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Danielle is the co-founder & CEO of Scrunch, a data-driven Influencer Marketing platform helping to connect brands, publishers and agencies to the right Influencers for their campaign.Danielle has a background in fashion design, blogging and enterprise sales – but her heart really belongs to travel and coffee. 10 years ago she started the blog Brisbane Threads while pursuing a career in enterprise sales for Australia’s largest telecommunications company. It was through this blog that the world of digital Influencers and their challenges would interest her so much that she threw-in a rising career to pursue the world of technology startups. 5 years later, Danielle has successfully raised over $3Million in capital, built a world-class team and launched a SaaS platform in Australia and the US. Next stop, Margaritas in Mexico.
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Happy reading! Now here is the transcript of the podcast.
Ingrid: Hello, and here we are today with Danielle Lewis. And Danielle, hello in rainy Brisbane I believe?
Danielle Lewis: That’s right! I’m rushing around, true entrepreneur style today and it’s torrential rain but luckily I have an umbrella and it’s almost in a quiet space so, so excited to chat.
Ingrid: Thank you so much. So, let’s just start Danielle. What business are you in? What is your business, please?
Danielle Lewis: Absolutely. So Scrunch is an influencer marketing platform, which essentially means if anyone is not familiar with influence marketing, we connect brands and agencies to bloggers and social media influencers and the idea is that influencer marketing is really the new word of mouth. So typically you find an amazing restaurant on the weekend and you’d share with your friend and family and that’s very much a one-to-one word of mouth whereas influencers have opened up this opportunity for word of mouth at scale. So yeah that’s really what we’re in the business of is helping brands tell the world about their amazing products through social media influencers.
Ingrid: Fantastic. Now, when did you start this business?
Danielle Lewis: Well technically we started Scrunch seven years ago, however it’s taken a few different forms since that time. We started out as a virtual change room for fashion, if you can believe that, and we’ve had several pivots and the influencer marketing platform we started working on three years ago, it was commercialised about two years ago, and been in market for that long. It’s been quite the journey.
Ingrid: So, thinking back to when you were originally getting started in your business, so that’s probably about seven years ago, why did you want to start your own business?
Danielle Lewis: It’s a really great question, and it’s something that I’ve been reflecting on recently because seven years ago I was really climbing the corporate ladder, so I had been working for Australia’s largest telecommunications company in a sales role for about ten years. Really I always say this. I was an excellent box ticker in my life. I did well at school, I went to uni, I got a full-time job, I was climbing the ladder as it were and really I read two books that kind of opened my eyes. One was The Four Hour Work Week by Tim Feriss and the other was The Success Principles by Jack Canfield, and really I say it was like my eyes were opened.
I didn’t realise that people ran their own businesses and designed their life around them and around the lifestyle that they wanted to lead and I realised that I could do that myself. And at the time, I’d been writing a local fashion blog, just as a hobby on the side, and I realised at this point, I said ‘Wow this could really be my ticket out if I double down and turn this blog into a business’. And it was through that blog that I met the co-founder of Scrunch, Salvatore, and it all spiralled out of control from there and here we are today.
Ingrid: So my next question is, what did you want from your business from day one and it kind of sounds like you’ve answered that a little bit. You’ve talked about having your own business there, from having read the books. What did you want from the business from day one? What did you want it to give you?
Danielle Lewis: I think it’s evolved over time. But from day one, I think I felt as if it was going to be lifestyle design. That I could essentially be in control of my own destiny. I quickly realised that’s a little bit of a myth. A lot of people that run their own businesses will know that it’s probably much harder work running a business than it is working in a day job, and I’m sure that’s not the same for all day jobs, but it certainly was for mine. But over time, working on my own business has meant that I’ve had to learn and adapt and find so many new skills and things that I would never know about and never learn working behind that desk in my job. So for me it’s become almost a challenge to myself to grow this amazing business and learn everything and really grow and develop as a person, and the lifestyle design might come a little bit later.
Ingrid: You’re still waiting for that bit?
Danielle Lewis: Still waiting for that bit.
Ingrid: So, given you’ve had a couple of pivots, if we think about Scrunch as it currently is, when did you realise that you were actually in business? When did your business become real? When did it feel real for you and what made it feel real?
Danielle Lewis: For me the thing that made it feel real was our first customer. So we had been essentially building product on savings and then debt and then capital raise, and we didn’t make our first dollar until November 2015, which I’ll never forget that month. To me it was kind of a make or break. It was really, ‘if we don’t start making money, what the hell are we doing here?’ When we did, I was like, ‘You know what? We’re actually onto something, so let’s double down on this and make it happen’.
Ingrid: Fantastic. It’s a magic moment isn’t it when you get that moment, isn’t it? That money comes in. It’s magic.
Danielle Lewis: What we did for that customer on day one, we wouldn’t even dream of doing it today for the price that they paid but your first customer you treat like absolute royalty. And you should treat all your customers like royalty but you certainly go out of your way to learn all of the lessons and make sure that you really deliver for them so that you do consistently build a customer base ongoing.
Ingrid: Danielle, thank you for that. That is such an insightful comment and I hope everyone listening is hearing that. Just how important those first relationships are. So Danielle, how did you know what your customers wanted? How did you get to that point where you were changing, you were pivoting, how did you know what people wanted?
Danielle Lewis: This is a really interesting thing. We made a lot of mistakes in that respect early on. We built lot of products without knowing, based on our gut feelings and previous experiences in the industry but without talking to our customers, and it was a really hard lesson to learn. It wasn’t until we really started pitching customers and trying to sell what we had that we were speaking to them and really understanding their problems and what they cared about, and realising that we’d done the wrong thing and we did need to pivot and change. It was a hard lesson to learn but it was one that stuck with us and now we don’t touch a thing until we’ve talked to customer and we have a great backlog of product development, all based on the feedback that we get from our customers today. That’s my number one tip. Before you pick up a tool, make sure a customer wants it and is willing to buy and pay money for.
Ingrid: Somebody wants it. So you mentioned there that you raised capital. Is that how you funded the business in the early days?
Danielle Lewis: Yeah. So in the very early days it was actually the deposit on my house. So I had been saving in my corporate career. I’d been saving, saving, saving. I’d started looking at houses to buy and when I met my co-founder and we started discussing a business, it was a decision I had to make as to whether I bought the house or started the business. That was a really difficult decision to make and a pretty risky one, but one that certainly paid off in the long term. So after it was savings, after we’d made all of the mistakes and spent the savings, we turned to debt, so we borrowed money to keep going and then we moved to investors once that option was exhausted personally.
Ingrid: And that’s a big journey. It’s a huge commitment to put your own personal savings into the business.
Danielle Lewis: I think it’s interesting if you’re willing to do that, how much you believe in your business idea.
Ingrid: Yes and really they call that skin in the game. Bootstrapping is really powerful in the early days. Changing direction, how do you find new customers now? It’s fascinating because you talk about your business as being the word of mouth for businesses, so how do you get traction for your business?
Danielle Lewis: We get it in a few different ways, but that is really good point because a lot of our business today comes from referrals, so we get a lot of repeat business from our customers who we’ve run successful influencer campaigns for or I’ve had a great experience using the product. Plus we get them referring us on to their colleagues in other businesses, which has been absolutely phenomenal for us. Secondary to that, we’ve got a sales team that does cold outreach, and then I guess tertiary to that, we do a digital marketing strategy.
Ingrid: So you have your own strategy for digital marketing? Because you’ve been involved in that area as well, haven’t you?
Danielle Lewis: Yeah exactly, so all of our social media content, digital advertising, influencer marketing. Can you believe the influencer company does influencer marketing?
Ingrid: Well we would hope so! So, let’s talk about money. What process did you use, and whether you actually talk about your pricing strategy or not, but how did you come up with the price? How do you come up with a pricing strategy for this sort of thing?
Danielle Lewis: In the beginning it was a best guess. So in the beginning we had three tiers of pricing and what we found was over time, all of our customers were buying into one tier of that pricing model, so we basically pivoted to a single price point, a premium and then that single price point model. And then it was over really time of us actually, literally time tracking every minute that a person within Scrunch spent delivering for a customer or talking to a customer, to really understand the investment we made into each different kind of customer so that we could price accordingly. So now we have premium and two pricing tiers and then we have market place model as well so essentially we make commission if a brand finds and influencer on scrunch and runs a campaign for our platform.
Ingrid: And that’s a nice extra revenue stream that sits over there doing its own thing, doesn’t it?
Danielle Lewis: Exactly. Exactly right.
Ingrid: So, exit strategy. Lots of businesses get started but they don’t really think about the end and you don’t need to tell us the details but have you thought about where this goes? Have you thought about an exit strategy?
Danielle Lewis: We have. The plan is one day to exit the lovely Scrunch. But really our strategy is really partnering and developing really solid customer relationships in the hope that one day we could move to an acquisition conversation, so for us right now it’s how quickly can we grow the business and how solid can we create relationships and partnerships based on value that a conversation like acquisition or partnership, becomes an easier conversation.
Ingrid: Nice, very nice. So what is the one thing that you wish you’d done differently at the very beginning? I think you’ve alluded to it around customers, but is there something that you wish you’d done differently if you could go back?
Danielle Lewis: I kind of struggle with this type of question as well because I actually believe and have no regrets. I believe as a new business owner, you actually have to make mistakes. There are so many resources out there telling you the right way and the wrong way but there’s nothing like that hands on experience of making a decision because you believe it was the right decision and then completely failing. That to me is the best teacher, and I think that there is a stigma around failure, making the wrong decision and having to start again or pivoting, but realistically, that is the path. It’s not linear. You zig and you zag, and the people that are the most successful, are the ones that have resilience and persistence. They’re the ones that stuck it out.
So whilst there are things that in retrospect, you could say ‘If I had have done that, would it be different?’, but then I always think ‘Well if I hadn’t made that mistake, it wouldn’t have led me to the next thing’, so the mistake in itself is valuable because all of those mistakes of mine, have led us to this success that we see today.
Ingrid: Exactly, exactly. That’s a terrific answer, thank you. Now this is a silently different question and it’s more about what you wish you’d known from the start. You’ve alluded to a couple of things in the conversation about your expectations and how it’s turned out. This is a different question to the previous one. Is there anything you wish you’d known at the start?
Danielle Lewis: I often think if I knew how hard it was, would I have actually done it? I’m on the fence about whether knowing if it is a good thing or not. But I think that probably the thing that would’ve been good is understanding the value of networks and personal connections. We very much stayed inside our bubble, building, building, building, and it really wasn’t until we surrounded ourselves with amazing people and built out our networks that things started to change for us, so I think that doing that sooner would’ve been really the key.
Ingrid: And that get out of the house, get out to the people, is such a strong message. Thank you for that. That’s terrific. So, who apart from you and your co-founder, has been of greatest assistance to you and to your business? Even name names or concepts.
Danielle Lewis: It’s been many people over time, and I think that one lesson that I’ve learnt is it’s not always that one person that’s going to see you through every stage or every problem that you have with some of your business. We’ve had advisers, we’ve had board members. We’ve got share holders, and they all have their own domain experience, and even cultural perspective on things. So each one of those people has been fairly critical each time a challenge comes up in our business. For somebody to bounce ideas off and really it again comes back to that surrounding yourself with amazing people. I mean even from a team perspective, I wouldn’t be where I am today without the team that I have and that team has evolved over time. People have come and they’ve gone, and each time we’ve moved the business incrementally forward, so you do have to be constantly looking ahead asking ‘What is the next challenge and who is the right person?’.
There’s a quote. It’s probably a Steve Jobs saying. If you’re the smartest person in the room, that’s a real problem. You really do have to surround yourself with people that are so much more intelligent than you and have other skills than you, and really put your ego aside and be willing to learn from them and grow from them. If you’ve never built and exited a hundred million dollar company before, how are you going to do that? What is the path? You’d be silly not to take advice, or whether you take it or not, but listen to advice from people that have done it before.
Ingrid: I know you’re on a bit of a time scale, so we only have a couple of more questions, but is that part of who can give you good feedback? Because the next question is, who can give you really useful feedback. Is there anywhere else you get feedback from?
Danielle Lewis: Everywhere. Customers again, number one. I have a very strong relationship with my board, so they give us a lot of feedback on different things and advice, which I find very helpful. Having a co-founder is absolutely phenomenal, and we can both be very brutally honest with each other as well, which I think helps. I think the thing is to understand when the feedback is constructive versus somebody’s personal opinion, and that’s really difficult to understand, and I think you over time learn to trust your gut instinct on that so that’s probably three areas that I get the feedback from.
Ingrid: So three characteristics that you have that make you successful in business.
Danielle Lewis: Easy. You already mentioned a couple. And it’s funny because my co-founder and I talk about this all the time, but we believe that persistence is the number one and both of us are these crazy people that refuse to give up, and we’ve been through every challenge that you can think of. I’m sure there’s more to come, but we absolutely refuse not to succeed. I think that’s been instrumental in getting us to where we are today so I think persistence is the top. I’m also a very naturally positive person. I always think that the world is trying to do me good and do us good, so I believe that’s again been part of how I’ve been able to be resilient is because I’m very grateful for where we are today and have a very positive outlook going into every situation. They’re my top two, what would be my third? I guess being able to have a laugh at ourselves is probably the last one. It’s tough. Starting a business is really tough. If you can’t find the time for fun and to poke a bit of fun at yourself, I think ‘What’s the point really?’.
Ingrid: Because so many people do it for freedom and they think they’re going to sit at the beach with a laptop and it’s not like that.
Danielle Lewis: Exactly. No.
Ingrid: You do have to have some fun even when it’s pouring rain and pouring rain literally or figuratively. You do have to be able to have a laugh. So just to finish up, what would you say to someone coming to you and it might just be a repeat of what you’ve said already. But someone comes to you and says ‘Oh my gosh, Danielle, I’ve got this idea for a business. I’m super excited. What do you think? Should I start my own business?’, what do you say to them?
Danielle Lewis: I always say just do it. The only way you’re going to know if it works, is to just do it, and I can 100% guarantee that the first idea someone has, no matter how amazing they think it is, it’s wrong because you don’t know. You just don’t know how the market will react, how the customers will react until you really get in there. There’s all of this detail that people overlook because they’ve romanticised the idea. It’s 100% the execution that matters, and you’ll never know unless you give it a go, and I think, ‘What is the worst that could happen?’. It doesn’t work and you go back to what you were doing. There is no risk there. What you’re risking is the possibility of an amazing life, an amazing business, so that’s a good risk.
Ingrid: Oh I love that! Just say that again. What you’re risking… oh my gosh that was gorgeous.
Danielle Lewis: What you’re risking is the potential of an amazing life or an amazing business. And that to me is a much greater risk than choosing to start a business.
Ingrid: Oh Danielle, that is just gold. Thank you so much for your time today and I know we’re bumping up against your next appointment but I totally appreciate it. And from our listeners, thank you so much.
Danielle Lewis: Thanks for having me.