Episode Transcript
Speaker 0 00:00:04 We all want a business like Netflix or Amazon prime dismisses, where once a customer engages with them, it becomes automatic and part of their lifestyle from then on. But how do you build that forever transaction? Robbie Kellman Baxter has been studying subscription and membership models for nearly 20 years. And in this podcast, she uncovers the secrets and strategies of the membership economy. Join us for subscription stories, true tales from the trenches.
Speaker 1 00:00:33 Welcome to the show. It's your host, Robbie Kellman, Baxter sharing subscription stories with you. And today's guest is Anthony Napolitano. Anthony has been leading Hewlett Packard's global instant ink subscription service. He has full P and L ownership for a business that's growing 20% year over year. He took on this challenge after working in several roles across Hewlett Packard, including supply chain operations, and as general manager of their retail photo business. We're going to talk about how to run a physical membership economy business. We'll also talk about being a subscription business inside a transactional company. Since we're recording in June of 2020, we're also going to talk about how to manage a business in times of great change.
Speaker 0 00:01:22 <inaudible>
Speaker 1 00:01:28 Welcome to the show, Anthony. Oh, it's great to be here. Thank you for having me. Robbie, how did you come to run instant inc. Looking back? Would you say it was inevitable or are you surprised at where you've ended up?
Speaker 0 00:01:40 I'm thrilled to where I ended up. I can't say it was fully a planned and chartered for sure. I think each of us have some times in our career where we make a specific choice and sometimes luck just kinda falls upon you and your, you look back at her grateful that it happened. I think most of my career I've spent in what we call startup businesses inside of HP. So these are new businesses that we're trying to grow and create. And it just so happened to be that before I joined <inaudible> I was in another startup business inside of HP, which was quite a unique experience is that I was there from day one until we actually shut down the business. So I was in that business for 12 years. And while it didn't succeed in kind of a commercial sense, I learned a lot from that business, but because I had that experience instant ink at the time was, was really only a few hundred thousand customers. And so, uh, I had this reputation of being able to grow new businesses inside of HP. And I was given the opportunity to, to come into Instinet and now we have over 7 million customers worldwide. How many customers was that? 7 million,
Speaker 1 00:02:50 300,000 to 7 million.
Speaker 0 00:02:52 That's right in the last five plus years.
Speaker 1 00:02:55 Wow. Now it's interesting to me that you're, you're really entrepreneur and yet you've spent most of your career inside a big established company. What has that been like for you?
Speaker 0 00:03:09 It's been really fantastic. I mean, I joined HP right out of business school. Didn't have much experience coming into HP. And so I thought, well, let me get a big name, you know, under my belt. And then perhaps, you know, move on, you know, to other, uh, other companies. Uh, but here it is 23 years later and I am still at HP and still really enjoying it because there are so many benefits you get in a large company, right? In terms of trying new opportunities. We're international, I've been in so many different businesses inside of HP, but around 15, 16 years ago, I really fell in love with this idea of being able to create a legacy right where HP has such a great legacy already, but perhaps I could take one of these businesses and have it become part of the future of the company. And I found that really motivating right. And instant ink right. Has really turned out to be something that I really believe the company is fully behind. And I believe five or 10 years from now, I'll be able to say, Hey, I was a part of making that happen. And that's really motivating for me.
Speaker 1 00:04:13 Let's, let's talk about instant ink. Instant ink is Hewlett Packard's subscription, ink service for their printers. So you buy an HP printer and then you subscribe to the, the ink cartridges. Can you explain the logic behind building out that model and kind of how it fits with HPS bigger, bigger promise to them?
Speaker 0 00:04:38 Absolutely. Yeah, absolutely. I think it's a really interesting story and, and discussion, uh, you know, frankly, I think it really started with trying to solve pain points that our customers have with printing. And they're really clear with us on what those issues are. I one is that the cost of ink is too high and the other, which is equally as painful, that while people don't print nearly as much as they used to, when they do print, they need the output. Right. I need a report. I need my child's homework to be due. And lo and behold, I'm out of ink right at that time. Right. We've had that experience once or twice, right. Once or twice. Um, so that was really what we saw as the problem. And we went to go set out to solve it. We also started looking externally and saw more and more industries moving towards as a service, right? Whatever it is, as a service, we saw subscription, really transforming industries. And so we felt well, we're the leader in consumer print. It's much better for us to be the ones let's say, writing the rules of how this should be played in the print business. And we set out to do that. And so we're able to solve customer problems as well as continue our leadership in this space. We're the ones doing disruption versus reacting to it by an outside player.
Speaker 1 00:06:01 It's, it's really interesting. I talk a lot about this concept of a forever promise and how in so many cases, the customer doesn't want the, you know, I don't want a printer. I want to be able to print your subscription is not about the services. You know, you talked about as a service, which is, you know, very invoked, you know, software as a service product, as a service, it's actually the delivery of the ink. It's a subscription to a physical product. How does that, you know, that's an operational challenge and that's kind of one step beyond most of the subscriptions that people think of the Spotify, the streaming content that many of us subscribe to. What kind of additional challenges do you have that let's say a, a Spotify or, um, as a Salesforce doesn't need to be.
Speaker 0 00:06:53 Yep. That's a great question. And even one step further, it's a physical product. That's not just, time-based, it's not based on every 30 days you're going to get something or, you know, you set the delivery it's truly based on your consumption, right? So it sounds very simple, right? It's even, it's even more complex and more of an investment. And frankly, why I think it's been so successful is that you're buying the outcome. You're not buying the consumable to create the outcome, right? The outcome is your report. It's your photo, right? It's your presentation, et cetera. So you're buying the pages, but we have to do a lot to ensure that you get that ink before you run out. That is our promise. And so there's, there's a whole bunch of security that goes into and knowledge that goes into the printers themselves to the cartridges themselves, to the connection, to the cloud. Then there's the algorithm that then determines right, based on your frequency and usage, you know, when we need to ship you something, we ship it to you in a box. That's just for you, Robbie. It's not a box that, you know, anyone could use. That is, that is for, you know, you, based on your personalized and individual, you know, consumption,
Speaker 1 00:08:04 You're talking about is kind of a whole order of magnitude more complex because what's actually going in the box is unique. And the cadence of delivery is also unique. So it creates a lot of challenges on the operation side. And I, I saw that you have a background in operations, which I thought was really interesting. I don't see a lot of subscription entrepreneurs with that kind of a background, but it might be like a secret superpower.
Speaker 0 00:08:30 Maybe. I don't know if I've ever thought about it like that, but I like to think about it like that, for sure. I think it goes back a little bit to what I was mentioning before about, you know, HP, I do have a varied background from finance. I even started in finance and I do have many years in operations. And then the last eight years have been in general management. And I think you need to have a little bit of everything, right. To truly be effective, a leader of a, of an organization from an end to end perspective. But, but you said it absolutely right. It is a complexity, right. For sure. That's been, that has been added, but it's also been part of our value prop and it's also been a barrier to entry, right? Cause as of today, we're the only ones in the, in the printing space that have a consumer, uh, subscription because it is, it does take innovation. It does take investment. To me,
Speaker 1 00:09:19 It's funny, a lot of subscription box entrepreneurs and all anti intrepreneurs. So entrepreneur of course, being somebody working on their own independently to launch something new intrepreneur with an eye, being somebody serving an entrepreneurial function, but within a larger company, the way Anthony does. And I think both groups often underestimate the importance of operations, of supply chain of process of how you do the distribution and how important those are to providing the value for the consumer. There's a lot of emphasis often on, I think too much emphasis on marketing and on what's inside the box, you know, the curation, as opposed to the full range of sources of value that you can provide to the customer.
Speaker 0 00:10:12 And you can have all the, you know, marketing bells and whistles, et cetera. But if you can't execute on what your promise is, then you either are not going to acquire customers or for sure you're not going to retain them. And we both know, right. Both of those things are part of your value proposition, right? It's difficult to get people to join and sometimes it's even more difficult to get them to stay. Right. And so I really view that operational muscle, but I suppose you're talking about a physical product as key to that. And again, that's one, that's one of the main benefits of being an entrepreneur. I love the way that, you know, you said that is I do get access to all of the scale and all of the muscle that HP has to offer and we do okay
Speaker 1 00:10:51 To, I want to ask you about the scale and muscle of, of HP. And I also want to ask you about the metrics you use. So I'm going to ask about metrics first and then I want to make sure we talk about your relationship within the larger organization. So in terms of the metrics that you use, uh, on your dashboard to know if the, if the business is healthy, what are the most important attributes that you're looking at to kind of diagnose where the problems are or anticipate opportunities for the future?
Speaker 0 00:11:24 Sure. That's such a great question because I think especially a, an entrepreneur or even entrepreneur, the metrics change over time, but what you're measuring at, you know, your early life, right, as you're trying to figure out, do I even have a customer value prop is very different from when you know, you're now operating at scale. Now you always have to keep an eye on the value prop and ensure that you're, you know, you're curating it. Um, but I think it's really important that leaders of these organizations are flexible and have the right metrics right in, in place. And so for us, some of the key metrics that we use is it is a term that we call adoption, which is basically the number of customers that sign up divided by printer sold, for example. So that's a key metric that we use because it basically tells us out of a hundred people that are buying a printer.
Speaker 0 00:12:18 How many, or are we inviting in and successfully inviting in to come into the service from a, from an operational perspective? That's the one I key in on, uh, the most, I want to see improvement quarter over quarter and for sure, year on year, right? And that's the one where I say, okay, printer sales could be up or down, but the percentage of people that sign up is my, my key metric. Cause it's really talking about, are we really speaking to the customer in the right way? That's really kind of top of mind for me. And then of course we look at gross enrollees, cumulative enrollees are, you know, key, key metrics. And then on the, I'd say on the backend, right. Looking at churn and reasons for churn are really the key metrics that we look at beyond the P and L financial metrics. Of course,
Speaker 1 00:13:05 If I were coming in as a consultant, or I were trying to guess what goes on in your business, I would be thinking about if there were problems, right. I would say, okay, well, if you're not, if you're not enrolling people, it's probably either they don't understand that it, they don't know that it exists. They don't understand what the value is or they don't believe it's as good as you say,
Speaker 0 00:13:27 You got it, right. It's one of those three things.
Speaker 1 00:13:30 And then, so those would be kind of three things where you could kind of adjust to where you'd be tracking and you'd be doing different things depending on those three. And then if you want to track engagement and retention, I would be trying to understand why people are leaving and are they leaving because they think, you know, it didn't work as it was promised. In other words, it's an operational problem. You said I was never going to run out of ink, but I've run out of ink twice. What's up with that. You're not delivering on your promise or you delivered on your promise, but I don't need it anymore because I'm no longer printing I'm back at work now. And I don't need my home printer the way I used to, or I've found a different solution for my printing needs. Or I think that I can get my printing done more cheaply or more efficiently in some other with some other way.
Speaker 0 00:14:18 Yeah. And one of the, one of, one of the things we hear from customers, and this is a place where, you know, having a relationship directly with customers, you get all the data, right. And so we ask people why they leave. And so it's no, there's no mystery right. As to why people leave. Um, it shouldn't be a mystery to anybody certainly isn't to us. Um, and typically what people say is sometimes they say, I don't see the value. Right. And in our case, what they're saying is it's either I'm not printing as much as I used to write, but yet I'm paying or the other one, which is a little more challenging to solve for is, you know, I'm not getting shipments of ink all the time. Right, right. So, right. Because we don't ship every month. Right. We ship, you know, when you need it. And so how do we educate customers that they are getting value when they're not physically getting something, right?
Speaker 1 00:15:10 This is a problem that a lot of physical businesses have where they say, you know, we're charging you every month, but we're only delivering maybe every quarter. So do we, do we charge quarterly? But then it's a bigger number, you know, do we charge only when we deliver, but then that not only is that a bigger number, but it also might make your customer think of it as a transaction. I pay you, you make a shipment. I pay you. And what you're saying is, look, if we need to make three shipments in a quarter, we'll do that. If we need to make one shipment in six months, we'll do that. But our promise to you is that you're not going to run out of ink.
Speaker 0 00:15:48 Exactly. Right? So it's now what are the touch points that you have in that interim to educate the customer that you're still seeing value, even though I'm not getting that physical product and you said it exactly right. Robbie, we don't want to charge you every time we ship you something, because now all we're doing is automating a transactional process. And that's not the value that we don't want you thinking about ink anymore. We want you to think about printing pages. And frankly, we want you to print color, beautiful pages because we're charging a page as a page, right? So you want to print eight by 11, beautiful full bleed photos, go for it. And part of the reason we want that is because an inkjet printer, which is what we predominantly are selling. The beauty of it is the full photo color. That's the emotional connection that you have with the printer is when you see a loved one or a family or a place that you want to go visit again, that's why we made a page a page. It doesn't matter.
Speaker 1 00:16:43 I bet your photo expertise is coming into play here. And I talk about this idea of a best member. You're, you're sort of describing a best member as somebody who fully uses the potential of your printer. So somebody who's just printing a lot of words. And then, you know, like, like a writer might not be getting as much value as somebody who is maybe an artist or maybe really interested in their family photos and constantly printing, you know, beautiful images. So knowing who your best member is, is really helpful, both on acquisition and on engagement and retention, because it gives you some guidance on which features to add, as your customers are asking for all kinds of features, you can kind of focus in on these are the features that are going to be most valuable to the kind of people that were really optimized to serve.
Speaker 0 00:17:31 Absolutely right. I mean, and the two things you need to be able to do, what you just described is a laser focus on your customer and what they are telling you, um, and the data, right? To be able to extract that and do something with it. If you have the, that, and everyone says, Oh, customer first, you, you have to believe that you are solving a problem. And you and I have talked about this many times, right? Any business, let alone subscription where you can cancel any time. And literally your customers are electing to stay with you on a, you know, on a billing cycle. Um, the urgency is, is through the roof, right? And so you have to have that mentality of continuing to solve, you know, problems. And the data is going to guide you and allow you to be able to do that in a, in a, in a real fundamental way.
Speaker 1 00:18:22 It's funny. I was just thinking about, you know, one of the challenges a lot of companies have when they're launching a subscription business, where they have actual variable costs, is the worry about how are people going to use this? If this is a buffet, are they all gonna head towards the caviar? And what's so interesting to me is that your model is based on attracting caviar lovers, right?
Speaker 0 00:18:44 That's exactly right. The we way we designed the program and the way the pricing is set is that the more you print you're more, you safe, right? I mean the higher page plans pay less than, you know, the lower. So we want to encourage relevancy. We call that print relevancy. That's the term we use internally to describe customers using their printer. And so that, that is absolutely a basis of how the program was set up black and white and color is the same. The more you print, the more you save that's, that's all fundamental in the program. The other interesting, and you know, this Robbie from your experience is that the world isn't perfect. People want to know they're getting a good deal. People want the promise of what the service provides, but by and large, if they feel like they're getting those things, they're going to set it and forget it.
Speaker 0 00:19:31 That's not a, that's not a negative thing. That's a, wow, you've really fulfilled a promise that someone isn't checking on the billing period that I really get, you know, what I paid for it. They're like, what they tell us is you've removed the chore from my life. Right. They've they're saying, I don't have to think about ink anymore. We call it convenience. That's kind of the word that everyone uses. It's like, how much would you pay for someone to do your laundry? I don't personally like doing laundry. Maybe you do. I don't know, but you know, if you could make three or five bucks a month for someone to do your, to take that chore right off of your list. Oh, okay.
Speaker 1 00:20:03 It's such a, it's such a good example. You know, I, um, last year I, I spoke at the apex conference, the oil chemists society conference. And, you know, I hadn't realized this, but those are the people that make soap and detergents. And that was one of the things we were talking about was that people who wash clothes don't want to wash clothes, they want to have clean, beautiful things to wear in their closet. And the way that I do that is by going downstairs to our laundry room and throwing stuff in the washing machine or bringing it to the dry cleaners or whatever I have to do, that's how I do it now, because I want clean clothes in my closet. But if there were a better, easier way, if there were little fairies that came into my, and whisked away, the stains, that's what I would like. And absolutely. Right. And so for organizations listening and thinking about this, it's really valuable to take a step back and say, what, what goal is my customer trying to achieve while they're using my product? And where do I fall short in helping them achieve it?
Speaker 0 00:21:06 Absolutely. Right. And that the, the process I am making them go through to, to achieve that outcome right. In terms of, yeah. I have to now go think about, you know, detergent and going somewhere and getting it. And in my case, it's ink or, you know, and now I have to go out and think about it. People accept that that's the way they have to do it. And they cope with that's the way they have to do it. But organization shouldn't accept that that's the best way to do it. And I think that's, that's extremely challenging for companies who are built at, by the success of that traditional business to really have the foresight, to realize we have to change for our longterm longterm survival. And that's where I give HP a lot of credit. Right. We've built a franchise on people buying ink, transactionally. I mean, we we've, we're the best at it. We've had it for 30 years. We're number one in the market and have been forever. But we had the foresight five, six years ago that says, okay, we have to give customers choice because they're telling us they want a different way. It's a, we have been the ones really leading that Tran transformation as we talked about earlier, that's not always the case.
Speaker 1 00:22:17 Do your customers when, when they, you know, so I buy my printer, I sign up for instant ink. Do I have to be onboard?
Speaker 0 00:22:24 Yeah, it's a good question. It's a really good question. So you, we don't have a lot of the time that we get people to sign up for the services is typically when they're setting up their printer by that that's typically, that's just like if you had a nest device, you know, at that time, they'll say, create an account and here's things that you could buy and subscribe to. So similar IOT kind of experience is when you're setting up the printer, there's a delicate balance, Robbie, that, you know, yes, you want to educate the customer, but you don't want to inundate them. Right. Because, because they're, they're trying to set up the printer or set up the IOT device. And so yeah. Offer them something of value, but you really have to be crisp in what you're offering. And then if you want to find out more there's ways to find out more. So we really try to get really clear with customers and the value they're getting, which is savings and never run out of ink. We know that's the value prop that resonates. And it has been, you know, for years, there are places to learn more. Right. And then we do the onboarding. As you said, once you're enrolled, then we'll send you, you know, communications. It says, here's, here's basically all the value that you just bought. You don't even realize it.
Speaker 1 00:23:31 What I've found is that the first thing you described, getting people to sign up is very traditional marketing kind of one Oh one, but the onboarding that is somebody who's already paying for your service, but the onus is on the organization to make sure they get value of, I drive, if I buy a new car and I roll it off the showroom floor and I never take it out of first gear and I never see what it can do. That's, that's my problem. I already wrote a big check, right. But if I sign up for instant ink and I only use it for a few pages of black and white print every month, right. I'm going to cancel. So it's not enough for you to just get me to sign up. That moment of transaction is only the starting point. You have to think about how to onboard me so that I be, I do the behaviors that are going to get me the most value, because if I'm not getting the value I'm paying for, I'm going to cancel.
Speaker 0 00:24:22 It's extremely shortsighted, right? To view, you know, people that let's say the wrong plan are not using your service to think that's a great customer, right. Because I'm not spending any money and your, you know,
Speaker 1 00:24:34 That's the person who doesn't go to the gym.
Speaker 0 00:24:36 Right. Exactly. Like great. They've got, I'll go to the gym. Okay. Guess what happens right after March 1st, when I have gone to the gym for two weeks, what happens? I'd probably cancel. Right. So I mean, you're absolutely right. You will have the best success when one you've created something that actually has value and to customers take advantage of that value. Right. And that's what we're saying here. You have to educate them how to take as much of that value. Now, now I will say there's lines that you don't want to automatically do things for customers. They've told us they don't want us to do that for them. Right. They want to be in control, but you're saying, educate them. Right. In terms of what's available, that that's the right. Yeah.
Speaker 1 00:25:13 Educate them in terms, I mean, this is onboarding and this is kind of the principle behind customer success. Educate them about the value that they're entitled to. It's not about upselling. It's about ensuring that they're doing the things that are, that they're already paying for it, which is very counterintuitive. I think for most organizations to encourage people to use what they've already paid for. I want it, I want to go back to this question of being in an intrepreneur inside a big company that is not only is, is HP transactional, but they're used to making pretty big transactions relatively rarely, right. I mean, you know, you're buying, you know, you're buying, I guess you'd call it a durable. Good. Um, what's it been like being the subscription guy in a transactional, uh, business?
Speaker 0 00:26:04 Yeah. I'd say, um, well, I'm gonna, I'm going to change the, I'm going to change it a little bit. Like what, what, what does it take for us to be successful and as successful as we have been? And I, you know, I think some of the key success factors to enable it to happen. And I think it really had to start at the top. You need champions, you need folks who are setting, put a stake in the ground and say, this is, this is the direction that we need to head. Even though I don't have all the evidence that it is necessarily, they have that conviction.
Speaker 1 00:26:35 You definitely need a leadership champion.
Speaker 0 00:26:37 Absolutely. And they need that champion. Now, now for us, what we had to prove to that was that we had the value prop. That was the sole focus. The idea was, you know, can I get, if I can speak to you one on one, right? Can I get a high percentage of you to sign up for the service? That was when we did pilots early on, all we were testing was can we create a service that if you had perfect awareness, which we know is not true in the world, that we could get people to sign up for the service. Once we had that, then it was like, okay, well, let's figure out now how the business model can work for HP. And that's really counter, I think to a lot of times in a lot of ways that I've seen programs start is they're trying to solve a company problem.
Speaker 0 00:27:28 And then they back into how do I now sell it to the customer? And I think that that's not the way it's the ink was created. It was created truly from how do we solve a customer problem. And then now let's, let's, let's make it work, you know, for us. Uh, and, and that's, that's really what we did. So you asked like how, what is it like, I think it's, it's been really eyeopening for the company because we have this direct to consumer relationship where we are having 12 transactions a year, versus as you said, you know, maybe, maybe one transaction every three years. Um, and all of the rich data and insights we can bring to the table have, have really just been part of our success and really the way we've been able to continue to garner support, right. For, you know, the program, uh, is really with that data and that insight, then all of our discussions start with customer first that that's how it's done
Speaker 1 00:28:28 Evaluated just on the basis of the success of your instant ink business, or is in your metrics or your performance reviews. Are you also expected to be contributing to HP as a whole, or to what extent are you expected to be contributing those insights, um, your subscription expertise? Uh, some other things that I didn't think about to the organization as a whole strategically.
Speaker 0 00:28:55 Yeah, we, we, so, so you know how I'm evaluated as again, predominantly on how my business is doing, but part of the way that we were able to build, let's say a coalition for change. I don't know if that's the right term, but there's this groundswell of, you know, momentum was by showing all of the benefits that we're providing to the corporation that has nothing to do with instinct P and L, right? And so we have very specific data points on how we're helping the hardware business, how we're bringing new entrance into print, how customers are printing more photos, you know, when they're on instinct, all of those things that are, that are vital, you know, how we're bringing the next generation into HP because they want access, not ownership. And the business model is critical to bringing those customers and all of those additional benefits are things that I have, and we have brought to the forefront to continue to generate, you know, and, and that momentum to continue to invest in growth.
Speaker 1 00:29:59 So I'd like to ask you for some advice for people like you. Um, and I'm actually thinking I have a, I have a particular client right now, the company that I'm working with that is in a very similar position. They're, they're a large company, global leader in their space. They have a product that they sell on a pretty regular cadence already, but they're thinking about subscription. And of course my client is the one that's been tasked to figure it out and make the case. What advice do you have for your fellow intrepreneurs who are sort of subscription leaders in an organization that doesn't really do subscription?
Speaker 0 00:30:38 Yeah. Yeah. It's um, I'm sure there's, there's a lot of them, right. Because as, as, especially now, right. And everyone is seeing now all the value of subscription and okay. That that's, that's fine. You know, I would say there's some fundamental elements that need to be in place for success. One of the things that, that is difficult in a big business to kind of wrap their heads around is how the team is even structured. So I'm going to assume that some C level person has asked this person, Hey, I want you to go figure this thing out. Right. So I'm just gonna start with that's the premise. Um, what I've seen fail is when you ask people who are responsible for the bulk of the company's revenue to take this on as a pet project, right. And all the people that are working on it are doing it as a 10, 20% part of their job.
Speaker 0 00:31:32 Uh, that's a recipe for disaster to be totally Frank, you need a dedicated team. It doesn't have to be an army. Right. But needs to be a dedicated team that has enough of the end to end elements and the empowerment to operate outside of the machine. Right. Outside the way. Exactly. Right. Exactly. Right. And, and, you know, sometimes that's viewed as really scary, like, Oh, you guys are shadow it or shadow this, or, you know, you're creating your own well, well, yes we are because we are trying to completely change everything about the way we do business. And you really need a team that 24 by seven, this is all they do. So to me, it starts with, with that basic of a foundation. And again, it doesn't have to be a hundred, it needs to be enough absolutely
Speaker 1 00:32:25 Dedicated team. And often the corner that's right out there outside of the, you know, kind of core shared services.
Speaker 0 00:32:34 And they need sponsorship though of those folks are going to need to participate. Right. Um, as part of it, because if it's just me in the corner and I have to, I am going to have to knock on a few doors. I'm not going to go build my own supply chain. For example, I need to use and leverage, you know, what we have to offer. So there needs to be enough. Yeah. We're, we're incubating, but I also can call on you when I need you. And that's where the C level support is really critical. So I'd say those are like structural things, Robbie, but then beyond that, um, it really don't worry about the financial model at all, right. You, you need to start with what is the problem that you are trying to solve the customer problem, right? That you are trying to solve and spend your, all of your time figuring out how are we going to solve that problem.
Speaker 0 00:33:25 It's not just, Oh, take what I'm doing and I'll get you to buy it. You know, more regularly now you've got to attack it a totally different way. Right? What is it, what are they telling you? They don't like about the way that they're doing it today and really go about solving that once. You know what that hypothesis is, then it's about piloting, iterating, failing, failing, often failing, fast failing without having to make tens of millions dollars investment. So create your Sandlot where you can have those experiments to really guide where you need to go. That could take you a year. It could take you two years, but by the time you now know what your customer value prop is now you're ready to talk about, okay, well, how will we, how do we price it? How are we going to make money? How do I scale it all on that? Exactly.
Speaker 1 00:34:18 Now that they want it. Now you can price it because they're going to say, yes, I'd like that. How much is it? You actually can have that company earned the right to that conversation. Exactly. Right now, I have a second question for you. We are recording during shelter in place. Things are opening up a little bit, but this has been quite an unprecedented time. These last few months. What advice do you have for business owners, especially in entrepreneurial businesses to be resilient during times like this, what have you learned last few months?
Speaker 0 00:34:52 So I know I talk a lot about, you know, customer value prop, you know, et cetera, but if you didn't know what your customer value prop was before you sure do now, right? Because either it's been reinforced that, wow, you actually were solving a problem, uh, or it's totally changed because the environment has changed and now you need to now solve another problem or will you were solving one and now you're no longer, um, you know, really providing the value that customers need. I think, you know, that ability to have that inner interaction with your, with your customers have the data and the ways to get that information are true, you know, are so true now, even more than ever given how much changed in such a short period of time. The other thing I would say, we are treating this cohort as a very, as its own cohort, right? So when we're looking at them and if they're behaving differently, whether they're printing more or printing less, are they, are they staying with us longer? What are they telling us? Um, and, and really not treating them like everybody else. Now, I can't tell you what the answer is yet, Robbie,
Speaker 1 00:35:56 But that's so important. I, I didn't mean to interrupt, but I'm just excited. That's like an aha for me is that, you know, we talk a lot in the subscription world about, you know, understanding different cohorts, whether that's, you know, all different people that subscribe and, you know, for the first time in January versus June, or they come through this channel versus that channel, um, there's a lot of cohort analysis in the world of subscription. And this is really important that somebody who comes in for a different reason in a different time is likely to behave differently. And so it's important to track that, to not assume that they're going to behave in the same way as other cohorts. And you don't want to set expectations that, for example, they're all gonna stay, right. If you've had a spike, because they're all working at home for three months, and they're going to go back to the office, but you also want to learn that. So that the next time that there is some kind of unexpected spike, you have a process for setting expectations and for onboarding these unusual new subscribers.
Speaker 0 00:36:57 And perhaps we even find that there is a new segment that we didn't even know existed before, which is the exciting thing about all of this, right? It's like, yeah, they could act differently, but like we could be attracting people that maybe didn't even own a printer before. Right. Or, or did. And like, and for years said, I don't want this instinct thing. And now we're saying, Oh, I want to, okay. Well, okay. Well, why I was say, because you couldn't go out and now are we showing you the value, you know, et cetera. So I, I think it's fascinating from that person.
Speaker 1 00:37:25 Yeah. But I'm noticing in a lot of subscription businesses is that they're gaining new trial because people are being forced to establish new routines because they can't do what they've normally done. And they're forced to endure the friction of learning a new way of doing things, whether that's buying a printer. So I can print at home or having, you know, video conferences instead of regular book club at somebody's house. And when we go back to normal at some of these new tools in our toolkit are going to stick with us, we're going to, we're going to keep them. So if you're a subscription business right now, I think you want to be thinking really hard about how you're going to make this new habit, a permanent habit for your new subscribers.
Speaker 0 00:38:08 I think that's absolutely right. You've seen it on both sides, things that we go, wow, I've tried this and now I will continue doing this, or I've tried this. And now I think, wow, the old way was so much better. Yeah.
Speaker 1 00:38:20 Close out with a speed round for you. So I just want you, um, I just want you to answer the question, the first thing that pops into your mind first subscription, you ever had a CDs it's CD of the month club,
Speaker 0 00:38:32 The BMG, whatever. Yeah. The one I can never cancel
Speaker 1 00:38:36 Your favorite subscription that you have today.
Speaker 0 00:38:38 Yeah. I guess I'd have to say Netflix is your super power. They can quickly,
Speaker 1 00:38:44 Uh, what are your employees love about working with you and hate about working with you?
Speaker 0 00:38:48 I'm open minded. As I think they like about me. I empower them. I can be pretty direct.
Speaker 1 00:38:54 Um, and what is the one thing that you want people to retain from this conversation?
Speaker 0 00:38:59 I think a growth mindset. I think that, um, yeah, there's always an opportunity to do something better, whether you're an entrepreneur in entrepreneur, you know, if you're focused on the customer, but really solving, you know, critical pain points they have. And I think that's really critical for success. Anthony
Speaker 1 00:39:18 Autonomy. Thank you so much for being a guest on subscription store.
Speaker 0 00:39:22 My pleasure. This was a lot of fun, Robbie. Thank you.
Speaker 1 00:39:28 Thanks for listening everyone. This has been subscription stories today. I was talking with Anthony Nepal, Caetano, vice president, and general manager of Hewlett Packard's instant ink subscription service to hear more success, stories of entrepreneurs, creating their forever transaction in this new and exciting membership economy. Subscribe to my podcast, wherever you download your podcasts. Also, if you like what you're hearing, please give me a rating and review. They mean so much. Thanks for listening and for your support to learn more about instant ink, go to instant ink dot HP, connected.com. I'm Robbie Kellman Baxter.
