maier

08:06

And whenever there's these massive cultural and technological changes, this is where entrepreneurs jump in, you know. So I started to think about, what are the businesses that are going to evolve from the way people are traveling and the way people are working, this whole gig economy thing. And as you mentioned earlier, I met a gal in Santa Fe again, my hometown. She came out to the Bay Area where I was advising startup founders because I wasn't going back to a regular job because I was making so much money renting rooms in my house.

Ellen Yin

08:43

What a great situation to be in, yeah.

Fran Maier

08:47

So I was doing some board work and things like that. Anyway, Carrie comes over, and because she's from Santa Fe, I say, Well, yeah, I'm going to meet with you for sure. And she gives me the pitch. And that was the very beginnings of a gig economy powered marketplace for renting baby gear. But at that point, there was only two locations, right?

Fran Maier

09:07

And in that first meeting, I said, well, Carrie, I should be your CEO, and which was kind of cheeky, and she didn't say yes right away. I didn't expect her to, but it started the conversation. And by May of 2016 we formed baby quip and started the expansion process.

Ellen Yin

09:27

Wow. And the rest, as they say, is history, right? But I really love and appreciate how being an early adopter is a through line of your entire career, right? And, and I see that here too, with baby quip being an amalgamation of, like you said, of the gig economy, of the popularity of rentals, of just the way that people are more mobile in their location these days, how we can work remote, how so many people are just more flexible with location freedom.

Ellen Yin

09:55

And so just for some context for our listeners, before we actually get in. To the case study around how investing in your internal infrastructure to support your independent contractors or quality providers, as you call them. Before we get into that side, I think it'd be helpful for our listeners just to better understand how Babyquip works. If this is the first time they've heard of it, maybe they're not parents themselves. Who is baby quit for? How does the business model work, right? Could you just give us a little context there?

Fran Maier

10:23

Yeah. So as I said, Babyquip is for traveling families with young children. So a family can say they're going to set where are you at Ellen?

Ellen Yin

10:33

I'm in Oregon. Okay?

Fran Maier

10:35

So they could say they're going to Oregon, and what dates they could come to babyquip.com or their app, put in where they're going, their dates, and pick the baby gear that they want while they're there, and everything from strollers, car seats, cribs, foot toys, baby baths, monitors. I think we have over 100,000 items on the platform.

Ellen Yin

10:59

Wow.

Fran Maier

10:59

Okay, and soon, if you're a family with a pet, you could also rent pet gear. Oh So and, and soon outdoor gear, because maybe you're going to the Oregon coast, and not only will you want those chairs and an umbrella, but maybe a nice blanket to keep you warm.

Ellen Yin

11:18

You know how our coastline works exactly,

Fran Maier

11:20

exactly. So the secret sauce is that we have this community of 2600 quality providers, and these are mostly moms. They're they're the ones that own the gear. They're the ones who might live in your destination in Oregon, and so would deliver to you, maybe even set up the crib car seat stroller. Not car seats. We don't set up car seats, but crib strollers and things like that.

Fran Maier

11:50

So they make pretty good money. They keep 78% of the item fees and delivery fees and any surcharges. Surcharge might be if you want us to meet you at the airport, well, that's a little bit more expensive, understandably. And on average, the quality providers, I think last year, were making over $1,500 a month once they got going. We have some that are doing 1000s of 1000s a month. And this is more than just renting gear that you already had from your own children. They're actively building up their inventory so that they have more and more to offer visitors to their location.

Ellen Yin

12:32

That's incredible, and that's how we do it. Yeah, and I love to see how there's so much opportunity now for people to be an independent business owner and be able to really get creative with you know, how they want to service their I mean, it's baby quips clients, but in many ways, they're their clients too, right? And how-

Fran Maier

12:51

Oh, yeah, no. What I love about this is we're teaching them how to be entrepreneurs. So we teach them about hospitality, cleanliness, safety, and they take all those things very seriously. We help them get a Google My Business page, an integration with next door. How to do affiliate marketing, how to sign up those hotels and vacation rentals in their town.

Fran Maier

13:15

We have a private community on Facebook, so busy every day and posting everything from here's a great deal on this particular stroller at Walmart or someplace, or they're posting that I have this difficult customer, or maybe they're posting yesterday I saw that somebody got their 500th order and wanted some props for that. And they sometimes they take photos of how they pack their car or their garage with all the baby gear. So they really help each other.

Ellen Yin

13:50

Yeah.

Fran Maier

13:51

And what's really unique about this opportunity, probably one of the most unique things is a lot of them do it with their children, you know? So, you know, I've heard of moms on our platform who, you know had to leave the corporate world for one reason or another, but love that they could contribute to their family, and they could do this with their kids, and they get a lot of gratification and joy from it.

Ellen Yin

14:14

What a wonderful opportunity like you mentioned, to really build build business around your life rather than the other way around. And I'm really curious, just from your perspective of when you stepped into this role as CEO and started to expand and fully launch baby quip, why go the route of independent contractors and this gig economy and empowering people to have micro businesses within your larger infrastructure of a business, rather than, say, start corporate locations and hot spots for Babyquip, where you own the equipment and you're renting it out yourself.

Fran Maier

14:51

Well, I mean, first of all, owning equipment and all of that is a big capital expense, and so we're very capital efficient because we don't, we don't own anything other than maybe to take some photos, right? You know, so really capital efficient. I think it led us to expand more quickly that this is a unique opportunity.

Fran Maier

15:15

So I think it'd be harder to find employees if we hadn't gone that route. I also really resisted the franchise route. We felt that the best way to build the brand, and remember, this is when Uber and Lyft and all these other services are just emerging, and you know, the more cars you put on the road with that sign, the more you're going to know about it.

Fran Maier

15:39

So I really resisted assigning territories or giving anybody, you know, anything that even looked like a franchise, because I thought there was a lot of unmet demand, and the best way that we're going to do it is to get out there. The other thing that's kind of related is that a lot of investors early on said, well, why don't you just do in the LA market before you expand everywhere? And I kind of really bucked that advice by saying, no, if we're a travel brand, we got to be where people are traveling, you know.

Fran Maier

16:14

And our experience was, as soon as we put the quality providers or turn them on in a marketplace. We had orders. I mean, there was demand, and I also knew, and you know, looked at the market before we entered it, there was really no national competitor. There was no national brand we're the only ones, even now some regional brands, and certainly around Anaheim and Orlando, there's some mom and pops and, you know, and so on that have been there forever, but we really had an opportunity to dominate a category and in a marketplace, if you could dominate a category, that's golden, absolutely.

Ellen Yin

16:58

And yeah, I mean, to your point, the challenges in in starting a capital heavy business are so different in terms of your your speed at which you can run and test right, compared to having your quality providers really take on the responsibility of of supplying inventory. And that kind of leads us right into today's case study, where you, I think realize, it seems, from what I'm hearing early on, that your quality providers are your greatest assets. Those people, that community is what makes baby clip work.

Ellen Yin

17:29

And so you have chosen to invest in support infrastructure for these just for our listeners. If I say QP, that's what I'm referring to, quality providers, just for short. So you've invested a support infrastructure for your QPs, and one of the primary ways you've done this is through investing in building a proprietary tech platform that streams line their back in business operations. And by doing so, you actually saw a growth in your QP network by 60% so I would love to understand you know, how this strategic decision directly correlated to this massive expansion that you saw in the number of providers that were on your platform prior to building this proprietary tech.

Ellen Yin

18:13

What were your QPs using to operate their business, and what were some of the challenges that you were seeing them come across and being able to facilitate these rentals.

Fran Maier

18:24

Yeah, so we turned on the technology pretty darn quick. Early on, they would have to get their own Stripe account, and Stripe makes it pretty easy, but it's still too hard, you know, you know. And I would say, over the years, the technology platform has become increasingly strong. So for example, we didn't have inventory management. Early on. They would have to keep track of what inventory they had when it was available, and all of that.

Fran Maier

18:53

Now, of course, we have inventory management, and that's critical, because it's better for us to be able to show the customer who has a particular inventory that they're looking for, if there's a recall or something that we have to take off the platform, right? We can do it automatically. So that helps us in that regard. But I'd say for, I don't even know how many years we didn't have inventory management, you know? So it's over time.

Fran Maier

19:20

My overall philosophy, just stepping back, is that, yes, quality providers can have their own baby gear rental business, or they could list with another one, or whatever. I felt always we had to earn their business.

Ellen Yin

19:33

Okay?

Fran Maier

19:34

You know, by giving them the tools and the support that they needed, probably the most strategic thing that we did that nobody else can offer is we have liability insurance that covers the quality providers as well as the company and most of our quality providers. They're married, they own their own homes, God forbid. And you know what I'm going to knock on the wood. We've never had a claim. Hmm, or anything, wow, which is great, right?

Fran Maier

20:03

But God forbid it could happen. Probably will happen. Super important that we have coverage, but that insurance coverage does is quality providers keep orders on the platform, because if they were to take them off platform and just exchange with the customers directly, while there's no insurance, right? It is also very important for our partnerships, that we have insurance, and we have partnerships with lots of travel agents, hospitality companies, hotels, vacation rentals and so on.

Fran Maier

20:33

So really important that we have that coverage. I'd say a third thing that we did, and this was a very, very important thing, is, during the pandemic, obviously, people stopped traveling, right? Yes, I mean, and we had probably, then less than 1000 quality providers on the platform. Now we have over 2600 but I want to make sure they still have something to do. And so we launched a cleaning business to clean the car seats mostly and strollers, mostly for local families.

Ellen Yin

21:06

Okay.

Fran Maier

21:07

And it's, it's not a big part of our business now, but it was something that showed them that we wanted to help them during this time. And cleanliness, of course, was very big during the pandemic, and I think it showed our dedication to them and that we built this, this service that they could do.

Ellen Yin

21:28

That makes a lot of sense. And I think it's so creative how you know you found different ways to provide income opportunities right during a time when their main source was being cut off. So I love that you did that, that you pivoted with them and didn't just leave them kind of to figure things out on their own. The two key takeaways from what you just shared about how this tech infrastructure helped your QPs that I want to just pull out again for our listeners is one you assumed the majority of the risk with the liability policy.

Ellen Yin

21:58

So I think regardless of what type of business you have as you know, those of you who are listening, even if you know you're not, obviously in the rental space, or you don't, maybe employ a network of independent contractors, I think it's important just to always think like, how do you reduce risk as much as possible for your end customer, end user?

Ellen Yin

22:16

So that's one thing I want you to take away from what Fran said. And then another thing you said, Fran was just that what seems like a very small ask, like, okay, sign up for a free Stripe account, probably takes 60 seconds for someone to do so, but you're right. It is an extra step, and it is if someone's unfamiliar with being paid in that way, like if they've always worked only a w2 job where they get a paycheck direct deposited.

Ellen Yin

22:38

Sometimes it feels scary to sign up for something different that you're not familiar with, and so I think your dedication to reducing the friction in the onboarding process, or making the adoption of whatever platform it is easier is also something that I want to make sure our listeners really come away from when they're thinking through their own products and services.

Ellen Yin

23:00

How do they apply that same principle to their businesses? So that was really helpful. I'm just curious if there was anything else that you specifically noticed around the infrastructure improvements that really made it more attractive for new people to join or to even hear or learn about baby quit, because 60% increase in 2022 I mean, that's that's very significant.

Ellen Yin

23:24

So what else was drawing people in to become new providers?

Fran Maier

23:29

Well, first of all, a lot of them were customers. Okay, so as we grew our customer base, we got more applications to be quality providers. I think another thing a growth hack we had from almost the very beginning was that, if you're willing to, you could say that you have inventory that you don't personally own right away.

Ellen Yin

23:49

Okay, like a pre-rent and pre-sell concept.

Fran Maier

23:53

Yeah, so we pay the quality providers when the orders come in, rather than waiting until the order is complete, which would be the more prudent thing to do. So if you want to say that, you know you have the stroller car seat or whatever you can do that we'll pay you, and then you have to hop on over to Target or Walmart or Amazon and get that piece of inventory.

Fran Maier

24:15

But you have, you have some cash right now. It doesn't work for everything. I mean, crimps are expensive, hard to get in a day, even from Amazon, yeah, a folding crib with the right kind of mattress and so on, sure, so you have to be smart about it. But what that did for us is our quality providers end up building more inventory, and that was a pretty good growth hack you know,

Ellen Yin

24:41

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Ellen Yin

26:04

That's so smart. I love that. So again, going back to that, it's that same theme of reducing risk, right for your quality providers, where they don't have to front the cash until there's demand, and really, they're not even the ones fronting the cash. It's, it's you guys, like, when you pay for that.

Fran Maier

26:22

It's like a little bit of a loan.

Ellen Yin

26:23

Exactly, yes.

Fran Maier

26:24

And and we try to advise them. The other thing that we're constantly doing is that in October, October is what we call QP month, and we're doing trainings on all kinds of things. They're learning from each other. As we've gotten larger, we're getting more and more manufacturers who or brands who want to offer deals to our quality providers so they get discounts on good equipment, like slumber pods.

Fran Maier

26:50

And I don't even know all the brands at this point, I can't keep up with it, but I'd also say that one of the biggest surprises to me personally was how important that community is, where they share ideas, they talk to each other. You know, we have one official baby quick community. They probably have some sub communities for their city, or whatever that's fine. But you know, when we do a survey, that's one of the things that they say they care most about.

Ellen Yin

27:21

And that tracks with your demographic. You said most of your QPS are moms, and I feel like I'm not a mom myself yet, but all of my friends who are moms, especially those who are new moms, one of the common themes I hear is, you know, there's this loneliness in being home alone all day with your kids, or even if you're a working mom, just there's this disconnect sometimes from your peers when you're in that stage of life.

Ellen Yin

27:47

And so I think I can understand why they see so much value in the community aspect beyond just growing their business, but really like just getting them through different life seasons together.

Fran Maier

27:58

Oh yeah. I mean, they share, they share all kinds of things. It's fun. It's really, really fun. And that makes a difference too.

Ellen Yin

28:06

Absolutely, and you referenced just a moment ago that you also saw an increase in these quality providers, partly from existing customers who then decided to go on, you know, the business side. Did you actively make efforts to recruit or do you make active efforts to recruit customers where, after they make a rental, do you ever send them, let's say, a follow up email or any sort of communications letting them know, like, hey, if you enjoyed your rental, you have the opportunity to also, you know, become a quality provider. Or is that kind of more organic?

Fran Maier

28:37

It is a little bit more organic. We've done some of those referral programs and and I think they've probably worked well enough, you know, the QPS, they don't want us to put more people in their market.

Ellen Yin

28:50

That's fair, more competition, yeah,

Fran Maier

28:54

So, so we couldn't really rely on them to do that kind of marketing. And over the years, we've gotten better about the onboarding experience. We're constantly reinventing it. One of the things that I think is critical to our success as a brand with customers and Ellen, we have a 93 Net Promoter Score.

Ellen Yin

29:13

Wow. Super high.

Fran Maier

29:15

Okay, yeah. Super high, yep. And I attribute that to the quality providers really going above and beyond and the strength of our platform and so on. But we don't take all applicants. We actually interview them all, you know? We put them through an onboarding and training process. They actually have to show us that, that they're serious about it. We make in the pay couple $100 up front. I We're picky, yeah, and that probably is important part of our success.

Ellen Yin

29:46

Yeah, no, that that makes complete sense. And especially being a company that has a network of independent contractors, I would imagine that one of the most difficult aspects of managing that network is to keep a consistent. Distinct standard of quality right across your quality providers, and so it makes sense to be really rigorous in the selection process.

Ellen Yin

30:08

I am also curious, what other besides ongoing education and community support, what other ways are you able to maintain that quality assurance across all your providers, in terms of, let's say, the cleanliness of their inventory, or just little upkeep, things like that. How do you monitor or help administer that?

Fran Maier

30:30

We do customer reviews and ratings and so we can see. But honestly, in the eight years, practically, we've been doing this, yeah, we've only probably taken off 20 quality providers for issues of cleanliness, safety or just non performance, right? I mean, they're pretty good, and I attribute that to that onboarding and filtering that we do at the beginning, but also as a company, we really reinforce the values of cleanliness safety, going above and beyond.

Fran Maier

31:09

And that community that I talk about that reinforces that as well. So we very rarely get a complaint. And of course, this is a highly personal category families are not going to go to Craigslist to rent baby care.

Ellen Yin

31:25

Yes, okay, accurate.

Fran Maier

31:27

I mean, they want clean and safe, no question about it.

Ellen Yin

31:32

Yeah, and the convenience factor too. I mean, like I said, I'm not a parent myself, so I previously was not aware of Babyquip because I've never personally had a need for it. But when I searched just, you know, before interview and doing some preparation, I was, you know, just testing the site, seeing, like, okay, if I were coming to my own city, you know, on this date, what's available.

Ellen Yin

31:52

And it was really refreshing that even as a mid sized city, we're not, you know, a huge market by any means, there were still so much variety. There were several different providers and great track record, and I can see how the convenience aspect makes it super appealing for users, even beyond the trust factor and whatnot. You mentioned that you have about 2600 or so QPs currently, and obviously this case study is about how you were able to grow to that number in your vision for the continued growth of baby quip, do you see the expansion of the QP network, especially at those leaps and bounds of like, 50% 60% growth?

Ellen Yin

32:32

Do you see that being the direction that you're working towards still, or do you find that at some point you're hitting kind of like a, I don't know the best way to describe it, but like a homeostasis where it would be more in your benefit to just pour into the existing QPS rather than growing that network.

Fran Maier

32:50

Yeah, this year was a little bit slower in terms of demand growth. You know, we had some very, very fast growth post pandemic, as families were able to go back to travel. So, you know, 22 was double 2121 was double 2019 you know, people, when they had the chance to go back to travel, it was a lot of growth.

Ellen Yin

33:12

Yeah.

Fran Maier

33:13

So growth. Growth has slowed a bit with the economy and things like that. So this year, we focus a little bit more on two things. One, looking at our quality provider community and seeing, okay, are these people really in it? Yeah, and and off boarding some amount of people who are really no longer active and focusing a little bit more on driving business to the current quality providers. I anticipate a major partnership coming soon. Can't tell you who.

Ellen Yin

33:44

Okay.

Fran Maier

33:44

That is going to really make us probably more rapidly, bring on more supply, plus, as we're going into these different categories, like, typically, we have moms renting baby care, well, we might have pet owners renting pet care, yeah, so, so they might be a little bit different, I mean, and that'll be interesting.

Ellen Yin

34:06

Yeah, no, I definitely think it's so smart to, like I said at the beginning when you mentioned the pet because pet parents, I mean, they joke about it in the media, but it's true, they they are just as dedicated to, you know our fur babies as you know any other human baby, and so I think that is a incredibly smart market to tap into.

Ellen Yin

34:27

And speaking of increasing supply and really investing and bringing business to current QP so that they can continue to grow, another side effect of investing in that infrastructure that contributed to your growth was that your gross merchandise value doubled from 2021 to 2022 so can you talk a little bit more about what you believe drove that? Because obviously the QPs themselves are the ones who would be buying more inventory, thus increasing the gross merchandise value available on your site. I think you mentioned there's like 100 1000 items that you currently carry in your inventory across all of your quality providers.

Ellen Yin

35:04

What motivated your QPs to go out and purchase more? Did you have any concentrated campaigns internally that supported them or incentivized them to increase their supply?

Fran Maier

35:16

It's really an ongoing dialog between our marketing team that's building demand in our supply team, right? So when we know that we're going to have major campaigns, we do, we do promotions all the time, and we tell the quality providers, okay, we're going to promote that. We're probably in the Halloween promotion time period right now, right?

Fran Maier

35:38

So there's going to be customers are going to get emails about these kinds of deals. So we really try to tell the quality providers, this is what's coming up at this point. We've been doing it for a long time. So So right now, with the holidays coming up in November, we're trying to get customers to order early so nobody has to run out of gear. Because that's to me, that's the worst thing if we ever run out of gear.

Ellen Yin

36:02

Yeah.

Fran Maier

36:03

That people cannot in any location, rent the crib, so we're really trying to motivate that. I think probably the most exciting thing that did not turn out great was we were on Shark Tank, and we knew our episode was going to air, and so we told the quality providers, Shark tank's coming. We talked to a lot of people who had Shark Tank experience, and everybody said, business will go through the roof, right? So I know a lot of them were buying inventory and getting ready. Our Shark Tank episode aired on March 6, 2020.

Ellen Yin

36:37

Oh my gosh, of course, like the universe is playing a joke on you, yeah.

Fran Maier

36:44

Oh my God. You know, after all that work, California essentially shut down. Disney World shut down. I mean, the pandemic, and what could we do about it, right? You know, in fact, the quality providers, everybody we were like, Well, like I said we started the cleaning business, but basically we had to roll with it.

Fran Maier

37:04

And I think that that resilience through the pandemic was really, really good for baby clip, and once things start to turn around, first of Florida in early 2021 it's been gangbusters, but we're getting ready to tell the quality providers that there's some exciting stuff coming down, and it's up to them, yeah, you know.

Ellen Yin

37:25

That's exciting. So you you're out there building these partnerships and then telling them, Hey, here's potential business coming into our pipeline that you should prepare for. And that's kind of driving them to go out and then purchase more inventory. You referenced, for example, like seasonal campaigns.

Ellen Yin

37:40

So like you said right now, in October, you're promoting Halloween. Help me understand this a little bit better, because maybe I'm just not as familiar again with baby gear. But let's say you're promoting October as, as you know, a seasonal campaign and Halloween as a seasonal campaign. Are you suggesting specific products that parents might be looking to rent around Halloween, and if so, like, what does that look like?

Fran Maier

38:05

Less about the products, the more about the occasion, you know, and more about boo hoo with Halloween. Rent over $200 and I don't even know what our promotion is, rent over $200 get $30 off, or 20% off, or something like that. It's mostly about that. Sometimes we do things about referring a friend.

Fran Maier

38:27

Sometimes we do things about renting in advance, like renting in advance of Thanksgiving, for example, big family holiday. Sometimes we do sweepstakes with other brands that help generate our email list. We do things with influencers, so that's the exciting thing, too.

Fran Maier

38:47

So influencers, and we've done hundreds and hundreds of campaigns with influencers, they're usually going to a specific market, so we give them they want in exchange for their posting. And we disclose this as we're supposed to, they get to rent the gear for free, but we make them go through the process pick a quality provider, and when the quality provider is the one servicing an influencer, oh, they have so much fun with that.

Fran Maier

39:19

They'll do they'll do the extra special. That said, sometimes we have influencers who come to us and we don't even know it, and then we learn about it afterwards, and they still have a good experience. Then occasionally our QPS are delivering and they don't know who their customer is, and it turns out to be a major celebrity.

Ellen Yin

39:38

And I bet that's a fun surprise and delight yeah.

Fran Maier

39:42

Yeah, that's a fun surprise too. So over the years we've, we've had quite a few, I can't really name names, but yeah, it's been kind of fun.

Ellen Yin

39:50

Very cool. Well, have you found, you know, as a CEO, as you're looking at your own financial books and whatnot, do you find that increase? And gross merchandise value. So like, as your QPs are increasing their supply, do you find that that translates to an actual higher rental value per user, so like, per transaction or per rental, are you seeing an increase in what they're renting?

Fran Maier

40:17

Yeah, generally speaking, it's been fairly solidly around $200 okay, on average.

Ellen Yin

40:23

Okay, you know.

Fran Maier

40:24

That's on average. Now we see some orders that are really high. I mean, I saw one recently. It must have been a grandma, and she just rented tons of toys, okay. I mean, you know, yeah, so, so we see that. We also see that different markets are higher.

Fran Maier

40:41

So family going to Hawaii is typically renting a lot more or is willing to spend more. I think this year, inflation is has been a concern of customers, so I expected it to grow a little bit faster than it's growing in terms of cost, but it seems like people are trying to keep a little bit of a cap on how much you're spending, right? You know, I get it. One of the things that we introduced for customers and for QPs this past year is cancelation coverage, and so that it's called cancel for any reason, that if you buy this coverage, if you have to cancel, you'll get a refund.

Fran Maier

41:20

The QPs will get paid. It's really fantastic.

Ellen Yin

41:23

Wonderful.

Fran Maier

41:24

And you know, with all the disruptions we're seeing in Florida, for example, or the southeast from hurricanes, we're really encouraging our customers look if you're going someplace, plus you're dealing with small children, you know, they get sick, you know, buy Cancel for any reason. I know, personally, for my own travel, I buy cancelation insurance because I just don't know what's going to happen.

Ellen Yin

41:48

Yeah, absolutely. And again, I feel like this is just like the recurring theme of our conversation, risk reduction is really, I feel like, where you've shined in terms of supporting both your QPs and, like you said, your customers, to really make it a no brainer for them to continually come back to Babyquip to rent their baby care.

Ellen Yin

42:06

Are there any other ways that we haven't covered yet that you feel like you really just want to shine a light on in terms of how you're empowering your quality providers to grow their independent businesses and in turn, how that's, you know, impacting baby quips growth at large?

Fran Maier

42:24

Yeah. I mean, I think as we go international, we're learning more about the challenges of having quality baby gear in different markets. That's going to make us think a little bit differently. Yeah, we're thinking about more services that we can offer them to reduce their risk and improve their overall margins. So, for example, we're looking at helping them with their auto insurance.

Ellen Yin

42:49

Oh, okay, as they're driving to meet and drop off the gear, yeah, okay.

Fran Maier

42:53

We ntroduced Damage Waiver insurance so that if something gets damaged or stolen, they get reimbursed for this. One of the things that we did to car seats being highly, highly regulated, right? Yeah. So our QPs can't buy secondhand car seats. They have to know where that car seat's been.

Fran Maier

43:14

And of car seats in the accident, for the most part, most manufacturers would say, take it off, you know, yeah. And so what we've done is, if a car seats in an accident, we'll replace it for free.

Ellen Yin

43:26

Wow.

Fran Maier

43:26

You know, yeah. So there's no incentive for somebody to keep a potentially damaged car seat right in the inventory, like, don't do that, yeah. So, you know, it's definitely risk reduction for our quality providers, but also for our customers, and that's why we have a 93 Net Promoter Score.

Ellen Yin

43:44

Yeah, no, I can see, I can see how you're really committed to the success on both sides of the transaction. So I love that. Thank you, Fran, for sharing your insights here. I think it's incredibly helpful, regardless of what model of business our listeners have. I think this recurring theme, like we've talked about, of risk reduction, is something that should be front of mind for all of our entrepreneurs that are listening to the show and how they can think through different ways that they can benefit their customers with with that so.

Fran Maier

44:13

Ellen, you've asked some of the best questions I've ever been asked, really.

Ellen Yin

44:19

Thank you. Thank you so much. That means a lot.

Fran Maier

44:22

That's good. Thank you.

Fran Maier

44:23

I really appreciate that frame more than you know, more than you know. This is like interviewing is my sport, so thank you.

Fran Maier

44:30

Good job.

Ellen Yin

44:31

Thank you so much. Well, where can our listeners continue to connect with you personally and and what you're up to as you know, as a CEO, as well as learn more about baby quip, maybe start renting from Babyquip, or becoming a quality provider and renting to others.

Fran Maier

44:47

So babyquip.com babyquip and on our home page, you can see a button that says, Be a supplier, or something like that. And you can also find me Fran Maier, maier at LinkedIn.

Ellen Yin

45:03

Perfect. Well, all of those links will be below in the show notes for you. Or if you're watching this on YouTube, make sure you check out the video description. And if Fran, you know, said anything that sparked an idea for you today, please take a moment to send her a message on LinkedIn thanking her for the insight and share what you're going to be implementing in your business.

Ellen Yin

45:19

So thank you Fran again for joining us, and thank you all for tuning in. We'll catch you in next week's episode.

Fran Maier

45:25

Really fun. Thank you, Ellen.

Ellen Yin

45:34

If you love today's episode, send it to a friend. Tag us on Instagram at cubicle to CEO, or give us a five star rating at rate this podcast.com/cubicletoceo. You can also access bonus episodes on our private podcast by joining the C-Suite, our flagship annual membership providing exclusive cash savings content and an offline community for small business CEOs.

Ellen Yin

45:58

Check out the link in the show notes to join us.

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