Customer Stories
Nov 26, 2018

For this Founder, Unit Economics are Easier to Figure Out than People

Steven Ou has been quietly tackling technical challenges since he was 12. That’s when he started programming — years before he took on the chief technical role at e-commerce company Touch of Modern. Under his leadership, the company today touts some of the industry’s best fulfillment costs as a ratio to revenue. The app itself focuses on offering unique products, not easily found at traditional retailers to “male millennial tastemakers,” with more than 250+ new items added daily.

Build a Company, Not a Business

An appetite for technical challenges is just the beginning of his journey, however.

“The biggest realization I’ve had was that I was building a company, not a business. In the beginning, I thought about our competitive landscape, our business model, processes, and margins. It didn’t take that long before I realized that none of that mattered without the people. A company is literally a group of people. And without great people, it doesn’t matter how good the business. The company will not survive.”

While Steven believes the team itself is a company’s most valuable asset, finding the right people comes with many challenges. “Hiring is the hardest thing. You cannot succeed if you don’t know how to manage and motivate people.”

Looking back on the early days of Touch of Modern, launched in 2012, he laments that the company did not hire top talent early enough, hesitating most with costly executive hires.

“It takes time for that talent to get in the groove and really be able to contribute. At some point not having these lieutenants is going to hamper growth and make your life exponentially harder. Don’t wait too long to hire your executives.”

Retail is Here to Stay, Just Not in a Traditional Way

Of all the customer questions that come up at Touch of Modern, most subscribers wonder why shipping is so costly. Questions like these make Steven especially aware of the fast-changing landscape in e-commerce, particularly expectations set by Amazon that shipping should be fast and free. He worries that the cost of e-commerce fulfillment is getting increasingly unsustainable. Companies that already have a lot of retail stores could gain an edge despite the “Amazon effect” if they’re able to use those stores effectively.

“Retailers need to start thinking about their stores either as experience centers or fulfillment centers, but not shopping centers. Shopping, as we know it, is all going to happen online.”

And while online retail is thriving, Steven thinks that there’s definitely a place for physical retail experiences. “We believe that brick-and-mortar retail is not going anywhere, but it is evolving. The retailers that don’t adapt to the changing dynamics will be left behind.”

Third Time’s the Charm

While Touch of Modern looks like an overnight success, Steven actually co-founded two companies that previously folded prior to it. When it comes to owning failures in your career, he’s all about taking action.

“Don’t rely on anyone to make your career for you. It’s up to you to forge your own path. Be proactive and learn as much as possible as early as possible. Success requires specialization in your field but also a great understanding of all other areas. And every other aspect of a business to advance and succeed at your job.”

It’s advice that’s been hard learned. Prior to Touch of Modern, Steven and his co-founders explored venture-backed startup opportunities in booking local experiences with small businesses.

“We spent two years trying to build those businesses but the fundamental economics actually didn’t work.” The learnings, however, were not wasted on the now-defunct companies.

“This time, with Touch of Modern, we knew better and we started to really research the market, put together a proper business plan and evaluate and test the unit economics before diving in. It was somewhat of a nerve-wracking meeting but all the prep work and validation we did helped convince our investors to let us take a calculated gamble in Touch of Modern. The rest is history.”

*Images by Mariah Tiffany.

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Heather Lohmann

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