Ownership Is The Ultimate Loyalty Program with Melinda Moore

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Episode Summary:

Melinda Moore has always wanted to change the world and be in technology, and so every step of her professional career was a step towards understanding how much human information processing and technology was going to impact everything that we do. As a social entrepreneur and a seasoned digital marketer, Melinda likes to create companies that solve real problems. She has a new company out called iConsumer that not only allows people to save money when they shop online, but to become part of the company through consumer stock. She says that ownership is the ultimate loyalty program. She has a new book out, How to Raise Money: The Ultimate Guide to Crowdfunding, where she talks about all the resources and everything you need to know to launch a successful crowdfunding campaign.

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On this episode on The Successful Pitch, our guest is Melinda Moore. She’s got an amazing story of how she has a successful exit with John Paul DeJoria of John Paul Mitchell Hair Care Systems. She has a new company out now called IConsumer.com that not only allows people to save money when they shop online but become part of the company. She says that ownership is the ultimate loyalty program and she has a new book out on how to demystify equity crowdfunding. You’re going to love her journey, her book and her new equity crowdfunding platform.

Listen To The Episode Here

Ownership Is The Ultimate Loyalty Program with Melinda Moore

My guest is Melinda Moore, who’s a social entrepreneur, a seasoned digital marketer, and a frequent speaker at leading technology conferences with over fifteen years as a startup leader, two successful exits, and a Fortune 500 experience. Melinda combines her passion and experience in health and sustainability, female empowerment, Yahoo! tech and digital media. Her work’s been widely recognized by Digital LA as one of the Top 50 Digital Women in 2015, the Green Business Bureau and the National Association of Women Business Owners. She’s also written a book called How to Raise Money: The Ultimate Guide to Crowdfunding. Melinda, welcome to the show.

Hi, John. Thank you so much for being here. It’s such a pleasure.

We were introduced by a mutual friend, Laura Wagner, at Digitzs, and that’s always the best way to meet people. I find that’s how I get my best guests. That’s how people get their network to grow and you’re a classic example of that with your expertise. Before we get into that, would you mind taking us back? You can start back as far as you want. You can take us back to high school, to college. When did you start saying, “I’m going to be an entrepreneur.”

It’s in somebody’s DNA. I’ve always been very adventurous and curious. When I was at UCLA, I was very fortunate that Peter Guber was running Sony Studios at the time and he had classes on entrepreneurship, motion picture marketing and technology. While I was at UCLA, I took his classes and it absolutely opened me up to how the future was going to be greatly impacted through technology. I decided back at that time I wanted to change the world and be in technology. My very first job out of college was producing educational software for Davidson & Associates, which then sold for $1 billion to the Ascendant Corporation. That was my very first job and it was understanding how much human information processing and technology was going to impact everything that we do.

That was like, “This is easy. I’ll do another company and sell that one.”

Unfortunately for that, when it was my very first job, so I was a producer, it was started by Joanne Davidson and her husband and so she was a teacher, but I essentially got an MBA, got the bug, and then after that I went on to my next company, which I had an exit in. It definitely got me excited and opened up the world of opportunity around entrepreneurship and making a difference.

I want to know about your successful eCommerce site, LovingEco to John Paul Dejoria in 2002. I met him several times. I used to call him in the John Paul Mitchell Haircare for advertising when I was at Condé Nast. He is quite the entrepreneur himself. How did you come up with the idea? How did you get the feeling enough to make him want to buy it?

I was born in Santa Monica, California, so I grew up surfing and hiking. I’m a little bit of a flower child and appreciate the planet. I was working at Rogers & Cowan running the convergence division. I thought to myself, “It’s time for me to get back into entrepreneurship.” I came up with the idea of LovingEco, which I knew women wanted to be healthier but they’re not going to sacrifice on style and they’re not going to sacrifice on price. I saw how successful the Gilt Groupe was at the time and flash sales. I created a green flash sale site called LovingEco. We guarantee that it had the lowest price on the Internet. We curated all the best natural products in beauty, health, fashion, accessories.

Loyalty Program: Most of us don’t fit into the profile, but it doesn’t mean that we can’t be fantastic business owners and create jobs and opportunities for others.

At the time John Paul Dejoria had started a company called JP Selects. LovingEco was started by myself and Justine Lassoff and we now have another company called LOVE GOODLY, which is based in Los Angeles. It’s like The Honest Company meets Bert’s Box. It’s a lifestyle company that gives back to charity and it curates all the best natural products. I’m an advisor to the company. Justine co-founded that company with Katie, who is another person who is on our team at LovingEco. What ended up happening and we were so successful that we got an offer to purchase the company about a year after we started it. We’re live by John Paul Dejoria. He folded LovingEco into JP Selects.

Did you have to pitch to get him to buy it? Did you have to pitch to get a co-founder? Did you have to pitch to get customers? Any pitching stories you have to share along that route?

I’m not Jessica Alba and not The Honest Company, but this was a little bit before that time. I’m always seeing what’s happening next, that’s just a talent that I had. It’s all about protecting the environment, so I thought the fastest growing segment of the beauty division was natural products and organic products and products that didn’t have chemicals because your skin is your largest organ. I knew that women didn’t want to pay extra, so I said, “I’m going to curate, do all the work for them and make it easy and I’m in to guarantee the lowest price.” That worked our cohort analysis, our lifetime value, all of the core metrics were very strong. In the combination of hardcore business metrics with the fact that natural beauty is the fastest growing category, that was the pitch.

When I pitched it to people on Sand Hill Road and as a woman, they’re like, “What do you mean natural products? What do you mean organic jeans and what do you mean you need to use dye?” It was almost as if I was speaking Chinese or a different language, which is partially why I went into crowdfunding and then wrote the book, How to Raise Money: The Ultimate Guide to Crowdfunding. Being an entrepreneur and recognizing that I’m not a male that went to Stanford or Harvard and wears a hoodie and a computer geek, then I wasn’t going to fit into the VC model. In fact, I’ve been a strong advocate for entrepreneurship, but leveraging crowdfunding and other methods to raise money. Because most of us don’t fit into that profile, but it doesn’t mean that we can’t be fantastic business owners and create jobs and opportunities for others.

That’s a nice transition. Usually, whether you’re starting a company or getting inspired to write a book, that’s because you see a problem that needs to be solved. Let’s take a deep dive into your book. How to Raise Money: The Ultimate Guide to Crowdfunding. We’re talking equity crowdfunding versus Kickstarter crowdfunding.

My book, it’s called How to Raise Money: The Ultimate Guide to Crowdfunding, which is available on Amazon for under $10. The book covers what is crowdfunding, what’s the history of it. It covers equity crowdfunding and it covers rewards-based crowdfunding, which is Kickstarter. Kickstarter has raised over $3 billion to date. It’s a huge industry and its surpassed venture capital. It also covers hybrid models. It’s a very comprehensive guide to my book that is available on Amazon, but ultimately, I am very passionate about entrepreneurship and ideas that can change the world. Whether somebody creates a hearing aid that allows somebody to hear for the first time. There’s so many innovations or they’re passionate about, electric bikes or a microbrewery or, in my case right now, I launched a company called iConsumer and I have a live campaign for crowdfunding. I’m very passionate about that, so I wanted to put that into a handbook. At the very end of my book, which is chapter ten, I put a guide of all of the leading platforms, their contacts, the marketing firms, lawyers, accountants so you can just literally, like I say, “Nike, just do it.” After reading my book, all the resources and everything are there to launch a successful crowdfunding campaign.

I’m interested in chapter nine about what works, what’s challenging, and what’s next. Can you give us a sneak peek on that?

What’s always challenging is people think it’s the field of dreams scenario. If I build it and if I take all the time to put a video in my deck and traction points to my business and great rewards, then the people will come. You have to understand that that does work. If you have a big database of existing customers that you can tap into that you can market it to, but you have to come up with an integrated marketing campaign almost as if you’re launching a new company to have a successful crowdfunding campaign, whether that’s rewards or equity. If you are not in a position to do that yourself, then you need to hire a firm, somebody like myself, someone like Darren Marble at CrowdfundX, so that you’re successful with the raise.

What services do you offer? You’ve given us a hint of the problem is. It’s not enough just to build it and expect people to come to it. Are you offering a service of, “Here’s exactly the five things you need to do to get people to want to fund this and share it in their network and make it a viral experience?”

What you need to do is think of it from an integrated marketing perspective. You have to have all the touch points. You have to have the right that you’re selling with the why you’re doing this. You have to have paid and earned media influencers. It goes down to having a fully integrated successful campaign. It’s all of those things.

Can you give us a story? I know that on your website, you have past work with some of your clients you’ve worked for. If you could walk us through what it’s like to have an integrated marketing concept, I think it would very much help people understand, “Don’t try to go this alone,” and that they need someone like you.

For instance, we raised a couple million dollars for Yao Ming, the basketball player. When he came to the states to play, he fell in love with a Cabernet from California and so he created Yao Family Wines. He put up a raise on Crowdfunder and at the time, I was the Chief Marketing Officer. What we did was created a fully integrated campaign. There was a lot of press and got into the Wall Street Journal. We did private dinners, investor dinners. We did a traditional marketing. We had him do marketing on his website. We marketed from the Crowdfunder website. It goes down to the experience and what are the assets that you have. In that case, we had Yao Ming, so to be able to have like a private dinner with the Yao Ming because you’re a shareholder, that has some very unique value. We were raising money for a tasting room, so you would be able to cheers and taste directly with Yao Ming if you put in the minimum of $5,000 into the deal. It comes down to unique experiential marketing.

[Tweet “Ownership is the ultimate loyalty program”]

It goes full circle from you being inspired by Peter Guber running Sony at the time. I believe that’s when that man seems to making these people their own star through crowdfunding. Let’s double click on IConsumer.com. What gave you the idea for that?

After writing the book, How to Raise Money: The Ultimate Guide to Crowdfunding, you have to then prove the model. I had met Rob Grosshandler because I was doing a lot of speaking. He’s the CEO of iConsumer and he approached me to co-found the company with him and be head of marketing to take it to the next level. It’s a massive B2C play. It’s essentially like Ebates or RetailMeNot where you’re getting discounts and cash back for shopping online. Who doesn’t shop online? By 2020, it’s going to be a $500 billion industry. Crowdfunding, there’s still a lot of mysteriousness around it and so you have to demystify it. A big B2C play where, as you’re shopping online, you’re getting cash back, but I’m giving you shares, actual ownership in iConsumer for just shopping online. When you sign up, I’ll give you 50 shares of iConsumer stock. Every time you shop, you’re getting cash back and you’re getting shares in the company.

What we wanted to do is essentially democratize the way companies are created, so we did a regulation tethered raise using equity crowdfunding to fund the company. That is what allows us to use actual equity as an acquisition and a retention tool so that we’re building and owning the company together. I always liked to create companies that solve real problems. What is a problem in the United States? There’s such income inequality. So much of the wealth is concentrated in the 1%. What about the 99%? When I looked at like what Blake did with Tom Shoes in the One for One movement, I said, “Why can’t we do the same thing with equity crowdfunding and prove in a big B2C model that people can be successful if you own the company together and then have people write another book and people copy what we’re doing with equity crowdfunding and what we’re doing with iConsumer so that you’re essentially voting with your wallet and you’re owning a piece of the company?”

It’s almost like saying to someone, “You’re going to be buying things on Amazon or wherever else you go online to buy something.” You might as well get compensated for it, not just like a coupon, but actually own part of a company that’s going to reward you for sharing this and using this. Is that accurate?

That’s exactly right. Our thesis is that ownership is the ultimate loyalty program. You’re already doing something, which is shopping online. You might as well shop smarter and get your share.

Ownership is the ultimate loyalty program. Everybody’s looking for that sticky factor when they get a new customer and it’s certainly investors are looking at that. What is it that keeps people loyal? I see this starting to happen a little bit in the cryptocurrency world that’s evolved out of the crowdfunding world. My guess is you’re going to write a book on that topic.

You now see the ICOs and people are creating platforms and they are rewarding people with cryptocurrency, blockchain. I know that Todd Chief raised like $1.5 billion to do these types of things. You’re seeing a lot of big business leaders moving into blockchain cryptocurrency for exactly what you’re talking about. It’s almost like Wild, Wild West.

If we take a look at IConsumer.com and you finish your round with this equity crowdfunding platform, do you anticipate that that’ll be all the money you need, or do you think, “I’m going to get a series from a traditional venture capitalist eventually?”

We launched the campaign on Crowdfunder, so it’s Crowdfunder.com/IConsumer and within the first 24 hours of the race, we had reached over 50% of our goal to get to a million. We have 50,000 members right now. We need another 200,000 to be cashflow positive, so most likely I will not do another round and most likely I will not include any venture capital. If I do anything else, I would open up another regulation a round. The current minimum investment is $1,000, but I could lower that to $50 or $100, so that our members could get more shares by opening up and allowing them to be investors. The whole goal here is to democratize access to people, being on Wall Street and in owning shares and understanding what that means. Rob, who is the CEO of the company, he also created another property called Shareholder Academy and that’s essentially a blog and a website for startups and for people understanding what equity crowdfunding is, what it means to be a shareholder. He was smart to basically help guide an education platform around shareholders in Shareholder Academy

Traditionally, if I understand Crowdfunder properly, you have to be an accredited investor to invest in that equity crowdfunding. Is that right?

That is correct. With the current raise that we’re doing on Crowdfunder, it is to accredited investors only.

However, if you go to IConsumer.com and sign up via Facebook or however you want to do it, you can start shopping and get 100 shares without being an accredited investor, which is the whole democratization that you’re talking about.

When you sign up, I give you 50 shares just for signing up and then the first time that you shop, because we want you to shop so that you’re using this site and that we’re making money, you’re making money, we give you another 50 shares just for the first time that you shop. If you refer somebody who shops, then we’d give you another 100 shares. I have about 1,700 shares just from shopping.

This earned impressions that’s part of this integrated marketing that makes it crowdfunding campaign successful is that whole sharing. Once you start getting brand ambassadors to promote, “This is the site.” If you’re going to spend the money anyway, you might as well own a little bit of it for that loyalty factor, but that earned impressions, brand ambassadors, word of mouth is the secret sauce.

The numbers are between 30% and 40% a week of our members are coming through referrals. People discover the site, they want to share with their friends, and they also benefit when they share. Definitely through referrals is a very strong way and an efficient way to grow a company and to grow brand awareness.

Loyalty Program: Definitely through referrals is a very strong way and an efficient way to grow a company and to grow brand awareness.

I’m on iConsumer and I see that you have Today’s Hot Deals on Amazon and certain things are for sale that you can buy and get credit for buying it on your site as opposed to the Amazon site, how does someone who is an Amazon vendor get to be considered part of your hot deal? Is it something Amazon decides or can people approach you to be a hot deal?

What we want is we want more small businesses to make sure that they are an affiliate and they’re signed up through iConsumer. That way, we can market the vendors directly. We have 1,700 stores and we’re adding new stores all the time. Amazon is the 800-pound gorilla in this space. I feel like we need to help smaller businesses and local businesses. Once they’re aware of iConsumer, they can sign up to be a vendor and promote their products. One of my girlfriends started Prelise, which is like a smaller skincare makeup line. Prelise is on iConsumer and we did a beauty newsletter and I was able to feature Prelise alongside Ultra Beauty and much larger brands. It’s really important for us to have an array of the big players but also the small players as well.

You’ve hit on something there that you probably take for granted because you’re such an expert at this, which is the co-branding effect. If you’re a small brand and you’re seen with other well-known brands that are much larger than you are, then there’s a little bit of a rub off effect that happens, “If they’re being featured this way, they must be at least as good a quality and maybe they might even be slightly less money. I might try them.”

The beauty of shopping is like discovery. If you do see bareMinerals next to Prelise, or sporting good company next to smaller electronics, people do associate credibility when they see one vendor on the same page or next to somebody else. It’s important too that we vote with our wallet, not for just the big companies out there, like the Amazons of the world, but also just smaller companies that are creating great products as well. They need the exposure.

I also see that you’ve got the hotel on here, which surprises me because I don’t think people normally think of e-commerce and travel as being that connected unless you’re on Expedia. How did that evolve?

Travel is a big vertical for us because the price points are high. If you’re going to go to Hawaii or Europe or New York and you’re spending somewhere between $300 to $1,000, why not get cash back and then earn shares for your ticket? We have Expedia and Priceline on iConsumer. You might as well shop through iConsumer because if you shop direct, you’re not going to get the same benefit as shopping through iConsumer. Part of that is an education process. Ebates is such a large company in that regard, so there are people familiar with Ebates but essentially, we’re Ebates but we give you shares in iConsumer as well.

It’s a double win, not just win-win. It’s getting that message out and you’re certainly incentivizing people to share it with their friends.

Whether you’re booking a hotel or you’re going to book Alamo or Hertz or Priceline, you might as well book it directly through iConsumer. We have Expedia. We make it easy because there’s departments and there’s different categories, so you can go directly to our travel and you can do that either on a mobile phone because we have an iOS as well as an android version and then desktop, so we try to make it as easy as possible for you to shop smarter and earn shares and cash back as you’re just doing what you do normally every day and every week.

I was impressed to see that you have a pet vertical on here because I know that’s a huge market, just like travel.

Pets are huge. It’s a multibillion dollar business. A lot of people don’t have kids and so they treat their pets like they’re kids, buying them toys, beds, clothes, food, and organic food. Pets is a very big area for us. Most people use PetSmart. You might as well use PetSmart or Petco through iConsumer. You go direct to Petco or Petsmart, you’re not going to get the cash back or the shares. You go shop through our mobile app or desktop, our buttoned browser, then you’re going to get 9.6% from PetSmart. You’re saving them as 10%.

[Tweet “There’s nothing more exciting than having an idea and wanting to bring that idea to life.”]

Any final thoughts or words that you want to leave our audience with? If someone’s thinking of starting a campaign, they should read your book. They should consider hiring you to help them so that it doesn’t just get up there and nobody uses it. Are there any life lessons you’ve learned along the way that you would say, “If I could say something to myself ten years ago, here’s the message I give.”

What I would say is there’s nothing more exciting than having an idea and wanting to bring that idea to life. When you’re doing that though, you have to be very methodical, very strategic. It does take planning and it takes money because if you don’t have that database or that existing customer database to market the campaign too. Then you have to figure out how you’re going to get influencers, how you’re going to get marketing to ultimately drive people to the marketing funnel of your deal. What you don’t want to do is just press go on a campaign because you’ve done all the work. It’s better to put a pause on that, either hire a firm that can help you. It goes down to having the right team and the right people and it’s about execution.

I was speaking to Darren Marble from CrowdfundX and he’s done getting Elio motors and big raises. We were saying sometimes people don’t understand how much work it is to be an entrepreneur. You have to make a choice. As an entrepreneur, it’s not a merry go round where you show up and you just attend meetings. It’s much more like a roller coaster. One day, you could have the highest high and you think you’re going to become a multimillionaire and the next day, you literally think you’re going to be broke. Things can swing so quickly. In order to be an entrepreneur, you have to be comfortable with being on a rollercoaster ride. If you’re the type of person that wants consistency and safety, then you need to get yourself onto a Merry-Go-Round and not the rollercoaster route of entrepreneurship. It’s hard work. The hours, the commitment, it’s not to be underestimated in terms of how much work it is. It’s fantastic and I wouldn’t have it any other way, but sometimes you just want to have a breakdown,

That’s so valuable and wonderful of you to let people in because from the outside looking in, it looks like you’ve never had a bad day in your life or even a bad hair day.

Entrepreneurship is sexy. Jessica Alba’s an entrepreneur. Gwyneth Paltrow’s an entrepreneur. Many top people are investing. There are celebrities and stuff, so it’s got this, “This is the next celebrities and stuff,” but what I want to say is it can be painful.

My big takeaway is that hope is not a strategy. If you just hope that people are going to find your equity crowdfunding platform, it’s not going to work. Melinda, how can people follow you? Would you give us your Twitter handle and everything else?

My Twitter handle is @Melinda_Moore. I have a website, which is MelindaMoore.com. That’s an easy way that you can follow me on Instagram. You can find me on Instagram and Facebook. It’s a great way to get more information. It’s been such a pleasure, John. Thank you so much for having me on your show.

You’re a fascinating person and a fascinating guest. I appreciate you sharing all those wonderful stories.

Thank you.

 Links Mentioned:

• Melinda Moore
• John Paul Mitchell Hair Care Systems
• IConsumer.com
• How to Raise Money: The Ultimate Guide to Crowdfunding
• Davidson & Associates
• LovingEco
• JP Selects
• Justine Lassoff
• LOVE GOODLY
• CrowdfundX
• Yao Family Wines
• Rob Grosshandler
• Crowdfunder.com/IConsumer
• Shareholder Academy
• Prelise
• bareMinerals
• @Melinda_Moore – Twitter
• MelindaMoore.com
• Melinda Moore’s Instagram
• Melinda Moore’s Facebook
• https://www.amazon.com/How-Raise-Money-Ultimate-Crowdfunding-ebook/dp/B01F7O926G/ref=sr_1_1?ie=UTF8&qid=1506641434&sr=8-1&keywords=melinda+moore

About Melinda Moore

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