On this week’s episode of Inside Outside Innovation, we sit down with Paul Jarrett, co-founder of Bulu and one of the original co-hosts of this very podcast. Paul and I talk about Bulu’s journey, as well as the future of e-commerce, supply chain, and logistics, and many more things. Let’s get started.
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Interview Transcript with Paul Jarrett, Co-Founder of Bulu
Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I’m your host, Brian Ardinger, and as always, I have another amazing guest. Today, if you’ve been around Inside Outside for a while, nine years ago, this gentleman and I started the podcast, Paul Jarrett. Welcome to show.
Paul Jarrett: Oh no. What’s up man? You’re doing it, man. It’s so friggin’ awesome to see…and every email…every, everyday I’m just cheering you on. And this is a little bit surreal, right?
Brian Ardinger: Yeah. It’s kind of full circle.
Paul Jarrett: It’s a long time, man.
Brian Ardinger: The first podcast was called Inside Outside, and it was an inside look at startups outside the valley. You and me and Matt Boyd tried to have some conversations about what was going on in the startup ecosystem here in the Midwest, and since then I started Inside Outside Innovation to focus on you know, larger innovation projects, as you went on and, and did some other stuff.
So, you were the co-founder of Bulu. This was a supply and logistic company based here in Lincoln, Nebraska. You started out in the subscription box space and have, you know, gone through a variety of journeys over the last 9, 10 years. And so maybe let’s start there. How did you get started and, and where are you now?
Paul Jarrett: Actually, probably another way of looking at it is like, oh, you’re on your third company or fourth company. Call it pivot. Call it evolve, call it new company. The way I look at it is finding a better problem to solve or a harder problem to solve.
My co-founder, Stephanie Jarrett, and I, who I happen to be married to, we started way back April 12th, 2012, because the first failure was trying to get it on April Fool’s Day. And you know, just because you submit it doesn’t mean that’s the day. So, but yeah, we raised capital. I tell people way too early. We raised like a million and a half dollars before we ever sold a thing.
God bless the people that believed in us. We were In San Francisco, came back to Nebraska, gave a presentation. I think we had all of the mechanics and people were like, yeah, they’ll figure out the product later. And we launched a consumer-packaged goods, CPG, direct to consumer brand. It was one of the very early subscription boxes.
We actually call them sample boxes because that was the first iteration. And I would say we were kind of the first non-makeup, non-beauty focused on vitamin supplements, healthy snacks. So, the idea is pay 10 bucks, get a Bulu box, come back to the website, buy full-sized version of the product, stack up your rewards points.
And actually, we were taking the data and we were manufacturing our own products, right? That went amazing. As CEO I take 100% responsibility for probably, I was talking to the wrong sort of investor. Like a software investor for a consumer-packaged goods company. And kind of like subscription was the thing that was common, but it was just different.
We have physical, we have a warehouse, right? I’m in a warehouse right now. But that worked. We grew a really small stint where we built a software based on the data for retail big box buyers to find products that we sampled and put them on the shelf. That’s called Bulu Marketplace. It’s now called rangeme.com.
Super proud of that. That is, I think, what it feels like to have a billion-dollar tiger by the tail and painful to look back and go, man, we had to get rid of that, but we had to sell it as an asset in order to continue to fund our company to grow. And so then we’re kind of sitting there with this Bulu Box thing that’s not very appetizing to investors. A small chunk of cash from the sale of Bulu Marketplace and RangeMe.
And we said, oh my gosh, what are we going to do? And it was all the marketing costs for the subscription Bulu Box that was the issue. So, we went to big brands and we said, we know how to do this thing. If you give us these metrics, we’ll cook up what a projection looks like for you. And man, it was just one after the other GNC, Disney, like that’s when you really actually go like I tell people when your questions go from how are we going to do this to things like, how do we find people.
Like how do you ship something to, oh, we need to hire people. We need to, that’s the moment when you’re scaling, and I think the moment when you’ve kind of locked in the model and you’re optimizing is when people are like. What do you do with this extra money? Right?
And so I tell people, we got to live that life for probably a couple of years where you’re like, we have a surplus. Like this is wild. What do we do? Better benefits for people. This is amazing, right? Pandemic strikes like everybody, world in one way or another got flipped upside down.
I would say that with our investors who are awesome and behind us for well over a decade, which is crazy, VCs with a brand for over a decade, the time was up to do their thing. We needed to do ours, you know, is a mutual kind of situation where thank God and everything else involved that we were able to make an offer on the company.
We acquired it a hundred percent. Stephanie Jarrett got that deal done. Hats off to her. My co-founder, who is now the rightful owner. So, I was like, no, you take more percent because number one, you deserve it. Two, you kind of run the show here and three, like maybe we’ll get some perks with women owned and whatever, because it actually is a better representation of the diversity, and it’s pretty cool to see non-traditional people like, you know, running old school, traditional business.
Then we kind of sat there and we’re like, okay, now what do we do? We have a hundred percent of the company. We have all this history; we have all the assets with Bulu. Okay, we have everything now. Now we got to make it work.
And so we went back to the table and really just kind of put on that ad of if I were a consultant, what would I do? I would probably come in, learn the business and strip out anything that didn’t make a good margin. Anything that they weren’t a core competency. I would take out without removing the ability for them to solve a hard problem.
And so, what I tell people is we basically remove the subscription box, the customer service for the subscription box, the financial management, the website build, all of that stuff we ripped out. And what we were left with was this really interesting, we call it true omni-channel fulfillment for consumer brands.
That’s an expensive marketing word. So, we say hybrid hub and spoke. And so simply what we say that we do is we now help any consumer brand get on the shelf and ship like a major brand. So that 12 years of Disney Logistics, Bulu Box, et cetera, we broke that down. And so now we’ll work with anybody and help get them both delivered to retail stores, to customers, to schools. Wherever they need to go at a rate that’s actually not going to crush them.
Because in this logistics industry, what we see is splitting up all that fulfillment and logistics amongst multiple partners. That’s actually where you get feed to death and lose your margin. So, it’s a ton of fun. We’ve landed like 30 clients in the last 60 days, and they’re not big or small, they’re just like really solid brands that just a little bit of tweak and boom, they’re selling in all these independent retailers. Because our technology and our process let them do that.
It’s super rewarding. Last two years, I wouldn’t wish on my worst enemy, but like, knock on wood, we just keep doing what we’re doing and I’m excited for where we can take it.
Brian Ardinger: I’m excited to have you on the show to talk about 10 years in the business and changing in a lot of different ways. When you first started, you didn’t have a warehouse. I remember you had them, boxes were in your apartment. Now you’re logistics experts and that. So, I wanted to have you on the show to talk about some of the things that you’re seeing in the future of e-commerce. Because that’s changed quite a bit over the years.
And then supply chain logistics. Some of the things that pop into my mind about where the market’s changed. You know, 10 years ago you didn’t have one person brands and one person companies that could create a product, source a product, ship a product, et cetera.
So maybe talk about some of the things that you’re seeing in this evolution of e-commerce and, and supply chain and how that’s impacting your current business.
Paul Jarrett: So, what’s wild is, you know, when we started 10 years ago, 12 years ago, you know, we were one of the very first users of Shopify and I remember actually talking to Toby, the CEO over there, you know, he was saying things like, Paul, I really like, I get what you’re doing. I really think you guys should work on building an app. We’re going to have an app store for a subscription billing.
And nowadays I would know to listen to people. At the time I was like, who is this client? I thought it was just Toby from customer service. Like, Nope, that he did a little better than we did. Maybe I should have listened?
What’s wild is even 10, 12 years ago, the things that we thought were around the corner for logistics, like never showed up, man. And you just go like, look at all these broken disparate pieces that you just can’t put together. Well, somebody will, and I look at what we’re doing today and we’re essentially solving the very first problem that we had.
One of the best ways to answer your question is like where I see the actual disconnect, right? And I think I want to say Obama had the, somebody had the quote of, they’re using cutting edge technology in the air while Barney rubble is running around on the runway trying to make things happen. I think that’s such a good description of logistics, right?
The pandemic really fast forwarded a lot of logistics, and frankly, a lot of massive mistakes were made by people that built software and invested in the industry. And all of, and respects to us and our team, but like there’s a big problem when somebody raises hundreds of millions of dollars and the CEO calls you. This is not a one-time thing, like multiple CEOs that got into the logistics industry that raised a ton of money and you know, maybe they came out of Ivy League school and they’re doing that route, and they were wanting to know answers for a software.
There was zero consideration about the people on the floor using stuff that they’re building. And no matter what I said, I was like, hey, like this is all good, but like if the people on the floor don’t know how to use it, like there’s a real problem. And that is what I see as like the disconnect, right?
I’m super proud of our team and we know this stuff better than 90% of the market. But one of the reasons we’re doing that is because we will do things like we sell like a software company in a traditional industry. We use Chat GPT within our sales software, we build APIs for the warehouse management system that we’re using.
It almost feels a little bit like when Shopify entered the market and everybody kind of scratch their heads and now it’s the standard. It feels like we’re a bit like we’re using the Shopify, we’re using all the things that exist. But it’s just that not a lot of people are putting it together correctly.
What’s wild is, oh, robotics is the next big thing, right? And I’m like, uh, yeah, like you know how many people are going to pour a Mountain Dew on a robot the first day they see it in a warehouse? Sounds crazy. But here’s the big difference. And I pride myself a little bit on being kind of like a person that can live in both, in all respects, just for translation, like I can live in both like white collar and blue-collar world, right?
To be able to kind of see like, oh, robotics, oh AI, oh, drones in the warehouse, all that stuff. And on that white collar side, everybody’s sitting like, oh, growth, strategy, solve a problem. Like the mentality is above the line, right? And then they provide these tools to people like us that are just gunning, like physically trying to get the stuff done.
They don’t think that most people in the world of logistics or where we live are just working to not get fired. So, what is the incentive to use this new thing that’s really big and complicated and flashy? But you know, if you touch that thing and you break something, you are probably going to get let go. Because that’s how this is. That’s this world that we live in.
And so what I see happening. Is actually probably a lot of like middleware companies, middleware. I was just checking out make.com the other day. Zapier. I think a lot of people that take advantage of those things are going to be successful because there’s just a big gap of what I might define as like the translator only working with software and third parties that almost they have to prove to us they either have been to a warehouse or that’s part of their plan.
And also, it’s been like a huge advantage of, hey, test out your beta on us. Come to the warehouse. Let’s see how it works. And that’s where I see like the technology is just going to keep following that curve.
Going, going, going, going high, high, high, high. Meanwhile, like the Barney Rubbles on the ground, me, which I’m proud of that, right? We need to figure out how to translate that innovation into how it’s used day to day. I really just think people underestimate like most fulfillment logistics companies I know, and I know a lot of them, they are contacting me, saying, how, how did you guys ever get off of paper? Right? How are you shipping to people’s homes? And you’re like, whoa. There’s a big disconnect here.
And so I think what’s going to happen is all the technology, it’s kind of like a medical science. It’s just going to take way longer, because of the bureaucracy and the compliance and everything like that. And I see that as a huge opportunity. Steve Case, Third Wave, right?
Brian Ardinger: I had a chance to visit your warehouse and walk around and that, and we were chatting about some of these things that you were seeing and that. And one of the things that stood out to me is because you came from like the software world as well.
Then you’re applying it to the real world, how the disconnect of distribution is and the transparency and the fact that quite frankly, a lot of folks aren’t using software well enough to be able to piece together where their packages are. And then move it across to wherever they need it to go. So maybe talk a little bit how you see the software industry impacting it and practically impacting it.
Paul Jarrett: Number one, and these are, so it’s almost like embarrassing to explain because it’s so what I think probably your listeners, a lot of other people think is like low level. Like are you kidding me? Like, no way. That’s the thing.
All I can say is I still don’t believe a lot of things that I see not at our warehouse, but like when I do industry and stuff like that. And I think like one of the easiest examples that I use is that if I have a physical product, like I got Tik Tac’s in case my breath is bad for the podcast.
Every system, financial tool, like everything for this consumer-packaged good physical product is just built to get it, the physical product from point A to point B. That’s how everything is thought about, is built, is margin wise, et cetera. We, since day one, because we really didn’t think there was another way or it just didn’t cross our mind, we always have thought yes, you have your physical product, but the more important piece arguably, is the digital version, right?
So, I think if companies and people interested in this industry really approach this as always thinking through how you simplify and attach the digital information of a consumer package good with the physical consumer packaged good, that kind of unlocks it to go everywhere that you need it to go, come back, you know, it’s not point A or point B.
It’s kind of this hub and spoke, right? You’re in the middle and you can send and receive however you want. You just really need to make sure that that information is all attached. And so, when you start to think about robotics, you start to think about Apple Vision Pro. You start to think about those things.
It’s more to me about, getting your software stack correct and ensuring that that data flows and then that the user, you know, they don’t have to enter in numbers, right? They can just identify a product with a camera or whatever it is.
And I think that’s probably the biggest thing, is that what I see in robotics right now. Is everybody’s in the phase where they have the hardware and the software. They’re giving you the hardware, low cost, they’re going to lock you in on the software and it’s closed off and nobody can kind of plug into their machine. Right? So, there would be that phase for a couple of years.
But I see, like if I were building a software, and this might be something we do, I would really focus in on platform software, right? Zapier type connections. And how do you translate a set of data so that it feeds with a physical product, data attached to a robot, to a warehouse management system, to an account manager’s project management tool. Right. Again, it sounds so simple, but it is unbelievable how that works.
I think the hardest part is we will connect to other warehouses, but they have to meet our criteria for like API build, we have to physically go there and check it out. And we got to make sure all their certifications are up to date. And if you can streamline all of that, anybody can kind of do what we’re doing. We’re just, have more experience at it.
Brian Ardinger: You mentioned the fragmentation, and if the industry’s an old established industry, a lot of times, you know, different pieces or parts of the industry scale up at different times or innovate at different times, and so you’re in that transition process of, yeah, how do we get everybody up to a 1.0, 5.0 version of what needs to be.
Quite frankly, you have a lot of other things that are happening with the marketplace itself. So again, going back to 10 years ago, the idea that an individual could source a product, build a product, ship a product, and build a brand all by themselves with low code, no code or Shopify or whatever, that’s completely changed the game too. So I’m imagining that the types of customers that you can interact with and their particular needs of a one person shop, so to speak, or five person shop, is different than a Procter & Gamble.
Paul Jarrett: Yep. You know, we get a lot of calls from big brands and you know, a lot of times what’s interesting is like they have all this amazing ideas and, and you know, they want to do certain things, but even with their own systems and with the brands that they are and all of that stuff they can’t change the logistics, manufacturing, supply chain process. It’s just too expensive, right.
We’re sitting there going like, this is a software stack that is a fraction of the cost of what you have, and you have to come to us to use it. That’s wild. And you know, I feel like we are on a massive campaign right now, hand to hand combat. Basically, saying like, yeah, man, like 3PLs suck. Like nobody wants to talk to them.
Yes, you’re right. It’s smoke and mirrors. Yes, they’re trying to nab you on the margins. We don’t understand why they do that. It was frustrating our first couple years, so we had to do it ourselves.
So, our attitude is if another brand and we share the same goal of more shipping labels why in God’s green earth would we not push as much margin back to that company in order to allow them to compete with advertising and marketing, right?
Because the end game there is actually more shipping labels for both parties and it’s just wild to call up these brands or you know, get calls or whatever and say, yeah, it is possible to ship to people’s home, to ship to Amazon, to ship to big box retailers, and it doesn’t have to be a case, a pallet. They can just say, send me two watermelons and a lime, and we can do that.
And actually, anybody can do that. Why they’re not doing that is beyond us. Or why they’re building really big, complicated software solutions without the end user in mind of the actual warehouse user, not the consumer. I don’t understand either. But it’s like this thing where AI isn’t necessarily like, it’ll help, but it’s not going to solve the core issue.
And one other thing that they’re on top of it, which I think is interesting, is that this industry still is ruthlessly competitive. Right? For me to call up another 3PL or for us to partner with one, once again, you know, we’re doing something just totally ignorant, right? Like, you know, these people are like, why are you calling us? Like, didn’t you steal? And you’re like, we all want the same thing, right? Like, can’t we work together?
Brian Ardinger: Well, and that’s interesting because, you know, again, if you think about innovation and, and how things happen, oftentimes takes a partner like yourself who doesn’t come from the industry to understand where the real warts are, where they didn’t realize they were warts because they’ve always had that wart.
The other piece I want to talk about is this idea of collaboration. It seems like you’re working with other third party software to create this API engine that allows you to track this digital twin as, as well as the physical twin. How do you go about collaboration in a market, like you said, that’s very fragmented and very challenging to work with?
Paul Jarrett: One example is, you know, there’s a lot of people that have refrigerated or frozen items, right? And with our warehouse, although we’re like food certified, FTA certified, et cetera, and we do a lot of that, like we don’t actually have on site frozen or refrigeration capabilities. Now, historically what would happen is that brand would probably have one fulfillment slash 3PL company for delivering to retail big box stores.
They would have another one that would be delivering to customers’ homes. Then they might even have a, a third and fourth one just for frozen items. Right. They probably wouldn’t even ship frozen to home. And what we’re working with companies and doing is we just got somebody out on the East coast, so we’re doing all of the inventory that doesn’t need to be frozen, but we connected with somebody on the East coast that does the frozen stuff. But for the client, they have one dashboard. Everything looks like it’s going through Bulu. They’re aware, the other partners approve. They can talk to them, but we want to be that one point of contact and these clients are like, oh my gosh.
You know, we call it the Tricky Ship. It’s a little cheesy, but like nobody wants to hear about logistics. Right? You know, just the sheer management time of now the operations person on the brand isn’t managing three or four different companies, yet one silly product or skew out. They just have one dashboard. One point of contact through Bulu, and we’re managing that for them.
And all those data feeds are real time, right? Like nobody’s sending a CSV of information. Nobody’s snail mailing. You’re like, that does still happen, right? What’s your fax number? We’ll fax your inventory. You’re like, what quick, somebody go get a fax app. Get a fax number.
It’s almost like watching all over again when we were one of the first companies to drop ship product in vitamin, supplements, healthy snacks, and we just didn’t know any better and we said, well, why wouldn’t the manufacturer just take our order and ship it out? And we didn’t know we kind of started that in this industry.
And so now it feels like the best part is we are aware of what we’re doing now, right? We understand the actual core problem is brands want to ship like major brands, but they can’t because they’ll lose their margin or they’ll just never get the distribution channels. And now that you solve that, it’s interesting to be in a place where people are like, no way. How did y’all figure that out?
And the response is kind of we didn’t know any better. Right. And we’ve been doing it for a long time and big brands funded it. And if you don’t believe us, like just go to LinkedIn for some of our partners or watch me blabbing on LinkedIn and you’ll literally see people say, Bulu is a godsent. I can now forget about the big box retailers in Amazon and I can like ship to all these independent stores.
And yeah, it’s just, it just all boils down to like there are really hard problems in this industry that are actually easy solutions. But I think that gatekeepers and the people that they’re probably a little bit older and technology scares them, they’re going to scare people away.
So, I almost feel like we’re on a mission and one of the reasons we bring in you for a tour and everybody else, we just want people to see. That’s something that nobody does. We’re like, let’s just break down the walls of logistics scary, right? Yeah. There’s a bunch of big, ugly, smelly dudes like me with tattoos, running around, throwing stuff around and it’s like you can feel people like kind of take a step back.
But once you remove everything and go, hey, it’s a physical product and a digital version of it, and we’re just trying to make sure physically and digitally it all stays together, wherever it goes. All of that smoke and mirrors just starts to disappear. And boy do those other companies that have been here, they just start like treading water.
Like you know, you just see on their website like multichannel AI fulfillment. Seriously. It’s a interesting time to be here and as much as I want to like do the robot thing. Dude, we’ve had robotic arms, we’ve had those things. The typical things in industry changing where you go, yeah but like how do you find a robotics developer? Oh my god, they’re so expensive and they don’t even exist. Let’s wait and keep our eye on it.
Brian Ardinger: There’ll be plenty of opportunities for the Amazons of the worlds to make that happen on that side. And you can get the benefit after they’ve worked out some of the kinks, perhaps. But there’s plenty of business, plenty of hard challenges that can be solved by folks like yourself and others in the marketplace that are, that are doing it.
I mean, supply and logistics has been around since the beginning of commerce, and that’ll continue to be around and it’s nice to see people like yourself innovating and thinking about things differently. So, appreciate you coming on and, and talking about that. Any other final comments or topics you want to discuss?
Paul Jarrett: Yeah. Well, I was just going to say, you know, I was the guy that probably, you know, I came up in advertising and marketing and I worked in the big cities. I was always, you know, going to the cutting edge and looking forward and you know, we built and sold the software, right? Like we did that stuff, right.
I do not think those days are over by any means, but I do think that going back to Steve Case and the Third Wave, we’re actually now starting to see that happen. And as much reluctancy, I mean, we avoided the logistics fulfillment world for the first three years, right? I would encourage people like those things that actually might not think excite you or things that you don’t want to look at, or you’re like, eh, that’s for somebody else. That’s whatever.
If I could go back and tell myself like, hey, that’s actually like your Spidey sense, and yeah, like go after that and learn about that. That’s kind of, I feel like where things are headed. Right? And it’s like, don’t jump on the AI, Bitcoin, whatever wagon unless you really do have a edge on somebody and you know it. Why not look at the industries that are not paid attention to. It’s not just logistics, man. It’s like everything. Governments, agriculture.
There’s still a lot of industries that are waiting for really simple things like API connections and marketplaces, and so hopefully that resonates with a couple people out there. And I want more people in this industry. There’s only a couple that are kind at that same wavelength as we are with technology and marketing and whatnot.
I’m almost super proud to be pioneering it in Nebraska with the team because I do believe this is the next wave. So, and I’m, I just appreciate being on the show and catching up with you and you’ve seen all the iterations. Yeah, hopefully you can feel just like, I’m like, oh man, I’m finally where we should be, when we should be, et cetera. And just appreciate everything you do for the community as well, man. That’s, it’s a big part of it that goes unsaid.
For More Information
Brian Ardinger: Well, it’s great to have you back on this show and in the community and working on the tough stuff that needs to be worked on and helping entrepreneurs along the way and that. So, appreciate you being on the show. If people want to find out more about yourself or Bulu, et cetera, what’s the best way to do that?
Paul Jarrett: There’s Bulugroup.com. There is the narcissistic pauljarrett.com. It’s a good marketing tool, but you know, if you made it this far and you went through all my blabbing, you can just drop me an email, it’s just Paul@bulugroup.com. Would love to chat with people about anything under the sun because it gets lonely in a warehouse out in Nebraska.
Brian Ardinger: Excellent. Well, thanks for being on the show. We’ll talk again soon, I’m sure.
Paul Jarrett: All right, man. Have a good one.
Brian Ardinger: That’s it for another episode of Inside Outside Innovation. If you want to learn more about our team, our content, our services, check out InsideOutside.io or follow us on Twitter @theIOpodcast or @Ardinger. Until next time, go out and innovate.
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