March 19, 2024 • 22 mins
Unlock the secrets of entrepreneurial success with Carlo Cisco, the visionary behind Select, as he joins me, Dylan Burke, on the latest episode of Growing Lean. Witness the tale of Select's remarkable journey, as Carlo shares how he harmonized his financial prowess and event planning skills to craft a membership service that connects discerning consumers with top-tier brands. This isn't just a story of creating exclusivity; it's a masterclass in fostering a community that values experiences and relationships, breathing life into a business model that thrives on member engagement and meticulously curated benefits.
Step into the world of startup resilience and learn how Select navigated the tumultuous times of the pandemic, emerging not only unscathed but with strides in member loyalty and a renewal rate to rival the giants of the subscription service industry. With an eye on the pulse of today's financial climate, Carlo delivers actionable insights on achieving a delicate equilibrium between growth and profitability. For anyone looking to fortify their venture with robust cash flow and unwavering customer value, this dialogue promises to be an indispensable resource. Connect with the essence of Select and absorb the wisdom of a CEO who's expertly charting a course through the entrepreneurial waters, ensuring that his ship not only sails but soars.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Hey folks, welcome back to the growing Lean podcast
sponsored by Lean DiscoveryGroup.
This is your host, dylan Burke,also known as Deage.
I'm happy to be here today withCarlo Cisco, founder and CEO at
Select.
Welcome, carlo.
Yeah, thank you so much forhaving me.
I'm excited to learn more aboutyou and your business.
To get us started, can you giveus a little bit about your
(00:27):
history and background and whatled you to Select?
Speaker 2 (00:32):
Sure, yeah.
So I started my first businesswhen I was 18.
I had like an event planningand promotion business while I
was in school at University ofMiami, so mostly doing like
large scale events bringinganywhere from 100 to sometimes
upwards of a thousand people.
So that did pretty well.
At the same time, I was afinance major, so I had
(00:55):
positions across various areasof finance everything from
merchant processing to wealthmanagement and ultimately, when
I graduated, I moved up to NewYork, got a job in equity
trading.
I had gotten into that becauseI had done well in investing
during school.
But as much as I love beinginvolved in financial markets,
(01:16):
it's very fast paced.
It's very exciting.
You get to learn a lot about alot of different companies.
Equity trading was a little bitthe opposite of investing,
where it's very short term focus.
You're sort of capitalizing onmarket arbitrage and other short
term strategies and I kind ofliked to get big on things I
really believed in.
(01:37):
Apple was my first stock backin 2005.
So year and a half into that Iwas getting the entrepreneur bug
again but didn't really knowanyone in the startup space and
sort of out of nowhereacquaintance of mine basically
got a job with Groupon, and thisis back in 2010.
Groupon was in the process ofbecoming the fastest growing
(01:58):
company in history by revenue,so reached out to congratulate
him and a few phone interviewslater ended up moving out to
Japan to help build Groupon inJapan.
So that was a really incredibleexperience.
It was sort of the ultimatestartup on steroids story in
Japan.
I also epitomized that.
But we became the number threeout of 48 total countries within
(02:22):
three months basically sobehind the US and the UK, so it
was one of the better marketsfor Groupon and it really kind
of showed me that there was ahuge demand for a new way for
merchants and customers toconnect.
But I felt like perhaps whatthey were doing didn't really
work as well for premiercustomers or premier brands and
(02:46):
venues.
So that was one of my bigtakeaways and that's certainly
part of the inspiration forselect as well Sort of kind of
combines all of thoseexperiences.
We wanted to create a membershipmodel that was all curated
places or brands, best incategories, how we'll typically
(03:10):
refer to it, and then in allcases, whatever the benefit is
and it's not typically 50%, butit's typically like 15, 30% can
go as high as over 60.
So a lot different than what youwould see from perhaps a credit
card, for example, and someonecould get that anytime they want
(03:31):
, as often as they want, becauseour thought process there is
that this hire to your customerhigh income, whatever they're
busy so they can't go at like anoff time.
They're not the one off salesare actually kind of annoying to
them even because they mightmiss it or whatever.
So we felt like it was a goodway to kind of combine customer
acquisition and customer loyaltyand build a membership around
(03:54):
that and effectively over timeit's basically proven true.
So in a way every experience Ihad kind of inspired select, but
Groupon probably takes creditfor perhaps being the biggest
inspiration, just because itopened my eyes to how big that
opportunity was, you know, basedon how fast they grew at that
(04:16):
time, and obviously it's adifferent story today.
But this is many of the yearslater and they're also
effectively the only ones stillaround doing what they do.
Speaker 1 (04:27):
That's amazing, that's so awesome to hear.
And can you run it through me?
And run me through it in a bitbasic terms?
So it's not a bank.
How does it work?
Speaker 2 (04:38):
Yeah, yeah.
So select today we describe asa digital membership and
concierge service.
We connect people withexclusive events, savings and
perks at over 1.3 milliondifferent locations all across
the world, as well as with avariety of online brands and
services.
So you know, people have toapply for access.
(04:59):
We do turn people away, unlikesome others in the space, you
know and in addition, they haveto pay an annual fee for
membership, but then, in return,access to all the different
benefits.
All the events are concierge.
It's all unlimited,unrestricted, you know.
(05:20):
So people can do, you know, asmuch or as little as they want,
but on average, members getabout two and a half times the
membership feedback just inbenefits, and then they're also
getting access to our conciergeand our events in addition.
Speaker 1 (05:36):
Okay, amazing.
And what is the qualifyingcriteria?
Speaker 2 (05:41):
Yeah, I'm.
We're mostly looking for peoplewho will be able to basically
take advantage of the ecosystemwe've built, because, at the end
of the day, it is a ecosystemright like we want the partner
businesses to be happy, we wantthe members to be happy.
So, you know, in order for thatto be the case, like, you do
need some sort of threshold ofdisposable income, and
(06:04):
disposable income can vary.
You know what sort of likecreates comfort based on where
you live, or, you know, perhaps,personal background or whatever
the case might be.
So that's certainly the mainthing we're looking at.
But then we're also looking at,like, education, interests,
employment, career trajectory,like basically everything to
(06:26):
figure out, like is this persongoing to be a member and, you
know, truly benefit from, fromwhat we do?
And and could they be a memberover the long term and really
take advantage of what we haveto offer and and advice, a versa
, be like an active participantwith the partner network?
So so that's really what we'relooking for.
(06:46):
An income is one determinantbut, but it's definitely not the
only one.
Speaker 1 (06:52):
Okay, awesome.
And in terms of revenue, isthat generated through the users
yearly subscription or do thepartners also pay fee?
Speaker 2 (07:06):
So we don't charge any of the partners.
The membership fee today makesup likely about 90% of our
revenue, so it's certainly themajority.
There are some cases wherewe're getting affiliate revenue
back and then there are alsosome case cases where we'll do
like event sponsorships.
(07:26):
So typically for some of ourlarger events and series, brands
will effectively pay to beassociated with that and to get
marketed to the members and alsoexternally, you know, as a as a
sponsor of an event like that.
You know, over time we thinkthat mix is going to continue to
diversify a bit.
However, we think themembership fee is actually
(07:49):
always going to be greater thanhalf of total revenue.
Speaker 1 (07:53):
Okay, yeah, that's amazing.
And in getting where you aretoday, what have been the
biggest challenges that youfaced?
Speaker 2 (08:03):
Yeah, I mean, look, any startup, especially if
you're growing quickly and youknow it's a tech company like
you're going to have a lot ofchallenges, that's for sure.
You know there's you knowcertainly at times, market
conditions.
You know, as a startup you needto generally raise outside
(08:25):
capital.
We have we've run about twothirds off of revenue.
That's a nice thing with thosemembership fees, as we're able
to use that to make the businessbetter.
But you know, I would say a fewof the biggest ones.
You know, certainly the pandemicwas a bit of a curveball for us
.
That kicked off.
Our most popular categorieswere dining, hotels and events.
(08:47):
So that's an interesting timeperiod for us.
But we just innovated reallyquickly.
We started hosting digitalevents.
We added take out and deliverybenefits with a lot of our
restaurants and particularly atthat time, because they're
mostly higher caliberrestaurants, they weren't really
on these various platforms.
I would say perhaps a largerportion of them are today, but
(09:09):
still not the majority.
We did all these like at homefocused lifestyle benefits,
added business benefits, all ofthat and ultimately ended up
with a higher member renewalrate in 2020 than in 2019 and of
course, it's shifted upwardfrom there and I would say more
recently.
You know we announced a creditcard earlier this year.
Also, I think the whole worldknows that, like, vc, funding
(09:32):
for startups is definitely lowerthan it was a couple years ago.
So you know, the VC funding issomething you have to adjust to.
However, our model just kind ofworks and you know, I think a
lot of the businesses that madeless sense are getting flushed
out of the market sort of justabout every day Pretty much, no
(09:53):
matter what amounts they raise,to some 10s of millions, some
hundreds of millions.
It doesn't really matter if youdon't manage it correctly.
And look, that still plays arole because certainly when it's
a better system and market forcapital that lets businesses
that do have great models scalea bit more quickly and more
(10:15):
quickly, you know, expand theiroffering and do the things that
they do.
And then, you know, certainlywith the credit card, you know
we were able to attract a verygood partner set and it's good
that we established that at thetime that we did.
But but I would say, likesentiments around fintech have
have changed a bit since a fewbanks blew up, right, although
(10:39):
now, you know, the markets kindof come around to realizing why
certain companies blew up andyou know sort of that.
Everything we've built isbasically very much counter to
that entire story.
So it ultimately works out forus.
But yeah, I would say those area few.
Obviously, you know any startupit's a roller coaster.
(11:00):
You have new challenges everysingle day.
Speaker 1 (11:03):
Yeah, 100%.
And is it safe to assume thatretention is like your biggest
what do you call it biggest goalwith your clients, apart from
new customer acquisition?
I'd imagine.
Speaker 2 (11:20):
Yeah, it's certainly one of the biggest, for sure,
and especially because it's beentrending up pretty strongly.
So so our annual retention rateright now is a little over 75%.
So that would put us in theballpark of, or even slightly
better than, someone likeNetflix, for example.
So that's really kind of aboutas high as like direct consumer
(11:42):
software subscription.
You know, we do thinkultimately it can move higher.
That's also part of what we likeabout the credit card, quite
frankly, is credit cards havevery high retention rates
despite not doing a whole hellof a lot.
You know there's the core, ofcourse, providing payments and
doing some sort of rewards, butbut there's not a lot of
(12:04):
diversification, nothing likewhat we have.
So that's one of the things welike there.
But but the cool thing aboutretention as a goal that I like,
just as like an operator isthat like just about every
positive thing you can do feedsinto that goal Getting customers
to engage with your product,making the product more valuable
, making the user experiencebetter All of these things help
(12:28):
build into that retention number.
So it actually is a reallygreat measure of like hey is the
business working out?
And then, of course, the otherinvestor favorite but it makes
sense is like the LTV to the catratio, which is just like
what's like the value of yourcustomer over your life, their
lifetime verse, like the cost ofgetting that customer.
(12:50):
So so retention is always topof mind and definitely one of
the biggest focuses.
Speaker 1 (12:55):
Okay, 100%.
And apart from retention andcustom acquisition, what are
your other performanceindicators that you look at?
Speaker 2 (13:04):
Yeah, that's a good question.
So we definitely look at thecost of acquisition.
Are we acquiring peopleefficiently?
We look at broader engagement.
We generally like to seeengagement going upward,
especially as the membershipgrows.
Like membership's going toroughly double this year, so
that means that engagementshould effectively more than
(13:26):
double.
Right Now it's personal becauseit depends on when those people
are joining and all of thosesorts of things.
But yeah, we're looking atengagement, we're looking at
overall efficiency.
We're also just looking at,like, would we be excited about
this if you know when we are all, in a way, you know, customers
(13:48):
of select?
So those are basically thedifferent things that we think
about.
So perhaps engagement would be,like, you know, number three
after just sort of growth andretention.
Speaker 1 (14:00):
Okay, amazing, and on this journey, how long have you
been doing this for?
Speaker 2 (14:07):
Yeah, so we have been growing select for about eight
years, so we've been doing thisfor a minute, so we've
definitely seen all thedifferent ups and downs that you
can see.
But you know, it's an excitingjourney and it's also exciting
after that period of time to begrowing as quickly as we are
(14:28):
right now.
Speaker 1 (14:29):
Yeah, 100%.
Could you run us through acouple of the notable
accomplishments on a timelinesort of basis?
Speaker 2 (14:40):
Yeah, sure Cut out for a second, so sorry.
Speaker 1 (14:43):
No worries.
Speaker 2 (14:45):
You know, timeline perspective, you know I think
getting up and off the groundwas was number one, really right
, and that happened, you know,really towards the end of 2014.
And as soon as we were up andoff the ground, you know I would
say paying customers as thenext one, and we took a
different approach there.
A lot of people will just kindof give away things at first to
(15:08):
like kind of user tests, but Ididn't think that was an
accurate user test, so we did abeta instead, set up a table
like New York Tech Day and justlike hard pitched people on
signing up, signed up a fewdozen people and then, of course
, continue to take it from there, you know, sort of when things
really picked up for us.
(15:29):
So we actually closed thepublicly traded client before we
started formally launching themembership.
So, like during this beta phase, that was UDR, which is a
publicly traded real estateinvestment trust.
They bought memberships forsome of their buildings.
But then early 2015 is reallywhen, you know, the direct
(15:50):
consumer membership started totake off.
That's that's when that startedto grow quickly and you started
to see the revenue go up likethat, and then for a while
during that period is just aboutgrowth and, in our case, like
adding markets, and we alwayshad like hotel and travel
benefits that were global, butwe sort of did a market to
(16:11):
market launch approach.
So now there's about 25 ofthose markets, but we have
members in like 11 countries.
So, like, well, outside of anyof those markets, those are
almost all in the US.
There's one in Canada, one inMexico.
So, you know, these days it's abit more about like, what can
(16:32):
we do next?
Like what's the next valuedriver, what's the next growth
driver?
Really.
So you know was around the endof 2021 when we started to put
together our credit card deal,so that was a big milestone for
us.
We were able to announce thatthis year, so that also, in a
way, felt like a milestone.
(16:54):
And you know, now you knowwe're just getting into all
sorts of different things.
So I really think the next setsare just going to be around
compounding the membershipgrowth and then like getting
into some other market areaseffectively that we think are
interesting.
We think private marketinvestments are interesting.
(17:15):
We think AI is interesting.
We built our first likeinternal AI in 2018.
So we've had some experiencethere, but we think there's
going to be a lot happening inthat side of the market.
So, yeah, most of it's now isaround innovation and using that
as a catalyst for for futuregrowth and for member value.
Speaker 1 (17:37):
Okay, amazing, and yeah, I can definitely agree
that AI is going to be a hugetopic of conversation.
It's exciting times we're in atthe moment.
What are the tools that you usebesides your internal one?
Speaker 2 (17:54):
Yeah, so we're certainly using the platforms
operationally, both chat, gptand Bard.
We find that they're good atdifferent things.
We find Bard is good forresearch, chat GPT is good for
like bouncing agreements, backand forth analysis, that kind of
stuff.
And then the internal tool webuilt that's like a concierge
(18:17):
assistant, so it basically justhelps our concierge team do an
awesome job while handling, like, a greater flow of requests.
But now we built like aquestion and answer one, which
is something a lot of companieshave done, but we wanted to
build our own rather than usingsomeone else's.
And, generally speaking, when webuild technology, we build it
with the mindset of we're goingto use this, but we also want to
(18:41):
, in the future, let our partnernetwork use it right, because
there's about 1000 businessesthat power those 1.3 million
locations.
So we want to be able toprovide them with really cool
and useful tools, and sort ofthe most recent one that's in
like a testing now and this willbe, I think, a very crowded
area of the market, but a lot ofpeople will do it wrong is
(19:01):
effectively like a travelitinerary planner type of AI, so
basically can map out a wholetrip for you, which I think is
something that's pretty cool.
It's sort of like makes thetravel agent experience instant
and then in our case we're ableto add those booking abilities
plus, if someone has select,then all those savings abilities
(19:21):
and special perks as well.
Speaker 1 (19:25):
Yeah, that's, that's awesome.
I love it.
Love to hear it.
And so we're running out oftime now.
But before we go, what piece ofadvice would you like to give
to other business owners lookingto succeed in this crazy
technological world we live in?
Speaker 2 (19:42):
Yeah, you know, I think it's.
You know, grit and persistenceare really important.
You got to make sure thatyou're passionate about what you
do.
At the same time, I think youknow, look, most businesses
don't ultimately pan out, so youwant to listen to market
signals, right, Like we've had along journey and it wasn't
(20:04):
always straight up into theright.
Sometimes it was a little moreflat during the pandemic, maybe
a dip to little right, but wecould tell that, like, the
overall trend line was up.
And if that's the case andyou're willing to fight, then
you want to push and get it done.
I do think that these days youknow that sort of cash flow
(20:25):
analysis and being a bit smarteron the P and L front.
I do think that's back in styleand I think it's permanent.
I don't think that's atemporary thing.
So these companies previouslythat were able to just grow
revenue while lighting money onfire, I think that's gone.
So if you're looking to startthat type of business, you know
(20:48):
I don't think you're going tohave much luck anymore.
So, yeah, I guess those wouldbe the pieces of advice.
You want to make sure thatyou're passionate about what
you're doing and you want tomake sure that you're providing
unique value to whoever yourcustomer set is.
That's what makes a companyvaluable, that's what lets you
charge, that's what you knowenables P and L to look good.
(21:09):
It really just comes back tocustomer value at the end of the
day.
Speaker 1 (21:13):
Amazing.
I couldn't agree more and,carlo, thank you for your time
today.
I have really enjoyed it.
What is the best way for ourlisteners to reach out to Carlos
Cisco if you have any offersfor them or if they're looking
to sign up for select?
Speaker 2 (21:28):
Yeah, so I'm just my name on every social channel.
The website is justmeetselectcom.
Feel free to apply there or askour little bot any questions
you might have, and if it can'tanswer real humans, will we do
have a whole concierge team thatjumps in anytime they're
(21:51):
enraided.
But yeah, those are really thebest ways to reach out.
Speaker 1 (21:55):
Amazing.
Thanks so much, carlo.
Yeah, thanks for having me.
Hey folks, welcome back to the growing Lean podcast
sponsored by Lean DiscoveryGroup.
This is your host, dylan Burke,also known as Deage.
I'm happy to be here today withCarlo Cisco, founder and CEO at
Select.
Welcome, carlo.
Yeah, thank you so much forhaving me.
I'm excited to learn more aboutyou and your business.
To get us started, can you giveus a little bit about your
(00:27):
history and background and whatled you to Select?
Speaker 2 (00:32):
Sure, yeah.
So I started my first businesswhen I was 18.
I had like an event planningand promotion business while I
was in school at University ofMiami, so mostly doing like
large scale events bringinganywhere from 100 to sometimes
upwards of a thousand people.
So that did pretty well.
At the same time, I was afinance major, so I had
(00:55):
positions across various areasof finance everything from
merchant processing to wealthmanagement and ultimately, when
I graduated, I moved up to NewYork, got a job in equity
trading.
I had gotten into that becauseI had done well in investing
during school.
But as much as I love beinginvolved in financial markets,
(01:16):
it's very fast paced.
It's very exciting.
You get to learn a lot about alot of different companies.
Equity trading was a little bitthe opposite of investing,
where it's very short term focus.
You're sort of capitalizing onmarket arbitrage and other short
term strategies and I kind ofliked to get big on things I
really believed in.
(01:37):
Apple was my first stock backin 2005.
So year and a half into that Iwas getting the entrepreneur bug
again but didn't really knowanyone in the startup space and
sort of out of nowhereacquaintance of mine basically
got a job with Groupon, and thisis back in 2010.
Groupon was in the process ofbecoming the fastest growing
(01:58):
company in history by revenue,so reached out to congratulate
him and a few phone interviewslater ended up moving out to
Japan to help build Groupon inJapan.
So that was a really incredibleexperience.
It was sort of the ultimatestartup on steroids story in
Japan.
I also epitomized that.
But we became the number threeout of 48 total countries within
(02:22):
three months basically sobehind the US and the UK, so it
was one of the better marketsfor Groupon and it really kind
of showed me that there was ahuge demand for a new way for
merchants and customers toconnect.
But I felt like perhaps whatthey were doing didn't really
work as well for premiercustomers or premier brands and
(02:46):
venues.
So that was one of my bigtakeaways and that's certainly
part of the inspiration forselect as well Sort of kind of
combines all of thoseexperiences.
We wanted to create a membershipmodel that was all curated
places or brands, best incategories, how we'll typically
(03:10):
refer to it, and then in allcases, whatever the benefit is
and it's not typically 50%, butit's typically like 15, 30% can
go as high as over 60.
So a lot different than what youwould see from perhaps a credit
card, for example, and someonecould get that anytime they want
(03:31):
, as often as they want, becauseour thought process there is
that this hire to your customerhigh income, whatever they're
busy so they can't go at like anoff time.
They're not the one off salesare actually kind of annoying to
them even because they mightmiss it or whatever.
So we felt like it was a goodway to kind of combine customer
acquisition and customer loyaltyand build a membership around
(03:54):
that and effectively over timeit's basically proven true.
So in a way every experience Ihad kind of inspired select, but
Groupon probably takes creditfor perhaps being the biggest
inspiration, just because itopened my eyes to how big that
opportunity was, you know, basedon how fast they grew at that
(04:16):
time, and obviously it's adifferent story today.
But this is many of the yearslater and they're also
effectively the only ones stillaround doing what they do.
Speaker 1 (04:27):
That's amazing, that's so awesome to hear.
And can you run it through me?
And run me through it in a bitbasic terms?
So it's not a bank.
How does it work?
Speaker 2 (04:38):
Yeah, yeah.
So select today we describe asa digital membership and
concierge service.
We connect people withexclusive events, savings and
perks at over 1.3 milliondifferent locations all across
the world, as well as with avariety of online brands and
services.
So you know, people have toapply for access.
(04:59):
We do turn people away, unlikesome others in the space, you
know and in addition, they haveto pay an annual fee for
membership, but then, in return,access to all the different
benefits.
All the events are concierge.
It's all unlimited,unrestricted, you know.
(05:20):
So people can do, you know, asmuch or as little as they want,
but on average, members getabout two and a half times the
membership feedback just inbenefits, and then they're also
getting access to our conciergeand our events in addition.
Speaker 1 (05:36):
Okay, amazing.
And what is the qualifyingcriteria?
Speaker 2 (05:41):
Yeah, I'm.
We're mostly looking for peoplewho will be able to basically
take advantage of the ecosystemwe've built, because, at the end
of the day, it is a ecosystemright like we want the partner
businesses to be happy, we wantthe members to be happy.
So, you know, in order for thatto be the case, like, you do
need some sort of threshold ofdisposable income, and
(06:04):
disposable income can vary.
You know what sort of likecreates comfort based on where
you live, or, you know, perhaps,personal background or whatever
the case might be.
So that's certainly the mainthing we're looking at.
But then we're also looking at,like, education, interests,
employment, career trajectory,like basically everything to
(06:26):
figure out, like is this persongoing to be a member and, you
know, truly benefit from, fromwhat we do?
And and could they be a memberover the long term and really
take advantage of what we haveto offer and and advice, a versa
, be like an active participantwith the partner network?
So so that's really what we'relooking for.
(06:46):
An income is one determinantbut, but it's definitely not the
only one.
Speaker 1 (06:52):
Okay, awesome.
And in terms of revenue, isthat generated through the users
yearly subscription or do thepartners also pay fee?
Speaker 2 (07:06):
So we don't charge any of the partners.
The membership fee today makesup likely about 90% of our
revenue, so it's certainly themajority.
There are some cases wherewe're getting affiliate revenue
back and then there are alsosome case cases where we'll do
like event sponsorships.
(07:26):
So typically for some of ourlarger events and series, brands
will effectively pay to beassociated with that and to get
marketed to the members and alsoexternally, you know, as a as a
sponsor of an event like that.
You know, over time we thinkthat mix is going to continue to
diversify a bit.
However, we think themembership fee is actually
(07:49):
always going to be greater thanhalf of total revenue.
Speaker 1 (07:53):
Okay, yeah, that's amazing.
And in getting where you aretoday, what have been the
biggest challenges that youfaced?
Speaker 2 (08:03):
Yeah, I mean, look, any startup, especially if
you're growing quickly and youknow it's a tech company like
you're going to have a lot ofchallenges, that's for sure.
You know there's you knowcertainly at times, market
conditions.
You know, as a startup you needto generally raise outside
(08:25):
capital.
We have we've run about twothirds off of revenue.
That's a nice thing with thosemembership fees, as we're able
to use that to make the businessbetter.
But you know, I would say a fewof the biggest ones.
You know, certainly the pandemicwas a bit of a curveball for us
.
That kicked off.
Our most popular categorieswere dining, hotels and events.
(08:47):
So that's an interesting timeperiod for us.
But we just innovated reallyquickly.
We started hosting digitalevents.
We added take out and deliverybenefits with a lot of our
restaurants and particularly atthat time, because they're
mostly higher caliberrestaurants, they weren't really
on these various platforms.
I would say perhaps a largerportion of them are today, but
(09:09):
still not the majority.
We did all these like at homefocused lifestyle benefits,
added business benefits, all ofthat and ultimately ended up
with a higher member renewalrate in 2020 than in 2019 and of
course, it's shifted upwardfrom there and I would say more
recently.
You know we announced a creditcard earlier this year.
Also, I think the whole worldknows that, like, vc, funding
(09:32):
for startups is definitely lowerthan it was a couple years ago.
So you know, the VC funding issomething you have to adjust to.
However, our model just kind ofworks and you know, I think a
lot of the businesses that madeless sense are getting flushed
out of the market sort of justabout every day Pretty much, no
(09:53):
matter what amounts they raise,to some 10s of millions, some
hundreds of millions.
It doesn't really matter if youdon't manage it correctly.
And look, that still plays arole because certainly when it's
a better system and market forcapital that lets businesses
that do have great models scalea bit more quickly and more
(10:15):
quickly, you know, expand theiroffering and do the things that
they do.
And then, you know, certainlywith the credit card, you know
we were able to attract a verygood partner set and it's good
that we established that at thetime that we did.
But but I would say, likesentiments around fintech have
have changed a bit since a fewbanks blew up, right, although
(10:39):
now, you know, the markets kindof come around to realizing why
certain companies blew up andyou know sort of that.
Everything we've built isbasically very much counter to
that entire story.
So it ultimately works out forus.
But yeah, I would say those area few.
Obviously, you know any startupit's a roller coaster.
(11:00):
You have new challenges everysingle day.
Speaker 1 (11:03):
Yeah, 100%.
And is it safe to assume thatretention is like your biggest
what do you call it biggest goalwith your clients, apart from
new customer acquisition?
I'd imagine.
Speaker 2 (11:20):
Yeah, it's certainly one of the biggest, for sure,
and especially because it's beentrending up pretty strongly.
So so our annual retention rateright now is a little over 75%.
So that would put us in theballpark of, or even slightly
better than, someone likeNetflix, for example.
So that's really kind of aboutas high as like direct consumer
(11:42):
software subscription.
You know, we do thinkultimately it can move higher.
That's also part of what we likeabout the credit card, quite
frankly, is credit cards havevery high retention rates
despite not doing a whole hellof a lot.
You know there's the core, ofcourse, providing payments and
doing some sort of rewards, butbut there's not a lot of
(12:04):
diversification, nothing likewhat we have.
So that's one of the things welike there.
But but the cool thing aboutretention as a goal that I like,
just as like an operator isthat like just about every
positive thing you can do feedsinto that goal Getting customers
to engage with your product,making the product more valuable
, making the user experiencebetter All of these things help
(12:28):
build into that retention number.
So it actually is a reallygreat measure of like hey is the
business working out?
And then, of course, the otherinvestor favorite but it makes
sense is like the LTV to the catratio, which is just like
what's like the value of yourcustomer over your life, their
lifetime verse, like the cost ofgetting that customer.
(12:50):
So so retention is always topof mind and definitely one of
the biggest focuses.
Speaker 1 (12:55):
Okay, 100%.
And apart from retention andcustom acquisition, what are
your other performanceindicators that you look at?
Speaker 2 (13:04):
Yeah, that's a good question.
So we definitely look at thecost of acquisition.
Are we acquiring peopleefficiently?
We look at broader engagement.
We generally like to seeengagement going upward,
especially as the membershipgrows.
Like membership's going toroughly double this year, so
that means that engagementshould effectively more than
(13:26):
double.
Right Now it's personal becauseit depends on when those people
are joining and all of thosesorts of things.
But yeah, we're looking atengagement, we're looking at
overall efficiency.
We're also just looking at,like, would we be excited about
this if you know when we are all, in a way, you know, customers
(13:48):
of select?
So those are basically thedifferent things that we think
about.
So perhaps engagement would be,like, you know, number three
after just sort of growth andretention.
Speaker 1 (14:00):
Okay, amazing, and on this journey, how long have you
been doing this for?
Speaker 2 (14:07):
Yeah, so we have been growing select for about eight
years, so we've been doing thisfor a minute, so we've
definitely seen all thedifferent ups and downs that you
can see.
But you know, it's an excitingjourney and it's also exciting
after that period of time to begrowing as quickly as we are
(14:28):
right now.
Speaker 1 (14:29):
Yeah, 100%.
Could you run us through acouple of the notable
accomplishments on a timelinesort of basis?
Speaker 2 (14:40):
Yeah, sure Cut out for a second, so sorry.
Speaker 1 (14:43):
No worries.
Speaker 2 (14:45):
You know, timeline perspective, you know I think
getting up and off the groundwas was number one, really right
, and that happened, you know,really towards the end of 2014.
And as soon as we were up andoff the ground, you know I would
say paying customers as thenext one, and we took a
different approach there.
A lot of people will just kindof give away things at first to
(15:08):
like kind of user tests, but Ididn't think that was an
accurate user test, so we did abeta instead, set up a table
like New York Tech Day and justlike hard pitched people on
signing up, signed up a fewdozen people and then, of course
, continue to take it from there, you know, sort of when things
really picked up for us.
(15:29):
So we actually closed thepublicly traded client before we
started formally launching themembership.
So, like during this beta phase, that was UDR, which is a
publicly traded real estateinvestment trust.
They bought memberships forsome of their buildings.
But then early 2015 is reallywhen, you know, the direct
(15:50):
consumer membership started totake off.
That's that's when that startedto grow quickly and you started
to see the revenue go up likethat, and then for a while
during that period is just aboutgrowth and, in our case, like
adding markets, and we alwayshad like hotel and travel
benefits that were global, butwe sort of did a market to
(16:11):
market launch approach.
So now there's about 25 ofthose markets, but we have
members in like 11 countries.
So, like, well, outside of anyof those markets, those are
almost all in the US.
There's one in Canada, one inMexico.
So, you know, these days it's abit more about like, what can
(16:32):
we do next?
Like what's the next valuedriver, what's the next growth
driver?
Really.
So you know was around the endof 2021 when we started to put
together our credit card deal,so that was a big milestone for
us.
We were able to announce thatthis year, so that also, in a
way, felt like a milestone.
(16:54):
And you know, now you knowwe're just getting into all
sorts of different things.
So I really think the next setsare just going to be around
compounding the membershipgrowth and then like getting
into some other market areaseffectively that we think are
interesting.
We think private marketinvestments are interesting.
(17:15):
We think AI is interesting.
We built our first likeinternal AI in 2018.
So we've had some experiencethere, but we think there's
going to be a lot happening inthat side of the market.
So, yeah, most of it's now isaround innovation and using that
as a catalyst for for futuregrowth and for member value.
Speaker 1 (17:37):
Okay, amazing, and yeah, I can definitely agree
that AI is going to be a hugetopic of conversation.
It's exciting times we're in atthe moment.
What are the tools that you usebesides your internal one?
Speaker 2 (17:54):
Yeah, so we're certainly using the platforms
operationally, both chat, gptand Bard.
We find that they're good atdifferent things.
We find Bard is good forresearch, chat GPT is good for
like bouncing agreements, backand forth analysis, that kind of
stuff.
And then the internal tool webuilt that's like a concierge
(18:17):
assistant, so it basically justhelps our concierge team do an
awesome job while handling, like, a greater flow of requests.
But now we built like aquestion and answer one, which
is something a lot of companieshave done, but we wanted to
build our own rather than usingsomeone else's.
And, generally speaking, when webuild technology, we build it
with the mindset of we're goingto use this, but we also want to
(18:41):
, in the future, let our partnernetwork use it right, because
there's about 1000 businessesthat power those 1.3 million
locations.
So we want to be able toprovide them with really cool
and useful tools, and sort ofthe most recent one that's in
like a testing now and this willbe, I think, a very crowded
area of the market, but a lot ofpeople will do it wrong is
(19:01):
effectively like a travelitinerary planner type of AI, so
basically can map out a wholetrip for you, which I think is
something that's pretty cool.
It's sort of like makes thetravel agent experience instant
and then in our case we're ableto add those booking abilities
plus, if someone has select,then all those savings abilities
(19:21):
and special perks as well.
Speaker 1 (19:25):
Yeah, that's, that's awesome.
I love it.
Love to hear it.
And so we're running out oftime now.
But before we go, what piece ofadvice would you like to give
to other business owners lookingto succeed in this crazy
technological world we live in?
Speaker 2 (19:42):
Yeah, you know, I think it's.
You know, grit and persistenceare really important.
You got to make sure thatyou're passionate about what you
do.
At the same time, I think youknow, look, most businesses
don't ultimately pan out, so youwant to listen to market
signals, right, Like we've had along journey and it wasn't
(20:04):
always straight up into theright.
Sometimes it was a little moreflat during the pandemic, maybe
a dip to little right, but wecould tell that, like, the
overall trend line was up.
And if that's the case andyou're willing to fight, then
you want to push and get it done.
I do think that these days youknow that sort of cash flow
(20:25):
analysis and being a bit smarteron the P and L front.
I do think that's back in styleand I think it's permanent.
I don't think that's atemporary thing.
So these companies previouslythat were able to just grow
revenue while lighting money onfire, I think that's gone.
So if you're looking to startthat type of business, you know
(20:48):
I don't think you're going tohave much luck anymore.
So, yeah, I guess those wouldbe the pieces of advice.
You want to make sure thatyou're passionate about what
you're doing and you want tomake sure that you're providing
unique value to whoever yourcustomer set is.
That's what makes a companyvaluable, that's what lets you
charge, that's what you knowenables P and L to look good.
(21:09):
It really just comes back tocustomer value at the end of the
day.
Speaker 1 (21:13):
Amazing.
I couldn't agree more and,carlo, thank you for your time
today.
I have really enjoyed it.
What is the best way for ourlisteners to reach out to Carlos
Cisco if you have any offersfor them or if they're looking
to sign up for select?
Speaker 2 (21:28):
Yeah, so I'm just my name on every social channel.
The website is justmeetselectcom.
Feel free to apply there or askour little bot any questions
you might have, and if it can'tanswer real humans, will we do
have a whole concierge team thatjumps in anytime they're
(21:51):
enraided.
But yeah, those are really thebest ways to reach out.
Speaker 1 (21:55):
Amazing.
Thanks so much, carlo.
Yeah, thanks for having me.
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