Reshaping Consumer Habits with Helena Hambrecht of Haus (Part 1)

Kristen:

Helena Price Hambrecht. Did I do it?

Helena:

You did it.

Kristen:

Yes. I am just going to go ahead and explicit this episode right away because I can't fucking believe that you are here. Listeners, I'm going to try really hard not to fan-girl out too much in this episode, but give me a break. This is Helena Price Hambrecht, I can't believe that I got you on Playing For Keeps. Thank you so much for being on the show. I am beyond honored that you're here today. How are you doing on this fine Wednesday morning?

Helena:

Wow. That's so nice to hear because I am honored that you want to talk to me.

Kristen:

Oh, man.

Helena:

So this works out.

Kristen:

This works out. We have so much to talk about. Listeners, we already, before we hit record, I'd already said, "You know, we might have to do two episodes," so we'll see where we go with this. I was just listening to an interview you did with the Lumi team last night, and you have this crazy extensive background in tech, visual storytelling, PR, communications, all these different things. And when I was listening to it, and now I can't even think of the host name, but you guys were going back and trying to figure out dates of when it all started. And it was really ironic for me because you were talking about 2012 and you had this big moment in 2012, and then again, another big shift in 2016.

Kristen:

And it's crazy because those are two years for me that were, 2012 I graduated from high school, 2016 I graduated from college. So I'm listening to all this and I was like, "Wow, this is so crazy that I'm so new in this space and you have all this background." But on that note, you have such an intense background, but I actually think we're going to do things a little bit differently today, and I'm going to just link to that podcast, so listeners, you can hear really Helena's backstory. Today, We're going to dive just straight into Haus because there is so much on the retention, customer experience side that we're going to talk about, and it's where our journey together and how we started to talk, it's where we started.

Kristen:

So I think we're just going to go with that, if you are excited to just jump into Haus. Can you start out by telling our listeners a little bit, the snack-sized version of the background story and really what the mission of Haus is?

Helena:

Yeah. Haus is quite literally the baby of me and my husband, the nonhuman baby, and we know that it took a techie marrying a wine and spirits guy for this company to exist. The long story short of it, which we can obviously go into more, is that it didn't seem like there was any brand out there today in the alcohol space, particularly the liquor space that was made for our generation and how he drink, and everything was owned by a corporation. And that didn't sit right, but it hasn't happened before that anyone's ever successfully built a brand to compete with the corporations. But we figured out how to do it and we're here.

Kristen:

And this is what's so interesting to me and so timely about this interview because I'm going through this crossroads in my life. I'm 25, hangovers now last two days. I forget things a lot easier than I did when I was 21, like the college Kristen, she's just not at it anymore. So I'm getting to the point of really questioning my own relationship with alcohol. And like you said, it seems to be a common trend with millennials, and then even more aggressive going into Gen Z. So I'm curious where you got this idea that this trend was happening and where you started to research it and really found like, "Oh, okay, this is a movement that we can actually provide something that's missing."

Helena:

Yeah. I mean, my journey with alcohol is, it's kind of interesting. I am not... Woody is the booze guy, he's the generation wine and spirits, I'm the techie brand person, but my first experience with adult drinking culture was when I was 18 and needed to survive financially and so I got a job in a bar. It was actually a fancy restaurant that at night turned into the club. And so I would sell martinis to wasted adults. It was actually a really pivotal moment for me because I grew up in the rural South and it's a pretty religious place and you're taught your whole life that adults are these very different, unique people than younger people and they're perfect and they don't have any problems, and you need to respect your adults because they're infallible.

Helena:

And I actually believed that there was some pivotal moment when you become an adult and all of your petty problems go away because that's what all the adults told me. And then I got a job in this bar and I was selling martinis to 20 somethings, 30 somethings, 40 somethings. And I was like, "Oh my God, there's no moment. All of these adults are the same as me; they all have the same problems as me, if not weirder and pettier and I'm doing fine." And it was this amazing masterclass in just observing adult culture drunk, and being like, "This is what I don't want to do."

Helena:

So really early, I mean, by the time I was 21 I didn't even have the desire to be wasted because I'd watched people be wasted for three years already, and so that's what informed my approach with alcohol my whole life. And despite that, I went through adulthood, I'm 32 now and really the next decade for me was having that perspective around alcohol but still having a hard time with alcohol because it was around me almost every night as a person building my career. So for me, my 20s was building my career. Again, we don't need to go into my past career because I would take it's on podcast, but every night I was out and I was surrounded by alcohol.

Helena:

And I wasn't out to get wasted, I was literally out at networking events and conferences and business dinners, and I was obsessed with meeting people for work. But work and life have always blended for me, so it was also social and it was also just being interested in meeting other people and getting to know them. And drinking was always there. And I've always loved the ritual of connecting with other people and doing it over a beverage, there's so many great things about it. And of course once I married a wine and spirits guy, alcohol became even a bigger part of my life and I had a deeper understanding for the positives of it, like the ritual and the people coming together and how so many good moments in your life can happen next to a drink.

Helena:

But then the downsides started becoming more and more apparent to me as I got older, like what you just said, the hangovers, I don't have time for a hangover, I really don't.

Kristen:

No, I do not.

Helena:

But they get worse. I mean, man, 25, it starts and it gets worse every year and then your joints start hurting and your sleep suffers. And then even just the basic idea of not having control, where if I, a lightweight drink at the same rate as someone else who can handle more than me, I'm accidentally super drunk at like a tech conference, and that's not the goal, my goal is never to be drunk. My goal is just to get a buzz and enjoy a drink and have a good time with the people around me. So it really got to a tipping point around 30 where I was like, "My God, is this supposed to be the rest of our lives? Are we all supposed to drink every night for the rest of our lives? Meet people, do business, enjoy this ritual and not die?" Something's got to give.

Kristen:

Yeah. At that point, it starts to look at like this is not sustainable. And that's really the point in my life that I'm at where I'm really looking at it and I'm like, I love drinking and it's a big part of me and my husband's relationship in the frame of, we love to cook and we love to have a glass of red wine while we cook. But then you have those things where you just, like you said, you get to a bar, you feel like you want to drink, but then you're two drinks in and all of a sudden you're like, "Okay, I'm already past the point where I would like to be for the rest of the night," but then you get stuck in that cycle of just you keep drinking and you keep drinking because everybody's drinking and it hits that point where you're just like, "This can't be it. This can't be the full ritual around something that is so valuable in your personal life that it ends up being bad for your health."

Kristen:

I connect to that so personally, that feeling of just like, "There's something missing here." So did you start to, I know then you went and did some customer trend research and noticed that you weren't the only one going through this. I'm curious what you found during that research, and if you have any anecdotes that really started to move the gears in your head and say, "Okay, this is actually something that we could fill a space for."

Helena:

Yeah. Well, I'll even take five steps back where I started learning about the ins and outs of alcohol through Woody, who I married. Woody's third generation wine and spirits, he's a grape farmer. He lives on a farm, which I now live on because I'm married to him, and he makes beautiful low intervention California wine, and he was actually already making aperitifs, but when I was getting to know his industry, which was really cool and fun to dig into because it wasn't tech and it wasn't like anything I was working on myself, I learned so much from him. I not only learned how this three-tier system works and how it doesn't allow any independent brands to become truly successful, you really have to be owned by a corporation, but I also learned about what goes into the juice.

Helena:

So Woody, he had his own winery at the time that I got together with him, but prior to that he was a partner in a bigger wine company that did lots of direct to retail brands. So they would make brands for Trader Joe's or Safeway or these bigger grocery stores and wine... Gosh, I could go on a tangent about wine, but prior to our generation, prior to this moment where wine's having a reckoning, wine in America was designed for taste and for scale and that's what our parents' generation cared about. "Does it taste great? And can I get it at Safeway anywhere in the country? And can I buy it for a reasonable price?" That's what people cared about. They didn't care about the ingredients or anything.

Helena:

So the industry optimized for those two things. And to do that, to make a wine taste the same at scale, you have to doctor it. Wine is a natural product that you don't have a ton of control over as it ferments, so in order to keep that consistent and keep the taste consistent, you have to doctor it. Whereas in Europe, you can see the list of interventions that are allowed in wine. In Europe, I think it's three. And in America it's like 50.

Kristen:

Oh God.

Helena:

I'm probably wrong about that exact number, but it's an approximation. So the reason you feel better when you're drinking a European wine is because it's not doctored into oblivion. So that's where Woody learned about the things that happen to large scale alcohol. So in wine for instance, the interventions that he would see like tubs of processed white sugar, fruit concentrate, artificial flavorings, sulphurs, fish bladders, eggs, milk, clay. It is very fascinating and terrifying exactly what goes into making an alcohol product that started out with something natural. It should be just grapes. I mean, that turned into something that is a bit more sinister.

Helena:

So that was my education on the industry and learning that pretty much every brand that's accessible in America is highly doctored, it's kind of like fast food. That's not just your Safeway wine, it's that fancy liquor that you like that's actually full of synthetic flavorings and caramel coloring, it's a bummer to tell people this. It makes for a conflicting situation of people not knowing that there was a better way, I didn't know there was a better way, and pulling the cover off of this industry that's really been hidden for so long. So that's the five steps back. And so after I saw all of that and then was having my own experience, and you know I've been researching consumer trends for a decade now because I don't know how to relax and that's my background. I studied PR and it's just in my blood.

Helena:

And so I already knew that all of these other industries had been shifting, every other industry had been disrupted by some millennial direct-to-consumer brand that was making products that our generation wanted. And building upon these foundational tiers that are important to our generation, like authenticity and transparency and convenience and quality and brand, ad they were eating the lunch of these legacy industries. And for me, it was so frustrating to see that hadn't happened for alcohol. So that was what made me want to start doing some research.

Helena:

And Haus wasn't even in either of our heads yet. It was more just like, “Woody is making aperitifs and he's an independent brand, and he's in all these cool bars and restaurants, but it seems like his brand is never going to get any real attention because of the three-tier system and the needing to be owned by corporation," and that is the leverage that you need to succeed as a brand. So anyway, I started doing research and very quickly found things that confirmed my hypothesis because my question was, what does our generation want from drinking? Do they want the same things as they do from other industries? Probably. Do they want the same thing as me? Do they have the same pain point as me? Probably.

Helena:

But I needed to confirm it. And very quickly found consumer research on the beverage side and the alcohol side and then found a ton of trend pieces around millennials and drinking even just Nielsen data around how millennials care about their health and their image, and they don't want to be that drunk person on the internet, they don't want to be Lindsay Lohan in Greece. They want to be that person that looks like they have their shit together and they care about what's in their food and their clothes and their beauty products. They care about that in every other industry.

Helena:

And then even more pieces around how low alcohol is on the rise and aperitifs as a category are such a grow in America faster than most other categories. And the Aperol Spritz was the fastest growing drink in America. It was all of these different puzzle pieces that to me was like, "Oh my God, this is not just a confirmation of my own experience, this is a tidal wave that's about to hit America around drinking and someone needs to be prepared for this. Someone needs to take advantage of this." The only bummer about the whole thing was our experience already with aperitifs. Woody had his gorgeous aperitif brand. He was making Vermouths and while he was in all of the best restaurants and cocktailists in America, he didn't really have any control over the brand.

Helena:

Bartenders would use the product however they wanted to, so he'd end up being a little sprinkle in a high boost cocktail. And Woody had no relationship with the drinker, the drinker had no idea who Woody was, even though he'd been drinking him in the best cocktails in America. So it really felt like the only way you can succeed is to get bought by a corporation and have them put bajillions of dollars into you and build the brand for you. But they don't want to do that because low ABV threatens their high ABV portfolio. So they've been really resistant to it, they don't want change.

Helena:

So I was basically complaining to Woody about this, I had all these puzzle pieces sitting in front of me and I was like, "God, what a shame that no one can make an alcohol portfolio for our generation and how they drink because of the three-tier system and how it's illegal to go direct and you have to go through the three-tier system. And the most we'll ever be able to do is what's happening with your aperitifs right now." And that was a funny moment where Woody was like, "Oh there's a loophole."

Helena:

And I had never thought of this until now, but it's basically that aperitifs fall into the liquor category federally, that's how it's always been. But there's this tiny little sliver where if you're under 24% alcohol and you're made mostly of grapes, which you would only know if you're a freaking grape farmer, grape-based aperitifs, then you can bypass all Federal regulation around liquor. You can be classes of wine and you can sell on the internet, you could build a direct to consumer brand. You could open brick and mortars, you can be sold without a liquor license, this entire world opens up to you.

Helena:

And it just hadn't occurred to anyone to use that loophole to build the Glossier [inaudible] of alcohol. It literally took the winemaker marrying the techie, whose like, "We have to use the loophole to build the Glossier [inaudible] of alcohol."

Kristen:

Yeah. And it's what's so interesting to me is, you've touched on the alcohol industry as a whole. And I've heard you describe it before as almost like a mob and this sense that there are these tiers and it's hard to beat them and you can't really get through and become something different in this space. And the thing that I think you guys and what I've seen has been such a difference in the way you guys market, the way you guys present the product is, there's so many kinds of brands in the alcohol space, there's so many different kinds of alcohol you can choose.

Kristen:

Like there's a better whiskey or a worse whiskey or a top shelf wine or a bottom shelf wine. But the essential habit of drinking is the same versus you guys are capturing a different side of it. You're still capturing the things people love about drinking like the unique flavors that you can get in a cocktail, but you're changing the way that people are approaching drinking, which just feels like a really big recipe for success in DTC because it feels like there's so much about changing the entire experience around a product. Very similar to Glossier changed the entire conversation around beauty and how we discover skincare and how we try new makeup and all this stuff.

Kristen:

It's this experience that I don't think customers can get anywhere else, which really separates you guys in the alcohol space as something totally new.

Helena:

Thanks. I mean, it's interesting because there's definitely people who reference us as creating a new behavior, and it's a little funny to me because generally that would be a terrible idea for any company to be like, "We're going to create a new behavior and scale it across the American population." Like no way. I mean, that theoretically is not likely to work. The good news is that we already knew that behavior existed somewhere. Woody discovered aperitifs in the first place by living in Europe, he lived in Berlin and that's where he discovered aperitif culture.

Helena:

And he was seeing these groups of people his age, he was in his 20s at the time, and they were drinking all night. I mean, in Berlin you drink till like 8:00 in the morning, but they weren't drinking to get wasted, they were drinking to have intellectual conversation, to hang out, to meet people, to remember the night, not forget the night, and blew his mind where he was like, "This is so much cooler and so much more aligned with what I think sophisticated people actually want from drinking and connecting with people. "Why doesn't this exist in America?" And that ultimately inspired him to start making aperitifs a few years later. So for us, it was like this style of drinking has been a thing in Europe forever, I mean, for hundreds of years.

Helena:

And so it also is a style of drinking that doesn't require the end user to do anything drastically different. It's not like if you drink cocktails and wine and have glasses in your home, you don't have to do anything drastically different, you can still pour it in the same glass as you drank your last drink in, you can still drink it in the same way you drank your other drink. So we had a lot of things going for us in that regard, you didn't have to like buy some special contraption to put your body or you didn't have to like buy some set of equipment or anything. It was just you had the tools, and generally the behavior was already there.

Helena:

So for us, the challenge was how do we take this category of liquor that's relatively unknown in America and talk about it in a way that actually shows people, "You're not doing anything different, you're actually doing the same thing and you get the benefits by doing the same thing."

Kristen:

Yeah. It's a little bit like, and I talk about this a lot in retention, it's this idea of new experiences around a product versus new product behaviors. And trying to get somebody into a new behavior, into a new habit is really difficult, especially over a digital space, but giving someone a new experience around something they already do, that's something that you can actually really tap into and start just influencing the things that are happening around the product itself not so much trying to create something brand new, which I think is a really powerful piece of this, is that it slips naturally into an existing routine, but also then shakes up the experience enough to where it feels like something different for the customer, it feels new and exciting,

Helena:

Right. For us, it's incentivizing people to do something that's enjoyable like having a drink with your friends, and really incentivizing people to enjoy the benefits of that ritual, which again, it's not something that they're unfamiliar with, it's something that they do anyway. And for us as a category that requires some education, or at first glance someone may not recognize or understand, it's, how do we not reinvent the wheel in as many ways as possible so that we actually just fit into their life and they don't have to change anything? So it's it's interesting to continue to see chatter about us teaching a new behavior where it's like, "Actually, we do everything we can so the person doesn't have to change anything."

Kristen:

Yeah. And that's a really tricky and yet really important piece of retention, I think for a lot of brands is less so focusing on nudging your customers to do something new and different, more of understanding what your customers are going through, understanding the stories that they're living and figuring out how your products can then naturally supplement that lifestyle that's already going on and make them more successful in what they already love to do.

Helena:

Yeah. I was just talking about this last night at a talk that I did and I was talking about flywheels and how there are likely flywheel behaviors built into your product. The most intuitive one could be that your product can be shared with other people, whether that's like a food or a beverage. And for us, that flywheel, it was a hypothesis, but it was a strong one that we wanted to build the experience around was a person buys a bottle of Haus, they get their friends together, they have their friends over where they go to a party or whatever, and then those friends all drink that bottle of Haus together. And those people have a great experience, not just because of Haus, but because all of their friends are together and they're having a great time.

Helena:

And then all of those friends, because they had such a great time and the product was good, they go buy Haus and then they invite their friends over and then they have that experience together with a new group of friends, and then it just butterflies out from there. And that was this hunch that we had around just building out these organic foundations to growth from the beginning where again, it's not about creating some new scenario, it's about tapping into a scenario that already exists in society, but that is inherently referral-based. It's like inherently an organic growth flywheel. And so it was just a win-win for us because alcohol, not all alcohol, you don't share your Bud Light with the other people, some alcohol, mostly wine not actually liquor. You don't have your bottle of whiskey at the table that you're pouring around at dinner, mostly wine.

Helena:

But we had the feeling based on our experiences with aperitif culture that we could push that same behavior around drinking it with your friends at the table and sharing the bottle, and it worked.

Kristen:

Yeah. And I've heard you talk about this customer experience before, and it's something that... I mean, it's the number one thing I'm talking about. It's theme of this season, is that everything begins and ends with the customer experience in that if you are creating an experience for your customers that's better than what they're already doing and it feels really exciting and that they're excited to share it, then you have retention built in and obviously that's been a really big focus for you guys, both really digitally and on the physical side of the product. Why do you find it so important and really what's your approach on that customer experience and focusing on it so it does create this organic flywheel?

Helena:

Yeah, I mean, it's hard to know everything that informed our philosophies around it, but I mean, part of it is that what do you and I are like psychos about doing things really well the first time, and we're just too proud and stubborn to release anything that's not good.

Kristen:

Are you guys both perfectionist?

Helena:

How can you tell?

Kristen:

Because I am one. I can tell.

Helena:

Working in startups has also helped me let go of that a little bit and know that you just have to launch as well. So for us, it's always that push and pull. But for us, part of it was that perfectionism, part of it was seeing so many brands come out in the last couple of years that have skimped on lots of parts of the customer experience and over invest in things that seemed a little superficial and not wanting to do that, and then also we couldn't afford to do anything else. Raising money was really hard for us in the beginning. So for us it was like, "Okay, we have this much money, we don't have any money to put into paid. So we better make this so good that people share it with everyone that they know."

Helena:

We obviously invested a ton into the juice itself. Woody, he's made something that's like leaps and bounds beyond anything else you can find at the industry in terms of quality. So I trusted Woody with that side of the business. And then for us with packaging with the bottle, you can't half-ass it, you only have one chance. And I got so much pushback from Silicon Valley friends, certain investors who were like, "You need to read Lean Startup." And I was like, "I read it 10 years ago." This is not a lean startup, it's consumer. You can't just launch a shitty thing and AB test your way to success, oh my God, you have one chance.

Helena:

So for us, it was, "All right these first six months, one year, we don't know whatever it is, we have to put every ounce of effort we have into making every part of the customer experience perfect and so wonderful that they want to tell everybody that they know about us. And that is how we will hopefully grow because we can't afford to do it any other way."

Kristen:

Yeah. If there is an absolute pull quote for this entire season, it was just that right there, this idea that... It's my number one tip for retention when I'm talking with brands is, "Okay, but have you experienced your product in those touch points, every single one, every single time your customer comes in contact with your brand, is it good? And is it representing the brand that you so dearly care about in the messages that you want to provide? And if not, that's where you go for retention work because that really is, like I said, the beginning and end all of retention and repeat purchases is, was it a good experience and would they refer somebody to it?"

Kristen:

And it seems so basic, but then there's all these... Obviously, we're already 30 minutes in and I think we've hit like two or three of my questions. There's so much that goes into it, but at the end of the day, it really does feel very simple and that dedication to the customer experience. And I think you guys had a little bit of an opportunity with having a hard time with funding and not having a ton of money to put into Paid. You had to get a little creative and it gives you an advantage versus a lot of the brands now who are having to make the shift into retention and say like, "Oh, we've put so much into acquisition, now, now do we keep these people around?"

Kristen:

You guys started out with that idea of, the first 10 people who try Haus need to love it and need to tell their next 10 people about it. And that's how we're going to grow. I mean, you can see it in the way the community around Haus reacts is that, that has really built up this loyal community. I think I read somewhere that you guy's repeat purchase rate is just incredible. You launched a membership recently, which we're going to get to in a little bit, but I think that's really the key of it. And I want to highlight it for the listeners that there's this key of starting with that mission. And if you're a brand you're listening and you're like, "Oh gosh, we're five years in and we haven't done it," you can still shift to this idea.

Kristen:

But it's such an advantage to have that from the get go and have those power customers from day one that, they were there right away and they're ready to go on this journey with you, which I think is really exciting and a really cool thing that you guys have leveraged with your personalities, the way you've connected one-on-one with customers, and really just this deep, deep focus and mission on every single touch point being perfect.

Helena:

Thanks. It feels like it should be common sense and I don't want to hate on anyone who's having these revelations for the first time, but I literally, last night at a talk, I had a slide about the product being good. Again that seems simple, but I've tasted many products like in the food and bev space that seem to compromise on the product itself, even though everything else is super tight, and you know people are going to have to taste it at some point. And so talk about retention, it's like you can raise a bunch of money and you can put a bunch of money into growth and then you have hundreds of thousands of customers that don't come back.

Helena:

And it is of an era, it's like, "Thank God we didn't launch three years ago," and it's actually a blessing that we're seeing this downturn in terms of this post soft bank, post WeWork, post Uber situation with funding and with companies just having to rethink their approach to growth because you have to get back down to the basics. It's like, "Why did you start this company in the first place?" Just go back to why you started it and it should hopefully be to make something good, and not just good inside the bottle or inside the box, like wholly an entirely good, because the experience is what you're selling.

Kristen:

Yeah. I love how you said like wholly and entirely good, that everything from the bottle to the box to the emails, to the receipts that you're sending, it's everything in an experience. And I think this comes back to this idea of building a product around your customer's lives as a whole, it's so many little things, like is the bottle stylish? Is it something that they'll actually want to showcase in their homes? Is it something they'll be proud to have on their shelf? Which is great for marketing. The first thing, your product stands out, people come over, they're going to ask about it, but it's also another way that you guys are super, super customer focused and create another engagement touchpoint kind of post-purchase. It's not just a drink, it's a piece of decor in your house, it's a piece of ritual, it brings people together.

Kristen:

It's really, you guys have focused so much on that that you can see it through every little thing, and I know you have a really rich background in visual storytelling, and I think it's really cool about how is that the branding isn't really that exact same Pantone light color, Sans-serif, DTC brand that you see come out. It has a different style to it and feel to it that feels really special to the unique customer that you guys are targeting. How did you come to that visual style and why was it so important for you to lock it down in the way that you did?

Helena:

Oh man, I wanted to do the opposite of everything that I was seeing three years ago, everything was an isolated object on a color backdrop and every ad looked the same whether it was like jewelry or dog food, there was no context. And ultimately, if I could sum up my entire career, it's comms. I started in comms, I studied comms in college, I did PR, then I got into visual communication, everything is about comms and so much of comms is successful based on context. And so for us, I was really set on creating a brand where every single opportunity to communicate, whether that was with words or visuals or type or colors or whatever, everything should have a reason why it exists. And I think for us, the biggest burden that we had to solve for was, can we, knowing that someone is buying us online, can someone come to our website?

Helena:

Can they immediately understand where this product lives in their life, how to drink it to gather their friends together in their home? And I know exactly how to pour it on the rocks or in a cocktail, can they understand that without someone having to tell them? And can they understand that in as little touchpoints as possible or maybe even with a photograph? And so that defined how I approached the entire brand. I wanted everything to feel educational, and photo... My background is, for the last eight so year, my life was spent producing and shooting commercial photo campaigns, so photo was important for me to get right.

Helena:

And for us, it was a perfect opportunity to use that as education. And someone can look at a Haus photo and inherently understand exactly where you're supposed to drink it, that you're supposed to drink with other people, that you're supposed to drink it in a certain way, that you drink it with dinner or you drink it at a Netflix night or whatever it might be. We can solve so many of those problems visually so that we don't have to take up the space writing copy that feels like top down and forceful, there's just so much nuance in how you can instruct people how to use a product. So for me, it was context, most products actually are used outside of a vacuum and outside of a photo studio with a color backdrop.

Kristen:

What?

Helena:

So why not use that opportunity? And of course, those photos perform well. So in the last economy of startups, that was all about optimizing for CAC and paid growth. I get it, you were optimizing for performance and those photos performed really well and you can clearly see the product in that context and you can see what it looks like or whatever. So I understand why it got to that place, but now in a post CAC society or postpaid society, you have to think differently and you have to use these opportunities to also just show the user where this lives in your life and how it can improve your life.

Kristen:

Man, I think that is such an important key of retention and it's this idea that I talk a lot about it. It's kind of this idea of retention-based marketing or thinking longterm in your marketing, so thinking past the performance of one ad, like you're saying. I think the shift is going from optimizing for performance to optimizing for connection, and in the line, really giving users an understanding of where the product lives in their life, is something that I think a ton of brands miss out on. Because of that, they really showed just the product and how the product looks and feels, and that has been a big part of the DTC movement, having really beautiful products that look great on your shelf, but beyond that, it's that idea of, but how does your customer actually use the product and are they going to enjoy it?

Kristen:

And if you can get that across before they even get the product, then you're already one step ahead because you already have your customer thinking, while the box is shipping to me, they already have it in their mind of how they want to use it. And that is in the tech world in selling SaaS, we call it the activation point of somebody who is on the tool. Twitter was like, or Facebook was like, they added five friends and then it's that sticky point of like, "Okay, I've had a success with the product, I know how to use it, I know it's going to make my life better." This idea of getting the context in front of a customer before they even get the product is so huge and it's a missed opportunity for a lot of brands because it inherently creates that activation sticky point because then you open your bottle of Haus, and the first thing you're probably going to think about is that picture you saw on the homepage or the ad that you saw of people gathering around a table and that feeling that you got of it, so you open that bottle, you see it again.

Kristen:

Most customers I would assume then are going to have that activation of, "Ooh, I should plan a dinner party." Or, "When my husband gets home, I'm going to make him a drink while we're making dinner." These little things, it beats that point of hesitation on using the product, and actually getting success with it. So then you've got it built in, you get someone to use the product because you've put in so much focus on the experience. As a founder, you can trust that experience is going to be great unless they're not the right fit customer. And then from there, retention is almost built in, which is kind of this magical thing that you guys have unlocked.

Helena:

Yeah, it's cool. And another thing that I think a lot about which is worth talking about because it also speaks to the shift that we're all seeing in aesthetic and photography is, it was really important to me to make things look messy because our product looks clean, it like looks kind of Luxe and it looks high end, and maybe even unattainable if it lived without context. So for me, it was very important to put it in context that feel messier and feel imperfect, not like the perfect house, not H-A-U-S-, but like H-O-U-S-E-, cool Instagrams that you see all over the internet where everything is immaculate, perfectly curated, your apartment cost $5 million or whatever . That era is ending and that type of aesthetic and that type of photography, it prevents people from actually wanting to gather because perfectionism can bite you in the butt.

Helena:

I've been talking to a lot of people lately and starting to do some interviews behind the scenes around having people over, and this hesitancy that people have around having people over because your house isn't perfect or you don't have the right plates or you don't have the right tablescape or you don't cook good enough or whatever, and this is a whole other tangent, but that came from the Martha Stewart era, she defined gathering for the previous generations, and all of it was about idealism and perfectionism and having the perfect the house that you've spent two days cleaning before the party and then you spent hundreds of dollars on this table scape that's gorgeous. And then you spent two weeks practicing this like John George carpentry, poultry or whatever. And it's insufferably boring and an unrealistic and white and wealthy and just completely unrepresentative of this newer generation, which just wants to reject all of that.

Helena:

And of course, there are still contingents that embrace that side of things, but generally, you see the macro shift happening on Instagram where the accounts and big brands and fashion and people who are forward thinking or new influencers or even TikTok, it's all about being messy and being authentic and not having highly processed photos and not dressing up and not getting your hair and makeup done and dancing in your pajamas. It's a totally different shift, and again, all these eye kind of monitor, all of these macro trends like Hawk, and it helps me understand where the world is going and how we need to prepare for these shifting behaviors. So for me, it was all about not just creating these photos that were instructional and educational, but also made people feel like they could have a shitty dinner party and it's cool.

Helena:

And I shot with it on-camera flash because like anyone can shoot something with on-camera flash. Obviously, I wanted it to look nice enough to be a commercial photo on the website, but I also wanted it to look approachable enough that maybe you could see that photo in your parents' photo album or maybe you could do it yourself with a disposable camera. It's all about that dance between creating the super high quality product that's essentially a luxury item, but then taking it and making it quite approachable, not from a buy it because it's approachable standpoint, but you can fully enjoy this product the way that it was meant to be enjoyed because you're doing fine. You have to-

Kristen:

Yeah. I love that. And it really, it's so respectful and supportive of customers, which is what's really exciting, we're seeing the shift in the beauty industry. We talked to Oui the People, Karen Young from Oui the People earlier this season and she was talking about turning the beauty industry on its head because women are so used to being put down by the beauty industry, and she's creating a brand that says, "You know what? You're perfect as you are, but if you want to feel something, how can we help you get to that point?" And I see a lot of similarity here and this idea that you deserve amazing products and no matter where you think your life is, these fit into your life and you can enjoy them the way that you want to in the way that you're already living.

Kristen:

It's such a supportive customer approach, which to me is really exciting about the space because a lot of advertising does seem to be very like, "You need this because you're not good enough at this." That scarcity building advertising versus what you guys are doing is this acceptance of your best fit customer and saying, "We understand you and we understand that you're going to like this because you value the same things we do." And that is something I want to dig into a bit, is this idea of finding the best possible customers. I read and I'm going to read off a quote that you had said in another interview, you said, of course there were people who thought it was stupid, a direct to consumer brand with no substance, "If I have to convince you that this is valuable, then you're probably not my customer."

Kristen:

This reminds me of something that Damien Sue said on our first episode this season, he said, "If you need to discount your products, then you have the wrong products or the wrong customer." And this speaks really highly to the importance of finding that right customer to approach. And as marketers, as communication leads, we can get caught up in throwing the widest net possible when really the trick feels like to hone in your net pretty narrow and find the people who can really gain something from your product. So a low alcohol aperitif isn't right for every single market, but with the right customer it does feel that genuine need. So how did you really hone in on finding those values of your best possible customers?

Helena:

Part of it, I think the best research I did, even though it's definitely specific, a socioeconomic subset of people is fundraising. I learned very quickly that no one in the liquor space thought what we were doing had any legs, they thought we were crazy. I also learned that any investor who was already super into aperitifs was not our customer because they already had aperitifs, they already knew about the category. And so I learned pretty quickly who was not our people, and my experience, fundraising and quickly learning, "Wow, I'm never pitching a liquor person ever again," that impacted my press strategy. It's like we don't go after liquor writers because who gives a shit? They already have liquor, and us telling them that other liquor is wrong isn't going to make them happy or like us any more, so they're not our people.

Helena:

And I think you learn every day when you're running ad, like we're getting into paid now, but like who does it not resonate with? It's a little hard to manage it on that level, but in general, the most valuable lessons I learned at the beginning were, who isn't going to be into this? And it lined up with my gut, I wasn't making this for the liquor industry. I wasn't making this for bartenders. So that's going to be very interesting as we go into wholesale, like, "What are the messages that are going to resonate with bartenders?" So far, it's that we're made of natural ingredients. It's the same things that make them into natural wine versus conventional wine. We can go after them by saying, "We're a natural aperitif versus a conventional aperitif."

Helena:

And so that's how we're winning over wholesale, but it's been this practice of, "Okay, these messages don't resonate with this audience." I can tell this more disrupter business -sided story with one audience, but it's certainly not going to matter to a bartender that I care about disrupting alcohol, they probably think I sound like an asshole, I kind of do. And so for us it's been all about like, okay, what matters to different people? Who do we want to be our audience despite certain messages not working on them? And how can we or can we create a set of messages for them that are true to the product that actually make them get it and understand that like, "Oh, it's not actually about me as a bartender and my philosophies around liquor, it's also about consumer trends. It's about like respecting natural products made by farmers, it's about respecting my customer who wants this product."

Helena:

So it's really complicated, everything's like its own little comms game to figure out like, "Okay. This person is definitely not my customer." "Okay. This person would not be my customer in this sense, but they may be in this sense." But you just have to test it and find out.

Kristen:

Yeah. And so when you're testing that really, we're talking about trends in these things that you notice of, "This group's not going to connect," or, "This group might connect to this story if not this story." How do you take all that information and then actually whittle it all the way down and translate it into actual visual and written content that those people are going to click with? Is there a process that you guys go through or is it just a lot of like, "Hey, we're going to test this email, see how people respond"? Do you have a system for how you boil all that down? I'm asking because I have a background in communication, so this is pretty natural for my brain to whittle down into something. I think it's pretty difficult for a lot of DTC brands right now is, taking all this information that you have in your head and then actually bringing it into something that you can present to the customer.

Helena:

Yeah. For us, I think it's more gut driven than anything else and more anecdotal. It's not like we're going and running some quantitative analysis or something. For us it's been like, "Okay. Well, what messages really resonated when I pitched a bajillion of people to fundraise?" "Okay. What messages resonated in the medium post or the different press articles that came out about us?" Like what are the things that are really clicking with people where they're saying, "Oh my God, this is something I've been looking for 10 years and didn't even know it," versus a message where people are like, "Huh, why do I care?" A book that really impacted my philosophy around all of this was, Start With Why by Simon Sinek, and everyone should read it. Holy shit, it's amazing. And the basic premise is no one gives a shit about the what.

Helena:

If we want Haus and we were like, "they're aperitifs," most people would be like, "I don't know what that is and I don't care." Like, "Whatever." But by focusing on the why, then you tell the story of the why we created this company and people are like fainting in their chairs. So it's a big difference. And at the end of the day, that's going to connect with people more than anything. As a company, you can't just be like, "These are good, you should buy them." You're not compelling at all, and we're not an authority on that. We're not like the gods of alcohol, we just have our own experience. That's the only thing that I can be an authority on. I can only tell you my own story, that is the only thing that I can say confidently. And the irony is that a freaking medium posts that I wrote about why we started the company converted more people than anything else ever.

Kristen:

Wow.I wrote this down as you were talking, this idea that you're saying customers don't want the what, and I think a lot of it goes down to this idea that customers don't have the time to go find the why. We're scrolling Instagram, who has the time to go through products and then go like, "Okay, but which brand do I connect with most on the values and why would this be beneficial to me?" Consumers aren't going to do that, and we're inundated with so many products and ads all the time that there's not a reason for a consumer to ever go and do that research on their own. So if you're only selling the what, then you're missing out on that entire behavioral and psychological analysis that's going on in their head. You hit them with the why first and the what just falls in place.

Kristen:

If you can connect on that, that deeper why... And I love how you're saying my experience is the only one I can truly, truly talk to. And so if you're very authentic about that and owning your story as both a brand, as a founder, as a product, as every little thing, if you're honing in on that authenticity, that is going to come through, like you're saying, that's what people are fainting in their chairs about. It's also, I think, because it's pretty new, which is a little bit wild to think this is a new idea, but it's new for consumers to see a brand like this and to be so emotionally moved right away that there's a huge power in understanding and teaching the why to your customers.

Helena:

Well, think about it, what doesn't drive anything? Think about it like, we're not like, "I want shampoo." We're like I'm saying, I'm sitting at my bathroom, we're saying like, "Oh, I want my hair to look better," or, "I want more volume," or, "I wish my hair wasn't so greasy all the time." Or, "I want my curls to look better." You're not just saying, "I want shampoo." No one spontaneously is born wanting a shampoo, you want to improve the state of your hair or it's not wait for food, it's like, no one's like, "I want low sugar just for the sake of low sugar." You want low sugar because you want to improve your health.

Helena:

It's actually the why drives every single thing, so why don't you just cut to the chase and actually... We're not selling products, none of us are selling products, we're selling solutions, so why not [crosstalk] that.

Kristen:

Yeah. I already know of, and when Val listens, Val Geisler, our digest co-host, when she listens to this, she's going to giggle because I'm going to beat her to the punch here. She talks about this all the time, but this is really that idea of the jobs to be done model that's really popular in the SaaS space, not as much in the eCommerce space is that idea that no one's just buying a product, they're buying something to get some job done, to find some success or change in their life. So for Haus, to me like if I was going to say, as a customer, Haus to me is access to an experience with my friends that I don't have to regret. And that has nothing to do with the actual product itself in the what that I bought, it has to do with, "I'm going to stick with Haus because it gives me that experience that I was looking for."

Helena:

That is just a wonderful thing to hear, and it's like exactly what we were going for.

Kristen:

Well, that's amazing. And I actually think, I was thinking about this morning, I think we were saying before, it's not creating new behaviors, it's fitting into the behaviors that are already there. But I think there is almost an element of access that Haus also gives. It gives access to an experience for people who couldn't get there before. So for me, that experience of being able to have a night of drinking where I have more than two drinks and actually remember it. That's something that I don't have current access to, but with Haus, it gives me access to an experience that I didn't have before, which speaking about community building and retention, it widens the circle of people who then can partake in these rituals that we care so much about.

Kristen:

And so it just opens up this idea of community, which in 2020, in the world of social media and remote work, and I talk to my dogs more than I talk to any other human beings, that's so powerful to create something that not only is supplementing the lifestyle and the behaviors that are already going on, but also giving access to more people to those experiences that are so treasured.

Helena:

Yeah. It's pretty cool. Again, I can go deep on some tangents around consumer trends, but we're all changing in terms of the last 10 years or so, we've all been so online, everything... There's just such a shift that's happening because the internet is making us miserable and we're all sitting on Twitter angry all day and people are on Tinder and they're like losing faith in humanity, and we're all just craving connections with people that don't suck. And unfortunately, the internet sucks at connecting people in a positive way because all of our social skills have just deteriorated and we've become animals. And so you can just see it, it's already happening, people are looking for that way to build community and we're all less religious than we used to be, we're looking for the new church.

Helena:

I heard Emmett from Pattern and Gin Lane talking last night as well, and he was talking about the new church and ironically, it's brands that are driving a lot of it. And it could at first glance seems soulless, like how sad are we to be flocking to brands for community, but of course, because the brands that are working now truly represent a set of values and you already see it, people in our generation, we like to define ourselves and tell people about ourselves through what we buy. Again, it's not kind of superficial, but it's true. It's like a person who buys Aesop versus Softsoap, it's two different people or a person who buys farm to table food or organic food versus conventional or a person who wears a certain type of fashion versus another, you're literally trying to tell the world about yourself and what you care about.

Helena:

And the internet has actually accelerated that because you actually have the ability to share what you bought and then comment on it and say, "Oh, I bought Allbirds because I care about the environment." Or, "I bought Glossier because I care about natural beauty." Or whatever it might be, it really gives you the opportunity to say something about yourself. And so just that extra extension of that, naturally, is people being like, "Oh, I care about those things too and I would love the opportunity to meet those people who share my values."

Kristen:

Yeah. It's funny because I have a personal anecdote of this happening in my own life. My previous favorite athletes or brands were Lululemon and Gymshark. And these were during the times where I was lifting heavy weights, I was going through like almost the body lifting situation, I was post gymnastics in college, I still have that elite mindset going into athletics and I just approached fitness in the same way that I did as a gymnast in college, just it has to be very intense and I'm going to build up my body and I'm going to be strong and do this and this. And so obviously, a Gymshark-type brand really spoke to me. And so I would show up to the gym and I felt powerful and strong when I wore my Gymshark clothes because I know that I'm putting out the image of who I'm trying to be.

Kristen:

And now that's shifted, now, I'm a rabid fan of Outdoor Voices. I think I own almost every single piece of clothing they put out. And I did this self discovery before in another episode, but I realized it's because I had a mental shift in my own personal story and I changed how I started looking at fitness and it came with an injury and realizing like, "Huh, if I hated doing this my whole life, why am I doing it now? Why am I putting myself through this?" And now I connect a lot deeper with Outdoor Voices. And it really, the product quality matters, and I think that a lot of those brands have very similar quality, but at the end of the day, the ones that I repeat purchased on, were the ones that I felt connected to the values and the stories that I was living.

Kristen:

And I think that's really something that we've pulled out in this conversation, that you guys have been able to find those deeper stories and connect with them, and that's what makes it one, easy to find those best-fit customers, and then two, easy to retain them when you do.

Helena:

Yeah, I love that we built a liquor brand that you can be proud to drink. It's kind of crazy because that has not existed because alcohol is bad, it is still a vice, it's still objectively bad thing to put in your body, but we as a society are not going to stop drinking anytime soon and I love it too much to ever stop. It's so exciting to see a generation that's excited to shift from this like, "Party, work hard, play hard, I'm getting wasted."And showing off that side of you versus, "Oh, like I'm a career focused, early adopter, aesthetically driven discerning, grown ass person who may be 22, but I'm a grown ass person and I'm drinking something that is a little bit better for me and I'm drinking something because I'm discerning, I chose something that represents my values." And that is fascinating to me that we're the first company to play in that space outside of natural wine.

Kristen:

Yeah. And it's super exciting because that space doesn't really have that you're saying, there's not really a huge pride moment to pull out a bottle of whiskey from your cabinet that you've had for a week that's already halfway done. It doesn't feel that prideful stance and it's really exciting that you guys are building that experience for people. Well, Helena, like I suspected, we're going to have to do a part two of this interview because we haven't even touched the subscriptions yet.

Helena:

Hey, I'm done. And that's great because we just started, so maybe I'll have even more to say next time we talk.

Kristen:

Yes. Well, thank you so much listeners. We will be back.