323 | Creating Brand Experiences Beyond Ecommerce | with Jiake Liu

Jiake Liu

Do you capture an audience? You're pitching to an investor, but you're also talking to millions of people. Why should they care?  

Chase Clymer

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Chase Clymer

All right, everybody. Welcome back to another On Location recording for Honest Ecommerce. We're here at E-Tail Palm Springs. I'm pretty sure the day just ended because it's 10 times quieter than the last session that we did. But today, without further ado, we're welcoming the show Jiake Liu from Outer. Jake, welcome to the show. 

Jiake Liu

Thank you for the invite. Glad to be here. 

Chase Clymer

Absolutely. Absolutely. And also a big shout out to eTale. Go to events, meet new people, network, get on podcasts. It's a great time.  

So for those that don't know Outer, could you quickly let them know the types of products you guys are bringing to the market there? 

Jiake Liu

Sure. So Outer is a Santa Monica based outdoor living brand and we focus on outdoor living and we started introducing outdoor furniture products about five years ago. And now we're quickly moving into backyard renovations and prefab structures and all that. We've been in the market for, like I said, five years  and we are mainly DTC. 

We're mainly Ecommerce oriented. Some people might even know us by our showroom network, which is we're building showrooms in people's backyards. It's a crowdsource model. So we have over a thousand of these all over America. 

Chase Clymer

Well, I can't wait to dive in. You've already said some fun things that I already knew about, but all right. So first and foremost, take me back in time. Where did the idea to start a direct consumer outdoor brand come from? 

Jiake Liu

Sure. So I was born in China, but I grew up. I moved to the US when I was pretty young, middle school. So I grew up actually in the South in Alabama, where backyard living, you know, is part of the lifestyle as well. Certainly after moving to LA, after graduation, backyard living is definitely like a very everyday kind of occurrence. And so I was born in my previous software business. I was exiting it.

And one morning I woke up and I sat on my outdoor sofa in my patio  and 3.5 seconds later, I realized the cushion was wet. A lot of people have experienced that, you jokingly call it the wet bottom syndrome but you realize too late that it's a trap, right? And so, I was like, there must be a better way to solve for this. And so, that was really the impetus, the moment, you know, that I thought outdoor furniture could be better. And I looked at the category. It was one of the fastest growing segments for furniture. 

Chase Clymer

This was before COVID. 

Jiake Liu

Way before COVID. And certainly, COVID was kind of like a catalyst to all of it. But before COVID, it was already growing double digits in a market that's really stagnant, furniture. And so  that was the moment.  It was my second company. I had the fortune of having angel investors and previous investors I worked with.  

I got lucky meeting my co-founder Terry, who was a former head designer at Pottery Barn. And I also have a family member in China who's been in the outdoor furniture manufacturing business for almost 10 years. And so it's kind of like connecting all the pieces and saying, maybe there's something I can do here to kind of reinvigorate a category that's been overlooked. 

Chase Clymer

Yeah. And obviously there's some luck there, but it's also recognizing the opportunity is something that anybody can do if they just are paying attention  and  reading trends or just seeing what the problem is in their own life. You can go back through the last 300 episodes of this podcast and most people are like, well, this was a problem for me. 

Jiake Liu

Sure. 

Chase Clymer

And then no one else took it as seriously as I did. And then I just started to work on it. Once you start to expand upon it a little more, some great people in your network, your co-founder, and obviously, your family member helping you produce these products. What was the timeline between, I think there's something here to you're talking to an angel and trying to raise funds. 

Jiake Liu

So raising funds, again, this is my second venture funded business. That was almost like my angel investor or one of my investors, equity investor, institutional investor in my first business was like, hey, what do I want to do next? Makes it a little bit easier. It made it a little bit easier. He's like, hey, I got a blank check for you. What are we going to do? And I was like, how about outdoor furniture? 

He's like, how about something else? But it worked out for him. So fundraising the second time around was definitely easier. And I think I got very lucky with kind of like the capital markets where it was way easier to raise money, you know, before 2021, obviously. So we've had a lot of luck with fundraising and picking the right investors instead of just going after investors.

Chase Clymer

And so meanwhile, obviously, your fundraising, what was the idea? Was there a flagship product or product line? You just can't ask for money for outdoor furniture. What were you trying to change? What were you trying to improve? 

Jiake Liu

And from the very get go, I had some experience in running a little shop on Wayfair/Amazon and helping my family member sell his outdoor furniture. What I realized was, it was a really fast growing business.

The reviews are like 3.5 stars. It's like why are people buying this really crappy product and they rant about it, yet they still buy, you know, non-stop. There must be some magic to it. And that was one of the indications I had about it. 

And so, when I went to the investors about this idea, in the beginning, it was just like building a better, maybe high-tech, you know, outdoor furniture that's magically, that can protect itself in rains and advanced materials and stuff like that. 

I actually pitched to one of the executives at SpaceX. I remember having the conversation next to his rocket engine. He was telling me how they are changing the fate for humanity and like interplanetary species traveling and stuff like that. 

And the funny thing is like I was like, I don't want to talk to you about what I'm going to do. I'm going to design a sofa. Wow. But he's like, well, no, like go ahead. What are you going to work on? Outdoor furniture.

He's like, well, what do you think, you know, when we go to Mars, what will people sit on? Not rocks, maybe furniture. Probably need to be UV resistant and all of that because of the space, you know, gamma rays and stuff. So he was joking, but then I realized building a really fundamentally better product for the market was the number one thing. The second thing was when I saw an opportunity to basically to, we call it the backyard economy. So here are some stats, right? 

There are 24 million acres of backyard space in America. Largely unused. It's covered by lawn grass, right? So you have to water it, you have to cut it. But it's the size, generally three to six times the size of like your interior, your home on average. Yet no one's really thinking about how to make use of that space despite you paying for the lot and buying the house, right? 

And so the bigger vision here is like how do we unlock the true value of the backyard? And the first piece was upper furniture, but soon, we're getting into the next phase of the company that we may be able to talk about later. But that was kind of like the bigger idea for the investors. 

Chase Clymer

What was the first product or products? 

Jiake Liu

Remember the wet bottom syndrome, the wet soggy cushion. So that was the very first product. 

Chase Clymer

Anti-wet butt. 

Jiake Liu

Anti, yep. So we call it the outer shell. It's a patent, believe it not, it's a piece of fabric that's zippered to the cushion. And you can use one hand to cover the cushion and one hand to  open it. We didn't think it was patentable, but one of our investors said, hey, you should probably look into patenting this. And we did.  

To this day, that was the thing that a lot of early adopters of Outer have known, the brand  because they saw this five-second animation of this sofa with an open and closing shelf that's like built into the sofa. And that went viral. It was like 70 million views in the first year before it went on a big TV show and that was the game changer for us. It was just a sofa. 

Chase Clymer

Yeah. We'll bury the lead there about the game, the TV show. We'll talk about that in a few seconds. So you've got this product and so you talked about it went viral. That was social advertising, the first foray into getting the name out there about the brand. 

Jiake Liu

That's right. I think in the beginning, we didn't have a big budget. We shot some short videos,  some photos and we did a 3D animation at the time, which was quite novel. This was like 2018. So AI definitely wasn't around then. And so we rendered this five second animation of the built-in cover being opened and closed. 

And it's looping for like 30 seconds. And so for anyone that has owned patio furniture, they would tell you how difficult it is to keep it covered and to keep it clean and to lug in the cushions in and out from the garage. You're from Ohio, so I'm sure like that's probably part of the 

Chase Clymer

Oh, I'm asking for a discount code after this call. I know this problem. I too suffer from wet butt syndrome. 

Jiake Liu

Maybe we should do like Honest Ecommerce, like 30 or whatever for like, you know, this guy. 

Chase Clymer

I'll have you in my backyard and we'll watch the next episode on my new outer furniture. 

Jiake Liu

That's an idea.  

Chase Clymer

Absolutely. Yes.Getting back to it. So you guys launched with  this 30 second ad, which was a mock up. But I want to point out this wasn't the actual product. 

Jiake Liu

No. 

Chase Clyner

And you guys put money behind this and it worked. 

Jiake Liu

It worked. People are like, oh my god, why did you think of that idea? Yeah, of course, a built-in cover for AdWords. if it makes sense, I don't want to deal with the weather tarp and whatever.  

Chase Clymer

Did you have a physical product yet? 

Jiake Liu

We had a prototype, but we weren't ready to sell yet. 

Chase Clymer

So with this thing going viral, how did you capitalize on that momentum? You go right into pre-sales or?

Jiake Liu

So what we did in the beginning is we added a chat bot to the site. We had leads coming in. I don't think in order at the time, we entertained the idea of like, maybe we should just start accepting orders, but decided against it. But we were talking to an influx of traffic asking, hey, like, is this where I get the, you know, the built-in same product? And so that was the first thing. And I was on the front lines answering all the messages.

I remember the names of my first customers because of that. And just getting to know what they want and what they were looking for and is it going to meet their expectations, pricing, all of that.  It's magical because you get to talk to real customers who express interest in a simple idea and then they can help you  dictate how to launch this product.  

So we didn't do a Kickstarter or whatever like that, but it gave us the benefit of understanding what customers are looking for  from a very, very early stage. 

Chase Clymer

And it helped you come up with product two, three, four, five, six?  

Jiake Liu

Yes. So it's to this day. So I joke that my title is CEO, but it doesn't stand for Chief Executive Officer. It stands for Customer Experience Officer. So even today, if you buy anything from Outer, we will send you an automated email, but it's from my personal mailbox, jkliveouter.com.

It'll have my cell phone number on it. And I encourage you to reach out to me post purchase if you have any issues or feedback. And so I'm still in touch with a lot of customers to this day, like six years after running. And they gave me a lot of ideas for what to develop next. And it's certainly a big input to what to build next. 

Chase Clymer

I mean, we talk about it on the show all the time. And again, these things come up all the time because they are important. But your customers will tell you what to do next, what to fix to make it better.

You know, we could take this entire conversation and talk about conversion rate optimization for the website. You know, I'm sure there's things in your inbox where someone's like, I almost didn't buy because of X, but then why? And you're like, oh, it needs to say that on the website. Sure. 

Jiake Liu

I would caveat that by saying, customers sometimes don't know what they want, right? So they're aiming for the better carriage kind of analogy, right? They want a faster carriage instead of a car. So again, my co-founder is really the, you know, he's the better half here who actually understands product design.

And so we actually have a channel on our website, on our Slack. It's called Seinfeld Moments. Okay. So this is his favorite thing, Terry's favorite thing. Remember, like in the Seinfeld TV show, he always starts with a monologue. Like, I've never noticed something like this one thing in life, right? Like we laugh. Like, oh yeah, like we all know about that problem, but no one does anything about it. So we kind of jokingly started this channel to basically encourage our employees to basically uncover issues.

When they  deal with outdoor furniture, whether it's like a chaise lounge and pool or like a, for example, like a blanket. I grew up in Alabama, like I mentioned, bugs were the reason I don't go outside in the summer. Right. And so we invented this  throw  blanket that repels mosquitoes naturally. You put it next to you and mosquitoes will not get near you. 

So customers are not going to tell you, like, Hey, can you invent  a blanket that repels mosquitoes? Like we had to have that insight. So, it's a good balance of both of what they want. Usually it's like a better product that we can improve on. 

But for new  ideas, another example is like a fire pit that we sell. It's like a coffee table with a fire pit in the middle. I'm a huge Korean barbecue fan. Like the allure of friends and family sitting together and grilling instead of just one guy in the back like grilling steak for everyone else. We call it a social barbecue. Like we came up with that idea. So we add a griddle to the fire pit. It's like, okay, yeah, you can sit around and sip and chat, but you can also cook.

Things like that, I don't think customers will tell you to invent those things, but you have to have the conviction and courage to kind of like say, well, I think that's a good idea. Let's try it. 

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Chase Clymer

Let's talk about the growth spurt you had and how it led you to a TV show. let you explain. 

Jiake Liu

Yeah. Okay. Well, so I mentioned this novel invention of the built-in cover. Another novel piece that we really, I feel pioneered of what we've not invented is this idea of neighborhood commerce or neighborhood showroom. 

So instead of having brick and mortar showrooms where you go and check out the product and sit on the sofa, we actually crowdsource our showroom. So basically if you go to the website, liveouter.com slash showrooms, you can type in your zip code and you'll find nearby customers who currently have outer products in their backyard. You can make an appointment to go to their house to check it out. And so basically, it's like a social offline, very authentic connection with real customers. And you get to see the product and feel it in real life in the real organic settings, like in the showroom.  

Chase Clymer

That in and out itself is game changing. It's one in your category. But two, I've  done a lot of these episodes. The concept of a trunk show is very fashion oriented. And then it almost takes me back to the idea of like the Tupperware parties. 

Jiake Liu

Yep. A lot of people draw analogies. The difference I would say is we do not pay commission. We strictly tell them, we call them hosts. So people who already bought our products, who volunteer to be on this platform. By the way, there are over a thousand of these homes. And these are all multimillion dollar houses because we target the premium market.  

People just do it willingly and they ask us like, Hey, where's the sell script? I'm like, no, don't sell it. Just talk about it. Like you would a neighbor and a customer, like a friend or a family. Because customers nowadays know, you know, what they want to know. Even before the visit, they already scoured the internet for reviews and YouTube videos and read your website and talked to your salespeople. They're just really there to experience the product in person, talk to a real customer, how they feel about it. 

So we do not do the MLM, you know, is that what you call it? Like multimedia, multi-level marketing, like Avon.

Chase Clymer

Yeah. Well, I wasn't trying to draw parallels to their business model, but just the idea of getting the products in front of customers in other people's homes.

Jiake Liu

That's the piece that is analogous. So we have one interesting story. We have a couple that actually got married last year  and they met each other three years ago during the pandemic  when the woman was visiting, the wife was visiting the husband for the outer sofa. So they got to know each other and then they started dating and then they got married last year. Obviously that's a very edge case.

Chase Clymer

You can find love with outer. Pivoting to social dating networks. 

Yeah. Absolutely. All right. So you have this product going viral. You have this amazing marketing strategy. Yeah. And then it helps. Did you apply or did they reach out to you? Yes. 

Jiake Liu

Okay. So you're alluding to Shark Tank. so, yeah. So the last month, so toward the latter half of that first year, they actually reached out to us on Instagram. They had read about us in a media piece about the showroom concept.

And then they found it to be very fascinating, the product. And they're actually in Culver city and I know, we were based in Santa Monica. So it's like next door in LA. And so they reached out to us. It's like, Hey, why don't you apply? Right. So you still have to go through the entire application process. It's not like, you just have a fast pass. 

So it turns out there were like 35 or 35,000 applicants that year. And they invited about 120 companies on site to film. And they eventually aired about 80 of them. We were one of the very few that was selected out of the 40,000 people. And yeah, that was just a whirlwind of, you know, we prepped it for like two months, we filmed it and the show dropped like literally a month after we filmed, which is very atypical. 

Chase Clymer

Yeah, that's the fastest turnaround I've ever heard. And I've interviewed maybe upwards of 50 folks that have been on Shark Tank. 

Jiake Liu

Oh, wow. Okay.

Chase Clymer

Cause I remember somebody like I just sat there twiddling my thumb. I couldn't tell anybody for a year which way they went. Did they, did they not know? 

Jiake Liu

For us, it was a shock too. So we filmed in September. We aired in November. I believe it was 2019, season 11. I don't remember the exact details, it's been history but it was like a very short time period where we didn't, we didn't even have time to negotiate with, uh, you know, the shark about the deal, right? 

It was like Christmas time and it was about to air. And so, it was good and bad. Good is like they, you know, we aired and we didn't really submit a deal. And after it aired, you know, we brought up a lot of traffic and obviously a very different company and all of that. But it didn't really give us a lot of time. So, but it's a known secret that a lot of Shark Tank companies don't really close deals after it was, you know, on the show. Right. 

So, I'll leave it there because I cannot talk more about it because I said an NDA. But I don't get in trouble. Yeah, so it's a fascinating experience. I would recommend anyone that's building a consumer for us to do it. It's once in a lifetime and it's so much fun. 

Chase Clymer

Well, even you alluded to the application products that I've heard through multiple X shark tankers, if we're going to use that term. 

Jiake Liu

Sure. 

Chase Clymer

That it just makes you diligently put your numbers in order and know them front and back, top and down. And it highlights problems within your business. 

Jiake Liu

That's right. And I think that more importantly, well, I should say as important for a brand, it's almost like a microcosm of how to build a brand because it's about understanding your numbers and like basic economics, but it's also about storytelling. How do you capture an audience? You're pitching to an investor, but you're also talking to millions of people. Why should they care? How do you make it funny or emotional or whatever? 

So the producers on sale were like, no, be more dramatic. That's why you like it, you always see it like this very much like I don't talk like that in real life. They're like, no, more energy. And so I think that's a really good lesson in building a brand, which is like, how do you become interesting? Why should people pay attention? Why should people remember you? And so, yeah, good lessons there. 

Chase Clymer

Absolutely. We've got  just a short amount of time left here and you talked about the future plans of taking over the backyard living category and talk more about that vision. 

Jiake Liu

Like again, as I alluded to earlier, there are 90 million single family homes in the US. 90 % of them have backyards, outdoor spaces, I should say. And there's about 24 million acres of backyard space in America. A lot of that is untapped, right? It's covered by grass, covered by lawn. And how do you actually, and it's paid for by the homeowner already. 

And so, if you're paying for this land, if you're not using it, what are you doing with it, right? And the size of the backyard is typically anywhere from three to six times the size of the interior. So you have this big plot of real estate that's underdeveloped would be a way to say it. And so we had this impetus when we were talking to some early customers.  

But like I said, I reached out to a lot of them directly and they say, oh, well, I'm waiting for my patio to be built to actually put your stuff on it. Cause you don't just buy outer and put it on the lawn. Right. And so I'm like, okay, well, building a patio sounds like a very nightmarish thing. And I went through that in the pandemic. 

I built an outdoor kitchen myself and I would not recommend it to anybody. It took way too long, two months and way too much money and way over quota. And like the quote they gave me, you know, and then somebody showed up, you know, at one day and didn't show up the next day. 

A lot of issues, right? And so how do we actually make that what we call it like an engineer or like a construction project? Can we actually productize that?  Can we actually get in front of the furniture buying cycle of actually making outdoor space usable? So we're launching a new thing called Outdoor Spaces.  

This is probably the first public venue I'm talking about just because it's so fresh. That we want to make an outdoor living space a turnkey solution for you. You can build an outdoor living space in one day. Turnkey. And we've invented this new process of building a foundation without drilling, excavation, concrete, or heavy labor. It's just two people, four hours, and you will have a really nice deck with modern age materials, composite decking, and aluminum frame. And it can build a percolon top.

We're even doing something extra. We're building something called the solar system. So it'll have a built-in solar panel and lithium-ion battery, just like an EV car.  And it turns into a solar generator that sits in your backyard, that extends your living square footage, but also provides electricity for your house to offset your energy consumption. So basically our idea is that solar does not solely belong on the rooftop. We believe it belongs in the backyard as well.  

And you can get the benefit of the solar while adding to your living square footage. So it's like two birds, one stone kind of scenario. So we're really, really excited to kind of launch that  very soon here. Yeah, I'm really excited to work on that. 

Chase Clymer

Absolutely. So if I'm listening to this podcast and that excites me, where do I go to sign up for the newsletter to get the latest and greatest on how that idea and vision is evolving? 

Jiake Liu

Thanks for the opportunity. It's https://liveouter.com. 

Chase Clymer

And then obviously, the website itself is liveouter.com. Go check out all the amazing products that they brought to market over there. Jake, thank you so much for coming on the show today. 

Jiake Liu

Thank you. It's a fun chat. Thank you so much.  

Chase Clymer

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

You can subscribe to the newsletter at honestecommerce.co to get each episode delivered right to your inbox. 

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Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.

Until next time!