Leadership + People: Episode 49 - Jana Francis - Part 1 of 2
In this episode Jana Francis, the cofounder of steals.com, talks about making tough decision and when the needs of the business come before the employee. Francis shares how she navigates the new ecommerce climate with the presence of Amazon and counterfeits, and the role a curated shopping experience can play for a consumer.
- The secret to a lasting business: refusal to quit [01:00]
- An example of a time when the needs of the business came before the desires of the employees [03:44]
- Challenges of ecommerce 10 years ago with little tech infrastructure [14:01]
- Fighting counterfeits and staying authentic in an Amazon run world [16:49]
- Creating a curated experience rather than a search bar lead transaction [16:49]
This episode of Leadership and People was originally released on: September 15th, 2018
Welcome to Leadership and People. This is a series that pulls back the curtain on leadership by interviewing CEOs, Senior Executives and Entrepreneurs who had large exits. We ask these experts about how they built trusted networks to rapidly grow their companies. And what advice they wish they knew if they could do it all again.
JL: Today on the show we’ve got Jana Francis.
JANA FRANCIS “Just to continue to make it about the business. It wasn’t about the fact that I’m pulling you know, the work from home. There were some muffed people. You know people really upset that worked for me. But it wasn’t about the people, unfortunately. At that time it was about, you know, I can’t continue to employ you regardless.”
00:45 JL: Jana thanks for making time.
JANA FRANCIS: Thanks for having me. I look forward to it.
00:50 JL: So started Steals.com. This is your first business. And you’ve managed to boot strap it. Start it in your basement and it grows into something that does 92 million dollars in sales over the last ten years. You know, any business that last ten years, Especially a first time business, is definitely something that is beating the odds. What do you attribute beating the statistics to?
The Power of Grit
JANA FRANCIS: Oh wow. You know, looking back I would have to say, and seeing so many other businesses fail, there are a few things that I would have to attribute it to. One: is just absolute grit. And the inability to give up. I mean, I refuse to give up. And so that alone. And just try to see through every obstacle that comes your way which of course over the last ten years has been many many many obstacles. But just really not, you know accepting failure and just saying, of course we’re going to get through this. So that’s one. And two: I would actually have to say, in my case I have a business partner that I started, three weeks before I launched the business I brought him in unexpectedly. But one of the things I’ve noticed over the last ten years, especially in the CPG business, meaning consumer product goods, which is a lot of the companies that we work with as a retailer. I see these businesses have incredible ideas, amazing products, even great sales. But they fail because the business partners don’t get along. I have somehow someway my business partner and I, his name is Rett Clevenger, formed a great very high trusting relationship over the last ten years. And that is one thing that i think has made us almost bullet proof to some degree. And that we just found a way to really have a solid partnership and not allow you know, that too pull us apart, or pull the company part. Which absolutely can happen quite often. And the other thing is just absolute and total hard work. We work harder than most. And when I say that I just mean you know, so many people think being an entrepreneur is so sexy and fun. But at the end of the day its really work nonstop. Your work follows you everywhere you go. Especially when you’re the leader of the business. You know, you just kind of select the hours of work, or the times of the day that you’re working. But it’s really nonstop and it hasn’t stopped in ten years. But you just have to be that passionate about what you do and believe in it that much to dedicate such a huge portion of your life to it.
03:44 JL: Sure. And you guys do some things different as far as employment and who you employ, and how you employ. Can you talk a little bit about that?
Business over People
JANA FRANCIS: Yeah. Sure. That’s evolved tremendously over the last ten years. And it’s almost come full circle to a degree. It’s really interesting. The first year, as you mentioned earlier, we bootstrapped the effort. And my partner and I didn’t pay ourselves. I was actually still moonlighting for a portion of it. For a portion of the first year I was at KSL.com and KSL News Radio at the time, when I had the idea for the business. And just thought, I would just start it and work on it just nights and weekends. So I moonlighted for the first five months. And we didn’t pay ourselves for the first year at all. Because we were focused on you know trying to get the company to be profitable and not pay ourselves until we were. And as we started hiring, you know, in our second and third year we grew tremendously. And hired… at one point at our height, I think we had 78 employees. And at first it was a mixture of certain departments working from home and certain departments not. Because obviously being in ecommerce we at the time we had a pretty decent sized warehouse down by the airport. And of course we had to have employee that worked in the office. But as we started, when we first really started hiring certain positions like customer service, merchandising and those kinds of things. We didn’t have an office. We had a warehouse. And the warehouse didn’t have an office when we first started hiring. And so the culture was work from home, work from home. The main… Aside from the warehouse, even though we did have quite a bit of… The warehouse was probably half female half male. But the majority of employees that we were hiring for the main positions in the company were female. Primarily because that’s what our target audience has always been, is catering towards women shoppers online. We always… I have true passion in a couple things as far as employment and hiring. And one of them is hiring your customers. We have such a unique culture and company. As far as what we cater, the type of person we cater to. And there was no better way to make sure that customer service department related to our customer than hiring our customers. And our customers for the most part were moms, you know some were working outside the home but the majority of them were not. So I was literally handpicking a lot of our employees from our customer base by really only advertising our job openings to our customers in the Salt Lake area. Although we had customers all over north America. Many in Canada as well. It was primarily in Utah. And I stuck to only hiring in Utah because of Nexus of course. But there were many people I would have hired outside of Utah had Nexus not been a thing. But… So at first it was really this kind of this, if you weren’t a warehouse employee you got to work from home. I was really able to help a lot of these women create careers, create, you know, money for themselves. And many of them it was there first jobs as well. I shouldn’t say first jobs, but real first jobs since they started having kids. And it really I think it empowered them. And they were all completely fantastic. It was absolutely wonderful, while it was wonderful. And then once we grew and grew and grew, it got to the point where we had… It was just absolutely impossible to schedule a meeting. It was impossible to get everybody to come into work at the same time, to have a staff meeting or to get people together to collaborate and coordinate. It got to where I spent more time trying to gather people together at the same time. And we were not… The company wasn’t as efficient as it should have been, because of the work at home environment. And I learned a lot of lessons from that. And as I look back ten years later, I definitely would have, not necessarily not had people work from home but completely would have changed the expectation that that was definitely a right not a privilege. Okay. So the expectation was that this would never change. They would never have to actually come to the office. And it got to the point where we had this beautiful warehouse with office space once we continued to grow. And each individual department needed to have meetings. And we have needed a company meeting. So we set that out in advance. Our company meetings are going to be this day. And you have to be there. But to actually have last minute or quick meetings, which you have to do in ecommerce all the time. It maybe would have been maybe different if the work from home scenario would have been maybe like 8-5. But it wasn’t. A lot of our employees kind of picked their hours. And although that was wonderful for them, as the business grew it was really really hard to scale. Really hard to communicate. Really hard to collaborate. Just spent more time trying to coordinate schedules than anything else. And we were missing opportunities day in and day out. And I was in the office every single day. As soon as we got an office two and half years in. And it created this division with our business as well. Where we have this great culture at the office, and the warehouse and the other people who were supporting people at the warehouse, trafficking and finance and accounting type stuff. But the people that got to work from home, it created this kind of resentment from the people that couldn’t. It just got to the point where it wasn’t worth it anymore. And again it was just too hard to communicate and collaborate. When you’re trying to move at the speed of ecommerce. And also I think work from home scenarios work fantastic when you are a company that has a clear level set of expectations. That it’s like as long as you do the following things from this time to this time you’re good. Sort of like JetBlue has a perfect package for people who want to work from home. Right. The expectations are clear. And the time is clear. And those kinds of things. And for our… The types of positions and the types of jobs and the speed at which we needed to react to the things which were happening, wasn’t working. So I had to make a really tough call. And ironically it was at the exact same time that the CEO of Yahoo Marissa Mayer, she actually came forward and said; no more work from home positions at Yahoo. And we just can’t collaborate and communicate at the degree we need to and grow at the speed we need to when most of our workforce is remote. And it was interesting at the time because there were articles about it everywhere. And I was having to make the same decision. And if anything else she reiterated for me that, you know, this kumbaya of everybody working from home is great for the employee, but is terrible for the business when you’re trying to communicate, collaborate. So I had to make the change. And that was a pillar in the company’s history when I look back. I had to… I gave everyone the choice, you know. And it wasn’t that they needed to come in every single day. It was that I need the majority of your work hours to be in the office. So that we can, you know, really react fast. We need to be more efficient. The costs of labor were just extraordinary at the time. And I knew it was out of whack. And I knew it needed to change.
11:35 JL: And so knowing that humans typically don’t like change change, especially when we feel entitled to something.
JANA FRANCIS: Yeah.
11:41 JL: We’re comfortable with the way it is.
JANA FRANCIS: Yeah.
11:45 JL: Can you give advice for the rest of us whether we’re going through that change or another change knowing that it’s something that may not be as exciting for staff. Any kind of lessons learned or advice for the rest of us on going through change that may not be exciting for the staff?
JANA FRANCIS: Yeah. I think, even looking back the advice I would give to myself is just to continue to make it about the business. It wasn’t about the fact that I’m pulling, you know, the work from home. There were some muffed people. You know, people really upset that worked for me. But it wasn’t about the people, unfortunately. At that time it was about, you know, I can’t continue to employ you regardless. I can only employ you if… Being the leader it needed to be about the numbers and what needed to keep the business going so they could all stay employed in the first place. And I think that given the easy environment that we had had, it got very I think personal on their side, as far as you know, they took it as; ‘well maybe I’m not doing my job good enough. So now I’m being punished.’ And no, that is not the case in any way shape or form. We need to move faster as a group. And we can get a lot more done when we are all together, and when we can just hop across the hall and have a conversation instead of try to call for 4 hours, and you are at the zoo because you are working at night. And I also think looking back, I would have been a lot more clear; that’s the situation for now, right? That as of right now that is a work from home opportunity and that may change. And I need to know that you are comfortable if that does change. So it’s all about setting expectations. I think for many people I did that. Ones that came in really really early on, you can’t predict the future. I didn’t know we were going to grow to the size that we were at the time. So it was kind of interesting.
13:38 JL: Well, thinking about the other changes I’m sure you’ve gone through, you’ve won all these awards, 30 Women to Watch, Utah Business, Ernst and Young finalist, Entrepreneur of the Year, and stuff. When you think about these ten years, with the ups and downs of the 2008 world melt down.
JANA FRANCIS: Yeah.
14:01 JL: Can you talk about the world of ecommerce? You know, you’ve obviously been through the ups and downs. As you look as the next years coming, what do you feel like folks who maybe aren’t in it full time might not see?
Branding in Ecommerce
JANA FRANCIS: Yeah. So ecommerce has made huge huge… It’s unbelievable how different ecommerce is now than it was ten years ago when I started. It’s primarily obviously dominated by Amazon. It really is fascinating to see how much they’ve forced other ecommerce companies to adapt and change just to stay relevant. When we started at Steals.com there was no sort of out of the box shopify, ecommerce shopping solution. There was no really inventory management software. There really wasn’t the technology to just plug and play as there is now, for ecommerce. And we had to write our own home grown system. We had to daily update each html. I mean it was… You know the technology has evolved tremendously. And so it’s never been easier to start an ecommerce business. Ever. I mean, it is… You can have a website up in an hour. And you can be drop shipping a product from overseas. And never even touch the product. That being said, it has never been more difficult to compete. And I see a lot of people right now. I see the ads, just because I’m in ecommerce, I get targeted ads all the time. People trying to target ecommerce business owners. Not realizing it’s actually a real commerce business. It’s not any sort of one of those, you know, triple resellers if you will. But I see so many people think it’s going to be this beautiful way to make money. And sitting on the beach, you know. Just drop shipping with Overflow, or whatever it’s called. I also see so many of those people spend so much money on Facebook ads, and the only one that really wins at the end of the day is facebook. Because there just sort of paperthin, pop up shops. So I think the real winners in ecommerce are going to be those that over the years create true brands. Whether it be, you are in ecommerce because you created a product and you are selling that product through your own website, or because you are a retailer that is promoting other people’s products, which is what we do. But has a brand that is really focused on growing that retail environment.
16:49 JL: Yeah. Can you talk about that, with the pressure from Amazon, what’s your differentiator?
Curation Versus Transaction
JANA FRANCIS: Yeah. So the main differentiator that we’ve had from day one is that it’s a very simple shopping experience for a mom. I created the business simply because I was, and this is again when ecommerce was very infantile, no pun intended, way back in 2005/06, when I was pregnant with my third child. And I was looking for the best place online to, you know, find the hip and trendy stuff. Because as I mentioned I was at KSL.com. I had a great career in media here in Utah and I finally had an opportunity to spoil a baby, it had been 6 years since I had had a baby and you know I was really excited. So I’m shopping online trying to find all the latest and greatest products, but it was hard to find even the dimensions of a stroller or a picture of the inside of a diaper bag. And ecommerce just, you know, for women, it was not very involved as of yet. So I kept thinking goll, you know, I’m a busy mom, I just want to be able to quickly look at something online and to have somebody curate for me what has been trendy. Keep me in the know of a really great product, and then give it to me at a great deal. And then suck me back in the next day and give me something totally different and new. And so that’s how we started 10 years ago with babysteals.com, was our first website in the steals.com family. Just totally catering towards a new baby product every single day at a really great price and going in depth on why that product is interesting for the mom. And then of course we expanded into kidsteals, and scrapbooksteals, and shesteals which is all for women. But our biggest differentiator on the surface is simply that you can come, have a look at what it is that we’re showing you, and off you go. You either buy it or you don’t. So we’re more of a curator. And Amazon is just a transaction. I mean 93% of sales on Amazon are from a search. You already know what you wanted in the first place. You already knew what you wanted and you either plugged in that UPC code for that vacuum bag that you need replacements for, or you saw somebody curating what the cool deals were on Amazon that day, or whatever. For the most part, again most transactions on Amazon happen at that search bar. And we are completely the opposite. Only, I think 15% of our transactions are from our search bar. And the rest are from what we’re pushing. Meaning here’s the daily deal today. So that’s one of our differentiators, that is the main one. Just that we are more of a discovering and curation. And they are just more of ‘here’s everything in the entire world that you could possibly buy’. The other thing for us is we work for the most part directly with the brand maker. So if we’re selling Aerosoft sandals, which we are today, we work directly with Aerosoft on that promotion. Whereas Amazon most often, well in many cases I should say, they’ll have thousands and thousands and thousands of sellers selling the exact same thing. Some is authentic and some is not. And that is the number one problem in retail right now. Literally the number one problem is counterfeits on Amazon. You have no way as a consumer to know if its fake. As soon as Amazon opened up third party shipping, meaning… Or I shouldn’t say third party shipping. For a chinese factory to ship directly to consumers, as soon as that happened, the counterfeit problem went through the roof. And it’s a huge problem for brands. You can go to steals.com and buy Aerosoft sandals. And they’re going to be shipped to you by Aerosoft. And you can know that those are going to be authentic. You can go to amazon and type in Aerosoft and you can find 8,000 listings for the same thing. You have absolutely no way to navigate or to know which ones are real and which ones are not. And it’s a big problem. So that is another differentiator with us, is that if you buy something from steals.com it is absolutely authentic. And for some strange reason someone got it through me and it’s not, we would cancel the seller. We’ve actually never had it happen though, just so you know that. If it did, I would move, you know, mountains to make sure it never happened again. So we’re just very… I’m just not going to allow, you know, counterfeit products. I’ve spent ten years promoting brands. And that’s my favorite thing to do. It’s what I love. I love to give people an amazing value. Meaning a great product at a great price. And a quality product. You know the shoes that you buy on steals.com, they’re going to last you through all of your kids. And you can probably resell them at the end on facebook marketplace and get half the price you paid for them. I mean… so I like to sell really good value. And I’m not talking luxury. I’m talking the space we really fall into is kind of the types of things you would find at Nordstrom or Costco right? You know as a consumer. You know, branded high quality products that are absolutely ridiculously priced, you know that kind of a thing. THe other really big impact Amazon has made on the other ecommerce companies is that their pricing algorithms. It can be pretty difficult. You know, like I said, a lot of the product can be counterfeit. So when somebody goes to steals and sees. At one point we had a specific diaper bag. Or I’m sorry they were Michael Kors bags. Ours were the best price online the day we check. I mean we do. We don’t put it up unless it’s the best price online. And we work directly with the people who are authorized to sell Michael Kors bags, on the promotion. And we were really excited about having such an awesome brand on the site. And within an hour and half the price had dumped on Amazon even less. But the bags on Amazon were fake. And the bags on Steals.com were authethentic. It’s just a heartbreaker, right? And it’s not just impacting my company. It’s impacting all of ecommerce. If anything else, what it’s impacting worse is the brands. The product inventors and the creators that work so hard to create an amazing product. And then it’s so easy for a Chinese factory to knock them off and then resell under their name and their photos and everything and then shipped direct to US consumers. It’s a big problem. That was a long way of telling you my differentiation.
23:35 JL: Sure. And as we close up here the first half of the interview, when you think about the rapid change of all types of businesses these days, less so much the actual tactical things you are doing to get the word out about your products, or authentic and kind of this differentiator over say your big competitor the Amazon of the world. As far as a mind set of adapting and overcoming this is obviously something you come at. Any advice of where you get your inspiration? Is there a book that you love? Is there someone you look up to as the mind set to adapt and overcome as the world changes?
JANA FRANCIS: Gosh. You know what, that’s a good question because I hate to admit it but I’m not much a book reader. I’m a listener. I’ll listen to a lot of podcasts and everything via passive. So there’s not necessarily been a book that’s been my mindset. Nor is there an individual necessarily that I would say has inspired a ton. However the two people I find myself repeatedly going back to read on my own time, meaning they are not pushing the content to me as much as I’m going to seek it out is Seth Godin and Gary Vaynerchuck. they are kind of a big pendulum swing there. But… A lot of my business is centered around, you know, really customer service. And Seth just kind of epitomizes. You know he is the man.
25:17 JL: Yeah. He’s great.
JANA FRANCIS: Seth is definitely one that I look to that kind of always has incredible advice. And Gary is more of like no BS. Get it done. It’s not impossible. You know. Anybody can do it if you put in the work, type stuff. And sometimes being an entrepreneur and being the leader, there’s really… Sometimes you need… Not that I need motivation. I’m very passionate. I’m very self driven in every way. But Gary kind of hypes me up sometimes when I need it.
25:50 JL: Love it. Well, let’s end there. This is great. Everybody please tune back in to the second half of our interview with Jana.
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