 First of all, we want to say thank you to Helsinki and Slush for having us. This conference is unbelievable and Max, I'm very happy to be here with you and before we get into it, Sequoia has been partnered with you guys since the seed and We're more convinced than other that this is a legendary company in the making and so Would you mind just telling people what fair is and what inspires you to start it? I think the founding story is really Wonderful for people to hear. Yeah, so fair is a wholesale marketplace We connect independent retailers with independent brands so they can then sell those products in their store And I think the story of fair really actually started Back when I was in college. I went to a public high school in Oklahoma and then I ended up going to college at Yale and The first couple of years that I was at Yale were really challenging I went from being successful and basically everything that I'd done in high school to Failing at everything that I did my first couple of years in college You know, I was the captain of my soccer team in high school I wasn't even a starter on my college soccer team my freshman year. I You know was on the debate team in high school I couldn't even make the debate team in in college and there was just example after example of that And I think it culminated my junior year. I was applying to internships Which is you know what you're supposed to do it in Ivy League school You want to go into iBanking or management consulting and I didn't even get an interview with any of any of the companies that I wanted to get an interview with and you know it's a little bit of an identity crisis at the time because I think achievement had been such a big part of my identity and I just wasn't achieving anymore and I ended up starting a house painting business in the summer after my junior year just to Kind of make money and to have something to do and I absolutely loved it I you know enjoyed every minute of it. It was the most fun that I'd ever had doing anything And it was really a liberating experience, especially after a couple of years of really struggling And I remember I called my dad and I said dad. I found my dream job. I know what I want to do I want to paint houses and my dad Who was spending a lot of money on education at the time said that's great son But I think maybe what you want to do is be an entrepreneur and you know I think that was really the beginning of it and I think he was right the thing that I really loved about it Was being my own boss. I didn't really like the house painting part that much And that ultimately led me to a couple of experiences that I had after college where I was kind of charting a path to try To be an entrepreneur The first was I ended up working as a product manager at square And I was really drawn to the opportunity to build technology products for other entrepreneurs I think being you know having that itch and really understanding that so deeply myself I wanted to build products for entrepreneurs. I also wanted the opportunity to learn from somebody like Jack Dorsey I think one of the greatest entrepreneurs of all time And then the other experience that I had was I introduced this product called the blunt umbrella to the US market On the side while I was at square and so you know I had this opportunity to basically on the on the weekends go to trade shows Try to get this product in front of retailers and then during the week. I was building products for small business owners and you know really seeing What happens when you don't have any technology in the case of me being a small business owner myself You know that ultimately led me to to to try to pursue the opportunity with fair And you know again have the opportunity to try to support small businesses and support other entrepreneurs by By building this wholesale marketplace to make it easier for brands to get their their products out of the shelves of retailers That's awesome. Well, we're glad that you didn't end up painting houses, you know and decided to do this instead One thing that you talk a lot about is small businesses independent businesses I think that a lot of times for people they think small businesses independent businesses small market And one of the things we've talked about a lot is that this is actually a giant market and it's a giant market That's hiding in plain sight What do you think fair was able to do and you were able to do in order to identify That market and why do you think you guys were first and I think it'll be inspirational for people who might think that all the good ideas are already picked over and you guys managed to find something that was pretty unique Yeah, so the the question of How big is the market and you know the fact that the market is hiding in plain sight was actually One of the things that made me most nervous when we were first starting out because I'd been going to these trades Shows for like six or seven years and it was really clear from the very first show that I went to how broken it was One of the things that held me back from just going and doing it Was the fact that it seemed like surely if there was a there there somebody would have done it This market is huge, you know trillions of dollars are flowing through the wholesale industry, you know There's hundreds of trade shows with millions of attendees If there was really an opportunity here somebody would have taken advantage of it and that frankly scared me off for a long time Yeah, and Once I left square with the idea of starting my own company I kept coming back to this idea and I kept asking this question of like why hasn't somebody done it before and I ultimately came To the conclusion that there's really two reasons first is The fact that it's not exactly hiding in plain sight. It actually is kind of hidden. Yeah, good You know the the retail industry really has three main players. There's brands There's retailers and then there's consumers and retailers sell the products of the brands to the consumer All of the innovation in the retail industry over the course of the last 20 years has really been focused on the consumer legs of that triangle You know you can think of Shopify connecting brands to consumers You can think of Amazon connecting brands to consumers You can think of instacart connecting retailers to consumers doordash connecting retailers to consumers Square connecting retailers to consumers No one was paying any attention to the wholesale leg of that triangle And I think a big reason for that is there just weren't that many people from the tech industry going to trade shows and seeing how broken You know the wholesale market was and so I think there's just weren't that many people paying attention to it And to the degree to which there were people paying attention to it I think the second reason that you know it took so long for for this to to this problem to get fixed is that It wasn't immediately obvious what the problem was that needed to be solved in order to move the market online the reason why trade shows exist is it's really a filtering mechanism for Retailers they're going to the show in order to see the products that are actually going to sell in the store There's all these showrooms these sales raps who are curating these showrooms where you know the retailer shows up They know that the products are actually going to sell And they're able to touch and feel and it gives them you know a sense of trust That the products are actually going to perform if you're a small retailer in particular if you Buy products that don't sell you go to business. And so it's really scary Buying products site unseen via you know on online marketplace And so there had been a few folks that had tried to move the market online But they hadn't been able to because they didn't solve that trust piece Yeah, and you know that was ultimately I think what helped fair get off the ground was we offered free returns net 60 payment terms We took all the risk out of buying and that enabled us to get liquidity and able us to get off the ground and you know That ultimately led to to things really taking off Yeah, I think that the one of the things that impressed us most at Sequoia was just this sort of Discipline around understanding the real customer need that you guys had and I think not force-fitting your own insight on it But actually going and listening and I think that's a real hallmark of the culture All right, so let's get to it in the sense of the name of this session is taking on Goliath Leveling the playing field for independent retailers. So maybe give us a history lesson How did Goliath become Goliath in this industry and what is fair going to do specifically? To level the playing field and arm the independent retailers. Yeah So there have been a couple of Goliaths over the years in in the retail industry I think the first was Amazon or was Walmart and you know now now it's Amazon But really the history of retail over the course of the last 100 years at least has really been a story of consolidation where you know I think in the 70s and 80s Walmart really rose up and you know proved that Scale economies of scale could really be brought to bear in the retail industry. They use technology they use data they use their bargaining power in order to drive down prices and You know in order to offer giant assortments to consumers all over the the country in the US And then Amazon has basically taken that playbook lower prices larger assortments you know data-driven assortments and they've applied it, you know tenfold and have had a lot of success in doing so The interesting thing is over the course of the last 20 years There has been there started to be a counter movement by the independent retailer Against the walmarts in the Amazon of the world. They've actually figured out how to compete in a world where they don't have the lowest prices They don't have the largest assortments. They figured out a compete on experience, you know these retailers are artists They are curating an experience for you as the consumer where when you walk in, you know, it's entertaining It's fun to shop in an independent store. They're community builders. They're connecting their communities They're building presence online and building their community online and you know, they figured out you don't have to have the lowest prices You don't have to have the largest assortment If you can create an experience that draws people in if you can build community among your customer base You can compete and so in many ways Walmart and Amazon are competing head-to-head on the same dimensions and the independent retailer because they already went through Their version of the retail apocalypse, you know, 30 40 years ago They figured out how to survive in in this new world And as a result They're actually thriving the number of independent bookstores in the United States at least has more than doubled over the course of The last decade that is a shocking stat that I don't think people really grasped Which is that there's this story that you know retail is dying and it's like no Undifferentiated retail is dying right retail with no point of view is dying These independent retailers are actually thriving in spite of some of these disadvantages that they do have that I think you guys can help fix Yeah, I think fair actually has a very important part to play in the next stage of the journey for these retailers You know, they still have these structural disadvantages. They still, you know, struggle to have bargaining power They struggle to get capital You know They're still at a disadvantage in many ways and I think part of the idea of fair is we're taking 600,000 retailers and you know soon to be a million retailers and We're pulling them together into a collective into a network into a community that gets stronger the bigger that it gets that brings The power of scale and technology to independent retailer that it's traditionally only been available to the largest companies like Walmart and Amazon We give them access to net 60 payment terms so that they can buy more inventory And they can actually carry more products that that ultimately are going to sell We give them access to the ability to return products that don't sell There's something called buybacks that actually large retailers have been able to do for for decades If a product doesn't sell, you know, our retailers can just send it back And that allows them to take more risk that allows them to to find the best-selling products themselves And then another thing that we're doing is I think we're actually allowing them to lean into their strengths Allowing them to you know be the artist that is curating this experience And one of the things that we've just started doing is we started using artificial intelligence to enable them to find the exact product from You know the 70,000 brands that we have they can find the exact product that they're looking for they can find You know coffee beans from the hills of Italy they can find, you know boho blouses from California They can find Nautical-themed goods from Maine, you know, whatever it is from wherever it is They can search for it on fair and they can find it rather than having to wander the aisles of a trade show Hoping that they stumble upon that thing they can have a creative vision and they can match it on fair And not only can they match it, but they can match it knowing that those products are going to sell Because we have the power of data 600,000 stores, you know ordering reordering returning we have pointed sale integrations Where we're actually seeing how the products are selling so not only are they able to you know create that vision They know that the products are going to sell and that they're going to be more successful as a result. I love that I think one of the things we talked about at Sequoia and we've talked about before is AI ought not stand for artificial intelligence It's stand for augmented intelligence and you think about taking these collection of artists and giving them superpowers and giving them The ability to leverage technology in a way that the Goliaths have had But you take that combined with their taste and I think you have something really magical And I think it's quite dystopian to think about a world where you only shop at these giant You know personality list big box stores one thing that's amazing about Helsinki is actually these stores are everywhere, right? And I think that This place is actually ahead of the game. I think on on that I think Europe in general has been ahead of the game with the local movement And you know, that's one of the reasons why I think we've seen so much success in Europe to date where I think we've sold something like 30 million products over the course of the last year It's been wildly successful for us as we've expanded over the course of the past year. Wow Well, I know there's a little off-track, but how has Europe done since we've launched here relative to the US at the same time? It's grown much faster, huh? And I think part of that is we'd already figured out a lot of the things that we needed to figure out You know when we were first starting in the US there was a lot of kind of tinkering that we needed to do to get it Right, but I think part of that is just the European market Is in many ways better suited because it's so fragmented because the shop local movement is so powerful here You know, we've seen fair takeoff here in a way that you know, not even in the US Where I think we also saw really strong growth. That's amazing well One of my favorite things about the job that I have is I get to hear the future from people like you Right and so I think that if we can give that as a gift to everyone Give them a glimpse of the future of retail You've done a little bit of that and then give them a glimpse of the future of fair. Where's fair going? Yeah, so I think that the future of retail is really one of blurring lines And I think there's a there's a bunch of different lines right now that are Segmenting the retail industry. There's lines between online and offline and I think that line is Increasingly blurring you hear a lot about omni-channel. I think that's something that's been happening Gradually over the course of the last, you know, 20 years But I think it's really accelerated over the course of the last couple of years at the beginning of the pandemic Only about 25% of our retailers had an online presence now Almost all of them have an online presence and actually an online channel is growing very rapidly for us It's growing and I think it's now about 20 25% of our total business is sold through online retailers pretty similar to the you know Overall e-commerce penetration I think the second thing that we're seeing is a blurring of the lines between brands and retailers in between D2C brands and Wholesale brands, you know traditionally a brand either sold through their Shopify store through their big commerce store Or they sold through wholesale Increasingly, you know, we're seeing the fastest growing segment on fair is actually brands that had never done wholesale before and I think part of that Is because they're realizing D2C is really tough right now, especially, you know with the privacy changes that Apple's made It's really made it a lot more difficult to build your brand through online advertising all of a sudden, you know Wholesale looks like a really good deal. It's a really good way to build your business And so I think the the whole concept of a D2C brand is really going to start to feel increasingly antiquated And and I think the the third line that that's going to be blurring is the line between social media influencers and Retailers I think more and more you're seeing social media influencers. They really are retailers, you know, they're they're taste makers They have an audience they figured out how to monetize that audience in the same way that retailers have an audience They have a brick-and-mortar presence. They have an online presence. They have foot traffic They're monetizing that audience by being taste makers increasingly. I think you're seeing the social media creators looking to use Retail to sell products to monetize their audience and you're also seeing retailers particularly independent retailers building community online you know identifying ways to create Content that connects to their community offline In really blurring the lines between their online community and their offline community and using social media to build their brand to build their Presence to connect with their customers and to sell more one of the most successful things that our retailers did during the pandemic It's sort of doing live selling On on Instagram on Facebook, you know, they found that that was a really successful channel for them They've got personality. They've got the ability to story tell and I think that's something that fair can can really play a role in In the future I think the future for fair is really to help to blur those lines. It's to help the D2C brand Sell wholesale it's to help the on the brick-and-mortar retailer Build an online presence and identify which products are going to sell online to you know push products directly from fair Onto their Shopify store onto their big commerce store and to take a lot of the pain out of managing an online channel It's to help the social media influencer find products that they can sell to their audience It's to help the online the brick-and-mortar retailer, you know build a digital presence give them the assets that they can then You know sell through their online channels one thing, you know, we talked a lot about the industry and the business There's a lot of aspiring entrepreneurs here as early founders one thing that I think would be beneficial as fair is one of the best-run companies that Sequoia has been lucky enough to partner with and I think that you all have built it with real Discipline and purpose Can you talk a little bit about the culture that you guys have created? What are some of the elements in it? Why have you done it that way because I think it has been built with this idea that it's going to be around for decades And it's not something that's just you know what it is right now, and so I think people will benefit from that Yeah, I mean I Said I wanted to be an entrepreneur and that I wanted to be an entrepreneur for for over a decade and I think one of the things that I found that I love most about the job But also that's most challenging about the job is the degree to which it changes Every year every six months the job is completely different than what it was You know the the prior six months and you know, I I've joked to my wife. It's actually it's usually not a joke She turns it into a joke About every six months. I turn to her and I say I don't know what I'm doing Yeah, like I'm bad at my job and she says you said that six months ago I say yeah, but this time is different like this time. I'm like really mean it I'm really bad at my job and I don't know what I'm doing and I don't know if I'm gonna be able to figure it out and Every time I mean it and you know, I think when we were first starting out The challenge for me was I'd never been a manager before you know I'd I'd been a product manager, but being a product managers really different You know, you're you're leading through influence. You're trying to get people to do You know what what you want them to do you're trying to facilitate You're not actually managing people people's careers are not dependent on you in the same way I had a really hard time making that transition. One of the things that I really struggled with was you know this idea of I'm the boss, but I Also want to be friends with the people that I'm working with and you know early on we had to make some difficult decisions and let people go I Really struggled with that and it made it so hard because I loved the people that I was working with Yeah, and so there's a period of time where I actually kind of withdrew because of that experience And I didn't want to build relationships with the people that I was working with Because I was afraid it would make it harder for me to make tough decisions I ended up reading this book called radical candor that was really clarifying for me And I think his ended up being a core part of Ferris culture and the idea is you know You want to be direct But you also want to be caring as a leader and you want to build a relationship with the people that you're working with and that Was really freeing for me where I realized you know You actually do need to build a relationship with the people that you're working with in order to be able to be direct in order to make the tough decisions Because otherwise, you know, you're just being what the book refers to is obnoxiously aggressive That's the opposite of and then if you're to ruin his empathy. Yeah ruin his empathy is that yeah Yeah, and I struggled between those two polls and I think you know my journey as a leader has you know That's been a big part of it. I think another big part of it has been transitioning from being a Product manager where your job is to build the product is to you know, make the product better and better and better Because that that was my background to actually thinking about the company as the product and that's been a big transition over the course of the last few years where You know my job is to make the product better But the best way for me to make the product better is to actually make the company better Yeah, and to really think about the company as the product to think about you know the people that we hire The culture that we build the way we define that culture We spend a lot of time thinking about our values and our operating principles codifying those values and those operating principles building mechanisms to reinforce those values and those operating principles our core values are Serve our community. We serve our community. So very mission-oriented seek the truth very rigorous Embrace the adventure so you know focus on taking risks being resilient You know one of the operating principles there as we laugh We like to have a good time be an owner you know being willing to do What it takes to make the company succeed and you know really thinking thinking of yourself as as you know Whatever it is whether you know, it's giving up scope whether it's doing the hard thing whether it's driving outcomes And then the final one is be kind And we were really thoughtful about the way that we try to build Mechanisms in the company to reinforce those values And then I think the the final thing that Has been a big adjustment for me over the course of the last You know year two years is making the transition from You know again being very focused on the product and the execution of the product to being more of a capital allocator Like I talk about the transition from PM to GM where you go from a product manager where you're just building the product to being a general manager where you know You're managing the company You get to a certain scale and the role starts to change where you're actually you know your job is capital allocation It's like making the big strategic bets that you know help the company succeed I think one of our investors I think maybe Vinod Kosla says you know your job is CEO ultimately you get to a certain scale It's to get the like five decisions, right? Yeah, there's like five decisions every year that matter And so one of the things that I've been focused on you know over the course of the last couple of years is getting better It make it identifying those five decisions and then making those five decisions And you know some of that is getting yourself into the right frame of mind to be able to make those decisions Some of that is building a decision-making process that enables you to make those decisions Some of that is building a team that is really good at kind of identifying You know your weaknesses or your blind spots and filling those in and creating a culture of debate that enables you to get to the right decision You know we do try to do that with our board. We try to do that with our executive team And then part of that is you know getting good at breaking down the problem into its component parts We use writing to do that a lot. We have a very written culture I find writing is very helpful and kind of clarifying thought also it exposes any Flaws in your thought process. You can't hide you can't hide sloppy thinking and writing The one of that is an extremely unique thing within the companies that I've ever been around The long-form writing that you all do to have discussions. Yeah, sometimes a little too long But but yeah, it's a very powerful mechanism to force strategic clarity of thought Well max, thank you for sharing your wisdom. Thank you for starting fair and thank you for letting us be on the journey We're very proud that we get to be a part of it. Thanks so much Ravi appreciate it. Thank you all. Thank you