Creating physical products and getting feedback from toddlers — KiwiCo’s Sandra Oh Lin

 Whenever it's relevant, we always adopt best practices. So we don't believe that there is a need to reinvent something, particularly if it's not going to be a competitive advantage, we can ask for best practices around multi-touch attribution or 401k providers, or hire a PR agency. And you could certainly spend a lot of cycles on these things, but really.

There's no reason to do that. And so we try to save those cycles for things that are going to be at a competitive advantage for us.

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For today's episode of in-depth. I'm really excited to be joined by Sandra Oh Lin. Sandra is the founder and CEO of KiwiCo, which creates hands-on learning kits for children. Sandra started KiwiCo over 10 years ago, after a career with executive positions at PayPal and eBay, she was looking for a way to give her own kids more hands-on projects to exercise their creativity.

Which led her down the path to become an entrepreneur and create KiwiCo. Today KiwiCo has expanded to include eight different lines of crates that are shipped out monthly. In the first half of today's conversation, we explore some of the thornier challenges that come with creating a physical product and Sandra's biggest aha moments as a first time.

She talks about creating the first KiwiCo crate, including the product development process and spinning up a supply chain and shipping department. Sandra also walks us through how KiwiCo approaches new product lines, particularly in the last year when KiwiCo's demands skyrocketed. She also discusses how the team gathers quality customer feedback.

When your customer is a toddler. In the second half of our conversations, she talks about some of the cultural practices at Kiwi co that all sorts of companies can learn from Sandra is a big believer in manager training for everyone, from the folks that manage just one person, two executives that have been managing for decades.

She outlines the specific management training modules. They leverage it KiwiCo and makes the case for having everyone at the company, fill out a motivation spread. Finally, she discusses the specific tactics she leans on for creating a feedback, rich environment for herself as a CEO. I really hope you enjoyed this episode.

And now my conversation with Sandra, Sandra, thank you so much for doing this with us. I am super excited to get to talk to you. 

Brett Berson: I thought a fun place to start given the uniqueness of KiwiCo is maybe to talk a little bit about how the product design process looks like at KiwiCo and maybe how you invented it or how you landed on this.

I think a lot of the times we tend to explore product design in the sense of creating pure software. But obviously you do a whole lot more. So curious to maybe use that as a jumping off point and learn about what you figured out there. 

 Sure. I think ultimately there are some things that are quite similar, but also some differences when you look at software relative to a physical product.

And so from a similarities perspective, certainly for both, you're trying to define the product vision. You are defining the recs and writing up the spec. You have the team engineers to bring those features to life. And of course you're constantly making trade-offs whether it's scope or timelines quality, but ultimately for both, I think you're trying to build a great product and you're trying to keep that customer from.

As you're building out that product. And so we definitely have that at KiwiCo we have a software technology team. That's building out a robust commerce and content platform, but in addition to that, we have our physical product design team. And I think that's what you're asking. So on that team, the engineers are really mechanical engineers or industrial designers or even educators.

And what we've built at KiwiCo is a vertically integrated process and system to be able to bring these physical products to life for kids and for families. And some of the things that I think are different when you look at a physical product, certainly the process at KiwiCo relative to a soft.

Product launch is one. When you're looking at things like quality timelines and costs, we can't really afford to let any of those things slip. And typically when you think about launching a product, whether it's actually digital or physical, you might be able to tweak those. You might be able to push out a release date or a timeline.

Maybe you reduce scope. So it's not as quite as robust as you may have intended originally, or you might even raise prices. But given we're actually a subscription product that gets delivered to kids. We actually set a price upfront when somebody is actually purchasing this thing, the subscription people count on it coming every month.

So it's a fresh new experience. And so we have a very, very set timeline and then we've established the customer. Around that experience. And it has to be delightful for kids and valuable for parents. And so we can't afford to let any of those things slide. And one thing that we do is that we have to make sure that this actually happens every single month, across several different product lines.

And that's something that we have managed to actually figure out and do. In addition to that, a couple of more things maybe that are a little bit different are with a physical product. Do you have to invest upfront to get things right? You can't iterate nearly as quick. As you can with software. If you look at our lead times, sometimes they're six months, sometimes they're nine months or more.

And so it can take awhile to see something, get to market and to see if it's actually working. And then the other thing I would say is data. And so if you think about software, what's fantastic is that you have such quick iterations and cycles where you're collecting feedback. The analytics is right there, kind of at your fingertips.

And when you're dealing with the fiscal. You just have to look at collecting that in much different ways. And again, the cycles can be longer too. 

 You talked a little bit about the, how you do it. And some of the things that you figured out in balancing the quality, timeline and cost, and the fact that you have to nail each one of those every month and you've been scaling rapidly for many years.

And so what are the systems and processes are, if you were to look at the overall process and the way in which it all happens, what does that look like. 

: Yeah, absolutely. So I'd mentioned that we have our engineers, so that is really our product design team. So they are at the core of ideating prototyping, putting products in front of kids.

So. Every week pre pandemic, we would have probably six to eight live sessions where the noise level would go up a notch in our offices. So making sure that these prototypes were spot on in terms of being fun and being enriching and being engaged. So all of those things are really key and core to the quality piece.

And as they're developing these products, they're also taking, look at the materials that are required, the build. And so they're working in tandem and in a very strong partnership with our sourcing and supply chain team. So as the products are becoming more of a reality, they're constantly assessing and seeing if this is something that actually works in terms of the economics of the unit, that's going to be going out the door.

And at the same time too, we are using a lot of different kinds of processes to ensure that things are up to snuff. So for example, one of the things that we do is we have a number of different checklists, and this is something that we've built over time. Something we didn't realize that we needed upfront.

But if you think about what people use in operating rooms or in. Cockpits, there are these complicated processes, but they're replicated time after time. And that's basically what we ended up doing as we're building out these products. And so we have several of these different checklists that we use throughout the process to make sure that the products are going out and we're paying attention to that equation of quality cost as well as timelines to ensure everything is going out the door and that we are delivering something that is ultimately really delightful for families.

 what's an example of one of the checklists or the contents of a given check list. 

 The different types of checklists include, for example, instructional checklists ensuring that certain types of materials are included or are not included in a given product, especially given the fact that we have safety measures and constraints that we have to operate under because we are delivering a children's product.

So there are certain types of materials that can and cannot be included. There's also different checklists when you're dealing with suppliers that we're constantly looking at too. So this is especially related to costs. So taking a look at not only the material composition, but the actual crate build-out that gets put into how things are actually inputted into a given space and then delivered to our fulfillment center.

: What have you found as you've been building this process for a number of years, what have been the trickiest parts to getting it right? And maybe some of the other problems or things you've had to figure out to get this end-to-end process to where it is today. 

 It's interesting. So my background has actually been in consumer products and e-commerce so I spent years at Proctor and gamble.

Most recently I was at PayPal and at eBay on the consumer products side, I was working in R &D. And so I hadn't really touched the physical product. And so when it came to the fulfillment supply chain, the operations, that was definitely an area where I was not well versed. At all. And one of the things that I think is really important as you're building a business is just being very, self-aware what you know, and what you don't know, but remaining very, very curious about those areas.

And so what I ended up doing is I ended up kind of surrounding myself with certain experts and not really being afraid to ask. For help and trying to learn those areas. So for example, on the operations side, one of the first people who I ended up getting connected to was Mike Smith, who was the COO of Walmart.

Most recently he was the COO at stitch fix, and he was so helpful in guiding us in the beginning. He interviewed all of my VP of operations candidates when we were getting started on the digital product side. I had been a product manager before, but I really wanted to make sure that our technology was robust.

So I asked someone who I knew who was an engineer and a co-founder at PayPal to be an advisor, and I convinced him to help. And then ultimately he ended up joining us at KiwiCo. And so I think that was really key in helping me figure out things that I didn't know. Upfront. And the other thing that I would say is that there are some areas where we actually very intentionally were very hands-on and mainly it was because we wanted to learn and we wanted to learn very, very quickly.

So an example of this was that we intentionally got spaces, office spaces that we could use as joint office, as well as a warehouse. So. Literally hands-on when it comes to packing out the deliveries to families. And I think what that did is it really helped us learn very quickly. We were able to identify what good quality was and how to respond to differences in quality.

We were able to get much higher back into the supply chain address issues at the core, and we knew that how to avoid these issues when we can no longer have our hands in everything as we got. Too. So I think this was all something that was really helpful for us, just knowing where and when to actually invest in diving a bit deeper for that understanding so that we were able to manage it effectively, as we continue to grow, 

 How do you think about inventing something new versus adopting best practice or talking to somebody who knows a thing and then basically copy and pasting it into what you're doing at KiwiCo? 

 I think we think about it as. Wherever and whenever we can, and whenever it's relevant, we always adopt best practices. We don't believe that there is a need to reinvent something, particularly if it's not going to be a competitive advantage.

And so a number of us who started KiwiCo came from. And eBay, and there were best practices that we were able to adopt around performance management or around some parts of our people ops. We also have found a lot of great resources. I mean, even if you consider first round has been fantastic, we can ask for best practices around multi-touch attribution or 401k providers, or hire a PR agency.

And you could certainly spend a lot of cycles on these things, but really. There's no reason to do that. And so we try to say those cycles for things that are going to be at a competitive advantage for us. And so, as I mentioned, the product design process, there was no playbook. Out there for that to be able to create something that was both a combination of super fun for kids, but a value for parents.

So we couldn't look to anything else. So we had to design that ourselves. We had to define what makes a great crate. We had to get a ton of feedback there, trial and error. So ultimately I would say definitely steal or borrow as much as you can elsewhere and save their reinventing for where it gives you the biggest advantage.

 Going back to some of the early days. And you were talking about how, the way in which you worked with Mike Smith to grow your knowledge base, are there specific ways that you approach these learning journeys or figuring out these new things? That you found increase the rate of learning or helped you rapidly close these different gaps in terms of maybe going from an executive that was operating in the pure software world to one that's now operating in both physical products and software.

: I would probably turn to the fact that I. Talk to the customer a lot. And I think that provided a great deal of insight and feedback that helped us define where we wanted to be from a product standpoint at the beginning. And then certainly has helped defined the business ongoing. So in the beginning, I had sent several surveys for more qualitative feedback via survey monkey, and try to get feedback from across the us.

I had focus groups with moms in my family room. These days, as I mentioned, we do a ton of in-house. Testing. And that goes from putting concepts, coming up with product concepts, with our kid product counsel, through to doing instructional testing and all that helps shape the product experience. The other thing is.

Gathering data by asking through survey. So we actually have a crate score. So we have a score for every experience that we've sent out the door from customers. And we use that and we have been able to actually define. What the loyalty and retention looks like for each crate. And then of course we know the gross profitability of a crate.

And then what we're able to do is actually send crates to customers at a given point in their life cycle. So I'd say this willingness to do research, to reach out to customers. Leveraging data and building out a data analytics platform that for us, has been able to extend retention, boost satisfaction, and just leverage these feedback loops in ways that have been really valuable to the business has been a great way to kind of get up the learning curve very quickly and also help shape the business.

: What are the types of things that you ask in surveys that have been really useful? I don't know if there were early surveys that you remember back to, or maybe how have you designed a survey today that has been useful for you? 

: Early on. When I refer to the focus groups and survey monkey, it was really about trying to understand if there was ultimately a need and a pain point for our parents in particular, because what wouldn't work so well is a solution that worked for an equals one, which was me because when we were getting started, Basically I had this personal need where I really wanted my kids to get hands-on.

I wanted them to see themselves as creators and makers. I thought that these hands-on projects could help them exercise their creativity and hopefully help them build their creative confidence. And so there's this question of, is this something that would be relevant to a bigger audience? And so the questions really centered around trying to answer that.

And then also putting out there, like here is a possible solution. So first of all, asking the questions around the need and then putting a solution out there. So there's different ways to frame a concept statement, but basically I would describe. The product that we were building the different features and then why the reasons to believe that we were going to fulfill this need that I thought that they might have.

And so that's basically what I'm put in front of parents, and we've been very fortunate to see that parents are looking for fun and enriching products and experiences for their kids. They're busy and well intentions of it comes from a trusted brand and it comes to them in that convenient format.

That's something that they're really. To buy into in our crate surveys these days. It's basically, how has your experience with this crate? A lot of one to five scoring, we actually have a crate NPS that we measure for each and every crate as well. And then we asked specifics around the different elements of the crate.

So for example, we have editorial and content that goes in the crate. We want to know how valuable that. For the consumer, et cetera. So always trying to make sure that we're gathering that learning and those insights so that we can continue to build something that's even better for them. 

 In sort of this process of really understanding the customer. Do you think of the parent and the child as two separate customers, or are they the same in your eyes. 

We think of the kids being front and center. And then we refer to the parents as the grownup assistance, but we do think of them separately, because if you think about the needs of each, they are. Different the way that we approach the solutions is similar though.

So when we think about our brand pillars, right? So things being deeply engaging or genuinely accessible or seriously fun, we want these attributes to actually apply to whatever we put out into the world, whether it's for parents or whether it's for kids, for parents, though, they are looking for things that are.

Like I'd mentioned just convenient that something that will engage their children, they want their kids to learn. They want things that are educational. And ultimately if you take a step back, I think where parents are today is that they really want T their children up so they can be productive. They can actually envision a better world and make that happen.

And so. That's really what parents want. And so we have to keep that in mind, as we are developing our products and as we're developing our positioning and our messaging, I think for kids, it's really about having fun. They want something that is. Really engaging. They love those moments of discovery. Those aha moments are something that definitely the kids and parents appreciate.

They take a lot of pride in their creations. And so what they want is a little bit different. It definitely intersects. So I wouldn't say that these things are completely disparate sets of needs, but they are different. And it's pretty important for us to. Both in mind. And in fact, I'd say that that is one thing that makes what we do pretty special is that we have to be able to cater to both because ultimately if the kids don't have fun and they don't engage, then we are not going to have a satisfied customer.

That's going to stay on for a long period of time with us. And then on the parent's side, they need to see that this is something of tangible value. For their child and for their family too. And so we're constantly trying to make sure that we're providing that value as well. 

 When you zoom all the way out again, there's been lots of different companies that are sort of stylistically similar to what you've created, but you've obviously operated or grown the business in a unique way.

Because I think most of those companies haven't worked out and you've built an enormous customer base and an exceptionally large business. What did you get, right? Or what did you figure out in building this business that maybe other people got wrong or didn't quite understand? 

 The way that we built the business is a lot of what we just talked about.

So being incredibly customer centric, being very responsive to feedback and to data, I think we built it in a way that was very disciplined. So we certainly have not chased growth at all costs, but while being with. To invest and test in the business. And we have been pretty good at executing across a lot of different areas.

And so I think when you look at this business, Everything needs to work well. So we talked a lot about the product design side and developing an experience for kids and families. But then we talked a little bit about the idea of having robust commerce and content platform on the technology side, the market.

Has to work as well. So if you think about the acquisition costs, if you think about retaining customers, we have to be really good at performance marketing in particular. So that's another area mentioned a little bit of the fulfillment. So we run our own fulfillment and our own warehouses to ensure the crates kit to our customers and the supply chain piece of the puzzle.

As well, there's just a lot of elements of this business. I think that have to operate in tandem. There's so much overlap. There's so much that needs to actually work together well, and that's something that we've really tried to focus on is around that execution. I'm curious 

 if you could unpack that in any way or diagnose it in the sense of, you said it very well.

You've developed the knack for basically being very good at executing across these different parts of the business. Is there something that you've done or a way that you hired or a way that you organized the business that has enabled you to do that? 

 I think that there are a few things maybe that have helped us.

So I think one is we have been. Disciplined around our goal setting and ensuring that there's alignment around priorities and focus areas for the business. And so I think what that does, then it enables people to understand how they fit within the bigger context of where we're headed. And it sets a little bit of a map for folks.

And so I think as you think about execution and thinking about how each individual and how each functional. Ends up laddering up to that bigger goal. I think that's something that is really, really important. I think the other part of it is, I think you kind of had alluded to this as is making sure that you have the right people and the right team in place.

And I think we have been fortunate and being able to hire some real experts and folks who are able to make things happen. So they may have some level of experience in area, but then they are also able to take. KiwiCo understand the unique business that we have and be able to make that better. I think the team is absolutely critical in this as well.

 Maybe we could talk a little bit more about that in terms of the team that you've put together. And is there something that you look for across all of the folks that you hire or potentially there's a type of person that you really love to have? 

We definitely look for folks who we think have potential around our value.

In particular. So some of our values center, for example, around taking initiative and being able to handle ambiguous situations, another one of our values, we describe it as caring about the house. So how, as well as the, what so the what being, being results driven. But in addition to that, really caring about collaboration and teamwork and how.

We can actually get the work done. We also look for folks who see the glass as half full. Not that we want to sweep things under the rug, but ultimately it's, it's better to work with positive people who see the possibilities and see things as an adventure versus an ordeal. And so I would say in general, if you were to take a step back.

These are all qualities and characteristics that we're looking for. So someone who tends to say yes, more than no, someone who tends to be more optimistic, someone who takes ownership over what they do, we do really appreciate. As well. So people who are able to do multiple things and also people who have great operating range.

And what I mean by that is people who are able to bubble up and think very strategically, but also can dive way down and really care about the details as well. 

For a couple of those. Can you talk a little bit about maybe taking initiative, sweating the details, et cetera, how you look for that in your interview?

 We actually have each of our KiwiCo values listed. We have questions that can be asked that align with each of the values. And then as we're actually looking at the hiring, we map up the hiring process and we often assign different people who are interviewing different values that we'd like for them to actually dive into.

And then they have a repository of potential questions. That they can ask to give you an example of maybe a question and a value. So one of our values is around remaining curious and humble. And so we. Really appreciate when people are wanting to grow, they believe there's room to grow. They're trying to learn, they're trying to improve.

And they're self-aware because ultimately if you're not, self-aware, it's difficult to grow. And I think it's also very difficult to coach that person. And so one of the questions that we might ask then is tell us about something that you're always going to have to work. So maybe it's like a flip side of a strength or something that is inherent to your personality.

What is that? And that gives us an indication of how self-aware they are. And it gives us an indication of how well they might align with or how much potential they have around that particular value. 

Are there any other examples of questions or ways that you get at some of these different values? Maybe you think back to a couple of interviews you've done.

 I like to see inflection points and a person's journey. I love trying to understand their motivations because I think ultimately that helps us understand where they might be coming from and at the core of who they are and how it is that they end up being engaged in a particular job. And so a lot of my questions end up getting to the core of that.

So telling me about why. At a particular point in time, they made certain decisions. What was the reason for that decision and really what I'm trying to get at again, is that idea of what is it that motivates you and why is it then that you made these changes? Or why is it that you pursued certain opportunities?

And a lot of times that ends up happening when somebody has actually switched jobs. So I think those are always very, very interesting. And then when it comes to the piece around. Ownership. I think that's where it's always great to get into tangible examples of asking if they can actually illustrate times when they demonstrated it, that kind of ownership or have taken initiative over a particular area or made something happen because they saw a problem or they saw an opportunity.

 Switching gears just a little bit, as you were talking about people at KiwiCo, I know one of the things that you've worked on over the years is developing new managers inside of KiwiCo and designing your own system and training around that. And I was interested. Can you talk a little bit about what you've done there and what that looks like today?

 Absolutely. We've actually created our own manager training. It's seven different sessions or modules. And we run this managers training these days probably quarterly. And we do this because we consider our managers to be so critical and so important to an employee's experience. And also to ensuring that the.

Continues to grow and that were oriented around the types of results that we'd like to see. And so we use it as a real opportunity to teach and train, but also to just level set around expectations of a manager. So we have everybody who is a manager at KiwiCo. Go through manager training. So it could be someone who was internal to KiwiCo and they've been given the opportunity to manage.

It could be someone external to KiwiCo who just came into KiwiCo they may have been a manager several times over, but they need to go through manager training at Chirico. So first-time managers sees managers. C level folks, they all go through manager training. And so there's a ton of information sharing.

Each of the modules has pre-reading number of the prereading things that came from first round review, the sessions, encourage discussion and debate. There are different ways of doing things. There are different ways to manage, but we want to explain here's how we do them at QE co. And this is. We do these things.

Sandra Oh Lin is the founder and CEO of KiwiCo, which creates hands-on learning kits for children. We discuss how Sandra tackled the early obstacles in creating a physical product — from the design process, production, and consumer testing when your customers are kids.