Businessweek Talks with Verishop CEO Imran Khan

Week on iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. Tell a little bit about what you're doing at Barras, because do you think about Amazon constantly when you're thinking about strategy for you guys, Uh, I fundamentally believe that one company cannot solve all problems. And I think if you look at e commerce right now is ten percent of overall retail filth and um.

And there's a funny story. In two thousand four, I was a research channelist and I went to see Netflix and Rid Hastings told us that when he reached seven point five percent penetration in the area, first blogbuster was shut down. And he told us that when I get to seven and a half to ten percent penetration nationally, the blogbuster will go out of business, and that exactly happened.

And then in advertising business, when Google and Facebook got ten percent of digital ad dollar, we saw an excelerated disruption. And now digital advertising is forty percent of all advertising. And if you look at online retail is now ten percent of overall retail sales. So I believe that in next ten to fifteen years online retail will of it. So we're gonna see excellent depreciation because the seven and a half to ten percent is the magic number when

things start really falling apart. And so how do you capture that slice of it? You've been doing this even live for just a few months. Now, what are you learning about the marketplace that maybe you didn't know going into it? Yeah, I think the marketplace what's really missing is a lifestyle e commerce destination. Right, So if you need your commodity, dispose about utility product, Amazon is phenomenon.

And if you need your luxury product, you know, like you want to buy Lucchi Bucchie bag or weave a turn back that you buy once a year, or you are a point one percent of world's population that that's all you buy. You know, you have a great relationship with those very expensive brands. But for your everyday luxury the like, let me ask you this, how many of you the clothes that you're wearing you bought from Amazon?

Maybe one? Hello, it's two. So so really, if you think about it, for your everyday luxury product, you know, for everyday lifestyle product, there is no real destination to go. You know, you go to either Bricken Motor stores or you go to this boutique place. Uh. And that's also happening at a time that we're seeing explosion of direct

to consumer brands. Right everybody is building direct to consumer brands, so there is no place for consumers to go find to discover new brands, find the brands all out and discover new brands. So we are creating a brand discovery platform where you can find all the cool brands for your everyday luxury plan. And with the convenience for Amazon, we now have the fastest free, fastest free online shipping

in the marketplace, free one day shipping. We put our customers support number on the top so that if you want to call, you can talk to our customers you know, and I read every customers support emails, and so we really scan for convenience. We stand for quality, and we stand for discovery. So cool Brands does it all high end. It's I would call them every day luxury price points

somewhere studying from seven to seven fifty dollars. What's to prevent somebody from going to your site saying okay, like this X y Z cool brand, and then going to the home site that brand in the future, and some people will do that, you know. Uh. The interesting thing is that consumers don't like putting their credit card number in five hundred different websites, right, so if you have a relationship with one reteller who knows you and your

product shows up, that's a great place to do. The second thing is the convenience, right, So because we gregate product, we can uh do the delivery like free one day shipping, free return, customers, support, all those things that you can't get anywhere. And then the third we're bringing a lot

of exclusive brand partnerships and things like that. So the really thing is that what we want to be, Like I fundamentally believe for every YouTube where you can go find everything, even like horrible things like people committing suicide. You need the world of Netflix right and Amazon where you can go find everything. They build the world's largest flea market. You need a premium lifestyle e commerce destination where you can discover cool brands and that we want

to build a discovery platform and the browsing experience. One of the ways that you are sort of grabbing share, it seems, is through influencers. That is well known to a lot of the influencers in this room. What have you learned about them? Because it's not so easy to identify the right people to figure out the right essentially business model around that, and it's not inexpensive. Sometimes, yeah, we're not doing that much with you know, uh, influences.

To be completely honest with you, I have a philosophy is do completely opposite what the world is doing. You know, if you look at in New York City, you will see our outdoor campaign in the taxi top or if you take the subway, you know, you will see a very sharp brand train. You know. I think so fundamentally, I believe that consumers are smart and if and they understand the authenticity you know, and and and the thing is that if influencers are too commercial and they're promoting

too much of the product. I think it doesn't convert

very well. So you really really have to understand that when you engage with the influences is an authentic relationship, because I think you really really have to appreciate that if you push your product in an inauthentic way, it's actually huge turnoff for consumers because consumers know that you're trying to dupe them, right, you know the but when we started the company, we call it very Shop and what is very Shop Verified Shop because we wanted to

build trust. You know, the world is going from fake news to fake people to fake product, and we wanted to build this trusted platform. And and so you want to do marketing that you want to engage in a marketing and trusted with And is it right? One million shoppers or not yet? By the by the end of the year, you have a free one der shipping right now, but no in terms of the number of shoppers that are on your site right now? Oh yeah, I think by year and we'll have a million unique shoppers on

a monthly basis. Alright, so we need to switch gear. Yeah, we gotta switch he gotta um when you talk about turnofs. One of the biggest turnoffs it feels like for the market this year and for a lot of people, was we work. You've got some thoughts on this. You've been watching this market as a banker, as an executive, as an entrepreneur, what happened, what went wrong? As you just still it down with we work? Um. The one word

is corporate greed, right. I think the key thing is whenever we give someone money, you give them your trust. It is a fundamental thing that people don't appreciate that that when an investors are forget about investor, your friend or your parents or your uncle or and investors give you money, they give you the trust. And and when you take that money, you have a responsibility. You have a responsibility to leave by the trust they give it

to you. And and I think oftentimes we saw that the corporate executives don't appreciate the trust that investors give it to them. And at and uh, at we Work,

we saw the gross, gross negligence of that trust. And yeah, yeah, executive level, yes, And the corporate greed is to a level that fundamentally I didn't see the since the world of what about the role of soft Bank in this, right the big investor obviously in we work And what about the role of investor and bankers certainly when they tried to take it public and obviously all of a sudden all these issues came out. Yeah, you know, responsibility

of investment bankers. So two different questions, you know, I think, Look, I think soft Bank as an investors, you have to

make two decisions. Right. One, you have to analyze the investment as a scandal and investment opportunity, and we can argue whether we work with a good investment or a bad investment from an investment lengths perspective, But what soft bank and as an investors, you always have to trust the management and you give them the money, and if they don't follow through it, you know, I think it's very difficult for investors. So I actually sympathize with stob Bank.

I know everybody blames soft Bank, but I actually sympathize with suft Bank because they gave money to someone who completely taar around and trying to didn't respect their trust. And UH. With regards to investment bank, look, I think you know, clearly investment bank would have higher standard of due diligence. But you know, the good news is they did the due diligence and they disclosed all this information. Do you feel like it was too late in the process.

This is the company that was around for a while. I think investment banks. They couldn't have disclosed it before the filing anywhere because the company would not let them disclose it. Right. So, so when you think about it through your your banker lens, your research analysts lens, one of the moments where we seem to be is this exploration of private markets versus public markets when it comes to valuations, when it comes to when money gets put in,

who makes the money in a lot of ways. You saw this in some ways, uh, at your job at SNAP. You know, it's sort of that that ride. What do you make of where we are at this moment and what's it going to take to to maybe fix this chasm, as it were, between private valuations and public valuations or

is it working the way it's supposed to? I think, you know, but I think the private market, you know, the valuation is arguably you can argue that in many cases are inflated, not always many cases, but you know, I think I can see why investors like it right because you don't have to worry about day to day volatility,

you know. Now the challenge with the public market, you know, is the market is so volatile and investors are short, short term oriented, and the people who are giving allocation to those investors are so short term oriented that it every little piece of news, you know, moves the stock every day, and and and that create challenges. So I think if you want to build a business for a long term and want to make a long term decisions, to be honest with you, it's very difficult to do

that in public market these days. Um So I think I understand the excitement and on private market, uh, you know, but saying that, you know, a lot of great companies were built in a public market and Amazon went public very early, Netflix went public very early, you know. But I think it's getting more and more challenging. And the thing is that also a lot of the funds are getting really really big that that they're not really interested in a small and MidCap name anymore. So that creates

a lot of challenges as well. And when when you look at and one of the themes that we've identified certainly for the year ahead is going to be what happens with big technology and the tech lash that we've seen. What are your expectations and should some of these companies, whether it's Amazon, whether it's Google, whether it's Facebook, should

they be broken up? In your view? I don't. I think my personal view, it's an American to break up a company because just because they're big, right, that is completely opposite of capitalism. And I think that just saying that a company is big and we need to break it up, in my view a person who is an immigrant to this country, it's not American, uh, saying that if these companies are engaged in an situation where they're

violated clear law, which I'm not aware of. If they're violate and the law, then obviously, you know, I think regular it should look into it and take action against it, whatever the right course of action it is. Well. And so let's talk about specifically like the digital ad market. In many ways, this is something that you watch from a number again of different angles, including in your role

as chief strategy officer at Snap. What did you learn about that market specifically that maybe applies to the broader tech world and what did you learn at Snap that that you're applying, you know. I think look at Snap, when I started building the ad business in January, we had zero revenue, and by the time I left, we did almost one point six billion dollar anialized revenue. And so I think, and we did that in four years.

So I think, you know, if you can build an audience and if you can recruit great team, I think you can build a business very fast. I still believe that there is an opportunity to build big businesses. You know. Look, when I'm not trying to defend anybody, but when Amazon came along with Walmart was really big, you know, and and and before when Facebook came along, Google was really big. Before Google, Microsoft was really big, and they're still big.

So I think that the disruption is happening at a such a rapid pace. There's ten percent of e commerce market going to become fort or the cloud computing penetration will go so significantly. There's still room for build businesses, you know. So so I don't think, you know, targeting anybody because they became successful. I just fundamentally don't believe that. I think that's a very cynical view of the world, you know, And we need to be more, you know, uh,

you know, have a more positivity about that. But again, if somebody broke any law which I'm not aware of, obviously should look into it and take action against it. If you're wearing your investment bank or hat right now and there was a technology that you want to invest in or that when you look at the landscape where there's AI with a trobotics what have you, or maybe something that we're not really talking about enough, where would

you put your money? I would invest in my business. Okay, there's a look I actually think, you know, I actually, you know think that there's a lot of talk about AI. There's a lot of really really smart people are working on AI. You know, there's a lot of talk about self driving and these people are actually smarter than me.

And I cannot really go figure those things out. But I look at e commerce in a retail you know, it seems like most underrated opportunity because if you really believe that seven and a half and ten seven and a half to ten percent is the is the number where you see accelerated disruption, you know, why wouldn't you go to online commerce? And so what's the biggest threat then for your business? And for the broader sort of e commerce, for that growth rate, What do you worry

the most about? Maybe not from a competitive standpoint, but from a more existential standpoint. I think the market will go to whether we will be successful or not. That will depend on can we execute right? And so I think with our strategies right, are we executing right? You know? So so that's only you know, so I would say it's it's depends on the team. But overall the market, where the market is going, I feel very very confident

that that's why the worry. Look, I went to the north Stone yesterday, you know, this big seventh straight north Stone, and after that, you know, my personal two cent I was like, I know, media love it, but you guys can have a good conversation covers what competitor do you most admire and why what competitors? Look, I wouldn't necessarily competitors, but look, I think, you know, like what Microsoft has done recently, really Satia has done a really amazing job,

you know, turning around the business. You know, I think Amazon continued to impress me what they're doing doing you know. And and full disclosure, I own personally share of Amazon and Microsoft, so I don't want to feel like pitching my books here. But you know, I think there are a lot of great companies that continue to execute, a lot of small companies that continue to exhibute. All right, we're going to use this for an upcoming edition in

a Business Week talks. And so when we have someone like you with us, another question, we like to ask his best advice. And this will be our last question. What's the best advice a mentor or a boss or someone has ever given you to sort of give the people something to think about when they go out to lunch. Be patient, you know, uh I And as I can see, I like to speak fast, talk fast, do everything fast.

And um, when I was twenty four years old, UM, my boss gave me the advice that hey be patient and as I look at a lot of the millennial audience, you know. Um. And actually I was in a conference and I was listening to black Rock president. He was talking that how millennials come. They want promotion in six months and five five years two years later they want his job. And I think, you know, in life, sometimes you've got to be patient and uh and work really

hard and everything works out. That's a great final note everyron. Thank you, thank you man, thanks for everybody, thank you, thank you. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio