The Grommet is an online marketplace where, says CEO Jules Pieri, three million people regularly go to shop a curation of new products. The site has launched Fitbit, SodaStream, Bananagrams, Swell water bottles, and more. In this episode of Mastering Innovation on SiriusXM Channel 132, Business Radio Powered by the Wharton School, Pieri describes how her team chooses those products.
Over a decade, the company has honed a process for finding innovative products that will connect with consumers. As a result, Pieri says, The Grommet’s return rate is only 3 percent. A high-touch evaluation means they reject dozens of product ideas while looking at about 300 each week. It also means Pieri, who wrote new book How We Make Stuff Now, has plenty of advice for entrepreneurs on prototyping, branding, and selling.
An excerpt of the interview is transcribed below. Listen to more episodes here.
Transcript
Saikat Chaudhuri: You mentioned something interesting, which is about pricing and getting that right. Nowadays, we know that, especially in online e-commerce-type marketplaces, there’s a lot of data and people talk about all these kinds of sophisticated means for using data analytics in order to determine prices. Is that your philosophy as well or is it more, “Let’s experiment, let’s try and see what the market bears and then quickly adjust?”
Jules Pieri: I would say it’s more the latter than the former. You know, we are generally launching products that don’t have a direct comp. So it’s not so much that you have pressure from the market or superimportant data that you can obtain. But we can project what the value of that product will be to a consumer because we have dealt with enough products in and around the product, or we have a good sense of what it should cost to produce and whether the company is priced appropriately around that. But you’re mainly worried about what the ultimate customer will see as the value of the product, and that should be the price.
Chaudhuri: That makes a lot of sense. And I agree with you, that sometimes we get caught up in the analyses as well. You have to have a baseline and a frame of reference that you’re talking about. When someone sends you a submission, what are the ideal proposals or proposed products? Are there certain attributes that they have? Are there others that might be disappointing to you?
Pieri: I’ll start with disappointed. I would say something incredibly niche, like maybe a single-use gadget for something, that to some extent, because our community, some of it at least, cares about sustainability, a single-use gadget, a very narrow use would be not as interesting. Here’s a kind of silly one, but we saw a perfume that purported to make women smell younger. And it just was … whether it worked or not, I suppose that we were judgmental about it, I guess. I can’t like rationally tell you.
Chaudhuri: I’m trying to think about what it means to smell younger.
Pieri: I know. It’s hard to imagine. We couldn’t wrap our minds around this one. But let me maybe talk about products that people would already know so they understand how we think about it.
Chaudhuri: Yeah, absolutely.
Pieri: When SodaStream was presented to us in 2009, in that case, it was kind of a revival, frankly. The company that had gone dormant out of Israel. So it wasn’t in the market and it was great timing because it was easy to understand that there would be great reception for a product that would make it either more convenient, or more economical, or more eco-friendly to have soda water or soda at home. That wasn’t hard to understand. And so, as long as the product functioned, it was priced fairly, we could see, “This is a good idea. This makes sense.”
“Here’s a kind of silly one, but we saw a perfume that purported to make women smell younger.” – Jules Pieri
One that was harder to assess would be Fitbit because at the time, none of us had wearables in our life. We did not understand the concept of Internet of Things. We knew we’d have to explain that to our community. We’d never had data on our wrists. We didn’t have the experience of sharing data with a community, personal data, or a manufacturer. And to compound this difficult analysis, the idea seemed like a great idea. We did understand the idea of quantifying your fitness efforts, and pedometers were not a novel idea. So this was a much more advanced idea over a pedometer.
But to compound our analysis, when a company like that first approaches us, sometimes they’re not quite ready for primetime. And Fitbit wasn’t. It didn’t work well. And it was a difficult assessment. Is it us or is it the device? And we had to sit on it for about six to nine months until they’d worked out the kinks and we were confident that both sides were working. Not only our use of the product, but their ability to deliver. So that was a harder one. It wasn’t so much that we were worried about the size of the market, but we were worried about what the product actually delivered.
Chaudhuri: What has been your key insight on the process, or a set of key insights, on the process of commercialization, how you take an idea and turn it into a business? You’ve written a whole book around those themes, but I find your background really interesting because you’ve got both the startup experience as well as the large company experience. What are the things that stand out to you as the must-haves in order to take an idea to the market successfully?
Pieri: I would say the one we touched on already a little bit was making sure there is a large target market so that you have — it’s going to be as much effort to create a small business as a large one or a larger one. And most of our companies do have the ambition to be self-sustaining, not a side hustle. So start there. I would say second, this is classic entrepreneurship, but the founders who have the tenacity and the hustle to get to build a great network of advisers and experts and people who know more than they know around them are going to get further faster. They aren’t as worried about sharing their idea, that’s kind of an amateur mistake, to assume somebody’s going to run off with your idea.
“It’s really important to stay in a kind of low fidelity, not slick, level of prototyping as long as possible. – Jules Pieri
In fact, I saw a quote recently that was directly hitting that: “Don’t worry about somebody stealing your idea. If it’s really all that brilliant, you’re going to have to beat them over the head with it.” An original idea tends to be ahead of people’s understanding of it anyway. I would say getting into — I’m a designer, as you highlighted — and getting into the most fundamental part of design thinking would be the prototyping, the iterative prototyping that a product creator should do.
It’s really important to stay in a kind of low fidelity, not slick, level of prototyping as long as possible for two reasons. You can iterate and pursue getting feedback on more ideas if you’re building them out of cardboard, or clay, or paper, cardboard, or very basic, clickable apps, or demonstrations of what you’re doing. And the minute you get into a very refined prototype, whether it’s 3D printed or a CAD drawing, your ideas stop flowing because you’re really just concentrating on executing that one idea beautifully. It’s a pro tip to stay very low fidelity as long as possible because prototypes are like truth serum, and you should never fall in love with your idea until you see that strangers do. So good entrepreneurs don’t rush down one solution or one path too quickly.
About Our Guest
Jules Pieri is co-founder & CEO of the The Grommet, a site that has launched more than 3,000 consumer products since 2008. Pieri started her career as an industrial designer for technology companies and was a senior executive at Keds, Stride Rite, and Playskool. The Grommet is her third startup, following roles as VP at Design Continuum and President of Ziggs.
Pieri completed her undergraduate degree summa cum laude at the University of Michigan. She is she is an entrepreneur in residence emeritus at Harvard Business School. She was named one of Fortune’s Most Powerful Women Entrepreneurs in 2013 and one of Goldman Sachs’ 100 Most Interesting Entrepreneurs in 2014. In 2017, Ace Hardware acquired a majority stake in The Grommet. You can find more @julespieri.
Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.