Episode: 36

Henrik Werdelin

BarkBox & Prehype

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Henrik Werdelin

Henrik Werdelin: BarkBox & Prehype

There are few things people love more than their dogs. And BarkBox, a subscription-based business that enables dog owners to surprise their precious pooches with a monthly selection of toys and treats, has tapped into this love in a big way.

The brainchild of Henrik Werdelin and two fellow dog lovers – Matt Meeker and Carly Strife – BarkBox grew from a casual “side business” to a fully-fledged enterprise with Bark & Co, complete with a media property, adoption service, and e-commerce site. Bark & Co even designs its own products under Henrik’s direction. He leads design, content and future product development for the company.

Originally from Denmark, Henrik has taken his entrepreneurial prowess across the globe – spending time in London, Paris, and currently New York. His extensive experience includes serving as Entrepreneur in Residence at Index Ventures, a leading venture capital firm, where he worked with start-ups that turned into household names like Rent the Runway and DropBox. He was formerly the Vice President of Product Development and Strategy for MTV Networks International, and he was named one of Fast Company’s 100 Most Creative People.

Henrik is currently the managing partner at Prehype, where he and a group of international entrepreneurs work with companies like Verizon and Intel to help them innovate like start-ups.

In this episode of On Branding, Henrik shares his take on creating a human-like brand, the importance of narrative – for company culture and fostering connections with customers – and taking a bold stance on humor.

If you’re listening, tweet us with your reaction to this show at @BrandFever, using the hashtag #OnBranding.

Episode Transcript

Vicky: Hi there!

Henrik: Hello.

Vicky: How are you?

Henrik: I’m very well, thank you.

Vicky: We’re so excited to have you on our show. Thank you so much for being a part of the On Branding community. We’re just so thrilled to talk to you today.

Henrik: Well, glad to be on.

Vicky: You’re from Denmark!

Henrik: I am. I’m from Copenhagen.

Vicky: Yes, so when did you come to the United States?

Henrik: I moved to New York about four, five years ago – five years ago, after about 16 years in London and a year-and-a-half in Paris.

Vicky: Oh, fantastic! Love it! Love it! I’m actually originally from Europe myself, from Antwerp, Belgium.

Henrik: That’s nice.

Vicky: I just so wish I was a fly on the wall in those early discussions about the ideation of BarkBox. Tell me about that.

Henrik: I think in many ways it wasn’t as glorified as people might think. Matt and I wanted to work together, and we had a few kind of themes that we thought were very important for us. One was doing some things that we really enjoyed doing in a space that we cared a lot about. Both Matt and I are big dog fanatics, and we wanted to build a business that had a pretty strong revenue stream from day one.

At that time, we really just wanted to build like a side business. We didn’t have a big ambition about it being a very big business. It’s something we felt that we could start pretty easily and just work together. Matt was kind of in doubt if he wanted to do something else, or he didn’t really know what to do next – and so I thought a good way of getting him to work with me was to actually just build the first prototype and just go around and filling the first subscription, just using Square on mobile phones. After getting like 67 people signing up, we realized this might actually require real work. And we were like, “Well, we should get somebody’s help to actually do all the hard work.”

We ran into Carly, who is very wonderful, smart and a bit of a powerhouse, and so we convinced her to kind of help us out actually executing on doing this thing. Then it just grew very quickly. We went from the 67 boxes the first month to a few hundred and then a few thousand and then a few hundred thousand, so…

Vicky: Wow.

Henrik: Where other people are probably a little bit more – I don’t know – they think a little bit more careful about it. Like, here’s this space…

The story that I would like to have told you was that we realized that there is a very, very large industry that hasn’t seen a lot of innovation for a very long time. You have 48 million households in the U.S. with an average of two dogs that are really thinking about ways of getting closer – you know, finding ways to make their dog happy. The industry hadn’t been served with a lot of innovation, and I hadn’t really realized that the relationship between dogs and their owners has gone from that of a pet to that of a family extension. Then we decided to go after that.

I think that’s the narrative that we realized as we were building it, but unfortunately, wasn’t what we thought about when we started it. We just wanted to build some cool stuff for dogs with some people we liked, and that’s how we got off the ground.

Vicky: That is just so fantastic. So, the company was launched without a designated marketing team, right? And making marketing every employee’s business. Have you kept this structure, as you’ve grown to that kind of volume?

Henrik: Yeah. I think we have. We don’t have a marketing team. We have a lot of marketing functions, so when I thought about us having a marketing team, it’s not that we don’t think that the components of what a marketing team traditionally do is not valuable. It’s just that we split it out, the roles and responsibilities, differently.

So we have a growth team, which does an incredible amount of work in doing Facebook apps, doing business development deals, to affiliate marketing to a lot of classic tools like that. But we created a culture where creativity isn’t monopolized in one team, and I think marketing teams tend to do that. It becomes kind of like the place where you’re allowed to think about colors and funny ways of communicating with the audience.

We think that it is everybody’s responsibility to both talk to our customers every day, but also finding out ways of communicating with them better, and then when they tell us something, finding out how can we serve them better in the future? So our what would traditionally be a content marketing team, is called BarkPost and it’s a media property in its own right, so we don’t see it as a cost center. We see it as a revenue center that will attract not just customers to our own products, but also customers to other people’s products.

So if we can monetize our content we a) know that it’s good, but also we can scale that business unit much bigger, much larger than we could if it was just a cost center. We tell the finance team that when they do something, they should be creative and funny and on brand, too. So one of our offer letters landed on Reddit the other day, because it’s all written in dog language and when you sign on, you also sign on that you promise to make sure to give belly rubs to the dogs in the office and stuff like that.

I think that brands today have to be unique, and they have to be kind of broad. Broad in the sense that they have to communicate a little bit like it’s a human. And humans are complicated and diverse, and they can do a lot of different things. So, what I like about allowing everybody in the organization to take on the character and the attitude of our brand is that I feel that we get to communicate in a much more broad voice than you could usually do.

The decentralized approach to marketing isn’t the only distinguishing factor of the BarkBox culture. There’s a certain accountability associated with the company’s unique job titles and descriptions that inspires employees to engage with each other and BarkBox customers in a more meaningful way.

Vicky: So, you call it customer love instead of customer support. How important is the way you talk about functions in the company to the way they’re executed?

Henrik: I think it’s hugely important. I think a lot of things are about narratives, and narratives are a formed by the words we use. We don’t call our office management function, “office management.” We call it the center of efficiency. We don’t call it customer service. We call it customer love, and I think that has two benefits that it creates. One is that you basically indicate what is it that you want that team to actually do – what’s your real goal? I think “service” for me as a word it’s utilitarian. It’s a one-dimensional word that’s about how efficiently you can get people out of the queue.

That’s not what we’re trying to do with our customer love team. What we’re trying to do is have a respectful and long conversation with our customers. We don’t want them quickly off the phone. We want to hear about their dogs, and we want to make sure that we have a relationship. So by using the word “service,” it would be something where our KPIs might be “We want our call time to be under three minutes, because then we can shove more into the day, that means that we need fewer people to man the phones,” and stuff like that.

The first element is that I think the words that we use to define some of the different tasks that you have in an organization are descriptive, and therefore you need to give them a description that actually fits what you hope they will achieve. On the second thing, I think also you also have roles, which historically in an organization are not considered very glorified. Like I think that a customer service organization in most companies are considered basically something that should be under the finance team, and it’s just about getting these annoying customers in and out of the doors as soon as possible.

I think the next generation of companies, and what I hope we are representative of, is somebody where we think that the customer is the center of everything, and so customer relationships shouldn’t be something you have out on the sideline. It should be the center of everything you do.

Vicky: Yes, yes. Great. So just going back to just the trajectory of growth that you guys have been on, what were some of the main success factors in that? What fell into place? What was a “right on”? What did that look like going from a couple hundred a month to 1,000 and now 100,000 a month?

Henrik: Yes, not to brag, but I think it’s hundreds of thousands, not a hundred thousand. Unfortunately, there’s not just like one headline. I think a lot of people, when they ask me the question of the firm and how we’ve grown so quickly, what they want me to say is, “Well, what we did was we came up with this one thing, we pushed the button, and then everything worked pretty well.”

So, I think a lot of the very mechanical kind of answers, there’s not one mechanical answer. It isn’t that, “Hey, we just got really good at search optimizing our website, and then it worked.” I think what we did – and so the answers become a little more fluffy and philosophical and we probably could spend an hour just talking about what are all the different channels that we tried for growth and which ones worked and which ones didn’t.

I would say in general, we have built an organization that’s very quick to try new channels of customer acquisition and then we test those very rapidly and if they work, we go all in on them and then sometimes they burn out and sometimes we have them for a long time.

From a philosophical point of view, we’ve done a few things. One is very cliché. We’ve hired people who really, really care about what we do, so everybody here – most people own a dog. If they don’t own a dog, it’s because they haven’t bought a dog yet, but they really care about all dogs.

So I think the authenticity that we provide to our customers is very tough to fake, and we don’t have to, because we really, really care about dogs. It’s very common that I see a note lying in the kitchen of our office, where somebody from the customer love team has been talking, and we had to cancel a subscription because somebody’s dog unfortunately died of old age and then they get everybody to sign a note, because they just sympathize so much with this person. Not as a novelty stunt, but just because it really pains people here that somebody will have to go through losing a dog.

The second component of growth has been that we took a stand of being a little bit new and fresh, so I’ll give you an example. I remember in the early days, we on Wednesdays thought it was very funny to post pictures of dogs humping each other on Facebook and to call it “Hump Day.” So we would post all these pictures and there were people who got upset. Our viewpoint was a little bit, well yes, you might alienate some people, but to be honest, this is what we find very funny, and if we find it very funny, then we bet there are a lot of other people who think it’s very funny, so we should just be doing that. Then the people who like us, who like this kind of silly humor will gravitate to us, too.

So I think we dared taking a stand with how we communicated with our audience, which was a little bit less utilitarian and had much more character than what other people did.

I think the third – there are always three things – the third growth component would be that we took a little bit of a gamble of saying, “We’re not just a stock in the box business. We are a business for people who care a lot about dogs and who want to create a stronger relationship with their pooches.”

So we were very quick in going in on BarkPost to create a media property. We were very quick to go into Bark Shop, which is kind of our e-commerce store where you can find unique things. We are very big on going in on trying to use our ability for creating digital products and services to help dogs in need, so we created Bark Buddy, which is a kind of service that we have that helps people find dogs that are available for rescue.

Vicky: In addition to rapid sales growth, the company has an expansive social media following. Its BarkBox and BarkPost Facebook pages boast over 2 million combined followers and recent analytics indicate that their content reaches up to 80 million unique users on a monthly basis

Vicky: Let’s talk about BarkPost and that decision to expand and start BarkPost. How has that venture impacted and brought value to the BarkBox brand as a whole?

Henrik: I think BarkPost in many ways gives us a much more active voice than you can if you’re just, say, a normal, common provider. So, BarkPost was started internally by one of our very early employees and Stacy, who’s the editor of it, really understood in a very intuitive sense how dog owners, dog parents they don’t just see their dog as a utility. They see them as kind of part of their lifestyle. Most of the content, then, that was out there previously was just about utilitarian things – Here’s 10 things you can ask the vet about.

We see BarkPost a little bit more as a lifestyle brand for customers who see themselves as dog lovers, so a lot of people who get married, who love their dogs as much as we do find a place to make their dog a part of the wedding. They give them a dress or stuff like them. A lot of us when we go traveling, we think about how would we add our dog to the travel? So, my wife and I, for example, have done a road trip of all the East Coast hotels that allow dogs. I think a lot of people think about running, they think about wouldn’t it be cool if I could bring my dog? How about that?

So we really see BarkPost as being more than just – here is another pet site that writes about a very utilitarian side of owning a dog. We see it as a site that you would read about the things that you care about, but would add a dog to it. Most of us who care a lot about our dogs, we are interested in that. So that’s how we really have been able to grow BarkPost to such a large size by being able to capture audience for people just in general.

So that’s one side and just like the category. And then I think our style is very unique in that we write in a funny way. We try to give people a little bit of a smile when they read our stuff, and I think we just write to people like ourselves and that has allowed us to connect with 10s of millions of people every month.

Vicky: With such a significant social media presence – and it’s so interactive – any advice for our listeners on growing this kind of community from the ground up?

Henrik: I think that it’s a lot of my team’s work, so I don’t want to take credit for their work. The thing that they keep telling me is don’t be only focused about some of the vanity numbers, but really care about communication. So internally, we measure stuff that we think is an odd number, not necessarily a common number. A lot of brands have millions of followers on Facebook, and they probably paid agencies money to give them a high number, but is this to have baited people but they don’t really care? Then to us, that’s of no value. So what our focus is on is engagement on the page, not necessarily the number. We measure number of comments, number of shares, stuff like that. We try to optimize what we do for having an interaction instead of just saying that we are social, but really just talking to people through a social media, which is not about being social. That’s just about trying to be loud.

What we’re trying to do is really have an attraction for the customer, and that’s what we use our social media for, and so we will happily – we would never go out and buy a lot of “likes” just because it would sound good. We want to build a very robust network, so I think that’s the general thing that works well for us. I realize some brand managers have a tough time explaining that to their bosses, but that’s definitely something I would say.

I think the other thing would go a little bit back to my earlier comment is that have a point of view and say something that matters. I think certainly we’ve been a little bit lucky in that we are a space where content is easy, but I would even like to give a shoutout to – there’s a mattress company called Casper, and I noticed the other day, I went into their Pinterest board and I felt like that was incredible, clever use of content. They had night caps and night stands and all these different things that were associated with sleeping. Not just mattresses. So I sometimes think that we have a little bit of an easier time because it’s somewhat forgiving to post pictures of cute dogs, but I think that other people are trying to do a little bit of the same as we’re doing and it lends itself to spaces that are much more difficult, like for example, selling a mattress.

Vicky: Great answer. So humor is something that BarkBox does not shy away from. Hump Day, dog butts. How do you handle the potential possible consequence that you might be turning off a potential customer? Do you think companies can benefit from utilizing humor in their messaging?

Henrik: I think for us it’s tough not to use it, as it’s so much part of our internal culture. We have a really good time every day, and dogs are not necessarily polished. Dogs are funny and quirky, and they fart at the dinner table, and they do all these things, and that’s why we love them.

Vicky: They slobber.

Henrik: Exactly, right. They are disgusting, and then they lick our faces. Now we definitely have internal conversations about it, like we pushed out a Valentine’s card – it said something to the extent of, “When I think of you, I lick my balls.” There were definitely people who think that’s a little bit on the crust of what we should be doing, and we definitely get somewhat aggressive letters and even people canceling subscriptions sometimes because of it, but I think the point about authenticity is important.

We want to be like people, and we want to write things that we think are funny and we – on Facebook we have something we call Bark After Hours, so we post stuff in the evening, which we don’t claim that it’s really something that people who are faint hearted should be watching, and we’re pretty good at posting at the top of the post on Facebook, “Hey, if you’re a sensitive person, then this is probably not something you should view.” Now, I can push that style and turn it because I think that we want to be – we want to have a relationship with our customers where we matter. I think that if you have a character and an attitude and we have humor, then I think that people will have a relationship with you. They will care. I think if you are bland and boring, then they might use you as a utility, but they won’t really care about it.

Vicky: So, you’ve mentioned you think email is an underappreciated tool for communicating with customers. What are some of your tips for making emails really effective, when it comes to engagement and ultimately generating revenue?

Henrik: I think it is to be respectful of people’s inbox, and so if you send something which is not thought through and you’re only thinking about a your own needs, then obviously users won’t care much about you. So we think a lot about how can we send an email that has value to the user? And that is by sending them content of cute pictures, and sometimes it’s about exposing them to offers that we have that allow them to buy things. But I would say first and foremost, be respectful of your usage of their inboxes, and therefore, you should earn your permission to kind of go in and intrude into people’s inbox.

What we’re trying to do more and more – we’re not necessarily there yet – is to be much more personalized, so I think most people will be happy to get an email from one of our Customer Love representative that could send them a personalized email saying, “Hey, I noticed your dog’s birthday is coming up. I have two or three products that I think you might like, because I know you have a Lab and I have a Lab myself, so therefore I just wanted to give you a heads up that we have these available in our store.”

I think that is a different relationship than sending out, “Dear User X, Y, Z – Here’s a well-designed JPEG,” but just looks like a flyer that you kind of slapped in my face. So really trying to become increasingly personalized in how you write to people and you can definitely use technology to become increasingly efficient in that way.

Vicky: Henrik has a history of being on the cusp of what’s next, and with Prehype, his current venture, he’s helping highly structured, corporate powerhouses get in touch with their more progressive side.

Vicky: So Prehype, the work that you’re doing there, it revolves around helping large companies innovate, you know, in the start-up world. Any wisdom you can share about how companies can build a genuine culture of innovation?

Henrik: Yes, I think obviously there’s not a one-size-fits-all kind of answer for that. There are different types of innovation, and I think a lot of companies are a little bit on their way of what type of innovation they’re really looking for. The mental model that I tend to use is that of, let’s say there are three boxes of innovation where number one is how do you make your interesting business better? Two, how do you kind of get it out to new platforms – how do you extend your current business? And thirdly, how do you do adjacent business? So how do you create new business opportunities or incentive plays or take big cost centers and turn them into revenue centers like BarkPost.

So I would say box two and box three are what we mostly work on in Prehype Square. We go into big organizations and we say, “Hey, let us help you find intrapreneurs that have ideas of new things you can do that can build very quickly.” Then we partner them with entrepreneurs that we have in residence, and then we take them out of the organization and then we build new initiatives together with them and operate them for a period of time, and if they work, we send them back in, we send them out as a separate company, and if they don’t we close them down.

I’d say based on having done that for four or five years with a lot of the Fortune 500s, a few things. One is we believe that structure is defined outcome. So if you are doing the same thing over and over again and getting a different answer, I think that it’s not because you don’t have internal motivation. It’s because you don’t have internal ability. And that’s often because you’re trying to use the same tools that you’re using for everything else. I don’t think you can go down to a team who gets compensated for making sure that tomorrow looks like today, and just ask them to think out of the box and do something completely different, because the second you move out of that meeting or you come back from the workshop, then the reality is that people don’t get bonuses for taking chances.

The legal team is not compensated for taking risks, but for making sure that things stay the same. The tech team has an 18-month roadmap already and don’t need extra stuff to put on, and the brand team doesn’t want you to try something that could piss off your existing customers. So you need to think about what is the structure that you’re creating in order to facilitate this innovation. That is what a Prehype basically does is to help create that structure.

I would say a passionate argument for me right now is I think a lot of people don’t take it seriously enough. I think there’s been a lot of talk about “It’s okay to fail,” which I think is kind of like a BS kind of thing. It’s not okay to fail. It’s a reality that you’re very likely to fail when you do innovation, but it’s not okay. And so I think people need to be a little bit more ambitious about it.

Vicky: Great insight for our listeners. So, one last question.

Henrik: Yes.

Vicky: So, you obviously have had many, many successes in your career. Tell me about a time when you had a fail, you know? When it’s not okay to fail. I love that. I wrote that down, and I agree, but tell me about when an idea or project just went terribly wrong, you know? And what did you learn from that?

Henrik: I think most of my projects, I expect in a weird way, to go wrong. Not because – I almost say I expect it. I think a lot of my projects, I’m realistic that there’s a statistical chance of them not succeeding and a statistical chance of unsuccess is higher than that of success, so one of the things that I’ve done the last many years is that I’ve reframed the way that I look about being an entrepreneur.

I think there’s been a little bit of a – entrepreneurship has gone through a little bit of a Hollywood phase, where because people saw “The Social Network,” everybody seems to think they’re going to be a billionaire because they have an idea for an app and obviously, the reality is that’s not the case.

Being an entrepreneur and starting new projects is very risky, and you are often kind of walking in between these two worlds where on one side, you are very positive and you tell the world what you have in mind is going to be fantastic. I wouldn’t say you lie, but you definitely explain the most positive version of what a future might look like and you do that to your – I do it to my wife and tell her, “It’s going to be fine this time, and I won’t work as much,” and I tell my investors that I know what I’m doing and I tell people who quit their jobs and join my company for option packages, and I basically all tell these kinds of people that all this stuff’s going to happen. The reality is that I don’t know. I hope it will and I think I have a good idea, but I don’t know.

The dark side of the entrepreneur life is that you have this endless amount of insecurity about all these things that you’ve promised to everybody, and I think in many ways, that is your job as an innovator and an entrepreneur, that is to take on the emotional responsibility for everybody else, because the reality is that the future is tough to predict and therefore you very seldom have hard data that will back up why you should be doing something that is either very innovative or very entrepreneurial. You just have to have a random gut feel that if I do this thing and I have integrity and I work hard, then there’s a great chance that this kind of stuff that you dreamt of will actually happen.

So, I think the failure part is something that all of us doing it for a while have very close to us, even when we’re succeeding. We’re kind of just worried about all these things that can go wrong all the time, because the reality is that most of the things are uphill and people around you tend to be pretty good at coming up with suggestions of what might go wrong. I think what we are becoming or we’re good at is that we’re good at not worrying about things that we don’t have to solve at the specific point.

I’ll give you an example. When I started BarkBox, one of the first questions most people had for me was how are you going to pack the boxes? I said I’m going to pack them myself. Everybody said, “Oh, that won’t scale.” I realized that if we were very successful, I won’t be able to pack hundreds of thousands of boxes. The reality is that I had no customers at that point, and so it wasn’t really a huge problem to solve. So, I packed the first 67 boxes to go, and then the month after we packed a few hundred and when we had a few thousand, we invented packing – we had packing parties and I lured my friends and family down with wine and cheese on Thursdays, and they thought they were having a nice evening out with me and they were packing boxes.

And now that we have hundreds of thousands of boxes, we have warehouses up the coast, and we have an endless amount of people who help us box things.

I guess that was a little bit of a long-winded answer to your question. I think we all have failures, and I have more failures than I have successes. I tend to talk mostly about my successes, because I like people to be impressed by what I’ve done, but I will say that the failure part is something that you have every day.

A few ways to kind of circumvent that is to work on projects that you like with people that you think are awesome. So when you fail, which probably you will, then you at least had a very good time. I would say stop worrying about all these problems that you don’t have to solve at that specific point, but really just solve the problem that is directly in front of you, which is often – can I create something that customers care about or not?

Then I think you will be successful even when you fail, because you had a good time with people that you like, doing something that was meaningful for customers.

Vicky: That’s fantastic. Thank you. I think our listeners will eat that advice up. Gosh, this has been so stimulating. Really, really have enjoyed our 50 minutes together, and I just want to thank you for being a part of the On Branding community and just contributing a great, great point of view and experience to our show.

Henrik: Thank you.