Zain Jaffer, an entrepreneur and investor focused on startups and property tech, provides insights into the startups that are not only surviving, but thriving during the pandemic, and predicts which innovations and trends will reshape the customer experience.
Key takeaways:
- Having an optimized website or app is not enough. The retailers that offer an integrated omnichannel experience are the ones that will thrive.
- In an increasingly digital world, augmented reality and virtual reality are about to have a large impact on the customer experience.
- A marketing automation platform that enables brands and startups to integrate technology and advertising data into every aspect of the customer experience is a key competitive tool.
Transcript:
Judith Aquino: Hi, welcome to the CX Pod. I'm Judith Aquino. On today's episode, we'll be talking about innovative approaches to customer support and customer experience that have emerged in the wake of the pandemic. Joining me in this discussion is Zain Jaffer, entrepreneur, founder, and CEO of the investment fund Zain Ventures. Welcome to the show, Zain.
Zain Jaffer: Hi, good to be on the show.
JA: Let's start by talking about startups. Since Zain Ventures invests in a wide range of startup businesses, what e-commerce startups have you been watching that have an interesting approach to customer support or the overall customer experience?
ZJ: Yeah, so Zain Ventures is my family office. And I also run a venture capital fund called Blue Field, which invests in a segment of startups in the PropTech sector. And I did this after selling my own company, I had an exit in 2019, sold in my mobile advertising startup for $780 million, and wanted to diversify. And I'm a very thematic investor, I focus on trends. So a lot of the startups I look for, especially through the pandemic, are seeing a lot of acceleration in the core trends that they've been targeting. Of course, there's also a category of startups that have gone to absolutely zero because the pandemic completely crushed them. I think a couple of cool startups that I personally invested in, or I'm looking at, one of these companies is Order For Me. And I invested in Order For Me prior to the pandemic. Order For Me is trying to really change the restaurant retail experience.
JA: And in what way?
ZJ: Yeah, so when you think of that, you might be thinking of food delivery or pickups, but Order For Me felt that the way we order food itself needs to change, and the retail experience itself needs to change. They actually took a unique approach and operated their own restaurant. And that really allowed them to look at all the ways technology can improve customer experience. And a restaurant can be one of those environments where it can really ruin your customer experience and your feeling overall, I always joke and say, the way I rate a restaurant is, I go to the toilet, see how clean it is, rate how good the food is, but also the customer service. It's so rare to find a restaurant that ticks all three boxes. When I looked at Order For Me, they reimagine the complete experience in dining and also remote. A complete omni-channel approach to the restaurant experience. For example, you can go and reserve a table, ahead of time, you're not waiting. I hate waiting for a table to just get to know you've got a table reserved.
When you're there as well, you don't have to necessarily talk to the waiter. You can scan a QR code, you can order from your mobile app. And the key here is, you're not just looking at the virtual menu, which is what a lot of people have done, you can actually place an order, and have your credit card details already in there and you can pay for it. What's really cool too is, imagine this, you order some food for the table and then you realize, whoops, I actually ordered too much, I want to change something. Now you've got to go flag down a waiter, the waiter comes back and the waiter or waitress tells you, "Sorry, it's already coming." With something like Order For Me, you can just in a few clicks, change the order in real time. And they've got a full integration with the backend, the kitchen itself, and the ticketing system for the chefs, so that they can see what's happening in real time. You can split the bill. I really like this start-up, it's doing really well, and I was the first investor in there, I was a pre-seed.
And now they're doing really well, they're in LA and they're expanding rapidly. I look at Order For Me and I think that's disrupting the restaurant space. Now, you're probably wondering, how did they do through the pandemic? Well, it's sort of a good and a bad situation. Restaurants are now realizing that they need to do more curbside pickup.
JA: Mm-hmm.
ZJ: A theme that penetrates throughout retail, or take-aways. And more and more of their revenue comes from that approach versus the in-dining experience. That part has sort of shifted, and Order For Me was well-placed. That was one of the startups I invested in. I can tell you about a few more if you're interested.
JA: Well first, it sounds like with this company, they were already keeping in mind the pain points that customers are dealing with. Would that company have, I guess, the framework to be able to pivot to the customer's new needs?
ZJ: What I think Order For Me has been doing has been digitizing restaurants and enabling them to have technology. Restaurants are one of those sectors in the retail sector that are the last to adopt technology. And it's very much a manual service-driven industry. Order For Me came in and has been retooling all these restaurants, to the point now where these restaurants are well equipped to survive. I mean, it's really sad, so many great restaurants in every city around the world, many of these restaurants have had to shut down permanently. They couldn't pay their rent and they didn't get enough governmental support or income coming in, and they didn't adapt to online takeaways and ordering. These restaurants were using Order For Me already to offer pickups and delivery. But now, they're also well equipped once COVID finishes, they're really well equipped to deal with the in-person experience, which I think restaurants didn't really think about. Even paying is the gateway itself, being able to pay from your phone in one tap, and split the bill and give a tip. All of those things really help.
And something else that's interesting is, the restaurant industry actually wants to, if you have a table and people are sitting on that table for a long time, that's capacity that's taken up and that capacity could be generating you revenue. And people are sitting there waiting for things, waiting for their food to arrive, waiting for the waiter, waiting for their table to be cleaned, that impacts your ability to make revenue. So restaurants realized, turning over tables, which is the industry term, is really critical. And something like Order For Me allows you to optimize that. Turning tables quickly, whilst enabling a good customer experience. When we think of turning tables, you might think of McDonald's. McDonald's has really uncomfortable seats. And that was deliberately there so that you wouldn't be there for too long. Often you think speed and quality are diametrically opposed to each other. And I think technology changes that, where you can have speed and you can have quality. And quality not just for food, I mean quality for customer experience.
JA: Right. And so what other interesting startups are you seeing that are adapting?
ZJ: I focus on PropTech, So I see so many technologies that touch the built environment itself. I'll give you a really cool example. I have a very global focus, I'll pick an example in Europe. You can tell by my accent, I originally come from Europe, from the UK. Wonderful female entrepreneur, Ella Jade, runs a startup called ROOBBA, and she used to run her own furniture store. I like companies that disrupt traditional stuff. Order For Me has its own traditional restaurant and it made it technology enabled, and now they're selling technology to others. ROOBBA was the same. ROOBBA was just basically a furniture store, or a place where you can go, old school, go in and look at their furniture that you like. And they were designers, so they would have a showroom. And they had a showroom previously in Harrods, which is one of the most prestigious places you can have your items showcased. And she decided that she wanted to focus more on the design of furniture, and wanted a competitor to Wayfair.
Wayfair is really known for really rock-bottom furniture prices. But there's often issues and Wayfair's one of those stocks that increased 20X in the pandemic. And Wayfair, renowned for poor customer service, it's sort of like those low cost airlines, no frills. Wayfair is sort of equivalent to that. She didn't like that. She felt like you should have high-end luxury furniture, and you should create an online showroom that allows you to, in a 3D environment, see how the furniture would fit into your room. And really unique furniture you can't get anywhere else in the world. And ROOBBA right now has its own unique stock of furniture that they design, that's luxury and you can order. And they've got all these really cool packages from a customer experience perspective. You go through Wayfair and you can browse endlessly, and you're not really understanding how this couch, or sofa, from one brand mixes in with a desk, or a table from another brand. And ROOBBA creates this group where you have a collection. Here is one collection with these different items that match each other, and you can customize them as you like.
That's something that I think really hits a big consumer pain point. And it's an industry which has been demolished. Online showrooms have really been hit, but virtual showrooms have done really well in the pandemic.
JA: Personalization and I guess, simplified end user experiences, in other words.
ZJ: Yeah, absolutely. I'll sort of dive into a similar example to ROOBBA. Again, staying on the spirit of global because they've got quite a global portfolio, an Australian startup by invested in, which is soon expanding to the US, it's called Superdraft. Superdraft.com.au is their current website, and obviously, we're going to work on how to make the brand more US-focused. But Superdraft solves an age-old problem, which is home renovation. How are you going to renovate your home? Often, projects run over time and far over budget, and you're not quite happy with what the end result is. And that's why people just don't do renovations as much. They'd rather buy a home that's made close to what they like rather than making it truly custom. Here, you've got a virtual designer, who you can hire, and they will co-ordinate with all the different vendors, plumbers, electricians, builders, different specialists, and you can design everything online.
The architect will put together a 3D virtual renovation, digital twin. Digital twin is what we call it, when you have sort of a digital version of how your home looks. You can see the exact dimensions, the exact colors, and then you can co-ordinate the entire build process on Superdraft itself. Superdraft has done well over a billion dollars now in projects, through that platform. And these are just examples of ancient industries that are being disrupted, and where customer experience is so key. Consumers want to be able to have a say in how their build goes, and they also want to manage it and work with an architect, and have one unified platform.
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JA: And so speaking of this real merge between the physical and online world, where there are twins of each other, what aspects of that do you think will continue on post-pandemic? Not to use an overused buzzword, but there it is. In what ways do you think the consumer is being trained to expect these new types of services?
ZJ: Yeah, I'm really bullish on VR and AR. And I'd say AR right now, VR more so in the future, because VR usually is tethered to a headset. But the idea of being able to use your phone, being able to visualize how things look, is fascinating. And I think that's going to stay. Before, AR seemed like a gimmick. Now, retail brands, if you take Zara, for example, Zara's a huge, you could say luxury mass brand, and they use AR to change the window shopping experience. You can be in a physical store, you can scan a code, and you can watch... It's wonderful, you can watch Zara models on a virtual runway in various clothing items, and then you can purchase them online, or even physical stores. I think physical stores are going to use AR in this way. And we're talking about physical stores, but if you look at my startup portfolio and the three companies I mentioned, and I mentioned those three because they're very different probably to what you usually hear. People talk about traditional retail, I sort of wanted to give three very different examples.
A restaurant, a furniture brand, and a complete service business, which is renovations. All those three areas can use virtual in some way. And AR particularly works well with hardware and physical goods. Being able to see how the physical good is going to look in your apartment and being able to customize it. If you think Nike, Nike was renowned as one of the first companies where you could truly do something like you could do with Dell. Dell is a computer prion, you could customize your computer. Well, Nike too, there's so much customization and you can flip that beautiful shoe around in 3D. Customers like that, customers are going to expect that more and more. I also think, a big shift is, and the pandemic really exposed this, is that people thought of websites and the virtual storeroom, initially, as just a marketing channel, and a marketing channel of many.
And I think the change now is it's not just a marketing channel, it's a sales channel. When you see your website, when you see your app, no longer as a marketing channel to reinforce your brand, and a one-way experience where you can view products, and you change it so it's more interactive. That's when everything changes for those brands. And that's been a reason why many retail companies have gone bankrupt through the pandemic. Many retail companies have had record sales, and have transitioned to a full digital experience, where it's no longer a marketing channel, but it's a sales channel.
JA: So are you saying that many retailers fail to, I guess, tap into that opportunity to do better, I guess, a service to sales?
ZJ: Yeah, and I hate to say this, but some of these companies were slow anyway with regards to how they adopted technology. The pandemic forced companies, unfortunately, it became a race, who could quickly redo their website and redo their app experience. And guess what happens in technology? Things take longer than you expect, and there’s scope creep. And the brands that were able to launch brand new web and mobile-first experiences did really well. The brands that screwed it up because they had the wrong technology vendor failed, and even worse, brands that were just too slow failed as well. Some brands did really well, some brands just used third party platforms like a Shopify. And they used that to test out the demand and then they fully transitioned. And either they stayed on Shopify, or they built a really beautiful custom website and app.
And we're living in a world today where it's crazy to say, "You need a website, you need an app," but it's not that. We're not in the 1990s, or the 2000s, we're in the 2020s now. It's not about having a website or an app, it's about having an integrated omni-channel experience, where your app, and your website, and your supply chain, all talk together and they work together. And anyone can slap a website or app together, and you can have people go on there and browse your products, you can have basic commerce functionality. But the brands that have done really well have integrated complete supply chain through the web and app experience. You can see what's in-store, what isn't in-store, and how you integrate the online to the offline. I just want to throw a buzzword out here for a second.
I came from the advertising industry and I built a very successful performance-based advertising platform. We worked with a lot of digital commerce brands, and we also worked a lot in Asia. And in Asia, there's a term called O2O, online-to-offline, about bridging the gap between the online experience and the offline experience, and using technology to do that. And technology usually would be things like enhancing the in-store experience, but also realizing sometimes consumers may want to use their mobile app. There may be a loyalty program attached to that too, which rewards consumers for doing things. And that's an O2O example. An obvious example and one we've touched on is QR codes. In-store QR codes, or virtual showrooms and 3D virtualization technology. But O2O, massive, big, and it's going to stay. And the gap between O2O is going to change completely. Everything's going to be more integrated.
JA: For these startups that need to integrate so many different areas, but what do you look for to determine that this company really has it? Have a real roadmap and understanding of how to integrate these different disparate types of data?
ZJ: It's funny you talk about that example. Literally every startup I invest in really wants me on board because they need help thinking about their digital marketing and how they do that. Obviously, from my perspective, I look for startups where the founder is coachable, and they appreciate the importance of online, and they want to disrupt things. If you take Michael Jordan, which is his actual name by the way, Michael Jordan from Order For Me, or Ella Jade from ROOBBA, both of these were founders who had firsthand experience in an ancient environment, and wanted to digitize. And that they did a really good job with that and I was able to point them in directions. Then you get natural founders. I'll give you an example of a natural founder at Vestaboard, okay? Vestaboard is really cool concept by the way, and this is again, an e-commerce, or a physical item that is just beautiful in what they're doing. And they have mastered the digital marketing experience and advertising experience itself. Dorrian Porter is the founder and CEO of Vestaboard. And vestaboard.com really has just been crushing it during the pandemic.
The idea is that we spend so much time on our screens communicating. And we're staring at a screen, and here you can have a flap display board in your home, that can be controlled through your phone. I'll give you an example. I just ordered one for my parents in the UK. And they're going to have a Vestaboard in their living room. And I'll be able to send messages to them saying, "Mum, I miss you."
JA: Mm-hmm
ZJ: That means so much more when you're in your living room and this board has these really cool flat-top displays. And it suddenly shows, "Mum, I miss you." And Dorrian has really mastered marketing, where he focused on the emotions on the messages. See, running an advertising company, it wasn't just about user data. It's about resonating with the user and the importance of your ad creative. Vestaboard realized, this isn't just a digital display flat board, flip board, this is a way for people to communicate with their friends and family. He started out, he created a campaign on Wefunder, or one these crowdsourcing or crowd investment websites. And he had a video of him and his daughter. And it's him, and he's busy, and he's driving a car and he texts his daughter a quote. And that text message turns into this beautiful quote on this display board he's built. And that got me, and that got so many people, where people wanted to invest and they want it to pre-order the items.
Really, I think when a founder can talk to a consumer in an emotional way, use video as a format, where the video is touching the core of your emotion. All of us, through the pandemic yearn to have contact with our friends and family. And we can't do that. And the technology at Vestaboard is fantastic for reinforcing. And then he's done a really good job with marketing on Facebook, and all these other platforms. But look, to make this actionable for your viewers, it comes down to a few things, your data warehouse and your CRM system. I think data warehouse is probably a topic a little bit too complex for the scope of this podcast. But your CRM system, very important from whether you're a small-time startup selling a physical consumer item or a massive luxury brand, you need a CRM system. And it's not just a CRM system, I'll take it back, it's a marketing automation platform.
You need a way where you can integrate technology through every aspect of your experience, whether it's in-store, or on mobile phone and web. And you need a way to also integrate your advertising data through that. And then you need to be able to push messages, whether that's text messages, email messages, newsletters, you want also customize the messages you give to your users. And a marketing automation platform, which a CRM is one functionality in a marketing automation platform, is really key for brands today, and startups alike.
JA: Right and that's why we've seen, just over the past few years, tons of M&A activity with marketing automation companies as the Oracles and Salesforces of the world pretty much bought up the little guys.
ZJ: Speaking of the little guys, and I can say this now, because it's now just becoming public, one of my friends started a company called The Hustle. And The Hustle was a newsletter, really, at its core, which had millions of entrepreneurs subscribing to The Hustle. And HubSpot just bought The Hustle. I can't disclose the price, but HubSpot bought The Hustle so they can gain access to much, much smaller marketers, smaller entrepreneurs, who subscribe to The Hustle. Hustle basically sends you daily tips about entrepreneurship, and daily news surrounding small business. And they cover so many different areas and industries. And HubSpot realized, we need a way as a larger company to reach your everyday consumer, the types of folks that are listening to your podcast as well. And so that's what made that acquisition, which I think was genius because now they've got access to a huge group of consumers who are actively trying to figure out what they do on the marketing side.
JA: Well, Zain, thank you so much for all the insights. This has been really interesting and I appreciate our conversation.
ZJ: Likewise.
