On this episode of Recode Decode, Tynan talks about overcoming investors’ skepticism in order to start her online framing company.

On the latest episode of Recode Decode with Kara Swisher, Framebridge CEO Susan Tynan joined Kara in Washington, D.C., to talk about the challenges of starting an online framing company, being a startup in the era of Big Tech and how the D.C.-based company is thinking about Amazon’s planned construction of a new office nearby.

You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Susan.


Hi, I’m Kara Swisher, editor at large of Recode. You may know me as someone whose house is decorated with framed printouts of Twitter arguments, but in my spare time I talk tech and you’re listening to Recode Decode from the Vox Media Podcast Network.

Today in the red chair is Susan Tynan, the founder and CEO of Framebridge. Before starting the company in 2014, she worked at LivingSocial — we’ll talk about that — and the Obama White House. That’s quite a resume, Susan. Welcome to Recode Decode.

Thanks. I’m excited to be here.

There’s so much to talk about. Unfortunately, you got me on a bad day. It’s the Facebook disaster day, which is yesterday and the day before, but it was a pretty bad story in the New York Times.

We’re gonna talk about that, being a CEO and tech responsibility, but let’s talk a little bit about you, yourself, and how you started Framebridge.

There’s not many startups started by women. We’ll talk about that issue and why. I know, I’m sorry, you’re gonna have to carry water for all women, but there we have it because tech is such a non-diverse place.

Let’s start with your background. It’s a really interesting background. You were at LivingSocial. Who was the CEO? What’s his name?

Tim O’Shaughnessy.

Tim O’Shaughnessy.

Yep.

That’s right. I remember, it was back in the day, it was a big deal. It was that and Groupon and everything else. Tell me about your background. Go through it for us.

Sure. Before that I had been a management consultant, and then found my way really into consumer tech, sort of fintech before fintech.

You worked for Boston Consulting or something like that?

Accenture.

Accenture, whatever. Same one.

Exactly. But actually wound up doing a big project for the Postal Service in which I find myself back in a warehouse. But then sort of meandered through a few different consumer tech jobs and grew to love it. Loved the consumer orientation and the speed. Certainly, that was what I loved most about LivingSocial. I was actually in the Obama White House when friends from a previous job started LivingSocial.

Right, and they brought it to Washington?

Yeah, it was in Washington and I watched it and it was the most exciting thing in Washington since probably AOL.

Yeah, right, exactly, and sort of went that way too. But all right, you went there. What were you doing in the Obama White House?

I worked in the budget office and I had a role that was really to solve management issues that could become political issues. It wasn’t a policy job. It was truly things like response to the oil spill, response to GI bill delays. The current administration’s still dealing with that right now.

Like you would look at it and say what?

Let’s look at the data, let’s figure out what’s happening and make recommendations, and then also have the fun of being able to say you’re calling from the White House.

Is that fun?

Yeah.

It is?

What a privilege.

What happened exactly? They go, “Oh!”

People responded quickly.

They do?

Yes.

What do you think now? I’m not going to ask your political opinion.

I definitely was amazed at the caliber of the people. Truly, the smartest people in every field rushed in to the first administration, to Obama’s first. It was an awe to be around these people and I just feel sad about that.

Right, okay. You did that and then you decided to go off to do a startup?

Yeah, ‘cause I saw them building it and it looked like so much fun and yes.

How did you get hooked up with them?

I knew them from a previous startup. I was watching them and was sort of almost waiting to be called, maybe too prideful to say I’d love to join. Someone called me and said, “We’re gonna start a sort of new business line, wanna join?”

What did you do there?

I started new deal categories, so home services, family-friendly deals, and then ultimately what is now Groupon’s main business, Groupon Goods, selling products.

Selling products itself, which LivingSocial did. Can we talk about what happened to that business? ‘Cause it was hot, hot, hot and then both of them went under. Groupon was bigger.

It required two sides to work and when it worked, that cycle was really supportive of one another. If merchants got good customers, then good merchants would do deals and customers would open those emails.

When it started, I think merchants started saying, “We’re not getting good customers. We’re just giving away the store.” Then, premiere vendors didn’t wanna be in emails, and then emails … And then also, worse, how do you make more money in that business? We had to put more and more deals in the emails and then just for the customer, it became less and less interesting. It just sort of unraveled pretty quickly.

Why wasn’t that thought of before, speaking of management consultants?

Yeah.

It was the first time people had done this deal, although there have been deals, like those books that you carry around, those big heavy books that you had coupons in.

Right. I think there were some offline versions, right, the Yellow Pages and then also there were versions of this that were … Yelp. I mean things exist that were connecting local stores with customers and the community. There was going to be a set of solutions to come out of that.

I think in some ways, I learned there’s an issue when it comes too easy and I think it came too easy and then it was just like a feeding frenzy for both companies to grow as fast as possible. We didn’t have to think enough about what happens next because it was coming so easy.

Right, that you were getting deals, deals, deals and you could always have the next customer and cycle through customers. But retailers got angry pretty fast, or vendors?

They did. But the growth was happening so fast that it all took place so quickly. It’s interesting because I have since formed a company that is so fundamental. We place something of value in someone’s hands and that is definitely a result.

Right. Of that, okay. You did that and you stayed there till when? Because it started unraveling pretty quickly. How much money was put into it? One was Steve Case and one was Ted Leonsis, right?

It was Steve.

This was Steve.

Steve was LivingSocial. Both Steve and Tim, backers of Framebridge, which I think is sort of the best thing we see in tech, right?

I left in ‘09, or sorry, I left in 2011 and it was, yeah, it hadn’t … The future was unclear, but it wasn’t as exciting.

Right, and you thought what? You wanted to go to another internet company?

Yes, and I took a product role, head of product for a taxi app.

All right, which one?

Taxi Magic, which then became Curb.

Right.

Yep.

Right, right, right and that was early, that was early days.

Yes, they were actually the first to have an iPhone app to hail a taxi. Thought that would be an exciting place to be certainly because industry-wise, something was gonna happen there. But by that time, I had the idea for Framebridge and it was brewing in me.

Explain what it is. Explain to people what that is.

Framebridge is custom picture framing, half the time, half the price of traditional framing. We do it all centrally. We send people packaging, they send us their art or they upload a photo and we print it and frame it.

I think really sort of two pretty obvious theses that we’ve been able to prove out — which is one, if someone made this easier and more affordable, people would do it more often.

Because framing’s expensive.

Yes.

And it’s local, it’s very local.

It’s very local, it’s fragmented and it should be a bigger category than it is.

Right.

We truly believed it was constrained because of the price and the way it was delivered.

There are a few chains, right? Not many.

The craft chains, yeah. But really it was that younger customers should love this too. They like experiences, they create amazing content, why wouldn’t they also? They would, it’s just the way in which it was delivered wasn’t appealing to them.

Then the second part, which I didn’t know how we would do, but since we have, was I’m sure if we aggregate all this demand, we can somehow deliver it in a way that is less expensive.

Right.

That’s really by streamlining our operations by bringing manufacturing best practices to this industry that had not been brought there before.

Talk about that. Why wasn’t it? Why did you come up with it? Why was it framing that you got interested in?

Personal need. I had four national parks posters, I took ‘em to a frame store, they cost $400 each to be framed and I thought $1,600 for a poster seemed crazy. And I started talking to everybody about the idea and everybody had a similar story: Delight at what they framed and sticker shock from the experience.

But why this? I like to get the idea of what someone decides at the moment you decided, “Why, I think frames. Yes, frames.”

Yeah, no, because it was broken. Truly, and because the first … Every time you ask someone about what they framed, they tell you about the sticker shock and then the second question is, well tell me about it and they say, “Actually, I went to Nepal and let me tell you.” People have stuff they love.

The thing they’re doing, right. You said, “Okay, this is what I’m gonna do”?

This is what I’m gonna do. Oh, but the reason I did it was because I was in this taxi business and I thought here’s a problem with what, at the time, hilariously, we thought was a $15 million market size, but every smart person in the country is working on it. I thought I have an idea that I believe in so much that no one is working on. Why wouldn’t I go do that?

That would worry people though, like, “Oh, nobody’s working on it.”

That’s the first thing they always say, but I think that’s only because you had to have the reverence for design, some tech understanding, and some willingness to figure out the manufacturing. It was really just could you put all the pieces together?

Right, and so you started off. Okay, you’re one of the few women as a CEO.

Yep.

This is your idea. How did you create it? What did you do?

I was in my late 30s when I started it, so I joke a little bit, I did it like a woman that was totally prepared at the time I started. I was able to raise … I raised money out of the gate and I raised money from people who knew me as a manager from other jobs.

Right, so Steve Case.

I was a known entity to them in that capacity.

How much did you raise at that time?

At that time, I raised about one and a half, it was at $3 million seed in two tranches.

You were trying to find investors like a Steve Case or Tim who had worked with you at LivingSocial or elsewhere?

That’s right.

Who wouldn’t bother you, really. Who trusted you.

You had to believe two things. You had to believe this was a category worthy of disruption — which obviously a lot of investors did not believe — and then you had to believe I could get it done.

Right, so talk about that process. Again, I don’t wanna focus on you’re a woman but there aren’t many women CEOs. There just aren’t. I can count them on my hands. One hand.

No, I think it’s interesting, even though this would obviously be an industry I might be interested in, I think the fact that it’s a crafty industry is a double whammy.

It’s a lady industry.

Totally, so I think there’s both a lack of understanding of it but also when I went out there, I think there was somewhat of a question of my ambition. Like, I wanted to build a very large business and this is how I was gonna do it, but I think paired with a mom going out and pitching a frame business, you had to know me to know that I was gonna get it done.

That’s why, I mean, I pitched to everyone under the sun on both coasts but wound up with people who knew me.

Talk about the difficulties of pitching, because I want people to get a sense of what that’s like.

I laughed … One day in two different cities, I got the exact same anecdote, which was I don’t understand the use case. If I’m in Aspen with my friends, I would take a picture, and I could frame it. I thought, this is amazing. I’m in two different cities in the same day and that was the only use case you could come up with.

Because they go to Aspen, these douchey VCs.

Yes, and there’s also a lot of, “I asked my wife and we have a decorator and we wouldn’t need it.”

Mm-hmm. Oh man, I hate these guys.

It’s really amazing. Then, I used to actually report back from the road and I remember my mom took an interest in this and would say, “Did you meet any women today?” Always, I’m like, “No, mom, of course not.”

Of course not, yeah, it was all dudes.

Although one of my original investors is from NEA Partners, a woman.

Right, okay. You had to get them around the idea, one, that it’s a good idea, and two, that you could do it?

Yes. You had to say, yeah, it’s a big enough category and I can get it done.

Right, right. What was your biggest argument? Pitch me. That you could do it.

It’s still my biggest, how many industries are left that haven’t been transformed by the internet? I found one!

I found one.

Then I think the wind at our backs in terms of all the content people are taking on their phone.

Right, exactly.

Obviously there’s all this stuff …

People want an analog version of this.

Yes, and I think it’s gonna be really hard for you to convince me people won’t wanna pull things down from the cloud and live with them in their real lives. Of course they do. That’s understandable.

Was there another example like it? That people had done that with?

People who’d done the same …

There was a lot of framing, you pull down clouds into a digital frame.

Oh, into a digital frame, yeah.

That came and went. I had 17 of those.

Yeah, I don’t even see it as a substitute for what we do. There really is some significance and people get an emotional reaction to …

To art or that they created.

Yes. I think … Interesting, I will give us credit for this. We had product market fit when we launched and we started selling ‘cause it made sense.

That’s the other thing, this is interesting with pitching. I’ve only gotten east coast money. I really think there is something sort of fundamental, clear about what we’re doing and we have interesting stuff to say.

Absolutely, we are growing the category. This is net new business. That’s cool. But it’s not, it’s too tangible. I think I really struggled with that. It was like, I get it, but what’s most interesting to a hot topic on people’s data. But what’s really interesting is you know what people value in their lives. We definitely do. We know if you got married or if you love dogs.

But what’s most interesting is that we provide this service in a much smoother way and you’re gonna incorporate it in your life more. But I definitely think there are investors who want something more. I actually remember an investor saying, A) it wasn’t sexy enough. They try and do sexier stuff and B) it just seemed like a line drive. It’s just too obvious.

A line drive. What a bunch of idiots. When you raised this money, talk about the … I like when entrepreneurs talk about the challenges they face. You raise this money, you locate in Washington, right?

Yes.

You have everything here and it’s a little bit like … I’m trying to think of a business, probably Stitchfix or some others. Very much centralized and then they go out. Your big problem would be marketing, correct? Getting people to use it.

Every day it’s lining up supply and demand, ‘cause we actually have to, unlike other companies, we actually have to build everything we sell.

Right.

Yes, it’s both. We had to build it all together at the same time. I had pulled in a couple folks, sort of the best people I knew from places I had worked and the second, close the funding, hire them on. So then we started working on everything all at once.

By that time we had done some of the product development of that app, but we built the website, we found a warehouse, right outside of D.C., we located ourselves in the warehouse and then we truly had to, I had originally told investors that we would outsource the framing from the beginning, because we didn’t know anything about framing, but …

Where would you have outsourced it to?

Right, it was just to prove the concept. It was like our MVP would be, we just have the website, and we’d actually just work with local framers and fulfill it, and it would all be behind the scenes.

Like what, like florists?

Right, but that wasn’t the whole business plan. That was just to prove it, so that I didn’t scare people about what we were gonna do.

I love all the casual lying that entrepreneurs have to do. No, I’m kidding. You know what I mean.

No, no, no. It was an evolution.

All right. Okay. Oh, nice, well said.

But it happened really quickly. We did not do that with one frame. I started meeting with framers and I thought, “Wait a minute. What am I doing?”

Why?

I can get equipment, we can do this.

Right. Why did you think that?

For all of the reasons that it was possible to come in, well, one, they didn’t have any storage. If we were talking to vendors and there was another, there was someone else in the value chain, why were we doing this whole thing? It just seemed, and most importantly, we couldn’t control quality, and we couldn’t start getting faster, or smarter faster. From the very, very first frame, we launched everything together. We got used equipment. We hired some framers, and we launched our website.

So, and you decided hire some framers to work for you directly?

Yes.

Right. And getting the actual things you need to make a frame and offer them kind of things.

Yes.

How difficult was that? Because you’re going against local people, right? What was the reception?

Yeah, so, not good. I think, I mean from consumers, consumers got it, we have a very clear value prop. Sort of …

Oh, I get it. I’ve spent $4 million on framing.

So people are, “I got it.” And then now, increasingly with social proof, people trust us, and they get it. Certainly the industry was suspicious. We came in saying — and I believe it — this is new demand and I think we’ve been able to prove that for the most part.

This is people that weren’t getting framed.

This is people who were not. A third of our customers had never framed something before, and 65 percent of the items, they say they would not have framed otherwise.

So, you’re trying not to piss them off, you’re disrupting …

Well, that’s not what I came in to do.

Right.

I came in to get this to more people because I thought people would actually get stuff.

What had been the problem, and why is this a disruptable industry?

Most people, well, know local framers don’t actually store any inventory, so they buy from distributors when you choose off of that wall of 10,000 frame styles.

Right.

So, it’s expensive and takes time.

Meaning? Explain that.

Meaning, so, there’s a wall of 10,000 frame styles, you choose, they measure your art, then they order from a distributor the materials in little chopped up pieces to come to their store, and so that takes a couple weeks and it’s expensive, it’s heavily marked up. So we said, we’ll essentialize all this, we’ll order in high quantities, and we’ll make things ourselves. Out of the gates, we were able to offer at a lower price.

Lower price, and so the premise would be that this shouldn’t cost as much, but you have less selection, right? You don’t have 10,000…

We do. We have 50 frame styles, but we added some attractive … And also the way in which the original industry worked, because products didn’t cycle through quickly, it didn’t even keep up with home décor trends. It really wasn’t … just a lot of value the customer wasn’t getting. Which was even design advice you’d necessarily believe in.

Right, right. So how many people do you have working here?

450.

Wow. In Washington?

No. We have about 70 people in Washington, and the rest in Lexington, Kentucky.

Wow, well I wanna talk about that in a second.

Yes.

And then the idea is that you’re bringing it to places that, you’re doing what Amazon didn’t do, I guess. Hiring people in areas that nobody expected.

Oh, yes, of course.

Yes, yes, but of course. HQ2, have you heard about that?

Yes, most recently, yes. Right, right, right. That’s exactly right.

So how do you operate? The company, then, is done in, so most of it, probably making of it, is in Lexington?

That’s right.

And then everything, instead of here. So then the challenges you face is, presumably, marketing it and getting people to use it.

That’s right.

And getting people to use it again and again.

That part we have, and that has been why we’ve been able to successfully fundraise, and sort of the wow of our business. It answers a lot of the open questions people have at the beginning, which was, I don’t get this, I do it once every 10 years when I move, and we said, no, no, no, truly, by making it better, the category will be bigger. So that’s what we’ve been able to prove out. People repeat and repeat with frequency, they give it as a gift, and we see and hear people saying they’re looking for things now.

Looking for things, so, to frame?

To frame.

To frame. All right. So, what do you spend your days doing? You raise more money.

Yup.

Correct.

Hiring. And really, the customer standard is really my life, is making sure that we’re delivering the best product for our customer.

How do you do that?

Well, I feel, a lot, I feel, just basic, almost unease in a great way that we’ve, that we’ve framed 600,000 items. We know a lot about what people should be framing. We should be using that to make a better and better and better experience.

Well, that’s presumably the idea behind Amazon and everything else.

Right.

The data gives you that information.

And why on Earth would we let ourselves lose this lead? I truly, at the end of the day, just want people to love what they framed, and I believe that grows a bigger, better business. All of the entrepreneurs I admire are obsessed with it, with the same thing, so that’s things from the product interactions and the physical product, to making sure things we’re doing to streamline in the warehouse, just make a better experience, not in any way a degraded one. And then, yeah, making sure everything we do represents who we are, and that always feels like whack-a-mole.

Right, right. And you, as the leader, tell us about some of the challenges you might face, and if they’re different from being a woman or not.

So, it’s interesting, I think there’s something, in some ways …

Where are you from, by the way?

Cleveland. Can you tell?

That’s what I thought, I’m like, yeah, I’m like, “What kind of accent?” It’s a plum, right? It’s a plum? That’s what they call it.

Yeah, it is. Cleveland’s a, it was New York is the Big Apple, and Cleveland’s a plum.

Uh huh, okay.

So, I think, sometimes, no, I don’t think it’s harder being a leader as a … I think being a leader …

Talk about the challenge of being a leader.

Emotional intelligence, I think, is obviously critical to being a good leader. I think, generally, I think women often have a leg up there, so I think that’s fine. And I think I’ve been able to recruit some other great leaders as well. So it’s pretty good. I think being a sole founder …

There’s often two people.

Yes, can be challenging just because, sort of, the weight of the world …

Right, is on you.

Yes, I have a very talented COO now, takes some of that weight off, but I think, sort of the, this is why we got into this, this is why we built this, all of that is one person. I think that can be a lot. And now, yeah, I have a tremendous obligation to our employees, our investors.

So, how much have you, total, raised now?

67 million.

Whoa. And then where did you go the second time?

So, same investors, Revolution, NEA and Swan & Legend, a couple times, and then we raised our C in the spring from T. Rowe Price.

Oh, that’s interesting. Henry Elgin bought in.

Yes.

He would love this.

Yes. He’s amazing, and he has such a fundamental view on things, like, this makes sense, you’re delivering for customers, they like you, keep doing that and I can understand how this will be successful. It was such a, as I said, east coast, it was such a refreshing perspective on our business.

Well, you know, what’s interesting is a lot stuff definitely doesn’t get analog stuff. Talk to me about that a little bit, because it’s the analog part of it, it’s a thing.

It’s a thing and it will always be a thing. Truly, there was, I remember a pitch meeting in which someone said, but really it could be, like, “What’s the social element to it?” I’m like, “Oh yeah. This is how people share. Blah blah blah.” They’re like, “No, no, no, but what’s the social element to it?” And I’m like, “Well, not really, because it’s in your house.”

Right, it doesn’t talk to anybody. Couldn’t the frames speak to each other and then the Russians somehow get in your living room, or something like that? So there’s no social element. I know why I like you. Today, I’m so up to my fucking eyeballs in all this shit.

Well, I don’t know if you wanna talk about that …

I do.

… but it’s interesting as a direct-to-consumer company, we could only exist because we could efficiently market in the early days.

Right, right.

And, so, the only way we could go from zero to a real company was the audience and targeting sophistication of Facebook. It’s interesting because, I’ve discussed my multiple lives, when I look back, that’s really okay if just people who might want picture frames hear about Framebridge. It’s really less okay if real debates and policy issues we should be having as a country are being inserted into specific peoples minds.

Into frames. Say, “It just hangs on the wall.”

Just hangs on the wall.

That’s all it does.

Did you see the Banksy frame? That was the most exciting, did you not see this? It was the most exciting thing on the news.

No, no. Tell me. All right, explain it to me.

Banksy developed a frame that shredded the art.

Oh, right. Yes, of course. Yes, yes, I did. I’m sorry.

Yes, yes, after it was bought at auction. But we were really excited because there’s not a lot of exciting news in our category.

Right. There’s not a … framing isn’t the place to be.

No, but that really …

No, yeah.

It was.

Did you, are you selling that frame?

No, but we should.

You should. Like a shredding … so you just keep putting art in it?

Yeah, no, well, now it dangles from the bottom. I mean, that’s part of the art.

Okay. I’m sorry. I’m just very literal. I like “it hangs on the wall.” It just hangs. I can see in Silicon Valley, they’d be like, “What?”

No, come on. New market. We created a new market.

I’m saying they’re idiots. I’m saying you’re brilliant.

Thank you, thank you.

I’m sorry.

And it makes people happy. It truly does. It is a fundamental good product.

Talk about what it’s like being a startup right now, because I think a lot of startups, it’s a very fallow period for startups. They’re aren’t any very exciting ones coming along. You had the Airbnb, Uber, Pinterest gang, but not since then. There’s been a very slow moving train. I think it’s because the big companies are dominating everything.

I think that’s right, and I’m in e-commerce, so there’s just like these digitally native brands, a lot of them, and a lot of them are really cool marketers. I think that’s fun, I think it’s been fun to see that that’s a relationship with the customer that is so different from the old way. I look at those companies and admire them. Sometimes I’m jealous of those companies, because …

Such as? Like a …

Yeah, like all of the companies, you could focus really only on marketing because we have had to scale custom manufacturing. We’ve had to invent things that don’t exist.

Right, right.

So a lot of our time and focus has been on that less glamorous side.

Right, which is how do we get the frame — you’re more like Amazon.

But the defensible, the defensible side.

Yeah, yeah, the moats, I call it the moats, and Amazon has moats and moats. They have data moats, they’ve got manufacturing moats, they’ve got packaging moats, customer service …

Right, so we unwrap packaging and inside it might be 10 Disney passes or it might be an old diploma on vellum, and our team has to use our software to make a series of decisions on how that should be framed, and then the rest of the factory has to be powered like a real factory. So, that’s not easy.

No, no, it’s an actual manufacturing, it’s another analog problem. And then you also have to go through customer service to get it back and forth. How do you look, who do you look up for then? It’s gotta be Amazon, right?

Oh, sure. We have team members who’ve been at Amazon who are terrific, and have learned a tremendous amount of … There’s so much that we admire there. I think for us, though, we have to look at, in an Amazon world, why do you exist?

Yes, I was gonna get to that next.

Deep knowledge of our category.

Right.

Could they do it eventually if they wanted to? They can do anything they wanted to.

Right, yeah. They just did microwaves, I don’t think they’re gonna get to you yet.

No, they’re not gonna get to us.

You’re down on, you’re number 212 on that list of killing off retail.

We’re in a category that doesn’t have a beloved brand and deserves one because we touch stuff you love, and there’s a trust and design element.

Right.

So, all of that means we can compete, and we can build something that people believe in and incorporate it into their lives. I think, really for us, it’s being very disciplined, about being very dedicated to this category.

I don’t think they’re coming for you. I don’t think so.

They’re coming to Washington though, as you said. Halfway, half of them.

Yes. I understand that, but I don’t think they’re coming, I can’t see them up in Seattle where they’re real headquarters is, not HQ2, I can’t imagine them thinking it’s a big enough category for them. You know what I mean?

No, it was a hidden gem.

And it’s too hard and it’s too, it’s big, but it’s not big enough. So, therefore, microwaves. Oh, I see microwaves, I see furniture, I see anything else, but that’s …

It’s also interesting because they haven’t done a lot that requires design and service.

Service. Yeah, I mean, they’re doing it in the studios, but it’s a little bit of a disaster over there, but, you know what I mean. It’s a much more difficult business, and certainly doesn’t make a lot of money, and so they … The cloud and their packing up of consumer goods is relatively easy.

Their focus on the customer though, amazing.

Talk about the move towards analog, because I think that’s a big area. It doesn’t matter if it’s in e-commerce, these, I guess Uber is an analog business in a lot of ways.

Yeah, that’s true.

But Uber, Lyft or others, talk about that concept, because I think so much more of the next year has to do with analog, whether it’s salads, or things …

I love those guys. I think that ..

The Sweetgreens guys, I just was with them, yeah, they have a beautiful headquarters. They talk about salads, I know, they talk about salad like it’s the second coming or something.

But, you know what?

It is. Okay.

Well, they have the best ones.

Yup, that’s true. I have to say, I went to eat there afterwards, and I tried to sneak in, they ended up buying my lunch for me, but it was delicious. I was like, “This is a delicious freaking salad, Steve Case,” yeah, whatever it was, I don’t remember.

I think, customers intracity using technology to make people’s lives easier, I think, obviously, I think the analog stuff is all about ease, right, in our busy lives. We keep crowding our lives with more, but certainly, even Framebridge came because I wanted nice things but didn’t have the time to figure them out on my own, in addition to not being able to afford it. I think that’s what everything will be now. I think there’s also, the beauty of the analog is, it’s a market that exists.

Right.

Sure, we’re saying it’s new demand, but it’s still, it’s something you can believe versus a solution in search of a problem.

Meaning? Explain that.

Well, I think some technology businesses like, there really isn’t, it might not have needed to have existed.

Right, right. And to fix it and stuff like that. So, when you think about that, you said you found this gem to disrupt, how many more are left?

Oh, yeah, I don’t, some are really hard, people keep mentioning things.

Like?

Well, you were talking to Elon about construction, I thought, “Oh, that’s really interesting.”

Right, yes, I’m correct.

Yes, that I think you are, and I was thinking about what we do in terms of custom manufacturing, and I think there’s a lot more there.

Yes. Construction has to change. It’s insane how slow it is. How artisanal it is. The guy comes to your house and puts in drywall.

Right.

It makes no sense. That wall could have been made somewhere else.

Also, all of the information asymmetry. I think any time the customer doesn’t know what they’re getting and doesn’t know who to trust.

Yes.

You should look into that.

I renovated several houses, I stay there and stare at them, because I learned it all, but I was fascinated by it. They were like, “You can’t customize it.” I’m like, “But could you customize it?” Sure you could. You could make that drywall to a specification. Why does it have to be made by one guy who they hire? You know what I mean? And it’s always a guy, but why can’t they be pre-wired and brought in?

Well, I think there are a lot of industries where making things seem harder than they are is part of the whole deal.

Yes. I see why they’re doing it that way, although I don’t think thinking beyond it. Construction is one of them, 100 percent, the way we build houses has gotta change. It’s ridiculous. So what areas do you move into, or is it just a big enough business to do it?

Right now it’s a big enough business. We have tons more opportunity, and people, as I said, are framing a lot more often, a lot more people to reach here and internationally.

Do you have any international business then?

We don’t today. So we have a lot of opportunity. Yeah, and truly I sort of won’t be constrained by today’s market size. I really think that was just very powerful.

What is that size?

It’s like 45 billion in the U.S. but that’s all the offline stuff, and of course half of our business is digital, and it’s new, truly, people are framing everything, it’s like company mission statements …

What’s the weirdest thing?

Company marathon bib, a ponytail, umbilical cord. A pretzel.

What? Really? What do you do when they get there?

You wear gloves.

Okay, I’m still back at ponytail. Okay, all right, so did they tell you? Did they warn you of a ponytail?

They did. Customer service knew.

Knew it was coming?

Yeah, for the ponytail they knew. Yep.

Wow, the umbilical cord now.

Yeah.

Whoa. I’m trying to like that, but I can’t.

Right. That one maybe, but you can like the little baby hats from the hospital, c’mon, or the bracelet.

Okay.

That’s good stuff.

I have them in a box. I have that in a box. I do not have the umbilical cord in a box.

Well. Think about it. I get excited about the potential market for the business when two things happen: Either I see something that has just so much emotional depth behind it, and people share these stories with us. So someone sent us a charcoal painting, a drawing, and she said “My neighbor drew this of me to build me up after our hard divorce.” I was like, that is really nice, and whoa, and so when we realize we’re dealing with things that matter to people, and have such significance, I realize there’s a big business here, and a meaningful one.

I think when we realize we’re part of anything happening in the culture, so we saw last Super Bowl, one of our product managers was pulling the feed of what people were framing, and all of a sudden it’s Eagles fans, right?

Right.

And you realize you’re in a stadium, and you’re celebrating something, and you’re thinking about commemorating that.

Right.

That’s so different for this category that would have been like, 10 years later. “I should have done something about, remember that time we went to the Super Bowl?” And I don’t think it’s deluding ourselves to think that what we’re doing is helping people remember good stuff in their life.

Right.

Before they forget about it.

Right. So you’re doing something that’s analog. Do you see a market in these virtual frames? They came and went. Why? Tell me.

No, and well sure I do as a substitute. I guess I just said it wasn’t, but yeah sure. It’s something you put on your wall. I don’t worry about the lack of wall space as an issue. It’s ephemeral. The whole point is pulling something down to store.

Actually, there’s an NYU professor who’s done some research on the difference in the photos you post versus the photos you print.

Oh.

And of course they’re a total different set of photos.

So what are they? Tell me.

Well, things you deeply value versus your made-up phony life.

Oh you know I could go on about Instagram, the performative nature of Instagram. Recently, I stopped using Instagram, because I think I hate it. I love Kevin Systrom, who founded it, but I just hate it, because it’s so not true. It’s true, but not true.

It’s interesting, because it’s only visual. Yeah.

Everybody’s really happy, and I know a lot of happy people, but not that many happy people, who will have moments of happiness and moments of sadness, and so one day I put all really negative pictures on Instagram and it really freaked people out. “Here’s a bag of urine I found on the street of San Francisco,” which is very common, and I just kept taking pictures of bags of urine and bottles of urine.

I have to tell you, Instagram is a platform.

I’m gonna send that to frame it for you.

Well, it wouldn’t be the weirdest thing.

Oh, c’mon.

No it wouldn’t.

If I sent you a bag of urine? Please frame it.

Oh I thought it was a photo of a bag of urine, in which case it wouldn’t be the weirdest thing.

No.

Maybe the bag of urine, yes.

Okay, all right, I’m not gonna do that to you, but in any case.

But I’m gonna look at the terms of service.

All right.

Instagram is a platform for us though, as an advertising platform, very good, not only obviously when all the right people are there, but …

People take those pictures.

Yes, and also it polices itself in terms of visual beauty wins, like good content actually wins.

Yes it does. That’s true. Fair point. So that’s good for you.

So that’s good for us.

Yeah, I just think it’s killing the human race, that’s all. It’s so funny, I have such a weird relationship with it, but it is owned by Facebook, by the way.

Well actually, our creative director is very worried. She thinks, “Oh my gosh, everyone’s home will look the same.” My gosh, just like everyone’s wearing the same outfit or styling their hair the same way. How quickly, but then we can move on, but still, there’s something unoriginal.

Yeah, it has all kinds of implications all over the place. In any case, but do people use Instagram and then print them out from there?

You can connect from your feed, yep.

Yeah, but do people do a lot of that?

Yeah, they do.

But it’s from their phone. So phones are everything to you, correct?

Phones are everything to us, and the cameras keep getting better and better, which means you can blow up the pictures bigger.

All right, so I have a couple more questions. As a startup, I really am interested in this idea of being a startup right now. Now you’re on the East Coast, which I think is very different in this idea, of Silicon Valley finding talent outside of Silicon Valley, and Steve is obviously a huge proponent of it.

Yes.

And you just gave a comment about the Amazon headquarters.

Yep.

Essentially, he’s being polite saying, “Why the hell didn’t you put it in Kentucky?” Talk about operating there, and operating here on the East Coast.

Yeah. There are goods and bads, and I really do admire Steve’s rise of the rest, but there are challenges, and I think as you scale you get into those challenges.

Such as?

We have, believe it or not, well you know this, D.C. is a very small pond.

Yes it is.

We can hire people we wanna hire. If we seek out someone we can get them. We’re the exciting thing happening, but there are some marketing, some engineering, some product design jobs where everyone’s in New York.

Right, which you need for your thing. For design.

Or obviously, for us. New York and LA …

So what does that mean from your perspective?

Yeah, well, D.C. is a funny market. It’s not like the middle of the country, because people do have to come here for certain jobs, and so we always pick up talent. Someone attached to a partner who’s at the World Bank or something like that.

Right, yeah.

People cycle in and out, and people have reasons for being here, and it’s a nice place to live so it’s fine, but yeah, I remember actually pitching someone out west and they said, “Yay, Susan’s back from Chicago,” and I was like, “Oh, Chicago,” Washington, it’s just off the grid for that sort of thing. I think we, for our production, we chose Kentucky for a lot of reasons.

Explain that.

The truthful answer is we found a terrific leader there who had stood up the Zappos facility there.

Ah. Tony Hsieh.

Yeah, and so that’s really why we’re there. It’s also fast shipping to most of the country, and a lot of people available.

Who can do this job.

Yep.

That you can train to do this job.

Yep.

Which is to frame things.

Yep.

Wow. Why don’t you take a bow in terms of locating there. You couldn’t have located it elsewhere, right, in this country? You had to pick.

No. You had to pick a place.

Where it’s inexpensive.

Where it’s inexpensive. I believe the rent per square foot of our facility there is a tenth of what it is in D.C.

Right. So you couldn’t make it here.

No.

You couldn’t do that here, and you didn’t think of outsourcing it elsewhere in India?

No. Turnaround time, people send us their stuff, you’re sending me your Kevin Durant signed jersey …

So if you operated in India, you might have one there?

Right.

Right, so it has to be closer.

Yeah, but we’ve done sufficient innovation, and we’re doing even more robotics, certainly all powered by our software, so we will be able to open new facilities that are smarter facilities.

Talk about the robotics.

Yeah, so a couple of things, we use robotics to track your art through the building, which is great. So we know where everything is, because obviously keeping them safe is our job.

Can’t lose that umbilical cord.

Right.

You really can’t get that back.

It’s hard to replace.

That is like a plot of a Lucy show. “Where’s the umbilical cord?” Can’t you see that?

That is hard.

That would be an entire plot of “Modern Family.” Go ahead.

Yes. Well, in early days … By the way, speaking of Lucy, I thought a lot about the chocolate on the conveyor belt, that’s what Framebridge felt like in the early days.

Yeah, that’s the See’s Factory in San Francisco, did you know that? That’s where they did it.

Oh really? That’s awesome.

I learned this from Sue Decker, and I think Warren Buffett. It was on — Anyway, go ahead.

Also, some simple tasks in the framing process, we have been able to automate. I think what’s important there is, I certainly am inspired by the businesses that are able to figure out what need to be humans and what can be done robotically, and certainly there are aspects of the design process judgment that requires well-trained human people.

People.

And crafts people.

Not for long, Susan.

Well, we’ll see.

I’m kidding. It’s a really hard thing, actually, not to have human intervention. It has a scalability problem. At this point, although I’ve just been visiting some Amazon warehouses, and also you could see that they could automate quite a bit more of it, so you can see them do it slowly, but there were certain places people needed to be. There were lots of people in the warehouse.

Yep.

So last thing I wanna talk about, being in Washington and having Amazon come here, what do you think of that?

Yeah.

Are they gonna steal all of your employees?

Right. I keep saying it’s great.

Uh-oh.

Yeah.

There’s only four employees, and they’re gonna take them all from me, and they will.

I mean, yeah, there’s a little bit of that. No, I do think the more vibrant this community is in Washington is good, it’s fine. I think it’ll be fine.

I love how you’re pretending. “This ain’t good for me. They’re coming in with their fancy pants Amazonian kinda thing.”

Yeah, but …

Yeah, but talk about that, because Washington was with Steve and others.

Yeah.

It was a hub, then it wasn’t.

I am the beneficiary. Framebridge only exists because Steve started AOL here, absolutely.

Right, but then it flamed out. I remember going to pick the headquarters out, at the time his manager, Jean Case, she was doing all the comms for them and stuff like that, and we went and looked at the headquarters.

I mean it popularized the internet.

Yes.

We all use this thing. You know what I mean? I do think there is, maybe you have to feel this way when you’re in the middle of a journey, but it existed for a reason, and I remember actually talking to Tim about LivingSocial. I only exist because of LivingSocial. A lot of people got married and had babies because they met there. A lot of people learned valuable skills. There is something about —

It’s gonna be a flywheel now that Amazon’s here, but how do you create that?

By supporting other people.

It’s not Silicon Valley. It tends to burn out I’ve noticed in most of these cities.

Yeah.

Austin had a big thing, and then it didn’t.

That’s interesting.

LA had a big thing, and then it didn’t. Well, Seattle does.

Well I guess funding, right? People had to have made enough money that they can support other entrepreneurs.

Right.

That’s the only way it can keep going.

Exactly.

I have make enough money that I can support other entrepreneurs.

Is that the plan, to go public?

Yeah, sure. The plan is to build a fundamentally good business that provides value to people.

Could someone buy you?

Yeah. Potentially. Some retail, anyone who wants to own photo, which is everybody, but yeah we think there’s a big enough opportunity here. It’s a real enough business, and we’re certainly ambitious enough about it.

All right. The last thing I always ask entrepreneurs, what mistakes did you make that you were like “Ugh, that was a stupid thing.” What did you learn?

Oh my gosh, we made so many.

You, yourself. What was yorur biggest mistake?

Truly, if I thought about them too much, I wouldn’t be able to get up the next day. Yeah, I had a real backlog situation when we first started manufacturing, and so the mistake was thinking that the original team could all be people from my network, or people I understood or knew, and it was like the business has a large manufacturing component. We needed to hire people who knew what they were doing. There may have been a little bit of hubris in the beginning on that.

But you could deal with that so far?

Yeah.

And what’s the best thing you did?

Started the company. No, but truly, despite everyone saying, “I don’t get it.” I believed in it enough to will it into fruition.

Right. A lot of people said that to you?

Oh everybody.

When I started podcasts, I was like, “I don’t care what you think.”

So the generous interpretation is that people are trying to prevent you from failing, which I do think that’s something people do to females more often.

Yes.

I do think there’s a, “I’m gonna protect you from the eventual embarrassment.”

Yeah, you’re right. That’s true. I just think people just yammer on. They’re risk free.

That’s true. I always say I didn’t have chicken pox as a kid, and everyone would tell me how serious that was, and then they invented a vaccine.

Well, you’re lucky on that one.

But you believe in the future.

I suppose. Anyway, Susan, it was great talking to you. Thanks for coming on the show.

On that note.

On that note, thank you for listening, everybody.

Recode – All Go to Source
Author:

Eric Johnson

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