2015-10-25 - Leveraging the internet to offer mass-customized artists' crafts

Anastasia Leng

A graduate of my alma mater, the University of Pennsylvania, Anastasia began her career at Google. After implementing Google programs to develop entrepreneurs for several years, she decided to become one herself. Partnering with a former classmate and colleague at Google, Anastasia founded Hatch, a firm that offers mass-customized products via an internet platform. I hope you enjoy her founding story as much as I.

1.   After majoring in psychology at my alma mater, the University of Pennsylvania (Penn), you worked at Google in their new venture business, through which you became intricately involved in implementing programs for start-ups, and in product development for five years before launching a company that has now become Hatch. Was this career progression deliberate, or did your desire to become an entrepreneur gradually evolve from your studies at Penn and experiences at Google?

My career progression has definitely not been deliberate. At Google, I realized that I tended to gravitate toward early-stage projects and products. I preferred working on something brand new for which there was not road map rather than on an already-established project where I would be following in someone else’s footsteps. I think I owe Google credit for my love of entrepreneurship. One of my last projects at Google involved helping the company set up entrepreneurial centers around the world starting with a South African accelerator and culminating in a large hub called Campus in London. While doing so, I met many incredibly inspiring people creating companies, building business from the ground up, infecting me with the start-up bug.

2.    Can you tell us about your business model and operations? How, exactly, do you earn a profit? What does your supply chain look like? Whom do you consider your nearest competitors? Do you feel large retailers like Amazon are a threat? How are you different from competitors? More specifically, what do you believe is your competitive advantage over them?

Let me frame my answer by telling you who we are and what our vision is at Hatch. Our vision revolves around creating an interactive, customized shopping experience in which the costumer can tweak every product to create a version that incorporates their preferences. The genesis of this idea lay in my realization that every shopping experience requires you to make a binary, yes-no decision to every product you come across. Hatch set out to transcend this limitation. To do so, we partnered with small crafts people and businesses, artists who were able to incorporate a degree of personalization and customization into their design, creating a two-fold product differentiation advantage. Every product featured on Hatch is a starting point for the final product determined by the customer’s preferences. You can change the material, color, size, and shape to personalize an item.

Regarding your question about our closest competitor, the macro answer is that we compete with every online retailer because when a customer is shopping online, the person is not thinking, “I want this customized piece.” Rather, the customer is thinking, “I want this item, and I will buy it from the company that gives me exactly what I want.” In that sense, we compete with everyone, including Amazon.

On a micro scale, etsy.com has made their name by aggregating makers of hand-made goods. For us, hand crafting has never been the differentiating factor. We are concerned with the personalization and customization that makers are able to offer, as well as the quality of the makers. In this sense, we are much more of a “curated” marketplace; all products are carefully vetted before being approved for sale on our site. We aim for a product and customer experience not available through other, similar sites.

3.   How would you describe your corporate culture?

Our corporate culture is incredibly fun. We laugh a lot. We are all very close, almost like a family. We genuinely like one another. We also disagree and argue about a lot of issues, but we also have lots of fun doing things together. Recently, we started working out together once a week, helping each other with our New Year’s resolutions to shape up. A few of us have formed a book club, and we meet once a month to talk about books and enjoy wine. I feel personally close to everyone on the team. The company would not be where it is now today without them. They are a great team.  

I hope that we will be able to maintain this culture as we grow. We have had to let some people go because we realized they were not a good fit, they did not share our values.. The ones who are still here embrace our vision. Of course, companies typically become more bureaucratic as they grow. This evolution is inevitable. But maintaining a core of down-to-earth, smart, humble, hard-working culture is not impossible.

4.       Tell us about Campus and other Google initiatives aimed at supporting start-ups. What is Google doing in Japan for start-ups? Broader Asia?

I am not sure what Google is doing for startups in Asia. While I was still at Google, I know they did have people on the ground in Asia exploring ways to support entrepreneurship and startups, but I had left before anything materialized.

I am familiar with their Campus model, which involves creating a hub in a city where can gain access to everything they need to begin their startup journey. In the same building, entrepreneurs can access mentorship, secure space to work, form a community with other aspiring entrepreneurs, and utilize suppliers of services who will help them with everything from legal documents to accounting issues. The Campus model in London really took off, and the hub was viewed as a success. I think the same model has been replicated in Tel Aviv, the Czech Republic, and at least one more place, though I do not clearly recall.

I know Google is still very much committed to start ups. In fact, they formed a team, Google for Entrepreneurs, led by Mary Himinkool, a brilliant woman with whom I had myself worked at Google. That team is actively working to develop entrepreneurship in other countries, looking at ways to help local entrepreneurs to enter the start-up world. In some countries, becoming an entrepreneur is difficult. Startups are not viewed as glamorously as in the United States. The Google team is working on ways to help entrepreneurs on the long, difficult journey of establishing a start up, with special focus on founders that are typically underrepresented in the technology industry.

5.    What skills, resources, and lessons from Google have you utilized in founding and running Hatch? What key lessons have you learned since founding Hatch?

Though Google is a company of incredibly smart, brilliant, and accomplished people, the most important lesson I learned there was about how incredibly important soft skills are. The factors most correlated with personal growth and success in the company were your ability to relate to others, your skill in leading a team, soft-touch abilities than cannot be learned from textbooks.

I have taken this lesson very much to heart in my work here at Hatch. When I think about all of the small victories along the way, like attracting investors and building a team, I feel they are all primarily people based, not data or product driven. Every single Hatch employee likely took a pay cut to join the team. Because they are all intelligent, rational people, I believe the opportunity to honestly and transparently interact with others who share a common goal motivated their decisions and helped us accomplish everything we have. I also had the opportunity to see different leadership styles at Google, so I have been able to cherry pick models in developing my own style.

As for lessons learned at Hatch, no experience better exposes you to the ruthless need to prioritize when you could be doing absolutely anything. There is the constant battle between data and intuition. Because no formula for the right balance exists, I have had to hone my own. At Google, if you couldn’t or didn’t do something, someone else there certainly could have stepped up to fill your shoes. In addition, Google had clear roadmaps for what they were doing. At Hatch, in contrast, the path is wide open; we could be doing anything. Creating a vision for what we want to be, combining it with tactical realities to determine what we need to accomplish and being ruthless about prioritizing are lessons and skills I will take with me wherever I go next.

6.   Coding and web design seem to be at the core of your business. What difficulties have you encountered with this technological facet of operations? How are you dealing with these difficulties?

As a founder, I never think that I am moving quickly enough. Our engineers are brilliant, and they do a phenomenal job. But we have a product roadmap that is miles long, a veritable laundry list of all we aspire to accomplish. No matter how fast we are moving, we constantly feel our pace is not brisk enough.

When we started Hatch, and when we first received funding, we lived and breathed by the numbers. Showing growth was vital. This concern drove us to implement every e-commerce practice we could think of and do whatever we could to increase the site conversion rate. In this process of doing so, we lost sight of the source of our uniqueness and the subtle differences that separate us from everyone else. At the end of our month of optimization, our revenue and conversion rates were up, but we were no longer able to see how Hatch was different from other e-commerce companies. We looked and felt like all the other sites out there.

Since the end of 2014 and early this year, we have committed to spending the next quarter setting up a strong foundation of who we are as a company, including the people who are the company, and building the design of that foundation. For the first time ever, we are thinking of building a brand. The process will be a design exercise as well as an exercise in strategy and marketing. Design, engineering, and strategy are all intertwined.

7.    In your talk, “Rise of Customization in Ecommerce,” you mentioned that you had effectively resisted pressure to vertically integrate coming from investors, noting that 90% of repeat purchases on your site were from a different product category. Clearly, you make data-driven decisions. In the age of Big Data, how do you determine what and how much information you need? How do you collect, analyze and ultimately utilize it in decision-making processes?

To be perfectly honest, I continue to grapple with these issues. Obviously, I do look at a lot of data. However, as mentioned, knowing who we are as a company and determining the pillars of our brand are pivotal for me as we go into 2015. This way, we do not run the risk of optimizing the data only to end up with a company that does not reflect our values. It may not even feel like it reflects your vision or philosophy. That balance is a tricky, delicate one. There is no point building a company reflecting an idea you have when customers are telling you it is not what they want. You cannot build a business that way. But if you totally abandon your beliefs and values, you end up with this one-size-fits all product that is neither highly useful to anyone nor something they can identify with, become attached to emotionally, and serve as an evangelist of. I cannot give a perfect answer to your question because I am still in the process of determining the right mix.

8.    How do you think being female has impacted your business? What are the benefits? The disadvantages?

That’s a very charged question. In a way, the benefits and the advantages are two edges of the same sword. There are far fewer female founders than male ones. I think the latest figures indicate that only 3% of venture-backed founders are female. On the one hand, I am a minority, so some venture firms will make an added effort to find me and other females.

My understanding of venture capital suggests the business relies heavily on pattern recognition. More specifically, the firms seem to look at the traits they have observed in past successes, using them to screen for pockets of possible future opportunity. Some of those traits are related to people, and some investors will look for founders with certain characteristics. Because most previous founders have been males, this pattern-recognition approach malfunctions when female founders appear.

Some articles suggest that investors are inclined to fund female founders who exhibit more male-like characteristics. I am sure that observation is partially true, but I have no complaints. We are lucky to have come this far. Occasionally, I have felt that being the only female in the room was a disadvantage. At times, I have received questions that a male would never be asked. For these reasons, I go to a VC meeting, I dress differently. I will never wear a skirt or a dress. I always wear my glasses. Everything I do broadcasts my business acumen and professionalism. I do this, in part, due to stories I have heard from other female founder friends about their experiences.

One plus is the tight culture among the female founder community in New York City. I have the opportunity to meet some incredible women who are starting and growing companies. We tend to be open about the good and bad, serving as a strong support network for one another. On my team at Hatch, I work with three females and three males.

9.    As you may know, start ups are relatively uncommon in risk-averse Asia, notably Japan. What recommendations would you give to young Japanese who aspire to become entrepreneurs, especially young women?

That’s a tough question because I think that bucking the culture climate in a country is difficult. Access to a strong support network could make the situation a bit better. My suggestion is that aspiring entrepreneurs find people doing what they would like to do, then stick to those people like glue. Offer to do unpaid internships. I did many of them in high school and college. Offer to shadow these entrepreneurs, even if doing so means spending the summer before you become a high-school junior fetching coffee for them. You will be amazed by how much you will be able to learn and absorb just by being around someone doing what you aspire to do.

In countries that do not have a strong appreciation for entrepreneurship, being part of a sub-culture that rewards and celebrates this enterprise makes a big difference regarding whether or not you are likely to start up a company. Furthermore, if you do take the risk, you will be more likely to stick with you your plan because you are surrounded by people struggling through the same journey as you.

Why this series on entrepreneurs?

Contrary to the impression given by the hype and  hoopla surrounding many recent tech start ups, research indicates that innovation is declining in the United States. To facilitate reversal of this trend, I decided to interview successful, young entrepreneurs to learn about their struggles, triumphs, and success secrets. I am hoping their stories will inspire you to pursue your entrepreneurial dreams the way I currently am.

In 2016, I will officially incorporate Play-Ed (Playful-Education), an educational company that will furnish after-school programs aimed to teach S.T.E.M. (Science, Technology, Engineering, and Math) with an emphasis on digital technology; cross-cultural communication, and life management skills. To view the site where my headquarters and flagship-school will be established, click the link below. 

Play-Ed  

During the summer of 2016, I will offer three, week-along, intensive, camp-style workshops for international students and professionals:

1. English + Coding = Future Success
2. Navigating the U.S. undergraduate and MBA application Process
3. Selling to Westerners

In addition to facilitating all workshops, I will provide individual coaching to each participant. For further details, contact me.

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