Joseph Marchione

@MichaelMartocci Shave his head. Takes less than 15 min and would guarantee he doesn’t come back 😎

I’m at a good barbershop and this guy comes in Sits down and after a few minutes starts saying he’s looking to get in and out in 15 mins The barber pushes back saying they don’t do short haircuts there Guy says to stop then and walks out What’s the right call? Give the customer what they want or stick to what you beleive in?

@nickgraynews This is super cool Nick! I did a few international first dates when I was in my early 20’s and worked in the airline industry - have fun!

I want to do a blind date and go to Tokyo next weekend If you’re a woman with a passport who likes sushi and Japanese food and can ride a bike in a big city… let’s go I'll pay for everything but in return you have to film stupid videos of me for my socials More info here or DM me or email hello@nickgray.net docs.google.com/document/d/1Hj…

@GuyDealership @X 2014 Audi A4 Quattro, Premium Plus, S-Line, only 75,000 miles, garaged and well maintained. $12.5K — Austin TX or reasonable driving distance

Time for another experiment… Let’s get your car sold on @X. Sellers: Post a 1-sentence description of your car and the price. Buyers: Tell us what you’re looking to buy and the budget. Go

Anyone coming to Austin this week for SXSW that still needs a place to stay, I’ve got a few openings still Airbnb.com/h/lacasabarton… #Austin #atx #sxsw #SXSW2024 #facebookdown

@YoannTurpin1 @HarryStebbings He still is the king

@HarryStebbings Fabrice Grinda was the king there ( 10y ago though)

I am leading a pre-seed deal for an incredible company innovating in the real estate marketplace category. Serial entrepreneur, sold last business for $100M bootstrapped. Who are the single best marketplace angels for this? X, work your magic…

@MichaelMartocci @swagup This is an MBA in two tweets! What a journey, thanks for sharing with us all 🙌🏼

PART ✌️ So we pick up the story at the Detox phase To regroup before jumping back in, 2022 was an extremely challenging environment for us @swagup and many others, and its one that I believe maps well to the stages of alcoholism We got caught up in the moment and drank the cool-aid to a point that we were in denial about the strength of the business, leading to a loss of control and ultimately emotional and physical deterioration that necessitated major changes So let's get back into it Detox + Outpatient Recovery - End of 2022 to Q3 2023 If we were going to get things back on track we had to confront our challenges head on and make decisive moves, quickly We had built up a lot organizational debt that was accruing below the surface and only became apparent once things slowed down Before getting into operational changes, first and foremost we needed to address short term liabilities We had a ST revenue based credit facility that was, while solid terms, was eating up $200k+/month of cash, this was crippling us...we needed to get some relief here to reserve as much cash for operations as possible...but why would a lender just give us a break? Here's the thing about borrowing money, when it's a decent amount, it's just as much of an issue for the lender as it is for you, no one wants to lose money and generally people want to be helpful...so we picked up the phone and talked to them, super straight up and just outlined the situation, told them our game plan going forward, and asked for some help...and to their credit they agreed to exactly what we asked for (basically trimming the monthly outflow by over 80% indefinitely until we were on stable ground) With that off of our backs, we turned our attention to the business itself, we dug into every facet and with an industrial engineering mindset looked for improvements throughout and executed non stop against them I'm a huge proponent of driving GM gains as the bulk of it flows right to the bottom line, small gains her can be massive for overall profitability The first thing we looked at was vendor/product data and our pricing. Our data was either incomplete, out of date, or just wrong - so many different people had had write access to our system, we didn't have nearly enough control over product data We restricted access and started cleaning up the PIM - we went to vendors and got exports with up to date data to update our system. Why does this matter? We had costs that was 2+ years old, we had margins and data that were set by BPO reps that were under-charging by 20%+ in some cases, we were showing items as available that weren't and then having to upgrade to a new item and cover the cost difference. We implemented system changes to add pricing to our Purchase orders in order to catch discrepancies early in the process vs being billed whatever by vendors and needing to back track after the fact, if we caught it at all - this also created a feedback loop to improve our product data consistently We negotiated with vendors to get better pricing and rebates, payment terms willing to walk away from vendors unwilling to work with us. We changed our storage cost policy, historically a pay once to store your items and never pay again no matter how long it sits, to a recurring 6 month fee. We ran reports on inventory that had been sitting for over 2 years and worked with those customers to either move it out, donate it, or pay for storage again The space we were able to free up from this allowed us to cut our overflow warehouse that was costing us an additional $30k/month. We walked the floor with our operations teams for a few weeks understanding the process gaps, the inefficiencies, the tech limitations and started to address them one by one. Things like batching work orders so that pickers could go pick multiple orders at once. Getting new machinery that would allow us to do the work of 3 people with 1. We brought the number of hourly workers in our facilty form close to 60, to just about 35 We had storage locations with 20+ different SKUs spilling out of it, we were often pre-printing labels in bulk and sticking them on packages (super error prone) This increased picking times, it led to items not being shipped on time or at all, it led to shipping the wrong packages to the wrong companies, subsequently increasing refunds/credits, and hurting retention and word of mouth We shifted to printing labels on demand as barcodes were scanned, limiting mis-ships/picks, we used the new found space we were making in the facility ot bette organize stock and increased our cycle count pace to ensure inventory accuracy (in addition to changing the customer UI inventory to be based on physical counts and not assumed levels) Both inventory accuracy and the % of shipments going out of the door within SLA began to approach 100% consistently One of the areas that chronically plagued our gross margins was shipping (or more accurately, our services) margins, often times a single digit percentage or even negative margin on a monthly basis. We assembled a SWAT team to quickly assess the situation and get it back on track. The biggest thing we discovered was that we were getting killed on shipments in large boxes. The issue was that we had a shipping algorithm purely based on weight, sow hen we quoted shipment costs to customers through the platform, it was purely based on weight, but the size matters just as much if not more. In some cases the weight based rates were fine, but when you had large items that weren't heavy, for example a blanket, or duffel bag, we were losing hundreds, even thousands of dollars at a time. I worked closely with one of our core engineers and we worked on a new algorithm for shipping rates based on dimensions of products and packages. We worked with our sourcing team to update unit dimensions and packable dimensions for every item in our catalogue. It was a mad dash to get this in place, but within 30 days it had completely flipped our shipping margins. In addition to these changes, we signed on a shipping analytics service that helped us analyze our costs, identify potential opportunities, filed claims on our behalf, and helped us negotiate RFPs. We introduced new carriers for certain routes, moving form primarily 2 carriers, to over 5, dynamically going with the most efficient label for each shipment We also increased our pricing on shipping generally - I think as founders we often want to keep prices low for our customers, but if it creates an unsustainable business and an inability to invest in innovation, that's not good for anyone We looked at things like shipping supplies (blank boxes, tape, packing fill) and determined we were sitting on way too much inventory at a time + was overpaying - we found a new supplier with lower prices than Uline who was also willing to sit on the stock and ship it same day - this lowered our costs and freed up more space in our facility All in all, the impact on margins was dramatic 🤯 Services margins (largely shipping, but also storage and some others) went from mostly negative, to around 40% Overall gross margin, which had dipped to as low as 23% in '22 also began to reach 40%+ As we moved down the P&L, we looked at one of our largest cost drivers, the sales and marketing org to understand where the opportunities were First off, we cut paid marketing spend by about 40% and worked on addressing attribution gaps and the customer journey, while historically efficient here, we needed to be more critical of the spend here and ensure were getting a clear return, quickly - we cut out lots of unnecessary costs on SwagUp brand keywords that for the most part we were capturing anyway whether spending a ton or not - we restructured the campaigns ot have higher levels of control per ad group and keyword to set more granular cost caps and reporting (still more to be done here) We made another cut that largely effected the sales org trimming ti by about 40% and putting more of our best accounts in our best reps hands and shifting some lower value functions to an awesome BPO (thanks @mo_amdani @ammaramdani 🙌) We had a liberal commission structure that was still paying out for underachievements...we created better alignment between reps and the success fo the business, implementing floors to achieve variable comp, and accelerators for overachieving - when we succeed you succeed, when we don't you don't - this ultimately brought our variable cost of sales down by over 20% We were largely treating all of our customers the same, irrespective of spend or potential...We pushed a cultural shift towards not treating everyone equal, and doing more with our best customers and better segmenting out of rev org to reflect this reality...if you want to progress in the rev org, you need to grow a concentrated base of accounts, not simply hit a rev number by any means necessary (ie pulling a new inbound to cover up account base decline...bottoms up brick by brick account building Even with these changes, we needed a better mechanism to create stickier customer relationships and rewards our best customers. In Summer '23 we rolled out our first ever recurring revenue memberships, these memberships would give our best customers prime-like benefits for consolidating their spend with us and let us know who our serious customers are. Since launching several months ago, over 200 customers have become members and members are ordering 3X faster than they were before (and 5x faster than non-members) with a 30% higher AOV - it's the cornerstone of how we build accounts going forward and we will only add more and more value to them over time...and we built the whole system including loyalty and rewards form scratch within 75 days While on the topic of product and engineering, we ended '22 with multiple product squads focused on parts of the experience + traditionally sprint planning. We were falling behind because we were over planning, splitting up our best people, and lacked leadership willing to make strong decisions on the fly. While not ideal, I decided to personally take over the core SwagUp product team, we combined the squad together, and split out a separate group led by our CPO and Head of Eng to work on net new infrastructure we'd migrate to over time. This gave me full autonomy to control the day to day SwagUp roadmap and address customer feedback and issues as quickly as possible. We moved away from lots of planning and more into an agile-type environment, working on the next most important thing as quickly as possible and staying flexible. Our team thought the approach was crazy at the time but it proved right The detox is the greatest thing that ever happened to us - it forced us to look our biggest challenges in the eye and address them head on. One of the biggest blessings of it, it brought the tea way closer together. For those that made it to the other side, and especially the exec team, being in the trenches solving problems together at that intensity level has created bonds that will lats lifetime. I'm sure there's more, but these are the major things that come to mind, and with much of this behind us, we've been able to move into the next phase Long Term Recovery - Q4'23 and Beyond By no means have we solved all of our issues, by no means can we rest on our laurels, if/when you lose the continuous improvement mindset is the day the decline starts, it's possible to relapse, but we've done a lot of the heavy lifting over the last 18 months that gives me the confidence going into 2024 that we are the path to Long term recovery Aside from the above, here's why I believe 2024 will be the best one yet for us Our entire rev org has been architected around building deeper relationships with our customers. Every rep must know their top 50 accounts inside and out and grow them a certain % this year. More questions, more learning, more providing solutions, less sitting and waiting for orders, and with Ops stable, they have the time to do it We've built incentives and a career path within the rev org that continuously rewards doing more with less customers, allowing us to recycle accounts down to more jr reps to give them the opportunity to grow the accounts that weren't the other reps top priority - We want to leave no meat on the bone We've layered in a dedicated Creative Strategist to work with our top customers on product ideation and design to be a proactive thought partner vs a service provider We've reorientated our New Business AE's to not just close the first deal but to be judged on their ability tog et new customers to their second deal quickly, creating true customers and not just initial transactions - this creates alignment to ensure we are onboarding successful customers that go on to place 10+ orders over time, dramatically increasing LTV We are building what i call a scalable "Revenue Factory" that on one side takes in noisy new business and young reps and deliberately turns them into raving fans and seasoned sales execs with multiple 7 figure + relationships With some of this + what was mentioned earlier, we are seeing early signs of retention improvements with the % of customers placing a 2nd order within 3-6 months up almost 2X from their bottom - still more to do to get the new biz flywheel going to create chunkier cohorts to get future repeat revenue from Additionally, we've got a ton of big product launches in the works for '24, two of our most requested products coming in Q1 alone, native storefronts and integrations. The team has been hitting a stride + we brought on a new UX designer a few months back that has been awesome and fully ramped = we are getting much more done Looking ahead to the rest of the year some product development themes include first of it's kind enterprise-level capabilities, growth hacks in platform, robust ecom, and a new market we plan to serve which we feel is super untapped and a trojan horse int the door with the best companies in the world 🚀 Keeping with the innovation theme, we started building an operating system for running a swag business like SwagUp from the ground up at the end of last year, we call it Quilt. Quilt has the potential to transform how we run our business, our costs, our ability to automate processes, as well as deliver new, better customer experiences. We are migrating a major portion of our existing infrastructure over to Quilt in the next 8-10 weeks and from there it's off to the races. In '23 we also successfully rolled out our first in-house manufacturing capabilities. It was profitable within 60 days and helped us build some new muscles that we plan to flex in '24 with at least 2 new vertical integrations, helping us expand margins while gaining more control over our supply chain and customer experience. It's no secret what's been happening in the tech economy and we have a ton (60%+) of tech customers. Tech is the first to pull back, but also the first to recover (cc @JesseTinsley), given how nimble it it is but also how far out on the risk curve it sits. Going into '24 there are early signs that the tech ecosystem is springing back to life, with AI, the prospect of lower rates, and future IPOs all leading companies to get more confident about future prospects and the need to continue investing into growth. We can't model this exactly but it has the potential to "raise all boats" Lastly and most importantly, is we are/have been making the shift from a defensive mentality to an offensive mentality. Mindset is so important and when you are in a fight for survival, there's not much else you can think of. Making investment into growth in that type of psyche and position is just very challenging. As we enter our Long Term Recovery, we are looking to the future with enthusiasm, knowing the work required to stay on the right path, yet grateful and excited to build back our new life 2024 🚀

@MichaelMartocci @swagup Keep going Mike!! I have faith that you guys have done all the hard work to right the ship and continue on course for great success 🚀

2024 is shaping up to be the best year in @swagup history, but there's much more to the story... These last 24 months have felt like going through the various stages of alcoholism, with all of the same ups and downs that you can imagine I haven't really shared this before, but let me take you back to early 2022, or what I'd call the "Denial" stage Denial - Q1 2022 We were coming off an insane Q4 in 2021, 4 years in and we just had a $7m bookings month, we were flooded with demand, and we were hiring like it was going out of style...there were some growing pains for sure, but overall, we felt we could do no wrong As we got into 2022, we continued the momentum with a relatively strong Q1 and geared up to raise a big round from the seemingly endless amounts of VC being thrown around But under the surface there were issues and, blinded by our enthusiasm, we were missing them... Plagued with pandemic and scaling related operational issues we were burning bridges with our customers, filling a leaky bucket with new customers...it hadn't quite showed up yet but our best in class retention was breaking down Margins were eroding...in a push to take advantage of the times and acquire as many customers as possible (200+/month at peak) we deliberately kept pricing low and generally paid more attention to top line (we were going to raise we assumed, VC's like growth 📈) - supplier costs were rising left and right and we weren't staying on top of them, we were bringing in (expensive and low quality) temps to handle volume and were giving out credits and refunds to smooth over issues To make matters worse, we hadn't yet switched to accrual accounting so we couldn't quite see it yet Cash flow looked solid given our negative working capital cycle, but it was hiding structural issues...the music hadn't stopped there yet but it would...but we were too naive to notice it Loss of Control - Summer 2022 By the summer of '22 it was clear things were different and not in a good way As we all know, the startup ecosystem flipped around May/June and layoffs began to pile up Our own underlying issues aside, this was problematic for us for several reasons 1 - Swag, for the most part, is highly discretionary 2 - We focused primarily on tech and startups 3 - One of our major use cases was tied to new hire onboarding, which came to a screeching hault Top of funnel began to slow and we were starting to feel the signs that things were changing Around this time we had begun to get better financial visibility, out of necessity (we couldn't just look at the bank account) - after some heavy lifting, we moved to accrual accounting and we created what resembles a weekly cash flow model...it was clear unit economics were crumbling and we were on a crash course to running out of cash as growth began to slow and our negative WC would become a liability Denial had past and reality had set in, we needed to make moves and fast Emotional & Physical Deterioration - 2H 2022 If you've ever read @bhorowitz "The Struggle" (linked below) it is the perfect summation of this time Up to this point, we had appeared to be the perfect company...largely bootstrapped, 10's of millions of revenues, 23rd fastest growing company in the country, over 200 employees, news articles, fun work environment etc And we had to take a recking ball to it all. I spent multiple sleepless nights with the team and friends crafting a game plan that would entail parting ways with almost 50 members of our team, nearly 25% of our team This completely shocked the company...we had referenced the need to focus on profitability but we weren't transparent enough - the energy in the business was sucked out of the room, the culture dead The rumors started to swhirl, the slack messages being sent, the linkedin posts popping up, reviews bashing me and other execs saying how terrible we were professionally and personally We quickly had an All ands/AMA to address things as well as we could and try to comfort and give confidence to the remaining team about the path forward The issues was, as a transactional business, with historical retention rates not holding and new biz being impacted by the macro environment, it was super hard to know what future revenue was going to look like...I believed in us but I honestly couldn't guarantee people were safe This naturally created a second wave of exits, people we really didn't want to lose but had to do what they felt was in their best interest This moment in time was the hardest thing I've ever had to deal with...period! I woke up with knots in my stomach and went to bed with them...we cut our personal expenses...my mind raced non step playing out all of the different scenarios And to make it even more complex, @hi_rankin and I had just had our first kid (which was the greatest blessing in disguise) But there was no space and time to hide, no room for self-pity, it was time to step up as a leader I can remember the turning point vividly, we were in a meeting as a leadership team talking through a few different scenarios (some not so pretty) to which I said something along the lines of "we are on train tracks and there's a train coming right at us, we can sit on these tracks and get run over or we can jump off these tracks and build a set of our own...idk about you, but I'm jumping off these tracks" And at that moment the detox started... If you want to hear the rest of the story, how we went from literal hell to detox to recovery and why I'm excited about '24, comment below and I'll keep going (because it takes a while to type all of this out 😅)

@heyalexfriedman Bought in Austin 2 years ago, feel good about it for the long term, but my property taxes are higher than my parents’ waterfront home on Long Island 🙄💸 I love the space, but miss the ease and flexibility of high rise living.

I’m starting to not see the point in buying a house anymore. - Most houses I’ve looked at are over valued. - Property taxes (in Texas) are wild. - I have to maintain everything. - Mortgage would be more than my rent. - No guarantee value would increase. - Less amenities than a luxury apartment. Am I crazy for feeling this way? I feel crazy for feeling this way.

@hi_rankin Paddle!

New swag coming… which would you choose?

@roblabonne Solar is the ultimate DIY project. Was quoted $36k for a residential install in ATX that would become an inherited liability for the next owner, vs. something I could do myself for $10-12k and have as an asset.

Solar panels are not that expensive but installing them is...

@MichaelMartocci +1 to those who are venture backed & in the tech world have maintained a tighter belt lately. Love to hear that Universities are still spending!

I’ve been asked a lot recently about how the macro headwinds have impacted corporate swag spending. My answer: We're still seeing a lot of orders. It’s not the number of orders impacted, it’s the size of the orders

@MichaelMartocci I’ve been waiting to see this announcement! 🇺🇸🚀

The greatest country in the world began to apex a few years back, it’s time we get started putting our trajectory back on track, and promoting education, innovation, and growth 🚀

@magdalenakala What a lovely tribute! And Villefranche-sur-Mer is one of my fav places in the world 🤩🤩

@MichaelMartocci Lol great video! Happy birthday 🥳

2️⃣8️⃣

@SamtLeslie @MichaelMartocci & @swagup to the rescue👌🏼

Recently saw a thread about swag. I want to leave #mesadeal clients with a gift when they buy from us Have thought about backscratchers, flashlights, plungers, massage sticks, blankets, pillows, coffee cups, tumblers, coozies... I want them to use it and think "Mesa" Ideas?

@isaacfrench_ @LiveOakLake 🤣🚙 this makes me want to make a gingerbread of my Airbnb backyard now!! Except it better now snow in Austin this year

@TheStartupJoe @LiveOakLake First, we melted lemon drops… No just kidding, haha. That’s the only part not made from scratch.

I like building stuff (including gingerbread houses). This kept me busy last few nights. Made from scratch. Very fun but a TON of work 🥱😄 MERRY CHRISTMAS from @LiveOakLake!!

@recostseg @mike_frederick Awesome, thank you very much!

@TheStartupJoe @mike_frederick You have to do it within 3 years of the due date of the tax return. So 2018 onward at this point. But can catch up properties from then to now!

Bonus depreciation (unlocked by a cost segregation study) is the single largest tax loophole in the American Tax code. It’s the #1 way massive wealth is preserved in our country. And it’s available to anyone who buys a piece of real estate!

@recostseg @mike_frederick Do they need to be done in year 1, or does it still help the buyer/homeowner in year 2? (Single fam, house hacked into two Airbnb’s + owner suite)

@mike_frederick We do have a virtual tour option to save you money. Most large commercial assets we do a site visit.

@joshuamschultz “Let me first respond to your inquires here, and if you‘d like further clarification we can hop on a call to discuss.” 🤞🏼good luck avoiding the meeting!

My worst fear... Someone responds to my email containing a question or two... ... with a meeting request to discuss. NNNOOOOOOO!!!!