Lori Peters’ Interview with KLUTCHClub CEO, Julie Bashkin

klutchclub.com

 

 

 

 

KLUTCHClub May Box Healthy Fit box

May KLUTCHClub Box includes KLUTCHClub Water bottle, Coconut water

KLUTCHClub July Fitness Box

JULY KLUTCHClub Member subscription box

KLUTCHClub Founder, CEO Julie Bashkin
KLUTCHClub Founder, CEO, Julie Bashkin gives me a candid interview

 

 

1. How did you get started?

While I have thought about the health and wellness space and multi-channel marketing for years, I did not come up with the exact subscription model concept until late last fall.  I jumped in and started executing very fast.  The concept was born in November, I created a business plan on a napkin (literally) in early December, I sketched out the website structure in late December while on vacation in Hawaii, and I started contacting brand partners to explore the partnership opportunities in January.  I did not fully commit to this until creating a prototype in late winter/early spring.  I had help thinking through this from a former co-worker and teammate, Emily, who helped conduct quick tests very fast in the Spring and Lisa, our COO, came on board to actually launch KLUTCHclub.  It is impossible to do everything alone and I very much relied on the help, talent, and expertise of some brilliant people around me.

2.  How do you make money from Klutchclub?  Do the brands you include in Klutchclub box pay you or do you make revenue from customer orders?

Our only revenue stream is from our customer subscriptions.  We will not take payment for inclusion of products in the box from the brand partners because we want to maintain an objective, editorial point of view on which products are good for consumers.

3.  Do you develop a relationnship with CEO’s, PR people or sales peoples for new brands?

It varies by brand as the decision makers vary by company but in most cases it is more than one person and includes all of the above as well as e-commerce and marketing people from some of the brands.

4.  Do you only include new brands to include in Klutchclub?

No, sometimes we include existing brands- for instance Zico or KIND- as they may have new product launches or may be less well known to people who live in areas where they may not have a Whole Foods or a Trader Joes.

5.  Are brands coming to you now or do you curate products to find what you want?

It is a bit of a combination of both – some come to us and some we seek out.  Because every box is themed (e.g. “Healthy Summer Entertaining”, “Health on-the-go”), we have to make sure the product is a good fit from a health perspective, a brand compatibility perspective, as well as a tie in to the theme.  We have turned brands away that wanted to work with us because we thought their products were not up to par or were too sample-like as opposed to a full product size that would be valuable to our members.  And we are learning from our members’ feedback about the types of products they do or do not want to see in the box and are adjusting accordingly.

6. How big is your company?

We now have 12 employees covering sales, marketing, operations, customer service, and finance functions.

 7.  I read something about stringent hiring techniques.  What is that about?  What does a potential employee have to do to get a job with Klutchclub?

Yes, it is not easy to get a job at KLUTCHclub and because of that I think we have the best capabilities in the industry which will give us a competitive advantage.  I also think it is one of the most fun and inspiring environments I have ever been in because everyone there is passionate and truly wants to be there and fits well with the company culture and the rest of the team.  I  have personally seen well over 100 resumes and some people on my team have screened even more.  The process goes something like this (with screens along every step):

 

1. A written assignment is given (e.g., submit a VC pitch)

 

2. The first round interview includes a live mock pitch and role play tailored to specific functions

 

3. The second round interview is a fit interview and includes questions on background and asks candidates to give us a list of development goals and what types of opportunities KLUTCHclub could provide in order for someone to meet those goals

 

This is well known ahead of time and there are no surprises.  Everyone gets plenty of time to prepare and we do not look for specific answers- we are more interested in the thought processes and communication style.

 

In addition to all of this, we do a lot of training, coaching, mentoring, performance management, and apprenticeship on the job which insures constant professional growth and development.  This is rare at a start up because so many founders are just focused on fighting fires and executing on tactical issues.  I put a lot of emphasis on the long-term investment in our people and creating a meritocratic culture and am convinced this will ultimately be the driving factor behind our success.

8.  You have a bit of variety of products with some creams, worksouts, foods, drinks…are you keeping the range for the boxes kind of open as to what they will include?

Yes- we define health and wellness broadly to give people a variety of products, as long as they fit with the theme.  After all, how many bars do people eat before they get sick of bars?   We also do not want brands to compete against each other in the box and because we promise to include at least $50 worth of products, we have to include many categories.

9.  Klutch Club is different because of the focus on fitness, but how different is it from brands like Conscious Box or Healthy Surprise?

The number one thing that distinguishes KLUTCHclub from other subscription models is we publicize what is in the box before the box is shipped so people can choose whether or not to sign up.  We are not a “surprise and delight” model.  Also, we do not promise to always deliver 100% organic or eco-conscious products because health and wellness means different things to different people.  While we do try to bring our members organic products whenever possible, sometimes we introduce them to healthier versions of products they are using today.  For example, Hydroxatone’s 90 second wrinkle reducer is not 100% organic but it is a healthier alternative to botox and we gave our members a full size $70 product so they could test it risk free and see how well it works before they invest such a sum in it.  Besides the fact that we are not a surprise, we differ from Healthy Surprise because we introduce members to health products beyond the snack category and feature apparel, fitness, beverage and skincare products.

10.  Do you have any exclusivity relationships with brands you use?  do they pay you for analysis or reviews of their products?

No, we do not offer exclusivity to anyone but we also do not feature competitive products in the same box. No, we do not accept payment from brand partners because we want to maintain objectivity and editorial choice over the best products.

11.  Do you plan to sell your products on your website at any point?

We want to do what is best for our brand partners as well as what is most convenient for our customers.  Right now we add value to our brand partners by offering exclusive promotions to our members and redirecting them to our brand partners’ sites.  We do not charge our brand partners to offer these promotions and we do not get a cut of the sales- this is all done for the purpose of maintaining objectivity while bringing membership perks to our customers and connecting our brand partners with their target audience.  However, we are flexible and we adapt and respond to our members’ feedback.

12.  How successful is Klutchclub?  Is it viral?  Are you getting more orders than you can handle?

KLUTCHclub is very successful and it is viral.  We do not pay to advertise.  Most of our subscribers find out about us from recommendations – press, blogger, or their friends and family.  We are not getting more orders than we can handle as fortunately we come from a very analytical background and we forecast demand.    We also formed wholesale partnerships so we sell some of our boxes through channels that buy higher volumes.

13.  How did you find investors and how are they involved.

 

We have raised a substantial seed round as we started generating revenue immediately post launch.  Many of our investors are people I have worked with in the past who know my capabilities very well and are bought into the idea.  Some of the investors are sophisticated entrepreneurs or people who have a lot of experience with venture capital and startups.  All of them know digital marketing, consumer packaged goods, retail, and technology space well.  They have been crucial to our success not just by contributing financially but also with their advice, their expertise, and their problem solving help.  They have also been great mentors, supporters, and overall cheer leaders for KLUTCHclub.

Thank you so much for your candid, honest and informative interview.  It is very inspirational and it’s great to see a positive feminine role model for health and fitness in this time of America’s epidemic with obesity.