Shaping the Share Economy with Nigel Phan, CEO of Whirli
In this week’s episode we sit down with Nigel Phan, CEO of Whirli to unpack the notion of the share economy, determining the consumer appetite and market potential for sustainable consumerism. We debunk myths about buying second hand, spotlight Whirli’s innovative approach and dive into the benefits of a circular retail model for the planet, parents and children.
Ever considered where all the world’s toys end up? Brace yourself for the ugly truth... currently, one in four toys are unloved within one week of purchase, destined to become clutter and then landfill.
So who is reshaping this market? Enter Nigel Phan, CEO and founder of Whirli, a toy sharing platform that has caught the attention of parents around the world for its pioneering approach to sustainable consumerism, enabling parents to borrow preloved ‘swappable’ toys versus buying new.
In this week’s episode we unpack the notion of the share economy, determining the consumer appetite and market potential for sustainable consumerism. We debunk myths about buying second hand, spotlight Whirli’s innovative approach and dive into the benefits of a circular retail model for the planet, parents and children.
Saif Hameed: This is Altruistiq, where we speak with pioneers in the race to zero and unpack the lessons from their experience for you, our community of impact professionals. I'm your host, Saif Hameed, and in this episode, we're going to talk about sharing economy. You may already be familiar with this space, already be an early adopter, or be entirely new to the territory. We're going to unpack the challenges, identify the opportunities, and determine the potential for sustainable consumerism in our conversation with Nigel Phan. Nigel is the founder of Whirli, a toy sharing platform that is at the forefront of this technology-enabled disruption. Nigel, thank you so much for joining us. Nigel Phan: Thank you for having me. Saif Hameed: When we first met and first discussed Whirli, I think it was about three or four years ago, and I think what was always really impressive for me was you were so completely on top of the numbers, and on top of all the facts and all the data in your industry, to the point where you had a super high level of conviction that this was just the right way to go and the natural progression for this area. My first question is I'd love to just hear a bit about what Whirli is in your own words, to describe and introduce it to our listeners. And then I'd love to get your thoughts on why the sharing economy is important for us. Nigel Phan: Thank you very much. In a nutshell, Whirli is a toy subscription where parents can sign up to a plan with us that gets them access to a wide range of toys, like a private library. Parents then get to pick and choose exactly what toys they want to borrow from us, and we do everything else. Pick it, pack it, quality control these toys, send it to the parent, their family, to enjoy. Families and children can then decide however long or however short they want to keep each toy for, so fully flexible model, and so when a kid falls out of love with the toy or outgrows it, so needs the next age or skill appropriate toy, parents simply send it back to us and choose something else to borrow. At Whirli, we deal with everything behind the scenes. So we will clean, check, sanitize all products before we make it available for the next set of families to enjoy. Now, I think quite intuitively, when I first started out, you pointed out I spent a long time thinking about the problem space, thinking about the solution for it. Nigel Phan: And what became quite apparent and very intuitive to any parent out there or any non parent is the fact that children outgrow stuff so quickly. And when you look at toys specifically, we did our own research where we asked questions, how long do you think a toy is loved and used at home after purchase before it just become forgotten in a corner? What parents told us is that one in four toys they purchase go unloved in just a single week. When you try to extrapolate that across the millions of household in the UK, across the millions of toy purchases, that's a really staggering number. And then when you layer that along the fact that most of these toys very difficult to recycle, either because they're made of complex plastic polymers or because they contain electronics for the sound, a lot of that gets thrown and eventually ends up into landfill. Now, what gave us a lot of conviction around the sharing economy in particular was the juxtaposition of the fact that these products are frankly really durable and evergreen. Nigel Phan: When you look at unloved toys in a family's house, there's frankly nothing wrong with the toy. It's a toy that is really functioning, it's probably still current, there's another family that probably would love to play with that toy, there's just no mechanism for it that is easy for a consumer to look at all the stuff that's unloved at home, take it, and then find a better home for it. A lot of people, especially as we saw the pandemic, they clear out to thrift stores, they Marie Kondoing their apartments, donating all of this away, which is really fantastic. But what we're also trying to offer is a more convenient service for parents that makes it a little bit easier for everyone to do it on an ongoing basis, not something that you do once every couple of years. And so you're looking at that, looking at consumer stories, looking a lot of bits of data, that was what gave me all initial conviction that the shared economy was absolutely the powerful way for children's goods and children's toys, yes, but frankly, to be honest, for so many other categories as well. Saif Hameed: Super interesting, Nigel. And I guess if I just play some of that back to you, I think that what you're describing highlights two sets of value propositions. One is the consumer-facing aspect, which I imagine goes to things like space optimization in your home, it's giving your kids something new to play with rather than having to go out and buy things fresh every time, and that's obviously super innovative, I think, from a consumer value proposition perspective. The other aspect is the environmental impact, which of course is our bread and butter at Altruistiq. I wonder what are your thoughts on what makes the ideal set of criteria for a share friendly category? In your space, the products are durable, evergreen, as you say, also difficult to recycle, also frankly just as good, probably in most cases, after their second or third use. What would you say are the three or four filters that you'd run this through almost? Nigel Phan: Yeah, sure. I think the one that we obsess over a lot is what we describe as our ability to funnel, concentrate demand into a narrow set of products and skews. And this is ultimately how sharing works in a nutshell, you have many people who want the same thing and therefore they can share it around at different time periods. And so toys was also really positive for that, of course, because when you think about the big brands, everyone remembers, in their childhood, probably having a xylophone at some point. And what this really means is that as a business, we're able to have what we describe as a really high utilization of all the products that we own. Something like 80% of all the products we actually have at Whirli is always fully utilized with a customer borrow, things come back to our warehouse, we clean it, we sterilize it, and it very quickly is out again being utilized by another customer. Nigel Phan: And we don't just have a long tail of skills that is sat in the warehouse because that's a very counterintuitive approach where if you have too much skew proliferation and you're not really sharing because each item gets only brought once or twice, whereas at Whirli each item gets brought usually anywhere between 5 to 10 times before we eventually have to try to retire that toy. So I think that's really important, and I think the second dimension that often gets overlooked is this whole notion of that leverage you get with average order value to delivery cost. As you think about the sharing economy, obviously on one hand, we're really massively reducing production because we need to produce less to consume the same, therefore less shipping associated with the initial part of the supply chain. Nigel Phan: But then what can be counterproductive is the last mile, carbon emissions of the swapping that takes space. Most of the sharing is enabled by eCommerce and logistics. And so for us, it was really important that there was a right balance between that sharing element, and the additional trips back and forth between different subscribers, and the balancing that again, easier for us in our category because our category is quite plastic dominant and so we can always understand that offset is quite important for landfill waste, but I think increasingly there have been questions that have been asked in other categories about whether this is really better if what you're sharing is actually recyclable and not that difficult to produce, not that energy intensive to produce. And thinking about how you can really promote genuine sharing where many people want the same thing, and secondly thinking about the type of product, whether it more than offsets any additional carbon emissions from last mile. Saif Hameed: Fascinating. And Nigel, the fashion industry has quite strongly embraced the sector. It actually finds interesting additional value drivers to make this work where you can actually capitalize on trends for specific items, you can get influencers involved and really promote their wardrobe, for example. Do you think that there are other categories where the model could be really interesting, beyond toys, fashion, and the obvious ones? Nigel Phan: Yeah, sure. Apparently B2B heavy machinery, obviously people lease heavy machinery a lot already, but the notion of sharing being a shorter term alternative to longterm leases, basically anything where you can replace large CapEx expenditure for short rental periods. And a lot of these markets already exist so there's a bit of a blurred lines. I think when you think about consumer households, the reality is that many of us look around our rooms that we're sitting right now, when you go on holiday, for example, sometimes people find themselves buying additional bags, maybe spending 100 quid for a bag for a holiday that they have coming up and no other future plans to use this bag. Why not rent that for £10 instead? Nigel Phan: For example, for me, I go through phases where I love to put together some furniture, do some DIY, and then I buy all of these tools and stuff, then horrendously fail at whatever project I was trying to do and then never turn back to the tools again. And so these are all things I could borrow as well. And I think it's really interesting thought, an open question, but furniture is taking off in some pockets as well. If you rent your flat, why not borrow your furniture? Why commit to the flat purchase? I wish I did as a student. Would've saved me a lot of the whole reselling my furniture at the end of my term type situations. I think generally I see the sharing economy as being able to be applied, in a theoretical sense, to anywhere where a consumer has limited use for an item and probably doesn't need to own it for the entire product's lifespan. Saif Hameed: I think the B2B space and the heavy machinery angle particularly is interesting because the value of the item there is also very large, and if you maintain it in a good order then the use you get out of it can be pretty much the same. Even just by the criteria you've listed out, I think that could be a really clear winner. How do you think about resale versus sharing? Because in a few other spaces, you almost see the two platforms competing where the resale angle can in some ways be a little easier to manage the logistics for, because you don't necessarily need the intermediary during the cleaning, and sanitation, and all of that. What are your views there? Nigel Phan: I like to think of this as complimentary parts of the same ecosystem, and the same mission and agenda, rather than competitors. I do think that we service slightly different use cases and consumer needs. At Whirli, we are very customer oriented and customer experience operator, and why we invested in our own operations, our own range, and ourselves as a retail service more than anything, it's because we wanted to recognize the fact that resale and marketplace platforms have been around for a really long time, and the take up of it is limited to some extent. If I give you a very specific example, you can quite easily get baby goods on secondhand marketplaces, but the common barrier you hear from parents is that notion of do they trust the marketplace seller? Do they trust the condition of the product they're going to receive? Nigel Phan: It's a little bit too inconvenient if I need to meet someone in a parking lot and make sure there's CCTV camera in the corner or whatever to do this exchange. Also just generally that they cannot find the products they want on the resale marketplace because resale places, you're always just limited by whatever the supply is on the other side of the equation. And so when we developed Whirli, we really wanted to be complimentary to that and tackle those customers that have those kind of concerns. At Whirli, because we buy all our toys and because we create our own range ourselves, we eliminate the issue of supply, we can cater, like any retailer would, to what we think the current immediate demand pattern is. Nigel Phan: When Frozen 2, the film, came out, our full range of Frozen 2 merchandising toys was ready to go. They could borrow it and take their kid to watch the new movie with it, and it's because we ran our own operation. And for a lot of parents, that would actually be really important because resale marketplaces would be a few months behind the new products, so their kid want to have something new yet know that when they return it and when that newness is no longer interesting, other families will enjoy it a few years on. Look, at the end of day I think resale platforms do an amazing job, we are actually quite active users of a few platforms ourselves in our household, but I think there's different audiences that we go after. And for us in the ecosystem, for us as a sustainability agenda, you need all participants to ride this wave together and build it up for each other. Saif Hameed: And Nigel, what are the things that you can do from a business perspective that just aren't possible otherwise? Because what you were describing, the differentiating factor of curation, where you were saying that versus a resale platform, you're able to actually curate the product selection, you could also actually go in a few interesting directions from there, either backwards into your supply chain or starting to shape which products you push out to individual consumers. Nigel Phan: We don't do any white labeling as of yet, although obviously there are some natural benefits to working with our manufacturers on better design choices. When you operate a sharing economy, what quickly becomes quite clear is that most retail products are made for eCommerce retail and they're not made for the sharing economy, and so that provides some challenges. Even when you think about just bricks and mortar retail versus eCommerce, what you see in toys, for example, is that lot of packaging contains try me buttons and whatnot. All these products are made to be put on shelves and carries excess packaging, usually described as frustrating packaging. As a eCommerce retailer, you just don't need any of that, but then as a sharing economy, you go one step further. There's other things we would do and they would generate efficiencies, not just from operational perspective, but actually from an environment perspective, where we're just cutting out waste and cutting out stuff that's not important to our user journey. Owning our own operations also means that we can be really clever on things like packaging. Nigel Phan: Which people, they under-appreciate to extent, maybe a little bit more so every time your eCommerce order comes in the huge box when your product's really tiny. We reuse all our packaging as far as we can because something that's interesting about our sharing economy is it's not just the products and toys that go back and forth, customers actually use the same boxes to return stuff to us and then we send those boxes out again. And so I think we're one of the rare companies actually offers this as a proposition. You get a small credit applied to your account, but if you opt in to use recycled packaging, the box that arrives at your doorstep will literally look a little bit beaten up. And we're quite proud of it, we're not ashamed of it as a brand, because the fact that the box is beaten up will show you that it's been through maybe two or three trips before. And I think things like that, yes, it's recyclable, sure, it's cardboard, but still we can go that one step further because we own those operations that makes it quite magical. Saif Hameed: What's really interesting about that is your ability to turn a negative, which is the fact that the box is scuffed and beaten up, actually into a brand credential. This is the evidence that it's more sustainable. Nigel Phan: Yeah, exactly. And that also is something we take too heart when we think about the control of our toys. What you find is that parents understand that the whole idea of what they're signing up to is sharing products and the secondhand nature or the pre-loved nature of these products. And so when something arrives at your door, and obviously new customers always check, they want to verify the product quality themselves, they will sometimes notice the scratches, maybe a crayon mark and whatnot. All of these are signs that the product has been well used, well loved. Nigel Phan: And what they will also notice is that these are all aesthetic, superficial things, and when you think about the functionality of the product, the enjoyment kids will get out of it, like the box, it looks beaten up but it serves its purpose, your parcel has arrived there safe and sound. And then that gives you quite, I think, a deep appreciation for actually if we don't have such a bar for absolutely everything and we recognize that it's fine for it to be a bit beaten up if someone else has used it before. That is actually a much better way for us to consume as a society and I think that's really quite a powerful thing about the Whirli brand experience. Saif Hameed: I think there's also something about, as we gravitate towards products as a part of our identity, then recognizing that actually the product is unique if it's been used. Personally speaking, for example, whenever I'm going books shopping, I actually always find myself drawn to the books that are a bit scuffed or beaten up, and I actually always prefer on Amazon to try and find a used option because that product has its own pedigree, basically, its own history and unique footprint. Nigel Phan: Its own character. Yeah, exactly. Was a subscriber that messaged us on Instagram because we had just posted a story about a young kid playing with, I think it was a baby walker, a stroller. And then what she said was that she absolutely loved that every time she saw on our Instagram, or on our grid, on our socials, a kid playing with a toy that they've bought for their own kid before because it gets that connotation, maybe this is exactly the same toy, exactly something that was in my household three or four weeks ago that now is being loved and enjoyed by another family and another child, and that kid is now so happy with it. You see the story and the history of the product, but also that bonding of that community and seeing that we're all in this together. This is literally stuff we're sharing as a community and that's really powerful, I think. Saif Hameed: I think that is really powerful. It's like a small part of yourself that you're throwing out there to be appreciated elsewhere. I guess also just thinking about the model and how it scales across communities, do you think that this is inherently a local model where let's say Whirli in the UK will enable sharing across the UK, but then actually making that work across the UK and France. So the UK and India is almost impossible. How do you navigate that? Nigel Phan: Look, I think what's really a fundamental part of our thesis is the way Whirli is using technology and operations to break down barriers. But sharing is a typically localized activity, sharing between family members, siblings, sharing between your local immediate community, or workplace, or extended family. And the barriers always persist when maybe your local community that you're very close to is not very big. Maybe your kids have very different preferences and that's a challenge when you have such a small community. At the heart of what we do is using technology operations so these barriers don't exist, and the family that today lives in, let's say, Aberdeen can share a family that uses Whirli in Bristol in a very frictionless way. Nigel Phan: It doesn't matter that you guys are 300 miles apart or whatever the distance is, showing my, sorry, lack of geographic knowledge here, but it doesn't really matter. No matter what interest your kid has or you as a family have, we will find another subscriber that has those interests as well, whether they live down the road or whether they live on the other side of the country, and we can facilitate the sharing quite well. And that's really powerful. I don't think that the borders of a country should stop that basically, to put it that way. There's no absolute reason why. The barriers of a country's borders is a little bit artificial to that sense of sharing should just be sharing no matter how far you are. Nigel Phan: I think thinking internationally also opens up really interesting use cases, because I mentioned holidays earlier. Something I think about is a day where say, I don't know, that's Whirli in Spain. Could we have a subscriber from the UK traveling to Spain, get a box of toys or whatever they need for the trip for their family, deliver it to their residents or their hotel, use it for their weeks holiday or what have you, and then it just get shipped back to the local facility there and they don't have to put it on a plane, they don't have to travel with it. It comes back to this notion as product as a service. You don't own the product, you're just paying much more flexibly as it were. You have much more convenient experience about how do you access the product and how do you utilize it. Saif Hameed: You're paying for user rights basically, right? Nigel Phan: That right. Saif Hameed: For a defined period in time. One of the things that also potentially enables the sharing across borders is the lifetime of the product, and you're in a space where the lifetime of the product, I presume, can be quite long, which means you can actually move things. Do you have any idea of what the lifetime is? How long does a toy live and how long does it live with Whirli? Nigel Phan: We stock over a thousand different toys so it wildly varies, but what we really like, and this is where we invest most of our range into, is what we describe as toys that are both evergreen and virtually indestructible. Maybe I alluded to things like xylophones earlier, but there are a set of toys that have not changed in design function. I played with it as a kid, these kids play with it, in 30 years time, the kids will still play with the toy in largely the same format, maybe minor updates, a slightly different color or what have you. That stuff is great. We quite like licenses that have very long staying power as well. So I talked about Frozen earlier, these licenses and these brands would be popular for years to come. Many toys are also made to be super durable. This is an industry where they know kids can be a bit rough with the way they enjoy things. And so you think about a doll or action figure, this is probably the one upside about the products made of plastic, they are very, very durable. Nigel Phan: When we look at those toys, we think those toys will last easily 5 years plus frankly, maybe 5 to 10 years, a range like that. So this is again, coming back to one of your earlier questions about what makes a good product category for sharing is that notion that this product genuinely has such a long lifespan. It's a product that can last five years, but for any individual household, they probably don't want it more than two to three months. So you do that maths in your head of therefore, if you are really efficient in cycling it through to the rest of other families, how much more can you extend the lifespan of the product and therefore how much material waste can you then reduce? And super intuitive is the fact that 10 families that would've separately bought the same product now just share one and that's a massive step change. Saif Hameed: The direction that product merchandising, and I'm thinking of Disney's ability to spin multiple lifespans out of storylines, means that you get a new lease on life for the product potentially. Nigel Phan: Look, if I say quite candidly here, what we do see industry, and it's very commonplace, is for the big movie franchises, the parents listening here might notice that there's cosmetic changes that happens to characters in every installment of a new movie, and this is quite frankly done so that you need the latest version of the toy. They look slightly differently. The content produces make a lot of money from their merchandising. The famous example here is Cars, which is Disney Pixar film. At the box office, it was a moderate-ish success, but from a merchandising perspective, I think they sold 10 billion plus on merchandise just related to the Disney Cars franchise alone. Nigel Phan: And so these are staggering amounts and parts of it is the notion of the changing appearances, slight updates to the model so that you as family need the latest version, not the version two years ago. Look, in reality, the kids don't really know and they don't really care. When we ran out of Frozen 2 dolls in our range, we still had Frozen 1 dolls, and no-one particularly minds that Anna or Elsa had a slightly different look to what they still know as Anna or Elsa. And this helps us extending that life and being a bit more mature of how we think about product range as well, just so that we don't find these products will get quickly made obsolete just by new content coming up. Saif Hameed: Hearing you speak, my heart goes out to my Optimus Prime, which has been with me for 30 years. Nigel Phan: There you go. Saif Hameed: And to be honest, looking at the newer installments of the franchise, honestly he looks just as good to me. But I think it's super interesting also just to learn about the business model of the merchandise decide. I guess from an environmental perspective, what does a Whirli toy look like versus a toy that I might buy in a store on the high street? Do you have any idea or numbers? Nigel Phan: So look, what's really popular with us, and part of it's the reflection of the kind of toys we select as well, but we quite like wooden toys, frankly, especially where the wood is FSC certified, much better for the environment. I think it's a must and a requirement for us, the sustainability space, to think about the win-wins. I think it's frankly difficult to come and have a new way of doing things, a new model, and then ask customers pay more or sacrifice a way of life. And so for us, we pride ourselves on the fact that we provide customer win-wins. And particularly what it means is, for example, when you think about the products in our range, the natural trade-off in the consumers' mindsets when they're buying toys, it's a little bit like this, there's a plastic version of a toy that's £12, and then there's a wooded version of a toy that's actually much more sustainable, it's much better for aesthetic point of view, but it's £25. Nigel Phan: And that's a very difficult trade-off to make when you purchase it because these things add up, with chances of spending more. You actually end up saving money when you borrow a wooden toy from us than buying a plastic toy in high street. So a Whirli toy tends to be usually a little bit unfiltered, I would say, from a parents' point of view in terms of these are stuff that they want and therefore they like wooden toys, they like some of these things that maybe they get for themselves, a little bit bigger purchases that they would otherwise regret buying or have second thoughts and hesitations about buying off the high street. Nigel Phan: We index a little bit more towards the younger age groups as well, so 0 to 18 months, so baby and toddler effectively, up to 3 or 4, 5 years old. Largely is a reflection of one our missions as well, which is actually thinking about child development and how important child development is in those early years, and the wide variety of toys in facilitating all of that. We like toys that share common values to us as a organization. One of the examples I always share, because it really genuinely is my favorite, we have a to set in our range called the Wonky Fruits and Vegetables set. And this is a wooden toy, really lovely. We've got a few fruits and vegetables, a wooden knife, it's Velcro, your kid learn to cut a vegetable, but there's something slightly misshapen about each vegetable in it. Nigel Phan: Maybe the pear's a bit bruised or the banana curves at a angle that you don't really expect, something like that. And what subscribers really like about is that it helps you have the conversation with children around your food not needing to be perfect. What is wrong with something that looks slightly bruised? And we all know that obviously food waste is a big issue of our time, and particularly a lot of it is driven by the fact that supermarkets just don’t even let these wonky fruits and vegetables go on the shelves because no-one picks it. And so these are toys that we really like. It ticks all the boxes for us of it's a price point where we can give good access on a boring service, it's eco-friendly in the way it's constructed because it's wood, it targets key development skill, and it's quite value space as well. So that is really at the heart of what we like to see at Whirli. Saif Hameed: I love that and particularly what I love about that is it's on brand as well. It's sustainability built into the brand and built into the value proposition. Nigel Phan: That's right. Saif Hameed: How do you communicate this to customers who might otherwise be averse to buying a secondhand product? And I remember in your earliest days, you would often tell me that one of the big challenges that customers come with is will it be sanitary or clean, or how does it compare versus that. Nigel Phan: Yeah, I was just chatting to my team about this last week and what was really, really positive and mind-blowing to extent is that in the last few months, we've not had any questions like this. If you look at the history of Whirli over the last three or four years, at the smallest stage when we were just starting a new brand, no-one's heard of us, we did get a few more questions around that nature of how do you clean products and how do you do that? Obviously, we take pride in the quality and so we do all that properly, and we're happy to always explain to any customer who asks us this question on live chat. But when COVID came, our QA and QC processes became quite a really big strength of our business. I think we all remember, it feels like a long time ago now but not too long ago, when everyone was trying to figure out what does this mean for any shops that want to stay open? What does it mean from social distancing? Everyone's trying to wipe everything down in between each person touching it. Nigel Phan: But for us at Whirli, we made a few things a bit more rigorous, we reviewed our processes, no fundamental changes because we have always operated under the assumption that everything that comes into Whirli needs to have a thorough cleaning inspection sanitization before it becomes available again. And these were capabilities we knew how to do everything. We didn't have to reinvent our operation to deal with in the COVID world. And then subsequently, I think it also validated the importance for having our own operation to be able to control all of that. The pandemic did see us grow quite sharply as parents tried to educate the children while schools were closed. And then since then, I think mindsets have shifted. If we can do what we did without any issue in the midst of the first and second waves of the pandemic, I think we'll be fine from hereon out in the nutshell, because we survived the highest bar of that check of the quality of our products and the cleanliness of all our toys. Saif Hameed: For sure. Nigel, just before this conversation, I was speaking with the chief sustainability officer at a Swiss food company and she was telling me that the last year has been challenging for them, not so much on the top line, which has actually been really good, but more on the supply chain where they've seen some serious disruption as a result of global challenges. And I guess that for you guys actually, that's less of a problem, right? Because a lot of your inventory is rotating customer to customer. What has COVID meant for you guys on the overall business, and the supply chain, and the other fundamentals? Nigel Phan: You're quite right. I think we still experience some challenges with our supplies and manufacturers, of course, especially the run up to Christmas where everyone's just making sure they have adequate supply for their customers. We navigated that well though, but as you point out,, a part of it is also the fact that we just have so much product going through the circular economy. It's really a circular business, a new product is only required because our subscriber base is growing very quickly. And so you just need more products in circulation is how we call it, almost akin to money supply. We've got to think about product supply across the injecting new product into the circulation as and when our customer growth passes certain levels. Nigel Phan: Generally, look, I think it will be of no surprise, but the last 12 months or the last 18 months of the pandemic have been quite challenging for us from a business operations, team point of view, trying to navigate all the general uncertainty, the changing regulations, and everything else with it. I think in particular, we are quite mindful of also doing the right thing for employees and our staff, and so want to make sure that we keep all of them safe as well. And then that comes with the usual challenges of ensuring staff get off for the self-isolate if they need to. As a business, we chose to deliberately invest ahead of the problem basically, so over Christmas I think we carried something like 20 to 30% extra capacity. Nigel Phan: This is what we actually needed. And that was very much myself and my board really wanting to make sure look, we don't want to find ourselves in a position where isolations and supply chain, I think, causes us to not be able to satisfy customer demand. And rather invest a bit more money now, do the right thing, make sure we have absolutely no pressure from the management team down to anyone in the staff team about how long they're away from work for if they were to have to self isolate. And I think that's really important. I do recognize it's a bit easier for us to do these things because we're a fasting business, and so this extra 30% capacity will be eaten up by our growth over the next couple of months. And when you're obviously a big retailer, very steady business, it's a little bit more difficult to just say yeah, let's have 30% extra capacity just in case. Saif Hameed: Nigel, this has been super interesting. I'm moving on to my last question, which is in a previous life, you were a strategy consultant advising some of the largest consumer goods companies in the country and in the world amongst others. And my question is if you were to go back into that world and start giving advice to some of your old clients, what would you tell them knowing what you know now? Nigel Phan: That's a very good question. I don't think it'd be anything new or stuff that management consultants have not tried to tell their clients before, but I do think that's a general sense of lack of appreciation for the oncoming disruption is probably the way I'll describe it. And the whole challenge around big corporates trying to be agile where really they should be thinking about doing things agile in completely different teams, because the whole way of working is just so completely different. Big companies will always be marred down by bureaucracy or just difficult to pivot operations, and there's always that easy tendency to say this is a nascent new startup, they're not going to go anywhere. But things can go somewhere quite quickly and to a point where you don't have time to react. And so I think my sense for the corporates would be to recognize where you really need to invest in completely new modes, and that's like how do you do things outside the current confines, set up whole new teams, new process a little bit more quickly to what's happening around you in the competitive space. Nigel Phan: My second piece of advice, if I'm allowed to have two, is that I fundamentally believe that we're going to enter an era where consumers start getting a lot more savvy and cynical around greenwashing and CSR policies. Not to name names, but obviously CSR can be seen very much as a PR exercise more so than generally CSR, ESG initiatives. There's a little bit of a grace period now while people are figuring out, but I think more is being done, you guys are doing some of it as well, to really promote transparency in this space. I think consumers will demand more transparency over the next couple of years. So if there's something that corporates really need to sort out for themselves and brands need to sort out for themselves next five years is to really walk to walk, not just talk the talk. It's really important and sets their brands apart from the other brands that say the same things but really quite apparently don't reflect that in what they actually do. Saif Hameed: I couldn't agree more, Nigel. I think both of your points, the first around being agile and responsive enough to both see the trends coming, recognize that they're coming, recognize how fast they're moving, and also maintain the operational flexibility to actually respond and often spin up new businesses or transition business in short spaces of time. And the second is to be mindful that consumers are going to start to see through a lot of the claims out there. What I really love about your product and just the aspects that you've described is it's really actually product-led transparency. In the product itself, if you see someone posting on Instagram the use of the toy that you were using last month, if you order a toy and you receive it in a battered box that's clearly been reused, this is actually the real evidence that's very hard to greenwash. Nigel Phan: I'm a sole founder at Whirli, and when I reflect on it, I think that has helped me quite a lot because that's who I often describe to my team, my investors, my board is the need for the coherence of everything we do and the authenticity of everything we do, a level of consistency that really shouts this is a brand. It's not me, but it feels like a singular person, it's super consistent in everything we do. Nigel Phan: And that's really what's lacking, I think, in the corporate space, because obviously naturally you've got your CEO there, you've got your CSR officer that does their own thing, and then they're not really aligned. And then that comes across because then you've got ops, marketing, that's another thing, et cetera. And so that level of bureaucracy in the corporate can then just mean it's super fragmented, the decision making. And then when you're an end consumer and you're looking at the whole picture of the custom proposition, customer experience, whatever, it becomes super clear you say you're this, but when I talk to a customer service rep, it doesn't feel like you bleed it, and that's [crosstalk 00:35:09]. Saif Hameed: Yeah. I really hear you on that, Nigel. And I think that some of the brands that are now coming across as the most iconic in the sustainability space are the ones that have a super cohesive mission that actually filters all through the brand and every expression of the brand. And I immediately think about the companies like Patagonia, Lush Cosmetics, these ones, where it's just so front and center of how they operate and how they do business, whether it's how they think about data privacy and data ethics, or the product, or the supply chain, or the revenue, or the advertising, all of those aspects. Nigel Phan: Yeah, absolutely. Saif Hameed: Fantastic. Nigel, thank you so much. This has been a thrilling conversation. I think what I take away as the main features of this is one, there's actually a business model shift. You're not just providing a product, you're providing a service, you're building a platform, you're ultimately creating a recurring engine that can move product from A to B and back to A, and actually have that as an acceleration on a macro trend, which is do consumers want to have more personality reflected in their products? Do they want to have a lower environmental footprint? Do they want to get better value? And do they ultimately want to get better products and services ultimately? In what you're describing, for example, on the wooden toy versus the plastic situation. Saif Hameed: The other aspect is that what we're seeing is not just a local phenomenon, this is global and this actually doesn't need to be contained within the UK or within a particular economy where you're doing business, this can actually cross borders, which I think is a really nice stake of globalization, frankly. The third piece is really just the resiliency of the business model. And again, I think about the fact that you're less susceptible to supply chain challenges, you have a little more visibility on where business is going, and you have a deeper connection with your customers that ultimately creates a more durable business. So super exciting to get some of these lessons from you and really fascinating, as always, to hear about Whirli's mission really to change one major segment that's in everyone's homes and a part of everyone's childhoods. So thank you so much for making time for us, enjoyed this conversation. And on behalf of all of our listeners, customers, and supporters, wish you fantastic next steps on the Whirli journey. Nigel Phan: Thank you. It was wonderful to speak. Saif Hameed: Perfect. Take care. Saif Hameed: Thanks for listening to today's episode of This is Altruistiq, now for some shameless self-promotion. 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