Building Touch of Modern, with Co-Founder Jerry Hum
The journey from packing and shipping boxes in an apartment to a streamlined and well-oiled eCommerce machine
Your first idea isn’t always your best idea, but it is a great place to start and learn from. That’s been Jerry Hum’s experience, and for him and his co-founders at Touch of Modern, iterating on one idea after another was the only way they were eventually able to put all the puzzle pieces together to create a winner.
It was through their initial failures with companies that were focused on peer-to-peer marketplaces and curating experiences that they were able to learn valuable business lessons. They were getting attention and they had users, but there was still something missing.
“What we learned from that was we need a reason for people to transact,” Hum said. “There wasn’t a real business model there. There’s just a ton of engagement….So we were like, what were we good at and what were we not good at? We were really good at getting people engaged. Really good at the discovery aspect of things. We just needed something more scalable to be the thing that we featured. And we realized that, hey, products… You get scale with products, right? Mass distribution and all that. There’s real margin there because that’s kind of built into the modal that already exists.”
They knew that beautiful design with products was the way to go, now all they needed was a unique angle. And that’s how Touch of Modern was born with its membership portal, app and eCommerce model that brought deals and uncommon products from all over the world right into the hands of their customers.
“We just started sourcing things that we thought were cool,” Hum said. “If we think it’s cool, other people are going to think it’s cool too. … Right away it hit in a way that the other two businesses did not hit at all in two years. Day one we started getting real transactions and kind of buying activity.”
As an eCommerce platform, Touch of Modern was able to differentiate itself from the competition by offering companies a platform that was open to members only where they were able to showcase products that were new, radical, or simply unique. And because of the fact that it was behind a membership wall (even though membership is free), prices weren’t available across the internet. It’s a win-win because members get a curated list of more than 300 new products every day and vendors get a platform to amplify their products.
One of the other ways Touch of Modern was able to stand out among the thousands of other eCommerce platforms was its early adoption of mobile apps and the fact that it was targeting male buyers. Most eCommerce sites tend to cater more toward women, but Jerry and his team saw an opportunity with their male peers, who tended to enjoy buying on mobile.
“We went to mobile pretty early on …and it was interesting because men tend to be more comfortable buying on mobile,” Hum said. “And maybe that influenced part of our strategy or vice versa. It seems to actually be the more popular platform for us. Both in terms of actual use engagement and revenue as well.”
But Touch of Modern wasn’t just on the cutting edge in terms of the mobile platform, it was also an early winner in the world of Facebook marketing.
“In the early days of Facebook it was like the wild, wild west,” Hum said. “Big brands weren’t really on it, so it was a great time for companies like us.”
As the company kept growing, it expanded its advertising strategy onto TV and other platforms, eventually helping to build an eCommerce platform that attracted nearly five million visitors a month.
But when it comes to success as an eCommerce platform, visitors per month doesn’t pay the bills. For Hum and his team, there are certain metrics that mean a lot more than others, so that’s where he aims his sights.
“For us, we are a multi-brand retailer,” he explained. “So what’s important to us is lifetime value and retention. How fast do you break even on the cost to acquire a customer? At the end of the day, that’s the most basic thing for any company in our space. But the products that you’re selling may influence how you look at it. If you’re selling cars or mattresses or something that you just don’t buy very often, then you may think about it very differently because it’s just not feasible to think that the retention rate is going to be nearly what ours is. Or at least not be frequent enough for you to be able to plan your marketing spin around.”
Ultimately, Hum and his co-founders were able to find a build on the metrics that mattered. They scaled their company and went from packing and shipping all of their orders from their house to finally opening an office, having a dedicated fulfillment center and building a team to handle the demand that just keeps growing.
But growth always takes time, and it’s never easy. Through all of the ups and downs Hum and his team have seen, they have always come out better, smarter and more nimble than ever. Which in turn has helped make them the ideal founders for an eCommerce company built to disrupt the industry. Touch of Modern wasn’t perfect when they started and it’s still not perfect today. And that’s okay, because that was one of the biggest lessons Hum learned on his journey, and it’s advice he shares today.
“We made some classic mistakes,” Hum said. “I think the big one is you build the whole thing and you spend like a year building it and then you think that one day you’re going to open and people are just going to come in. Then you start thinking, ‘Hey, maybe we just keep tweaking the product and eventually people will come.’ Really all you’re doing is staying busy because if the demand is not there, it’s not going to suddenly show up. So you have to prove out the demand first. And then when the demand is there, you can take your time with the product.
“You don’t want to be in a place where you’re convincing yourself that the reason you’re not succeeding is because the product is not quite right. If there’s a real need for it you can come out with something that’s pretty minimal and just addresses the core need. And it doesn’t even have to run perfectly and be totally ironed out. And that will give you enough signal that there’s something there that people want. And then you can find it down the road and keep expanding your market.”
To hear more from Hum, listen to his entire interview on Up Next in Commerce here.