In this podcast, we speak with Dave Raymond, ZAGENO’s VP of Operations, and Jason Krupp, Senior Director of Operations Excellence at ZAGENO about their partnership and journey from helping build a world-class operations model at Wayfair to tackling the complexities of operations within ZAGENO’s Life Science marketplace.
Dave, Jason, welcome to the podcast.
Thanks for having us, Greg.
I want to get right into where you guys first started working together and how that is manifesting at ZAGENO. How did you meet?
Jason Krupp: Sure I can take that. I started at Wayfair, at this point probably about 14 and a half years ago and I had been at Wayfair, focused on the early days of operations, mostly in the catalog and content space, for about three years at which point Dave joined the company.
I think Dave can tell a pretty funny anecdote about our first experiences meeting each other.
Dave Raymond: Yeah. So, when I was coming in the company was fairly well established. It probably had 300 to $500 million in annual revenue. It was several hundred people, maybe 300 people but it was also still very much a startup and one of the first things we were doing are looking at offshore. What we had was a bunch of work that was really well suited for potential off-shore partners and we were looking at companies in India and Vietnam. So, one of the first things I was going to do, like the week I got there was to go on a trip with Jason, who I had never met before to Indian and Vietnam.
We were still a startup and you know this because, Our, travel department had no idea that you needed to get a visa to go to these countries and so I showed up and I was like, "oh, great, you got my ticket, what about the visa?"
We scrambled to get that taken care of and then we finally made it happen. We did this round, the world trip, and it was pretty incredible. As a manager, I was brought in and this was like the first time I met Jason, who's my direct report. So, it must've been extremely odd for him but I learned a ton about the business, and we actually set-up some relationships with third-party partners that lasted the whole time we were there and are still going on.
You said $300 to $400 million when you began, that was the annual revenue for the company?
So, I looked at their Wikipedia page recently and it claims revenue of over $120 billion a year. Is that right?
Dave: I just don't know off the top of my head. That sounds high but definitely, we had year-over-year growth of between 30 and 50% every year, for the full decade I was there. And it was probably even faster than that before, when Jason was there in the very early...
Jason: ...yep, closer to 70 to 80%.
Wow, okay. So, we're going to get into some of that but Dave, when you arrived, where had you been coming from, what were your expectations, and were they met when you arrived on-site?
Dave: I had spent the early part of my career in consulting and tech at big companies. So, it was consulting and PricewaterhouseCoopers, then the part I was working with, got acquired by IBM, and then I pivoted, after business school, to a very small startup of 20 or so people in Chicago, focused on operations.
I was just looking for something where I really bought into the vision, the leadership team, and it had a proven track record of growth.
So, I decided to leave that company and I was actually following someone and who I worked with at that company who moved over to Wayfair. I was just looking for something where I really bought into the vision, the leadership team, and it had a proven track record of growth. so my expectations were that it was early-stage enough to leave my imprint on the culture, as well as, how the operation worked. and I was, I would say I was able to do that.
The company itself is about 18 years old. Jason, you were there for most of the years, 13 years, a large portion of the company's existence. what occurred in your journey at Wayfair?
Jason: My story is a little bit different than Dave’s in that I was just starting out my career when I found Wayfair. So, Wayfair was pretty much my first job out of college and I spent the next 13 years there. It was an interesting experience in that, at the very beginning, I was probably somewhere between the 100th and 120th employee.
At that time, we had never taken any external capital... fully bootstrapped, very frugal, profitable, growing, scrappy, and really, our focus was how do we do the best with what we have, which is obviously a very different model than what Wayfair became as the flywheel continued to turn and, our dual-sided marketplace model really took hold.
It (Wayfair) was really about an obsessive focus on the customer, an obsessive focus on data, a focus on making sure we're making the right decisions and the right investments at the right time...
Where we were to start with was very different from where we ended up. At the end of the day, I think the core backbone of what made us great was our company values and those never really changed. It was really about an obsessive focus on the customer, an obsessive focus on data, a focus on making sure we're making the right decisions and the right investments at the right time, and making sure that we're always aligning the vision with what we're doing on a day-to-day basis.
Were you in an operations role at Wayfair, or was it called something else?
Jason: At the beginning, there, wasn't a great delineation of departments. And as you might imagine, as a startup, many of the people had different hats on and their hands in many different roles. And so I actually started out my career, actually on the category management side. So, a little bit more on managing the business, understanding the PNL, working directly, with our suppliers. and then as time went on, my focus changed to be, much more on the operational side of the business, as relates to, how do we actually do these things? And as time went on, how do we do things in a more efficient manner? And then as time went beyond that, how do we do things in a way that creates value both for Wayfair and for the customer outside of just running the business?
Yeah, that makes a lot of sense; sounds familiar too with people, wearing many hats at ZAGENO.
Dave, let's talk about the idiosyncrasies and the characteristics of a good operations person. What do you look for in those skills; what tends to make a good operations colleague?
Dave: I think it's, a real satisfaction in, first of all, understanding how things work and what the drivers are behind any action. So, when there's a problem, someone who likes to get into the root causes of all the different things that may cause that issue. That's the first part.
The second part is then someone who is creative in coming up with new ways to think about that. So, you understand exactly what's going on in the world and can think outside of those constraints and come up with a new paradigm that will make things better.
That's very interesting. It almost sounds like there's some investigative journalism that goes on, really having to triangulate and be very data-oriented and so forth.
James: I'll tell you that, some of the times of Dave and I are having the most fun is when, there's some sort of obtuse, very specific error or issue, and we get to go down the rabbit hole of connecting all the dots, figuring out why, and then coming up with a process or come up with, a solution to make sure that those sort of things don't happen again. that's the core of what makes me excited.
Better you than me, I guess! I want to pivot towards some of the nuts and bolts of the work that you do and look at that more specifically from the manufacturer and supplier point of view.
I imagine if I ever made a thing, I would be quite happy to have that thing appear in a marketplace like Wayfair, like ZAGENO... being compared, being sold and in the arena, so to speak. But I suspect from your knowledge about the things that concern suppliers, it's just not that simple, is it?
Dave: Yeah, just getting the product listed is really the beginning. That's an exciting first step but if I put myself in the supplier’s shoes, I'm looking for additional business coming my way. that's the first win. once we start getting more business, going to the supplier the next, level is, how can I process that business more efficiently, and such that it's less painful than getting it in numerous other channels.
One of the benefits of a marketplace to suppliers is the standardized way of doing business. So, you take thousands of customers and to the supplier, it doesn't feel like dealing with thousands of parties. They're just dealing with the marketplace and it standardizes, it allows us to have more efficient order processing, more efficient exception handling when there needs to be a return or something like that because they're used to working with us on a day-to-day basis.
We filled out technological platforms that we've made their life easier.
Now, given Wayfair's hypergrowth, it would appear they did well in this supplier side of their business.
Jason, can you speak to the arc of that from your vantage point? What was Wayfair doing for its supplier relationships?
Jason: Sure. And I think you described that appropriately when you said arc because where we started and where we ended up are very different states and that relates to a lot of what Dave was saying about volume in our importance to our suppliers as a partner.
At the beginning of our life cycle, when we were first in the state of, "Hey, these suppliers don't know who we are, they don't understand what kind of volume we can drive, they don't understand the value prop that we provide to them," our general approach was one, really explain to them what we were experts on, what they were experts on and how we could help them. And so a lot of that frame was, listen...we're experts on the Internet we're experts in online advertising we're experts in SEO and you guys aren't. You're experts in making beautiful furniture or making lamps or whatever it might be.
And so showing them how, through our channels and through our approach, we could drive new lines of business for them that maybe they had never been able to obtain before or potentially take market share from folks that aren't as forward-thinking about the future of eCommerce. In a perfect world, obviously, we would get suppliers to do things in a standard way, get them to provide standard information, get them to do it in a timely manner.
At the beginning of our life cycle, when we had very little leverage with our suppliers, our approach was to make it as frictionless as we possibly can. We don't want you to do extra work for us. We don't want you to go out of your way to do things you don't have to. We'll take whatever you can give us paper catalogs and we'll figure out how to work with it. Give us CD ROMs of images and we'll figure out how to deal with it.
Our approach was really to both illustrate, the vision of the future, that we could drive and partner with them as well as make it as easy as possible, for them to benefit with us, without it seeming like it's a heavy lift on their end. And, over the lifetime, as we continued to grow, they saw us, more and more as responsive partners that listened to them. As well as, seeing our numbers grow and seeing our volume grow and seeing us rise as one of their most important customers, we were able to start changing that relationship to the supplier and enabling the vision of the dual-sided marketplace, where, instead of it being our customers and then Wayfair acting on the customer's behalf and connecting with the supplier and then connecting back with the customer we built out, a toolset and a paradigm by which our customers and suppliers could connect directly. And we acted more as moderators. And, where we did employ heavy, Op/Ex it was really around value-added tasks that provided value for Wayfair and also provided value for our customers.
...we're experts on the Internet we're experts in online advertising we're experts in SEO and you guys aren't. You're experts in making beautiful furniture or making lamps
And here again, if I skipped the reference to Wayfair over the course of that description, I could easily think we were talking about ZAGENO.
Dave, do you feel there are any parallels between that arc Jason described and what you're both trying to accomplish at ZAGENO? And, if we are trying to pursue some of the same practices that you underwent in the Wayfair, model, where are we in that arc?
Dave: Yeah, I think there's definitely some parallels. The way I see it, there's not a one size fits all for a supplier. Suppliers will always be of different types, different sizes, different capabilities and the thing that's maybe most similar is how much change there is in the industry, just inherently.
In Wayfair, the big change was a move from a distribution channel that was brick and mortar based to one that was more online. And that was something Wayfair was helping drive and helping facilitate and so that had a big impact in the industry.
With ZAGENO, I think there's parts of that going on but there's also just an inherent change in the supplier base. Because it's biotech, it's new inventions by nature. There are these new suppliers that are just exploding because they've discovered something new. if one of those suppliers starts small with ZAGENO and buys into the formula, we partner very well they will experience that growth on ZAGENO's platform and we'll work together during that hyper-growth phase.
There are these new suppliers that are just exploding because they've discovered something new. if one of those suppliers starts small with ZAGENO and buys into the formula, we partner very well they will experience that growth on ZAGENO's platform and we'll work together during that hyper-growth phase.
That allows us to build even more efficient processes because when you're adopting processes, as they're scaling, you're working on those challenges together; there's pain points when, "oh, wow, we can't handle this order volume...what do we have to change? Oh, supplier, can you change this? Sure." And then we can change something on our end and we're building it together, to really come up with an optimal solution.
So, working with our suppliers during, their growth and our own growth will only strengthen that relationship.
I want to speak about how operations affect the customer experience and what your team is doing to delight our customers. What things do you do behind the scenes that we would never know about without having this conversation that makes them want to purchase their lab supply on our platform?
Dave: In general, where we're moving and we're incrementally getting closer and closer every day to, a fully automated experience where we're bringing a ton of efficiency to bear. And so when a customer places an order, doing it through ZAGENO is just way more efficient for them because we've eliminated a bunch of touchpoints and we've made that transaction very smooth.
So, let's say a customer is placing these orders by calling them into a supplier. And when we take that volume on for them, we're doing the same thing. We're calling those orders in... what can we do to make that better? If that order was supposed to ship on a given day and it hasn't we can proactively follow up and chase that down. So we've built out whole suites of alerting and proactive flagging of issues so we're not waiting.
And that's the thing. When you are a customer you basically have an advocate in ZAGENO that's working with the suppliers to follow up on your request to make things happen. So that's one way that we're really going the extra mile for our customers on behalf of the suppliers,
When you are a customer you basically have an advocate in ZAGENO that's working with the suppliers to follow up on your request to make things happen.
Jason, when you were at Wayfair, customers were like you, like your wife, like your neighbor, like your mom, your dad, and so forth... really easy to put yourself in that place.
Over the course of your time at ZAGENO have you ever come to a new technique and maybe thought back to how this would have had some elasticity, it could have worked in your Wayfair experience?
Jason: Yeah, I totally see some of those B2C concepts and how applying them to "B" can be transformative. as time has gone by, The thing you got to realize is scientists also order, as consumers and so they may order from Amazon or Walmart or whatever it is, and, the expectations that they start to have around the consumer experience, start to get applied to the B2B experience.
They start to realize what it's like to get all of their goods the next day, be able to ask the question, where's my stuff, and immediately know exactly, where their stuff is. And so I think, absolutely and I think it's happening organically and naturally, and it is actually even coming from the customers themselves, in the B2B market, because of how B2C eCommerce has changed consumer's expectations, as far as speed, quality, time, and the features that they can use in order to drive their experience.
I want to get back into the culture that you were experiencing and compare and contrast that with what we're experiencing as colleagues, today.
Dave, bring us back to those years at Wayfair. This was hypergrowth, this must've been a frenetic pace, exciting at times, exhausting at other times. Describe what that was like.
Dave: I would describe it first and foremost as fun. We were growing and such that there was more than enough opportunity to go around. It wasn't like the only way to get a promotion is to take it away from the person above me. It was a place where, if you want to lead, there is so much opportunity to step-up and take-it-on initiative step into an area that was a clear opportunity, but we didn't have anyone to run it.
So, in that respect, it gave people pathways that just materialized out of thin air and you could have a runway to grab that opportunity and run with it. It was very exciting.
And I assume this is something you're in gendering, at ZAGENO?
Dave: Yeah, there's a ton of parallels and this is why, after Wayfair, I think both Jason and I, looked for an opportunity, to get back somewhere that was small and growing at an incredibly fast rate where we could leave our imprint, where we could, grab an initiative that one day will be a huge part of the business and start it from nothing.
So, these types of things are happening all the time. And that's part of the culture here, too where everyone's encouraged to take the initiative. Things aren't top-down, people have great ideas, and they can run with it and that's super exciting.
...there's a ton of parallels and this is why, after Wayfair, I think both Jason and I, looked for an opportunity, to get back somewhere that was small and growing at an incredibly fast rate where we could leave our imprint...
But there is that elephant in the room and I'm going to bring it up, COVID-19 lockdown and the idea of developing a great culture and engendering all this goodwill and getting people excited about being in a startup that's trying to change a status quo.
Jason, I'll go to you first. What has it been like trying to get some momentum into these best practices when you're so dislocated from your team?
Jason: I'll be frank in saying it's definitely challenging. I think it's a challenge that all companies are largely experiencing now, where the personal connection is an effort, creating the feeling of teamwork, team alignment, of fun is more challenging and I think the answer there is you have to put more effort and focus into those things.
I think communication becomes absolutely essential and I'd say over communication becomes absolutely essential. So, some of the things that we try to do as a team to mitigate the fact that we can't always necessarily get together, and driving alignment on key initiatives and key issues can be a challenge is, we over-communicate. So, we have daily stand-ups where we connect every single day, for those exact reasons, as well as more strategic meetings that we have, less frequently.
We've been instituting meetings that are focused, not so much on even work product, but on, personal health, how they're feeling, how they're feeling about their careers, how they're feeling about growth, separately from the work as related to ZAGENO for exactly those reasons.
So, people understand, one, even though we may not be sitting together, we are absolutely a team, we care about each other. And us as managers, we absolutely care about your personal health and your personal growth but it's one of those things where you can't take your eye off the ball and it takes a lot of energy and it takes a lot of focus and that energy and focus is absolutely necessary in order to, combat some of the challenges that COVID does bring.
I love that. Do you guys have any space on your team cause I'm really looking for that?
Dave, on a related note, someday we will be back together again and I wonder if you've given any thought to how that will affect your team?
Dave: One thing about my team is that we've always been in multiple offices. We have a team here in the Boston area and a team in Berlin and working on the same things. So, we already had a geographical disparity that we had to work through, and actually switching from two offices to, if you think about it, the team of 40 individual home offices, has been a shift, but maybe not a big one as if we were all in one office and then had to break to 40. So, we had already shifted to the two paradigm.
And I think the adaptation of zoom and the etiquette of these remote meetings has just gotten much cleaner and we've been much more efficient with how we use our time remotely than I think we were when we were in the office, but remote.
Sometimes we talk too much about the effect lockdown has on people, but there are, those among us who look at the glass as half full and I hope and suspect with both of you, that is the case.
And so to you, Jason, my final question. What makes you optimistic?
Jason: There's so many things it's hard to list just one. But I think overall, hearing from our customers how much both the product and the service that we provide are absolutely necessary within this industry and how much this industry is absolutely ready for disruption makes me feel like we're in the right space, we have the right product and we're at the right time.
You see some of these parallels that came together for Wayfair and you're seeing a lot of those same things here, as well.
And then, I think more personally and for our teams, within operations, what I've been excited by has been, the addition of some really talented folks to our team, the growth of a lot of our more junior employees as we've given them more responsibility, and seeing them take that on and be successful. And seeing some of those same parallels that I saw at Wayfair around, okay, we started at the bottom of this mountain, we didn't have a team, everything seemed impossible, we started, finding, similar-minded people, focusing them on zones, seeing the growth and you're seeing a lot of that same pathway happening.
And so I think, both from the perspective of opportunity and from the perspective of execution, I'm very excited about the future.
Dave: When COVID first hit and lockdown started happening and you see some of these other industries where that have just been really hit super hard and people are hurting out there it is wonderful to be at a company where we are growing, a department that is growing where we are getting people into jobs, is very rewarding and I'm super optimistic about the continued success there.
And then to be in an industry where we're working on a cure, we're working to figure out how to prevent it and we're making that better through our efforts in research. So, that's also extremely rewarding. So I'm optimistic for the growth and for the space that we're in and our continued success.
...to be in an industry where we're working on a cure, we're working to figure out how to prevent it and we're making that better through our efforts in research. So, that's also extremely rewarding.
I'll tell you in another life, I want to come back as a junior operations person and work for either one of you.
This has been great. I really have learned a tremendous amount about why it is we brought you in as a team. It's clear how you've taken all these best practices that you learned in Wayfair and prior to that, and applied them to a very complex industry of life science, and we're grateful that you took some time to speak with me today.
Jason, Dave, thanks very much for your time today.
Thank you, Greg. This has been fun.
It's been great. Thanks, Greg.