“That's the lesson here: the businesses that figure out how to use technology to the best of their abilities are the ones that are going to be stronger and more resilient, no matter what happens.” – Dan Frommer

Dan Frommer (@fromedome) is Founder and Editor in Chief of The New Consumer, a publication about how and why people spend their money. Dan has written for Forbes, The Atlantic and Recode from Vox Media, and he helped create Business Insider as its second team member. Dan’s Consumer Trends Report in collaboration with Coefficient Capital is a fascinating look into recent spending trends.

To listen to Dan’s bonus interview and learn more about his daily habits and routines, click here.

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Chapters in Part 1 of this interview:

Dan’s background in journalism and technology, and how it led to The New Consumer
What technology can unlock for brands
Who is the modern consumer?
How legacy brands fail to serve the consumer, and authenticity at scale
How Target and other big brands have kept up with the modern consumer
How small and direct-to-consumer brands can grow in today’s market
On sweetgreen’s success and branding
Why brands must embrace digital experiences to move forward
The Consumer Trends Report with Coefficient Capital

Links from Part 1

Key Takeaway

Dan’s research has shown that in order to woo and appease the modern consumer, brands must be digitally-enabled and keep up with tech trends.

It's not that every company has to create a new technology in order to be technology-enabled, but basically every business—especially as we learned over the last year and a half with the pandemic—every business should be technology-enabled to some degree, and it unlocks so many different opportunities, whether it's growth, speed, breadth of growth, or just a deeper connection with your customer. All of these things are possible because of technology.

There used to be this idea that the oldest brand was the most trustworthy because they've existed for this long. Their product must work. It must be good. But to me, that doesn't really fly anymore, because developments in science and tech say the company that has been formed most recently should actually be the one using the newest and best stuff. I think consumers are much more interested in and willing to trust new brands than they ever were before.

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Transcript

Daniel Scrivner:

Dan welcome to Outlier Academy and thank you so much for your time, I'm really excited to chat with you today.

Dan Frommer:

Thank you for having me.

Daniel Scrivner:

So just a little bit of background for people listening. I think I signed up for your newsletter close to when you launched it. I think I've been subscribing for two years and some of the things that I love about it is you just write about something that is niche but also meta in a lot of ways, which is the modern consumer, how people are spending their time and their money. And you've got some fascinating observations. So to start, I thought just to lay some foundation for people that might not be familiar, can you just give kind of a quick sketch of your background and then we'll talk about some of the origin story of The New Consumer.

Dan Frommer:

Absolutely. Again, thanks for having me on. I was a '90s internet kid, I started building websites in middle school, in the mid '90s, both for myself and for my father's ad agency clients. So I had an early start in crafting brands on the internet and building websites and publishing digitally. And then I went to college to study journalism. I went to the Medill Journalism School at Northwestern and studied to be a TV reporter actually, I really wanted to actually to go into radio and public radio news. But ended up moving to New York a year after I graduated and basically applied for every job in media and started my career as a digital journalist.

Dan Frommer:

So since then, and that was almost 16 years ago, I've spent my time both acting as a professional business and technology journalist, but also as an internet entrepreneur. I'm starting new media brands. Started my career at Forbes, which is kind of as big and as old as it gets in terms of business media. And then immediately helped start Business Insider, which is as new and as different as you could get in business media. So I've gotten to do a bunch of those new brands from scratch, including some of my own. And I've also had the opportunity to work at some more established media companies like The Atlantic when I worked at Quartz or Vox Media, which was my last kind of staff job when I was running a tech site called Recode.

Daniel Scrivner:

Yeah, it's incredible. You've been at all of the kind of iconic names, which is interesting, or many of the iconic names. I'd love to talk a little bit about just the origin story of The New Consumer. And I think what I'd love to explore there is what was so important to you about exploring this topic in this space? And then, was there any sort of element to it that was timing related where you were like, "Okay, I've got to start this now"?

Dan Frommer:

There's two parts to it. One is that I've always been really interested in independent publishing as a solo publisher. And I actually started a site in 2011 as a solo publisher called SplatF. And it was about basically the world of Apple and for a business and an investor audience, that's where I started making some of my famous charts. But back then, my business model was advertising and it just isn't a great business model for niche media, or at least it wasn't back then. And it probably still isn't now, unless you really are, hands-on, selling sponsorships by yourself, which I didn't want to do. But the other part of it was that I had spent more than a decade watching technology and covering technology. And to me, the most interesting thing about technology isn't the big tech companies themselves, but the effect that technology has on the world, as I say, it's a layer on life. It's not just an industry, it's just part of everything now. Every company has to be a tech company. Every product to some degree is influenced by technology.

Dan Frommer:

And my personal interests is food, grocery, consumer packaged goods. Like I said, I grew up in an ad household, one of my dad's clients was Gatorade. I got really into Gatorade when I was a kid. And if I ever have two hours to kill, you're going to find me at a grocery store somewhere in the world just looking at every single package and really trying to understand what's unique about the market. So five, 10 years ago, I started noticing these brands that seemed really new and interesting. I was living in New York and there was a new brand called Warby Parker, which was really taking a fresh look at the eyeglasses industry and competing not only on price, but also on style. There was a company called Harry's, which was doing a similar thing for men's grooming. And then there was a luggage company called Away. And a makeup company called Glossier.

Dan Frommer:

And these brands were really interesting to me, not just because their products really felt fresh and exciting for a younger consumer, but also because of the way they were building their company and their brand. And they were using technology to do it in a way that most big companies and small companies weren't doing before. That's not to say these are tech companies, I think that's a misunderstood thing and perhaps some misallocation of investor resources over that time. But they were digitally enabled in a way, whether it's building a community or doing marketing or customer service, or even just simple e-commerce. The e-commerce experience with these companies was just far and away better and different than it was for a traditional brand.

Dan Frommer:

So I was really interested in these brands. At Recode, we were covering them a little bit, but at some point I said, "Hey, you know what? You want to do your own thing again, there's this subscription business model that is new and compelling for independent publishers." Substack I think had just launched. Memberful, which is this tool I use had been going for a while. I must always mention Ben Thompson and Stratechery which was the pioneer of this model and someone who I had really respected and admired and said, "You know what, why don't I take all these things and try to do something with them? Let's try to make a publication about the new consumer." Which is the person who's buying and shopping at these brands, but also the innovation in the business themselves. "Let's write the stories that I want to read because I sure wasn't reading them anywhere else. And let's do some deep dives into this topic in a way that only I can do." And that's what compelled me to start The New Consumer. I launched it in March of 2019, so about two and a half years ago. And thankfully been going strong since then.

Daniel Scrivner:

You made some really interesting points there and I'd love to go a little bit deeper on one of those. And that's that technology is an overlay. And I think similar to you, I think I really started noticing really interesting novel and just the volume of direct-to-consumer brands that were coming out, but also food brands, whether that's House, whether that's some of the brands we're going to talk about later today, like Sweetgreen or Omsom or Fishwife. It just seems like we're in the golden age. And I remember just as a little bit of a parallel to something you talked about of that these aren't technology brands, but they're enabled by technology. I remember maybe three years ago being at an investor conference and someone, and this was right when Starbucks had really started to get some traction with their app and really started to see some stickiness, so people using that to order ahead. And I remember someone on stage was trying to make the point that Starbucks was now a technology brand. And I remember being like, "Well, that's not true." Their unit economics [inaudible 00:06:30] technology brand, unit economics. The question I want to ask is what does technology unlock for these brands? Does it unlock a better business model? Does it unlock a better connection with consumers? Is it faster to scale? Just any observations there?

Dan Frommer:

I mean, all of those things, plus so many more. Someone told me this idea once that if you remember the early days of GPS chips in cell phones, everyone thought, "Okay, well what's the application of location-based services going to be? Okay, well maybe you'll walk by a Starbucks and, oh, you'll just get an ad for that Starbucks as you walk by, like 25% off or something like that." by the way, some people try to build that, it hasn't really worked. No one had the idea that if you have a GPS chip in everybody's pocket, you could create a service like Uber where all of a sudden people could, through software that was very easy to install, free to install in fact. And on this computer that everybody has in their pocket that knows where they are, could build a global fleet of amateur taxis. People weren't thinking like that. And that's just a systems and a network concept that technology really enables.

Dan Frommer:

It also does so much more. There's a great company called Lumi based here in Los Angeles that just makes it really easy for e-commerce businesses to get really great packaging. That's a process that used to take a fax machine and a lot of connections and a lot of word of mouth. And now because there's the internet, there's websites, there's e-commerce, and there's this amazing systems integrator, all of a sudden you can do things just so much more easily and quickly than you can before. Even just finding industrial designers or other specialists, there's just so much more consumer choice now and so much more products because technology allows those products to reach bigger audiences more quickly. Everything from customer service to digital payments are so easy to do now, they were so hard to do even a decade ago. So it's not that every company has to create a new technology in order to be technology enabled, but basically every business, especially we learn this over the last year and a half with the pandemic, every business should be technology enabled to some degree. And it unlocks just so many different opportunities and whether it's growth speed or breath of growth, or just a deeper connection with your customer, all of these things are possible because of technology.

Daniel Scrivner:

Just listening to you say that, it's almost like that now technology is table stakes. People expect it to be threaded at all layers of their interaction with a company. So, yeah, I guess that is the big change. It needs to be embedded deeply.

Dan Frommer:

Totally. And it seems obvious, but it should. It is obvious. And it's huge.

Daniel Scrivner:

So I'd love to use this as a little bit of a jumping off point to explore a few things really in depth and the first one is I would love to talk a little bit about and paint a picture of the modern consumer, because I think that everyone's aware of the takes of kind of Gen Z that are maybe harsh, what they like, what they don't like. I feel like you can paint a more nuanced picture. And we were talking before, you were talking about that what you're really doing is you study supply and demand and how people are spending their time and their money. So I thought just to start, can you paint a vignette or a profile of the modern consumer, or at least help us flush out that picture a little bit more.

Dan Frommer:

That would be a beautiful thing. The truth is that there's just so many people that everybody is different and it really just becomes society. However, there are some things that I think the modern consumer is more comfortable with technology, is more comfortable with e-commerce, is more comfortable with digital tools and services, more comfortable trying new things I think. There used to be this idea that the oldest brand was the most trustworthy because they've existed for this long so their product must work, it must be good. But to me that doesn't really fly anymore because to me, technology and science, developments in science and tech to me say the company that has been formed most recently should actually be the one using the newest and best stuff. And I think consumers are much more interested in willing to trust new brands than they ever were before. Trust is kind of a tough topic these days, because trust in institutions and government and the media is basically at an all time low.

Dan Frommer:

So it's hard to talk about trust as anything but a problem area right now. But I do see people trusting new brands and being excited about being a pioneer almost, or an early adopter. I think products like the iPhone and even the iPod before it, and the Mac, Apple products specifically made people excited to be early adopters of technology. This kind of bragging rights. I was definitely the kid on the L in Chicago in high school who was very happy to have a mini disc player and a Nokia candy bar phone. And I think there is definitely an element of discovery now that people are excited about, Instagram I think has been a big part of that. People not only want to be first to a product, but want to show it to all their friends. And it really opens an entire ecosystem.

Dan Frommer:

I do a project and we'll probably talk more about this in depth. I do a project called Consumer Trends, which is a research driven report with a venture capital firm here, actually, I'm no longer in New York, but they're in New York called Coefficient Capital. And one of the things we saw in one of our previous reports is basically younger generations use more brands of products than older generations, specifically in beauty, they use a lot more beauty brands than older generations because this new economy means that you can specialize in something really, really niche. You can specialize in a certain condition, a certain skin condition or for a certain population. And e-commerce and the internet mean that you can target and reach that small community in a way you could never do before.

Dan Frommer:

The old days, it was all about, "Can I get the deal for Walmart or Target and be the preferred brand on display there." That's still important. That's still a big part of mid to late stage growth for consumer packaged goods brands. But today, it's all about, "How can I find my tribe of hundreds and then maybe thousands of people who will really be interested in this specific, unique product that I have. And we'll talk about it, we'll build a community about it. We'll build a following and an audience and almost sell it for us." And that's really kind of the strategy that a lot of bottom brands take these days.

Daniel Scrivner:

I would love to ask, and maybe this is a shot in the dark, so there may not be anything really here, but I'd love to ask almost the inverse question, which is, what do you think is most misunderstood? And this could be legacy brands, legacy brands trying to appeal to the modern consumer, just totally misunderstand and get wrong. But do you see any major misconceptions that are just totally not true that are leading people in a wrong direction?

Dan Frommer:

I struggle with questions like that because there's just so much nuance into everything. I would say that big brands are trying to do this sort of thing and they're trying to appeal to younger consumers and they're trying to make more niche products, but the execution is almost always poor. Every time I see a big brand come out with something, whether it's like a center of flavor that is trying to mimic the cool center flavor that a really niche brand has made, it's almost always just not good. It's just a bad approximation of what makes something interesting and special. So what is misunderstood? I would say probably a lot, but I probably don't have a pleasing answer to that question.

Daniel Scrivner:

But I think you hit on something really interesting, which is this idea that obviously brands are aware of the new brands that are entering the space and they know that these are disrupting their industry, and it may not be disrupting them, but it's starting to break in and are mimicking, basically trying to copy and obviously getting the broad brush strokes right, but getting all the details totally wrong. And maybe one note there is around authenticity. And I know that that's something we're going to talk about later, but is there anything around ... Do you have any insights, any points of view about why authenticity is so important today for modern brands?

Dan Frommer:

I think people see through phony BS in a way that before, again, some of this is just broad trust in institutions. You grew up seeing TV commercials and going, "Oh wow, these brands, of course they're correct. Of course they're right. Of course they know what's best." And then you realize, "No, they don't. They don't actually know anything." And now you just have so much more exposure to the people who actually are making things because they really are passionate about it and want to find the best possible thing. I think of these really niche olive oil brands, like there's a brand in the East Bay called Fat Gold. And it's just these two people who just really want to make the best olive oil imaginable. And I just can't go back to buying the mass brand crap at the store anymore because I've now been ruined by this really excellent olive oil. They're not the only ones by the way, there's Breitling, there's several other really niche olive oil brands. A spice company called Diaspora Co, which a young energetic founder who just wants to find the best Indian spices and bring them to the American consumer. And once you've had the turmeric from Diaspora Co, you can never buy Whole Foods 365 turmeric ever again. It's just not going to work.

Dan Frommer:

So authenticity is a word that is often misused and used in a way that is designed to make people angry more than anything else I think. But to some degree, it is a real thing. You can really tell when someone is super passionate about something when they're doing it because they really want to make a great product. And you can take a more skeptical look at not all big companies are like this, but a lot of times you can really tell their motivation is a lot different than that independent entrepreneur. And again, e-commerce and technology is what allows those brands to thrive now in a way that they just couldn't do before. Perhaps they could get into a couple of stores in their town and then grow organically from there. And organic growth is really still the ideal growth in food, beverage consumer, all those industries, but e-commerce just opens up so many opportunities and allows, let's make a buzzword here, authenticity at scale is now so much more popular and possible now than it was five, 10 years ago.

Daniel Scrivner:

I love that term. We're definitely going to add that in the show notes and I'll try to lay claim to that.

Dan Frommer:

Let's register that trademark right now.

Daniel Scrivner:

Yeah, there we go, I'll do that right after this. Your point earlier of around, we know all the things that legacy brands get wrong, it's been kind of rolling around in my mind since you say that. And the one, I don't think it's a counterfactual, but the one, I guess, thing that stands out is Target seems to have been surprisingly successful at almost stealing some of the DNA of some of the modern brands releasing that as private labels. And there's some things that are unique there. Those obviously aren't, I don't think you can get those on Amazon, you can't, those things don't have a direct website. They're not direct-to-consumer. So it's basically maybe Target taking shelf space from some of these competitors and offering an alternative, any insights there on why have they been able to be successful or what's unique about that?

Dan Frommer:

Well, first I have to ask you, have you hacked into my computer? Are you looking at my story ideas list? Because that's something I'm also very impressed with and really curious about. So one thing I'll point out there is Target historically was not a brand creator, they're a retailer. And they were historically selling other people's brands, Procter & Gamble's brands, Unilever's brands. And private label has been part of retail for decades, it's nothing new, but usually private label was the cheapest stuff. It was kind of crappy. It was basically there to make you pay more for the better brand, unless you really couldn't. I think back to the generic grocery brands growing up where it was basically a white label with black words that just said beer on it, or whatever, or beans or something like that. Private label has really come so far since then. And it's interesting to see retailers like Target, which again, in the past were not in the business of creating great brands, but really just selling other people's stuff, creating these new brands that are interesting, that have a point of view, that have high-quality, differentiated products and have kind of a fun brand sense to them. That's new. That's really interesting.

Dan Frommer:

By the way, most retailers are not Target. In fact, you look at pretty much every other retailer and grocery, their private label brands don't work like that. There are some though, I think Monoprix in France does a really good job with this. They have some pretty high quality private label stuff. When I'm in Paris, I'm buying a lot of Monoprix brand things. And Target does a great job with it. I think Amazon actually does a poor job with it. People are always really interested in all these Amazon private label brands, but ultimately I find them to be kind of not that great. I would say Whole Foods actually has done a really fantastic job with it. And of course, Trader Joe's too, which is basically all private label and continues to punch way above its weight in terms of interesting new products, unique products that you can only buy there and really sets as an example of what's possible with private label. There are some attempts from internet brands to do this, Thrive Market is one that comes to mind. Some of them do better than others, but Target, you're right, they've got something special going on there. And that's definitely something I hope to investigate further. So maybe we'll have a newsletter about that in the next couple of months.

Daniel Scrivner:

Yeah. I'd be excited to read it. My take just quickly is they've taken a very different approach to execution. I know a few people that have worked on some of the design elements for some of those private brands and they really, I mean, in terms of the process that they follow to invent these things and figure out what that point of view is and figure out what that brand identity is, they do best-in-class in terms of what kind of modern really successful direct-to-consumer brands are doing. So, yeah, I'd be curious to see what you uncover.

Dan Frommer:

There's a couple of things though that they have now that they always could have had but technology has enabled recently, which is really strong data on their consumer and first party data, which is important. They know exactly what everybody buys in their stores. They also have control over the execution, as you say, they can do everything from the product buy to the brand design, to the store merchandising and display, and they don't need anyone else's permission. They don't need Costco to bless them with an end cap or anything like that, or any complication like that. They can do it all themselves. And I'd love to see other retailers figure that out too. It really is something that Target is doing in a special way right now.

Daniel Scrivner:

Yeah. I think the merchandising element is really interesting because as soon as you tee up all of those different things, it makes it pretty clear that they have quite an unfair advantage because it's obviously their store. They control the display, they can take shelf space from other brands. So I'd love to pivot and explore other modern brands. And we were prepping for this, you were talking about that a lot of people are basically fixated on what modern brands are doing. And this kind of goes back to our point earlier of maybe legacy brands are trying to mimic just in terms of the execution or the final look and feel or what's on the surface of these brands. But what's interesting to you is how and why the most interesting companies are doing what they're doing. So I'd love to start there and just talk a little bit about if there are any learnings and takeaways of what these modern brands are getting right, in terms of how and why.

Dan Frommer:

To me the most exciting ones, again, are the ones that have a reason to exist and are also just executing in a way that is very high quality, but also is newly possible because of technology, social media, the internet. An example that I really liked recently is called Fishwife. It's a tin fish startup here in Los Angeles, it's started by two young women who did not have a background in fishing in-

Daniel Scrivner:

Tinning.

Dan Frommer:

... Cans, even in sales, but they were able to kind of have this epiphany about a year ago if I recall, they were like, "Hey, we like sardines, how come there's no really good sardine brand that's either from the U.S. or really high quality, or just really speaks to us? And this idea of speaking to us I think is really important these days, because the connection that consumers have with brands is deep and also is kind of ongoing, is constant. If you are a daily Instagram user, which hundreds of millions of people are, maybe it's a billion, you're coming in contact with these brands every day. And they become a part of your life in a way that they weren't before. They're storytellers, they're publishers, they're world builders. And if you look at Fishwife, first of all, these two women were able to source smoked salmon, smoked trout, sardines with no background. They just were able to source it. And some of that is through old school word of mouth, cold calling, walking up to people, taking trips, but some of it is possible because of the internet, and certainly reaching their customer base is possible from the internet. They were able to build a really interesting brand with very organic and analog drawings basically as their brand and their voice. And it really reflects them too. I've had a chance to chat with them and meet them in person, and it's really them.

Dan Frommer:

And that just was really hard to do before. You could do that again on a small scale, you could start a brand and sell it in a couple of local stores or something like that if you were lucky. But the fact that they've been able to build a clientele across the U.S. and get featured in a ton of newspapers and websites and newsletters and magazines and now you're starting to see it in more stores here in LA especially, it's really cool. And to me, it's just a really great example of something that you can create in weeks or months, and I won't say that they've scaled it, I mean, I'm sure their volumes are higher now than they were a year ago before they were selling stuff, but they can scale it and they can start it from scratch in a way that is really interesting and unique.

Dan Frommer:

And not to say there's a blueprint that everyone should follow, but it's a great example of what's possible now. There's another one called Omsom, which was two sisters in New York, Vanessa and Kim Pham who grew up in a Vietnamese American household. They started this sauce company called Omsom because it's actually really hard to find really high quality Asian sauces, the stuff in the food aisle. And actually there's a really great story in The New York Times recently about how the ethnic food aisle still lives on, despite the fact that it's just a flawed concept. The sauces you could buy in the ethnic food aisle are nowhere near as good as the ones that Omsom was able to create, again, with no real background in food or consumer packaged goods or branding or anything. They've been able to put together a really compelling brand that has great visuals, a really, really terrific product that reflects this commitment to really obsessively finding the best products.

Dan Frommer:

They also have an interesting model where they work with chefs to develop the recipes. They source really, really hard to find stuff. I believe there was yuzu or something, there was some sort of citrus that they were able to get into a shelf-stable packet that's just really hard to do, that just makes it taste like 10 times better than any sauce you've ever had from a jar or packet. And have this fun brand and they have a great newsletter that comes out and they're living the brand essentially in a way that in public, on social media, globally to a large audience of people who are really into them, this is new, and this is what I find really interesting.

Daniel Scrivner:

Yeah. Those are fascinating examples. I'd love to zoom up for a little bit and one thing I would like to explore is, I guess, how you think this is playing out in the overall market? And I guess, with some of what I'm curious, we're seeing this wave of new brands that are absolutely resonating with people our age, maybe it's the latest one or two or three generations. And I'm curious maybe one way of thinking about why that's happening now is previously in all of the grocery stores and in Target, there were no brands that spoke directly to this generation. So we're just seeing a new wave of brands that is able to capture a whole new audience that's basically going on the shelf, maybe is stealing a little bit of shelf space, but not potentially too much. It's almost just like there are now products coming for this latest generation. That's maybe one way of thinking about it. Another one would be that this is truly displacing older brands and it's going to cannibalize the industry. Have you spent much time thinking about that? Do you think that these brands are really cannibalizing some of the older brands or is it just they're taking a small footprint now, but you think they're going to continue to grow and grow and grow?

Dan Frommer:

I think they are growing the market. I think these brands probably never get as big as some of the legacy brands do, just because they're more specialized. The audience for a $10 can of smoked tuna is probably going to be smaller than the audience for a 45 cent can of tuna in spring water, just because of the realities of economics. I think they're growing the category. And by the way, it's interesting, both of these brands started as direct-to-consumer. Both of them aspire to be in retail. Fishwife has done some local retail. Retail is a scaling game, basically. And direct-to-consumer allows them to start, iterate and find a community without any permission of any buyer at a retailer who takes a year and a half to make any decision, without any permission, without having to pay a slotting fee, without having to do co-marketing with retailers. It's a really interesting thing that is, again, pretty new.

Dan Frommer:

Do they eventually replace and displace legacy brands? Yes, over time. If you look at where the growth is happening in the food and beverage and CPG industries, it is in smaller and medium-sized brands, but the big brands still have a lot of control over retail where most stuff is still sold. To me what's interesting though, is that, and the pandemic has really accelerated, you hear this word a lot, accelerated the shift to e-commerce. And let's look at the food and beverage industry or grocery for example, it is a trillion dollar industry in the U.S. Just in the U.S. a trillion dollars. And before the pandemic, it was single digit percentage e-commerce. Not much money being spent online relative to retail. Retail was still the story. And all of a sudden, when COVID changed the rules of society, when all of a sudden it was awkward or maybe even irresponsible to go into a store if you could avoid it, that drove a lot of shopping online. A lot of people tried online grocery for the first time and really started to rely on it before it was a convenience kind of a luxury.

Dan Frommer:

My favorite was like, "Oh, I'll order my groceries online from the plane as I'm flying home." And it's like, "Wow, what kind of jerk are you? Great, cool man, do that." But all of a sudden, it became a necessity. It became essential infrastructure. And a lot of people who tried online grocery for the first time because the pandemic forced them to are sticking with it. We find that in our research that most people who actually spend more money online for grocery prefer it. They like it more than they like buying stuff in the store.

Dan Frommer:

Now, what's interesting about that is A, again, trillion dollar market heading online. But as money heads online, it doesn't just go to the places it went offline. If you were doing your grocery shopping at say Kroger or Albertsons or something like that, when you do your grocery shopping online, it doesn't mean you're just going to go to kroger.com and spend all your money there. We see what's called a "share shift" often when a market goes digital. We saw it in media. The money and the attention in digital media has not gone to the websites of local newspapers, TV stations and radio stations. It has gone to Google, Facebook, blogs, Twitter, all kinds of other, Netflix, YouTube, attention and spending goes to a new place when it heads online. So one of my favorite slides in the deck that I produce, the consumer trends deck is titled What's a Grocery Store. As money heads online, it's not just going to traditional grocery stores, it's going to places like meal kit services, or meal delivery services, or online native grocers like Thrive Market or Imperfect Foods. Or this new wave of 15 minute grocery delivery services, which kind of started in Europe. There's one called Gorillas that's opening in the U.S. There's ones called Fridge No More. There's obviously Instacart.

Dan Frommer:

By the way, Walmart, Target they've captured a lot of that money because they've figured out how to be online and how to be digital. Obviously, Amazon has captured probably the largest single share of any of that spending and will continue as it builds out its grocery business. But there's so much more opportunity now to be a direct-to-consumer brand. And if, let's say for every 10% of the grocery market that goes online, that is literally a hundred billion dollars that is open to e-commerce companies that did not have to exist in that physical world that was dominated by large retailers. Sorry, that was long-winded, but there's just so much opportunity that exists now because the market is going digital that didn't exist before. So you could scale a direct-to-consumer food business in a way that you could never do before. You could grow a category in a way that you could never do before. Sure, you're going to get a level of scale when you go into Target and Walmart that you weren't getting before as well, but you don't have to, at least you don't have to as quickly now, and you can hopefully do it on your own terms.

Dan Frommer:

To me, that was one of the more interesting things. Harry's, the razor company was in the process of being acquired by a legacy CPG company that own Schick razors. And the deal was ultimately blocked by the U.S. government because when Harry's went into retail, big retail, which by the way, they were able to do on their own terms, they were able to do with merchandising that none of the other shaver brands did and they've all since copied. But it was such a boon to their business. And it actually reflected in lower pricing in the market in a way that it was actually an antitrust problem for them doing this deal. So there is still a lot of power to be a big retailer, and there's still a lot of pricing power that you can get once you get into big retail, but it's no longer an essential.

Daniel Scrivner:

Yeah. So Harry's is a fascinating example, which you just alluded to and shared a little bit there of, an incumbent brand, really helping to change the market and upset pricing and upset positioning and upset all of the brands that are there. I think that's a fascinating one. Another brand I know that you've written quite a lot about that I'm also really interested in is Sweetgreen. And I'm curious one way of thinking about that is it's like some of these brands like Fishwife or Omsom that's just much, much, much bigger, much more at scale, and just has progressed a little bit further. I guess, how do you think about Sweetgreen in terms of where it fits into this or this wave of new brands? And what do you find most interesting or novel or exciting about what they're doing?

Dan Frommer:

There's so many interesting facets to Sweetgreen, and certainly the pandemic has hurt a lot of parts of their businesses, but also has kind of open to some new routes too. I first started being interested in Sweetgreen about, I think five years ago when it was launching in New York where I living then. And like all great brands to me, it starts with a great product. And specifically the quality of the food, Sweetgreen is a salad chain by the way. If anyone's listening who's not familiar with it, it's a salad chain that started I think actually 10 years ago, right about now or maybe a little longer than that. I don't know. They just celebrated some sort of anniversary in Washington, D.C. And it's just a very high quality salad product. They make everything in each restaurant. There's no national commissary where they make all the dressings or anything like that. They make everything in each restaurant with a local supply chain, which has kind of made it trickier for them to grow than some other brands. But it has resulted in a product that's just much better than their competition. Specifically I would say the dressings. Their dressings are fresh and they're higher in acidity and lower in sugar than most salad dressings because they're fresh.

Dan Frommer:

So to me, that was always a differentiator. You are just getting a salad that just tasted so much better, so much fresher at Sweetgreen than you were getting anywhere else. But they also had really great branding. They had really great content. They were making these newspapers in their stores. Their store design was cool. There was a scene there, there was a line, it was a little obnoxious to stand in that line for 20 minutes to get your lunch, but it was also the best people watching of the day, so it worked. And they were able to scale to a point in New York and DC and other, they've opened in a bunch of cities in a really compelling and interesting way. But they also were taking really novel approaches to their business too. They started something called "the outpost program" where basically a company could put a shelf in the corner of the Sweetgreen office, and this was before they offered delivery to just anyone, and your coworkers could order Sweetgreen to be delivered at lunchtime to the office. There was a cutoff time and it was free delivery. And it basically meant that you didn't have to go wait in the line. But only Sweetgreen was delivering to that shelf in the office. And it was just this brilliant co-branding thing.

Dan Frommer:

And Sweetgreen is ostensibly healthy so it made companies kind of look good like, "Hey, we're looking out for your health. We're inviting this cool brand into our space." It's just a really interesting business model that no one else was doing. And unfortunately, it got totally wrecked by the pandemic. They were at a point where they had, I think, over a thousand outposts or were getting near it and then just got completely vaporized by the fact that people stopped going into the office. But then they ramped up delivery and in-store pickup, and again, not like a tech company in the way that Microsoft is a tech company or Google or something like that. But they have been able to use technology in a compelling and interesting way to make even just a really high quality ordering app and really high quality digital content. And they just did a rebrand with this agency called Collins, which again, just designed to feel fresh and interesting. And I think they just get the younger and more modern consumer in a way that pretty much few or no other fast casual restaurants do.

Dan Frommer:

I would say one that has continued to impress me is Chipotle. They have also done digital very well and it shows in their results. They've been able to ... Obviously Starbucks too, but Chipotle has been able to continue to grow their digital business during the pandemic, which again, made everything really hard for a lot of restaurants. But the ones that really figured out digital, figured out how to be, I hate this term, but omni-channel have been the winners. And that's the lesson here is the ones that figured out how to use technology to the best of their abilities are the ones that are going to be stronger and more resilient no matter what happens. We thought everything was reopening and every restaurant that had set up a little provisions corner has since shut those down. A lot of the restaurants that started doing online ordering have stopped offering take out. Some of the more sit-down type places that had kind of tried doing delivery and take-out have curved that back. With Delta variant, we don't know what's going to happen this fall and this winter. So the ones I think that figured out how to be nimble and how to be digital and really improvised during the pandemic, I think are the ones that are going to be the strongest going forward, even as things get weird in ways that we didn't anticipate before.

Daniel Scrivner:

Yeah, you made so many great points there. But I think one that I've definitely felt is food brands that have just an exceptionally good app or an exceptionally good ordering experience, whether that's in the app or on the web, but Sweetgreen is amazing. Chipotle is great. Another one I've been really impressed by recently is Shake Shack. If you were to ask me a couple of years ago, I would've thought, "I think that brand, that concept is maybe ultimately limited." Now I'm like, "They're doing just incredibly well." They have chicken now, they have burgers, they've just expanded, it's all super fresh, to digitally enabled. And it's a great experience that way. Anyways, it's just interesting to think about too, how quickly they've been able to kind of make that pivot and turn into a great digitally enabled experience.

Dan Frommer:

It's funny because it's crucial for getting [inaudible 00:38:08] business and for just making it really easy for people, reducing friction to ordering. The other interesting thing about digital orders is it can be much more profitable for the restaurant. Chipotle talks about this a lot on their quarterly earnings calls, because if you think about a Chipotle restaurant, there's that line that you kind of wait in at lunchtime and then a person is making your food while you're standing there waiting for them. They have a second line in the back, which I think they call their digital make line. There's no waiting. They just make it as quickly as possible. The station is set up so they can do it while standing in one place. And as a result, the throughput for that line is much higher. They can do a lot more quickly. They're not sitting there waiting for you to say which beans do you want? How much sour cream? They just, boom. It's like watching a really fast drummer do their thing, you know?

Dan Frommer:

So they can have a higher margin on that. They can also do things that would slow down the line that doesn't slow down the digital line. So one of the most interesting things now we're seeing in-app exclusives. Chipotle has launched the quesadilla as a menu item that you can only order in the app because they only will make it on that back line. And not only can e-commerce positively impact the profitability or at least the unit economics of a burrito bowl, but they can also open new opportunities for new products that didn't really make sense in the theater of the fast casual kind of assembly line, but make a lot more sense in the back. They can also have different cooks back there who may not want to be customer service or customer facing. There's a ton of opportunities there that digital enables.

Daniel Scrivner:

Yeah, it's fascinating. Now I want to go and Google what that digital make line actually looks like.

Dan Frommer:

It looks like a drum kit except it's salsas and ...

Daniel Scrivner:

It's circular, at least that's what I'm imagining.

Dan Frommer:

It should be able to spin around, that would be cool.

Daniel Scrivner:

I love it. So to wrap up this section, because we're going to go on and talk about this Consumer Trends Report in the latest version you put out in just a sec. But to wrap up this section, I'd love to just go super tactical now. And I guess the question I would ask is, so you've studied a bunch of brands, you've obviously met some of the people running them, companies like Fishwife, which you alluded to. I'm curious if you had someone that came to you, maybe it's a solo founder, maybe it's two people like the Fishwife founders, and said, "Hey, we really want to launch a direct-to-consumer brand or a food brand. We want to do kind of best in class execution. Where should we start? Or what should we get right?" If someone came to you and just asked for a little bit of direction of where they should be paying attention, and if you were to coach them, what advice would you give to that founder?

Dan Frommer:

I would say start really small. Figure out what is your launch hero product going to be that is truly different? That is special, different, better. That really puts you on the map because people who trust a new brand will invest money, don't mean as like a shareholder, but will invest money purchasing and will invest social capital kind of vouching for this new brand in a way that they never did before. So if you can kind of tickle people with something that's really interesting and unique, that's the start. And then build a world from there, figure out what your trajectory is in terms of growing your product [inaudible 00:41:16] in distribution. But also, what is the atmosphere that you're trying to create?

Dan Frommer:

A great brand that does this really well is called Entireworld. It's an apparel brand founded by a guy named Scott Sternberg who used to run a fashion company called Band of Outsiders. And you could see Entireworld is kind of a American apparel for the 21st century without the creepiness. But he's done such a fantastic job at just building this world, having a really fun e-commerce experience. A really kind of weird, but quirky advertising and content. And yeah, there's sweat pants and shirts and pants and dresses, and they're pretty simple, but you really want to go to bat for them because they've done something really interesting. They entertain you, they make you feel like you're part of something bigger and special. And I think that's really ... I don't know, maybe I'm too romantic about this.

Dan Frommer:

Every day and every week I'm introduced to these super successful brands that make tens, hundreds of millions of dollars a year selling stuff that just doesn't seem that interesting to me. Clearly they found a market niche that was unserved or underserved, but to me the most interesting ones are the ones who do it in a really creative and organic way. And take advantage of the media that is available to them, whether that's just really beautiful packaging design or fun videos, or having a conversation with your audience about any topic. Certainly we saw last summer during some of the civil rights stuff that companies were starting to talk about capital are real, real stuff in a way that they never had to before. Consumers want that. Consumers want to support brands that stand for more than just making money.

Dan Frommer:

They want to stand for brands that believe in the same things they do, we're going to see a lot of this over the next decade with sustainability and climate. We're going to see a lot of it with race and civil rights. We're going to see a lot more of it with all kinds of things to come, voting rights. I'm sure we're going to have reproductive rights. Brands are going to have to take a stand on this sort of stuff. And it wasn't really like that a decade or two ago, but it's just part of reality now. So also be prepared to do some of that stuff in a way that maybe is uncomfortable, but meaningful to your audience.

Daniel Scrivner:

Yeah, I think it's really interesting. I mean, hearing you rattle off that list, it almost feels like global warming and the environment/sustainability is like the easy, comfortable topic to talk about now. It used to be the popular topic and what people are looking for is maybe more engagement on the super uncomfortable topics.

Dan Frommer:

And going back to your question about authenticity, you also have to do this stuff in a way that's not phony because people will see through it and you will get in trouble for that these days.

Daniel Scrivner:

So I want to change now and talk a little bit about the Consumer Trends Report and just to start, so I know this is available for free to download, for anyone listening, where can they go to get this?

Dan Frommer:

Newconsumer.com/trends. Or go to newconsumer.com and click trends. But yeah, newconsumer.com/trends will always be the latest trends report. And for the foreseeable future, they'll all be free. I mean, there might be one that's not at some point, but these are. All you have to do is sign up for a free account and you can download the PDF or flip through the slides right on the site.

Daniel Scrivner:

And how did this come about? And I guess, can you share a little bit of the context of the partnership with Coefficient Capital? Obviously, they're in this space, they seem interested, but I'd love to know a little bit more about how this came about in the first place, that partnership.

Dan Frommer:

I love slide shows. I love presenting. I love giving talks with slides in the back of me. It's always just something that's felt really fun and comfortable for me. And I would say the king, but the queen of this is Mary Meeker. She was a very famous internet stock analyst during the .com boom. More recently, she's a venture capitalist and she has a report called Internet Trends, which I don't know if anyone will ever beat that. I think it's like 300 slides and it's basically everything from the super macro to the super micro and I love it. It's awesome. I had a chance to kind of see it up close when I was running Recode and she was presenting it at our conference. And I've always just had a huge intellectual crush on the Internet Trends Report and on Mary Meeker. So this was kind of my, nowhere near as good as Mary Meeker, but hopefully someday attempt to make a presentation that I hope is meaningful and also useful to people who are not looking so much at the internet trends, but the trends in consumer, food and beverage, consumer packaged goods, etc.

Dan Frommer:

And it's something I'd wanted to do forever. And one of these perfect things happened where I had a call with some of the folks at Coefficient Capital, which is an early stage VC firm in New York, and they said, "Hey, we want to do a consumer trends deck." And I was like, "I want to do a consumer trends deck. Let's do it." So it's a really great partnership because I would say we do things in a way that's super complimentary. I'm a journalist, I'm a researcher, I'm an analyst, I'm a designer, I make all the charts and all the slides. And I'm very comfortable with data in a way that I think actually a lot of my peers are not, I love telling stories through charts. To me, it's just a really fascinating medium. You can see it, you turn business into art in a way that you can't do with words.

Daniel Scrivner:

They're also super visceral I feel like, depending on the chart.

Dan Frommer:

Yes, exactly. And they can be very dramatic as well. And the Coefficient folks obviously have a much deeper look at companies than I do because they are shown financial information and told stories that I'm not. They also have background in investing and very helpfully, their senior associate, a woman named Natalie Borowski is a former McKinsey consultant who knows how to run surveys. And therefore we've been able to run now twice this proprietary consumer trends survey of over 3000 consumers asking them the questions we want to ask them, not relying on third-party surveys, and being able to really understand the topics that we want to go deep on. So that's why it's been a really great partnership to me because I get to leverage their skills that I don't have. And they get to leverage me in a way that would be impossible to do on their own.

Dan Frommer:

So it's a perfect collaboration in that sense. We started last December with the first Consumer Trends Report. COVID was a really fascinating thing that happened to the world and especially in commerce and across the consumer landscape because again, there were these arbitrary rules that, well, not arbitrary, there were societal rules that were set up to prevent people from getting sick basically, social distancing, work from home, shop online. Retail stores, a lot of them were closed for a long time. Gyms were closed, bars and restaurants were closed. And it forced consumers to adopt new habits. And it forced businesses to adopt new ways of selling and marketing.

Dan Frommer:

So our first report, which was over a hundred slides was trying to figure out which of these habits are actually going to stick. It's one thing, yeah, everybody made sourdough bread and bought puzzles last April, but then they stopped. But what are the changes that are going to be more structural and longer lasting and more meaningful? And we zoomed in on a few markets, including online grocery, beauty, digital fitness and home exercise and a few others. And we ran the survey and we did a combination of kind of aggregating the best possible data that was from either government sources or from other companies. OpenTable has been publishing their reservations throughput for the last year and a half. The TSA has been publishing checkpoint data for the last year and a half. The MTA in New York has been publishing subway ridership. There's a company called Kastle, castle with a K, that makes the key card reader in your office building, that's been publishing the data from their key card readers to show how many people were coming in the office.

Dan Frommer:

So there's just this fascinating data that's been out there that we aggregated, and then also combined that with our proprietary survey data. So we were able to find out not only how people were adopting these new technologies or these new consumer habits, but also whether they liked them or not, whether they wanted to continue with them. So this most recent report was supposed to be about this great reopening, we were thinking, "okay, the vaccines are up, the virus is down. Life is going to be booming for the next several months." Well, of course the Delta variant has really put a damper on that as well. So we called it the partial reopening special and essentially taking a look at, okay, last December we said, "These things were really working, online grocery big thing, digital fitness." It's been more than six months now, what's sticking? Is this actually the future or not?

Dan Frommer:

So we were able to repole a huge consumer audience. See what people were still excited about, what they were still doing differently. And we also work with this company called Earnest Research which tracks consumer spending with credit and debit cards. We were able to see that things like online grocery, which really shot up during the early pandemic have actually sustained that growth really interestingly. And actually, people now prefer online grocery more than they did last November. 45% of the people we poled last November who said they had switched to online grocery preferred it then. Now 61% of people prefer it then. If we look at a field like fitness, 82% have switched more to exercising at home. Sorry 82% of millennials, 72% of all consumers. Three quarters of the millennials say they prefer it, two thirds of all consumers say they prefer it.

Dan Frommer:

So this is the kind of thing where it's like, okay, we had this world of gyms, of equinoxes, of fitness centers, now all of a sudden people are forced to work out at home. Use the Nike Training app, buy a Peloton or a Tonal gym or whatever it is. And here we are now a year and a half later and they still actually prefer it in really large numbers. So some of these changes that happened during the pandemic are not fads, but they seem to be not necessarily permanent because what is ever permanent? But long lasting shifts. And again, to go back to that online grocery share shift, anytime money moves from one place to another, it's up for grabs. So there is a massive opportunity in these markets for new players to capture that growth. And we love having data that confirms our assumptions and not just this idea. So those are some of the takeaways from the report.

Dan Frommer:

We also looked at a couple other topics. Fortunately, the pandemic has really exacerbated the inequality in the U.S. And we have some really interesting research on how people in different income brackets feel about their financial wellbeing, about saving money. We asked everybody if they believe in the American dream, 68% of people in America believe in the American dream, but it's quite different depending on your situation. Younger people, only 56% of gen Z believe in the American dream. 80% of the Silent Generation does. 72% of people who are fully vaccinated for COVID believe in the American dream, but only 60% of people who are not fully vaccinated. So we got to see some interesting shifts there.

Dan Frommer:

And then also this idea we were tracing about, the Roaring '20s. And I think this was more apparent perhaps before the Delta variant, but there was this belief that maybe this next decade was going to be off the charts in terms of people just really celebrating life, traveling a lot, drinking, partying, living kind of a more wildlife. That definitely seems like it's kind of not necessarily going to happen, at least not right away. And we were able to kind of tell that story through data, both from partners and also from our survey. And really the one thing that people said they were going to do more than anything else is still spend time outdoors. So great for campgrounds and rental car companies, not so great for music venues. We'll see, I don't know. Who knows. It looks like Lollapalooza was not a super spreader event after all. Although, we'll see, I don't know if it's been long enough.

Daniel Scrivner:

Maybe still some hope for large concerts.

Dan Frommer:

Roaring '20s, still TBD I would say.

Daniel Scrivner:

I like it. There's so many fascinating insights in that report. So I definitely encourage people to download it and read it. One thing I wanted to ask you is you talked about that last time you surveyed people, you've got one reading of how much they like that behavior, how much they like this new way of doing things. And now that's gone up. I'm curious, do you read into that at all? And what is the insight there? Is it just that obviously change is uncomfortable and then people get more used to it. Is it that they changed and these things also got better? I guess, any thoughts on why people have gotten so much more satisfied over time?

Dan Frommer:

Both of those. I mean, certainly the idea of something that is novel and then becomes an ingrained habit or something you rely on over a longer period of time. Hopefully you're going to like it more than when you first started. I could see people feeling the other way around too about certain things as well. But these are for profit businesses. Amazon, Instacart, Walmart, theoretically, they should be investing huge sums into improving the customer experience. And in many cases they have, it's a lot more convenient and robust of an experience than it was a year ago. Maybe not like what you would really have dreamed it would be, but you can order groceries online and have a reliable delivery window or pickup window, which was not possible during the peak lockdown. So the products and services have gotten better. They're starting to differentiate more, again, there's this new crop of these 15 minute delivery companies, which is pretty interesting. We're going to just see so many more new ideas pop-up as these behaviors become more commonplace.

Dan Frommer:

I'm not sold on the idea that retail is dead. I think there's so many opportunities for retailers to build great experiences, great community. I've joked before, but maybe it's less of a joke than the truth, more grocery stores will look like Eataly, there will be a restaurant and a bar and still really great produce and meats and cheeses and that sort of stuff, but it will feel different. You won't just be combing these dead isles of frozen stuff and boxes of cereal because a lot of that will be handled for you. But you might still want to go there to explore new things, to discover new products. Discovery is something that's really hard to do online, really hard to do in e-commerce. A lot of companies like Amazon and Instacart see advertising as the answer to discovery. That will benefit the companies that have budgets for advertising, it will not benefit necessarily the most interesting or compelling products. So retail is still a great venue for discovery and community in a way that digital e-commerce is harder to do. But we'll see.

Daniel Scrivner:

This has been a fascinating conversation and we've talked about, it's been amazing. We've covered so much ground. We've talked about supply and demand, how people are spending their time and their money, what modern brands are getting right, as well as all these insights you have in your report. So thank you so much for the time, this has been a great conversation. For anyone listening that wants to subscribe, go to New Consumer, but do you have a pitch you want to share about why people would find it interesting and where they can go to subscribe?

Dan Frommer:

Certainly. If you're interested in what's next, if you are an entrepreneur or an investor or work in the creative field or anything that touches the consumer and want to know A, what people want and what they're doing. And B, what innovative and interesting companies are doing and how they're doing it and why they're doing it. That's the whole point of everything I do. It's just me. It's led by my personal curiosity, I'm starting to work a little more with more writers. But I try to zoom in and zoom out and do things in a way that you just would never get from Fast Company or Businessweek or something like that. So check it out, newconsumer.com. Please download the trends deck. If you find it useful, if you want to be part of what I'm building, join as a member, you're supporting indie publishing in a way that you would never be doing with a bigger publication or a bigger brand.

Dan Frommer:

And it's great to meet. I do quarterly office hours where we can have a quick chat and you can tell me what you're up to and get my advice on things. I hope to launch events once events are cool to do again. I'm still not perfectly comfortable going to in-person events myself, but hopefully we'll be eventually again. And I plan to be doing this for a very long time. It's been about two and a half years now. I love it. It's the best thing I've ever done and join me, newconsumer.com.

Daniel Scrivner:

And just to add, I would add a huge plus one to that. Someone that's subscribed for two years now, it's been incredible publication. And even earlier in the conversation, you touched on Sweetgreen's outpost piece, that was one piece that I didn't see that covered anywhere else. Super interesting from a business strategy perspective. So I think articles like that for me have been just amazing. So huge fan of what you're doing and thank you so much for your time.

Dan Frommer:

Thank you so much.

BONUS Dan's Habits, Influences, and Life Lessons – Dan Frommer of The New Consumer

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Daniel Scrivner:

Okay. We're back with Dan Frommer of The New Consumer for just a quick interview in this second bonus portion, we always go a little bit behind the scenes and we try to uncover a little bit of whether it's habits, tools, influences, books that have just been a big influence in your life. So again, thanks for the time Dan and excited to dig into these questions with you.

Dan Frommer:

Thank you.

Daniel Scrivner:

So the first one that we always ask, and I know we talked about this before, kind of leading up to this interview. And I'm excited to chat about this with you because you have an interesting take, is just around habits routines. So I'd love it if you can share your take on that, your struggles with that, how that shows up in your life.

Dan Frommer:

Yeah. I'm not the most regimented habit person. There are some things that I do every day. I make myself an ice latte every morning with an espresso machine. I make myself a full breakfast every morning with scrambled eggs and some salad and usually some toasts, something like that. But I'm not like the kind of person who has this really detailed regime of things I do every day. I aspire to. Maybe the ticket here is that I've always wanted to be more of a routine person, wanting to be more of a very regimented, organized person. And sometimes I study those people and I think about, "Oh, maybe I should pick up meditation or something like that." But it has not dictated my life so far. Perhaps some day it will. I don't know. I listen to Jerry Seinfeld on a podcast and he talked about how transcendental meditation and weightlifting have changed his life, and I was like, "Oh, I better order a kettle bell." But I haven't used it yet.

Daniel Scrivner:

TBD on that one. I'm curious, is that also show up is it that that's true in most of your life, but when it comes to writing, it's more disciplined, or maybe is it just you're wired for more serendipity, which is something I often struggle with myself. Just to share, I think I've struggled with habits and routines for a really long time. Over time, I have finally conquered that by just dropping the bar to the floor and making it almost impossible for me not to be able to do some things. But serendipity is a big thing, so I'm just curious for your take on that. And are you more disciplined in the kind of writing specific areas?

Dan Frommer:

I think serendipity is a good word for it. I also like just in time operations or whatever, just in time manufacturing. Look, what I do is a mixture of creative output and academic or intellectual research and thinking and analysis. And I do spend a lot of time thinking about things in advance, but really what gets created is what gets created when you're creating it. As much as I try to think otherwise, it's going to happen while it's happening. So I try to create an environment where I can be productive and I take notes, I record interviews, I relisten to them. I try to listen to other conversations on a topic that I'm writing about or really immerse myself in something.

Dan Frommer:

I also spent a lot of time just doing random research. I love looking at just Google maps of a city I've never been to, or a city I have been to a bunch of times and I want to see what's going on in a neighborhood or explore something new. I don't know if that directly turns into work necessarily, but it kind of feeds my broader curiosity. Still my favorite thing is just to spend time with someone who's an expert or a master in their craft and really watch her or him do it and kind of learn from them. And that to me is when I'm the most inspired and also I think when I do my best work, when I can really see whatever passionate is or expertise someone has in doing their creative field and then task, it really inspires me to do things as well as I can.

Daniel Scrivner:

Yeah. Those experiences for me are always a good, you're reminded of what the bar is of just someone loving something, someone just in the zone with it, someone that's mastered it, which is really special to witness.

Dan Frommer:

But I'm also the guy who's tried probably six different to do techniques in the last year and currently uses none of them.

Daniel Scrivner:

So just switching then to tools. I know that you are really big with tools and we talked about one yesterday, which is this device you use that's kind of disconnected from the internet to read PDFs, talk a little bit about that and some of the other tools that you use that you really rely on and enjoy.

Dan Frommer:

I mean the most basic tool is the internet and a Mac and an iPhone. It's just really incredible what digital technology enables in creativity and productivity. The fact that I can do my work from pretty much anywhere with very few tools, I don't need a printing press, I no longer need a dial up modem to do my internet work. Pretty amazing. The fact that I was able to start this publication while we were living in Paris for three months, just working at coffee shops really allows people to just create things in a way that they never could before. So the internet of course is also a horrible place if you're easily distracted, which I am. And specifically, I've always wanted to find a way to read articles, long articles, in depth research in a way that I was not pausing every five seconds to look at Twitter and have found this tool, and I thought, "Okay, the iPad will be perfect for that." But it really wasn't because Twitter is always one click away and email is one click away.

Dan Frommer:

I saw an ad for this thing called the Remarkable tablet, I think over a year ago, and purchased one. And it's really interesting. It's basically an e-ink touchscreen tablet and frustratingly limited in its capabilities, but in a way that's kind of perfect because I just load it up with PDFs of New Yorker articles I want to read or WallStreet Research reports. I just downloaded some journal article about the raw chicken industry in Japan, people eating raw chicken in Japan. Random stuff that I want to read and learn more about. And there is no Twitter on it. There's no email. So I'm able to focus in a way that I just have a hard time doing on a computer or even on my phone. So it's been really nice. I would say it's definitely a luxury, it's not a cheap device and I do use it for note-taking as well. And I'm not going to pretend that I use it constantly all day, every day, but it has served its purpose and I am learning things and reading things in a focused way and in a comfortable way. And I don't feel like I have a bright back-lit screen shining in my eyes, and I really like it.

Daniel Scrivner:

And someone who's always aspiring to read more and more, I feel like any device that helps unlock That is pretty powerful.

Dan Frommer:

Yeah. There's some cool software out there too. This sounds really dumb, but there's an app for the iPhone that's just earnings calls. So when I'm on a long walk or something like that, sometimes instead of listening to a podcast, I'll just pop-on an earnings call for some random company and learn what's going on with Shake Shack or McCormick spices or Campbell Soup, I don't know, stuff like that where it's like, "Wow, that company ... Hey, that's a public company. That's funny and weird. I wonder what's going on in their view of the world. Let's listen to it, Delta airlines or something like that." And that's a fun tool as well.

Daniel Scrivner:

I follow a Twitter account called The Transcript. I'm guessing it's not that, but it sounds very similar. They basically tweet out select quotes from transcripts of earnings calls so you can go on there. Do you know what the name of that app is? Because I would definitely download that.

Dan Frommer:

I'm going to look it up. I think it's just called Earnings Calls. That's what the app title is. I think the official name is ... It's just called Earnings Calls.

Daniel Scrivner:

Okay. We'll add a link to that in the show notes and I'll make sure we find that. It's super fascinating. There's two questions that we always ask that are kind of the inverse of each other and one is what are your superpowers? So as someone that's been writing for a very long time and a lot of different styles for a lot of different publications, maybe it's writing specific, maybe it's more around curiosity or exploration, but on your best day when you're like, "Man, I am just really good at X, Y, or Z." What do you feel like your super powers are?

Dan Frommer:

I think it's being able to zoom out and see the bigger picture for a lot of things. It's very easy to describe what's happening. It's harder and I think requires just a level of, I'm not going to say talent, but just interest in zooming out and maybe not even interest, just like prioritizing that. Trying to figure out, "Okay, what is actually happening here?" Yes, we know the details of this one thing that's happening, I will try to find out why and how those are the things I try to specialize in. But then step back 2, 3, 4 steps and go, "Aha, what is actually the bigger picture here? What does this shift mean? What does it say? What does it suggest is going to happen next?" Again, not pretending I'm a special person, but just being able to do that, and I think wanting to do that and forcing myself to do that regularly is something that I think I do better than others.

Dan Frommer:

And also just this weird group of skills that I got from being an early internet designer. I started making websites in the mid '90s when I was in middle school. So I know how to use every graphics tool and every desktop publishing tool. And I know HTML and I can read an edit PHP, but I can also do an interview. The term is one-man band. I can build a website, choose the fonts, install them, set up the CDN, build a website, make the WordPress template, write the articles, send the newsletter. I can do all of that myself, which allows me to run this business literally alone. Yes, I have an accountant, and if I need a lawyer, I have a lawyer. But that kind of group of skills and talents is rare I think, and has made me perhaps the perfect person to be running an independent online publication these days because I not only can do all of it, but I actually really enjoy doing all of it. I like building the website and I like choosing the fonts and making the charts look the way I want them to look.

Daniel Scrivner:

Yeah. You have the skills to take that idea in your head or whatever you're after and actually manifest that and create it, which is really powerful. The inverse of that question is what do you struggle with and how have you worked on those things over time? And these can be things you [inaudible 01:08:03] against in your writing work. These can just be kind of meta things that you struggle with in terms of whether it's prioritization, but just anything there that you struggle with and how you've worked to improve that over time.

Dan Frommer:

I forgot who said this, but to poorly misquote someone, "I hate writing, I love having written". It's always a struggle to get the first words out, sometimes I start at the end, sometimes I start in the middle. But a lot of times, I'm just starting at the beginning and I'm just really obsessed with the exact language I'm using. So fortunately there are things called deadlines and back in the day, breaking news, I don't really deal with breaking news anymore because I'm publishing on a more mindful cadence. But back in the day when I was blogging at Alley Insider, we were supposed to get the article up in minutes, if not seconds. So the pressure of the real-time web, as we called it back then, really kind of helps solve that problem.

Dan Frommer:

What do I struggle with? I would say probably like all creative people, everything that I make is a little different than I thought it would be, and sometimes it's better, sometimes I feel like it's not better. Of course, no one actually knows what I thought I was going to be making, so this is all internal. But just kind of getting over that and realizing that it's going to be what I can make it. And I can always hope to have more time and put more cycles into something, but that's impossible. There's no actual unlimited amount of time and resources that you can put into anything. So just got to get over that.

Daniel Scrivner:

Yeah. I relate to that in a huge, huge way.

Dan Frommer:

By the way, the beauty of podcasting, because when it's over, it's over, you can't go back and-

Daniel Scrivner:

It's very true. You can't rerecord.

Dan Frommer:

I suppose you could edit it. And now we have AI tools where you could simulate me. Hopefully you're not going to do that. But the beauty of radio is that when you're on, you're on. And in fact there's a great analogy, the founder of Business Insider, Henry Blodget, who was my second boss basically said, "Think of this as talk radio. You're not writing articles as much as you're just kind of pinging ideas out there. You're on the clock. You're talking to your audience, they're commenting, they're responding. You're on the air and then you're done. And then you go home and do it again the next day." Or more that night. But it was a really helpful analogy. And I think actually radio and audio are interesting in that regard because when you're on the air, you're on the air and when you're not, you're not.

Daniel Scrivner:

Yeah. And I think it gets you, you just by nature of that reality, you have to get comfortable in your own skin, knowing that you're going to make mistakes, it's more about a realtime exchange than perfection. One thing that you talked on super early on in your interview was about Ben Thompson and Stratechery and that being a really big influence. And one question we always ask people is what people have had a profound impact on you, is he on that list? Are there other writers that have had a really profound impact on you, have shaped the way that you write? And can you share a little context there?

Dan Frommer:

So many people have, John Gruber writes a site called Daring Fireball, which was pretty much the first professional indie publishing experiment I stumbled onto and luckily have gotten to know him personally and got on his show a few times over the years. A hero of mine, Ben Thompson for figuring out the subscription newsletter pattern. Thank you Ben.

Daniel Scrivner:

And just prolifically writing and covering interesting ideas.

Dan Frommer:

People like Anthony Bourdain had a huge impact on me. I was always into travel, it was kind of my thing. And just the way that he turned his exploration of the world into something that people could enjoy and could consume, kind of inspires me to do that. I'm no Anthony Bourdain, but I try to use my time as an explorer and not just as a writer or a researcher. I try to really understand something through first-person exploration. And I think that's another thing that the digital publishing world allows to do uniquely. I've read a lot of business books over the years. Some are really great, Piloting Palm was one of the first ones, I read about the Piloting Palm. The Theranos book was really good. I'm reading a great book about WeWork right now, co-written by one of my former colleagues, Maureen Farrell. There's a lot of great business books, Hatching Twitter, all that kind of stuff that has had an influence on me.

Dan Frommer:

But actually I think the thing that has had the most profound impact on me over the last few years has been a podcast episode between David Chang, the chef, and the founder of Momofuku and The New York Magazine art critic named Jerry Saltz. And he actually wrote a book too recently. It was a really inspiring conversation. They since had a second one, but it's the first one that they did in early 2019. It's the first podcast episode I've listened to four or five times where it really just helps me get out of any creative rut, really just get inspired to create and really realize as he says, "You've got to make it the way you're going to make it because no one else can do that. And that's going to be the best thing that you can do. And that's what you have to really focus on." It really gets to this idea that there are a lot of abstract ideas out there, there's so much to learn, there's so much to process, but you're only going to be able to do what you can do and it might be terrible, it might be awesome, but it's the only way that you can create.

Daniel Scrivner:

Yeah. I love that approach. I can't wait to listen to that episode. So I'll find that and make sure we link to that in the show notes. This is a little bit of a shot in the dark. You've already kind of referenced a few articles that are super interesting that I'm going to try to find as well and link in the show notes. But you talked about some of the books that you've read, so maybe to go more short form, just thinking about that reMarkable device and some of the things you might be adding there, are there any shorter form things you've read recently that just struck you or you thought were profound or really interesting?

Dan Frommer:

I mean, Twitter is just a non-stop. For all the horrible things about Twitter, it really is just a really great way to learn and to experience the world. I can't think of anything exactly specific recently, but I'll actually tell you, one of the articles that inspired me the most over the years, and I think it's actually either gone from the internet or really hard to find and probably nowhere near the form that it originally took. But to me, one of the most exciting and interesting things about digital publishing and the internet is that the article does not have to be a blob of 700 words of text. I find myself falling into that habit more than I should. I never thought I'd be in the business of writing 1500 word essays about online grocery, but here I am. But one of the most inspiring articles in my life has actually been, I think it was a Valleywag article and I think it was by Nick Douglas, but I don't remember specifically. I think it was the day that Apple announced the Apple TV in 2007 or early 2007, or maybe even late 2006. And it was basically a two-by-two matrix comparing the Apple TV to like an S-video cord or something like that.

Dan Frommer:

It was perfect. It felt a lot like front of the book magazine style stuff, where it had as much physical humor to it as intellectual content and thinking. But it was a really great example of just getting out of what you think is the pattern that you're supposed to be following and just going on a whole different direction. And that's something when I worked at Quartz, the business publication, which used to be owned by The Atlantic and it's now an independent startup. We tried to do that a lot, we tried to tweak the format a lot and I think I need to be constantly reinspired to do that, but it really is you can publish in any way you want and you should be, more often I'd say.

Daniel Scrivner:

Yeah, it is really delightful when you find somebody that has just a really interesting novel take on something that [inaudible 01:15:10] gotten tired. You almost don't even ... I think with stuff like that, it's not that in your head, every time you see an article, you're like, "Ah, God, same old pattern." But when you see something new, it's just like a breath of fresh air and it's so much more engaging and interesting and it kind of shakes you. We always ask the same two closing questions. And the first one is, if you can share a favorite failure. That nature of what we're trying to get at is something novel, something that is a failure in that maybe it didn't succeed, it didn't take off, it didn't match your expectations, but it's not a failure because you learned something from it or just as a really special memory.

Dan Frommer:

Well, there are a lot of failures, but I talked earlier about how I love being able to be the person who can not only do the research and write the article, but also set up the website and build the template and even run the server. And in the earliest days of Business Insider, I actually did do that. I was not only during the day a writer and editor, but at nighttime, I was also tweaking our movable type template and actually running our server. And we started just getting so much traffic that whatever horrible template language I set up, was breaking the site. And it was embarrassing.

Dan Frommer:

And since then, I've probably 10 or 15 times thought through, "Oh, I think I now know what the bug was that I built in 2007 that kept crashing our server." But of course I can never go back and fix it, but it taught me that at some point, you know what? You got to get out of the way. And we actually became the first MongoDB database users in the world because that was one of our sister companies. And we had a professional engineer make us a CMS and a website that was much more stable and faster loading than the one that I had been writing over the years or over the months, I guess, since we first launched. So it was embarrassing in a way, but also allowed us to thrive and build what is now one of the biggest digital publications in the world, no thanks to my bad pearl script.

Daniel Scrivner:

I don't know. Maybe you were the impetus for that big ... You needed to crash in order for you guys to make those changes. We always ask the same closing question, which is really just your definition of success. And you can take that any direction you want.

Dan Frommer:

I mean, time, time is everything. And for me, success, luxury, everything is just about how do you get to spend your time? Our time is finite, it's limited. The last year and a half has taught us that unexpected things can happen on a global scale that you could catch a novel virus and die or be severely incapacitated even at a young age. And you can't take your time on this planet for granted. So to me, the greatest part of my life is that I get to spend my time building The New Consumer, writing, researching, learning, doing it on my terms and on my pace. And I don't take that for granted. I appreciate it every day that I don't have to log into some awful slack at some company I don't like because that's what I have to do. I'm so grateful for my paying members and just for this model that allows me to spend my time and my life doing things that not only what I want to do, but how I want to do it. And it doesn't get better than that.

Daniel Scrivner:

That's an incredible note to end on. This has been an awesome set of conversations, so thank you so much again, Dan.

Dan Frommer:

Thank you. My pleasure.

On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.

Explore all episodes of Outlier Academy, be the first to hear about new episodes, and subscribe on your favorite podcast platform.

Daniel Scrivner and Mighty Publishing LLC own the copyright in and to all content in and transcripts of the Outlier Academy podcast, with all rights reserved, including Daniel’s right of publicity.

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#44 How They Built It: The New Consumer - On The Future of Consumer Brands and What The Best Ones Get Right | Dan Frommer, Founder

#44 How They Built It: The New Consumer - On The Future of Consumer Brands and What The Best Ones Get Right | Dan Frommer, Founder

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BONUS Dan's Habits, Influences, and Life Lessons – Dan Frommer of The New Consumer

#44 How They Built It: The New Consumer - On The Future of Consumer Brands and What The Best Ones Get Right | Dan Frommer, Founder

#44 How They Built It: The New Consumer - On The Future of Consumer Brands and What The Best Ones Get Right | Dan Frommer, Founder

Chapters in Part 1 of this interview:

Links from Part 1

Key Takeaway

Transcript

BONUS Dan's Habits, Influences, and Life Lessons – Dan Frommer of The New Consumer

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