Kat Cole (03:40):
And then from that point as a 20-year-old, helping to lead a department in the corporate office, which is what got me to Atlanta, Georgia. Again, as the company grew, I grew. And every few years, I took on more responsibility. And then just six years after starting my corporate journey, I became an executive with the company.

Trey Lockerbie (03:59):
Well something just stood out to me there, because you said you’ve worked multiple roles. I even heard or read that you at one point as a waitress would jump in and work the cooking line, if needed. So where did that drive come from? I mean, that’s a fairly uncommon trait that you don’t see very often.

Kat Cole (04:18):
I don’t know that it would be fair to it drive. Back then, I can look back and see the patterns of doing many things like jumping in the kitchen and really assess what was going on. It was in part curiosity, just like, can I do it? It was also a genuine desire to be helpful. I’m a helper. I always have been. People need help. I raise my hand. I go help. All the cooks quit one day. That’s how I ended up in the kitchen cooking. One day, the bartender needed to go home to take care of a sick kid. So I ended up working a bartender shift. The manager needed help shutting down the restaurant. So the answer was just always yes. So there was this deep curiosity to see can I figure it out? There was a true desire to be helpful.

Kat Cole (04:59):
And then the third driver was whatever you want to call it. Selfishness, personal reliance. I was paying my own bills. We were very, very poor when I became of working age and needed to save up for my life’s expenses. So more shifts meant more money. And different types of shifts being added to the menu of options of shifts also meant more opportunities. So I also can’t remove that from the equation of what looks like ambition or drive but was simply like, “Oh great, more opportunities to make money.” So curiosity, helpfulness, and then this concept of either selfishness or self-reliance.

Trey Lockerbie (05:39):
So as I understand it, your father at one point was more of in a white collar role, and you had a comfortable upbringing to a point. And then it changed. So you went from that to living on very little. Do you see that as playing into this in any way where sometimes, you’ve kind of seen the potential a little bit, right? Were you trying to get back to that level of comfortability at such a young age?

Kat Cole (06:03):
No. In fact, it was the opposite because we left my dad when I was nine. And yes, we had a comfortable living compared to everyone else on all sides of the family. My association with that was a negative one. We had holiday gifts, and we had a car, and we had a house that wasn’t on wheels. And we had not good things going on in the home. So in my mind, the one person with the fancy job on either side of the family equaled bad stuff. So it was the opposite. I wanted nothing to do with money. As soon as I made it, I gave it away. In fact, it became a real missed opportunity, because I didn’t save and have the thinking around financial planning that would’ve benefited me even more, because I actually started making a lot of money very young, because I was such a young executive. And I just wanted to give it all away. I didn’t want anything to do with it. I had a very unhealthy relationship with money.

Kat Cole (07:04):
The good news is it led to an abundance mindset. If I need it, it will come. And even if I don’t need it, if I’m doing things I love, it will come. And it did. But at the same time, it was something that I felt was deeply tied to negative outcomes and behaviors. And it would take me time to figure out the healthy balance in between those things.

Kat Cole (07:24):
What did tie to the drive was this desire to be independent and not be reliant on people like my father or other elements of my family. I just wanted to learn. Doing something tomorrow meant I was going somewhere, right? Different even for the sake of different was progress in my mind, and learning became my currency.

Trey Lockerbie (07:47):
That’s so interesting. Yeah. I’m just fascinated by this idea of nature versus nurture, right? Where people as driven as you who achieve so much especially so young, where that comes from. If it’s environmental or just comes from within. And I love the idea that money is more or less a byproduct, right? And you mentioned being a helper. And I imagine just putting all that good karma or driving the ship with that kind of good karma led to that abundance you kind of speak about. Really interesting.

Trey Lockerbie (08:14):
You mentioned dropping out of college at one point, because you were so busy, which I can relate to. I was curious because when I’ve heard you speak, you come across as one of the most intelligent speakers that I’ve heard. And I wonder if you have a practice of writing. And I’m also kind of curious if you were a good student. I’m fascinated by kind of the book smarts versus the street smarts, and you kind of seem to have both. So I’m fascinated by that.

Kat Cole (08:38):
I was a very good student. Advanced, AP, all of those things. I excelled in every subject in school until my senior year. And I just got lazy. It wasn’t challenging. I wanted to be a rebel. I was hanging out with people who were far my senior. I barely eked out my senior year with decent grades. I mean, it wasn’t horrible, but not compared to my straight A’s, 4.2, 4.3 of literally everything leading up to that. Made my mom a little nervous, but everything worked out all right.

Kat Cole (09:11):
So I was a great student generally and had an inclination toward academics. So there is some core book smart there. And I was put in situations all around the world with a complete lack of familiarity of culture with people I had never met before. And that forces at least in anyone who wants to be successful, it forces a muscle of excellent communication. Not only articulation, because I’m in other countries and yes they speak English. But needing to speak clear English, not what I would call comfortable or lazy English was critical in order to be understood.

Kat Cole (09:56):
And so very quickly between the ages of 19 and 20, I completely lost my accent. That was very deep from growing up in Jacksonville, Florida. Which is basically South Georgia. Often people will hear me and say, “I literally cannot tell where you’re from.” And it wasn’t a goal of mine. It happened because I wanted to be understood more easily and I needed to articulate very clearly in order for that to happen. So that occurred organically.

Kat Cole (10:25):
On the other side of speaking, or words, or intellect, words have definitely been my jam for a long time. I have pictures of me speaking in front of groups when I was three years old. So it would be one of those how it started, how it’s going memes for sure. And I’ve been a large scale public speaker for a very long time. So when you have to say a lot in a little amount of space to people you don’t know, that also builds a muscle of communication.

Kat Cole (10:51):
But I do believe the thing that formed my ability to communicate in a way that is clear and approachable, but still intellectual is running businesses from a young age, and needing to be in various stakeholder groups. From lawyers, to attorneys, to the press and media. Hourly employees, executive employees. This really pushes on the need to get through, to get a message across. Not to just be good at saying what you want to say, but understanding that the real goal is to be heard, and felt, and valued. And that again, it’s like this water weathering rock to build a really strong foundation for communication.

Trey Lockerbie (11:33):
I’m curious, what did you apply at Cinnabon maybe that you learned up to that point? What was iterated on? And do you believe that there’s a one-size-fits-all for every company, or do different companies need different customized approaches?

Kat Cole (11:49):
Well, we probably need an entire podcast to thoughtfully answer that question. So I’ll just touch on a few things that come to mind. But the answer is much deeper than we’re going to have time for. So one as it relates to what translated. From chicken wings to cinnamon rolls, from casual dining with alcohol, corporately owned and franchise to almost solely franchise snacks, malls, airports. A lot translated, all of it translated. It may have evolved or tweaked a bit, but the fundamental approach of being obsessed with the customer, obsessed with the key stakeholders. In this case, franchisees, and employees and the closest, most enabling vendors. Obsessed with them, in love with of them. Really wanting to understand what’s going on in their life right now and how our business affects that. That is a major key if you will to apply anywhere, always, and forever. And the questions are the same, the answers are different. And then the resulting actions are targeted to that particular environment. So that’s one thing that translated.

Kat Cole (12:56):
The other thing that translated is out of my 15 year tenure at Hooters, only two years was spent in the orange shorts, actually serving wings and serving beer. I was doing other things as that second year occurred, like opening franchises, and helping to train other employees, and going to other restaurants. But I was still a waitress in between those things. I was still an hourly employee with no contract in Jacksonville, Florida.

Kat Cole (13:21):
And that experience of being a waitress, a server in a casual dining environment where my income was tips. This was a tipped wage state, right? So the base tipped wage was $2.13 an hour. So all your income is tips. Which means the customer’s experience is so literally tied to my financial success.

Kat Cole (13:43):
And when you have the privilege to be in a situation where you have such proximity between your effort, the customer’s experience, and the returning appropriate value, that is a very tight feedback loop. It is instant. If they don’t like it, I can see it. I’m not wondering what was the unboxing like? I’m right there.

Kat Cole (14:06):
So that is a powerful training ground for a customer-centric mindset, clear on how value is created and shared. I can be a great waitress, but if the cooks aren’t competent, the outcome. So you can just see how literally the entire value chain is right in front of you. And you’re at the beginning, the middle, and the end of it. Including receiving the food and preparing the food. And it’s just such a powerful training ground. And even though that was only a small piece of my overall Hooter’s tenure, it has never left. The way I think about the world, customers, employees, brands, and how deeply I appreciate the connectedness of all the things in the business. So I could go on and on, but those are two things that certainly translated.

Kat Cole (14:53):
And then in terms of frameworks, I am the queen of frameworks. Partly because I was asked a lot of questions like this from a very young age. “How did you do that? Why did you do that?” And it made me think, and it made me reflect. And then when I became a public speaker, I was forced to put things in a nice package that was easy to remember and to apply for one’s self in their own environment. So the frameworks, because I was in so many different environments, became necessary. Because I couldn’t remember or translate every individual varied situation, but I could see the patterns between them and use that as something that would make each endeavor, or team, or challenge, or brand to make that learning curve a bit faster, and to help others and ask their own questions that I had learned to ask, but then come up with answers that were relevant to their situation. So I developed a lot of what would be considered frameworks that I largely used to populate my newsletter today.

Trey Lockerbie (15:53):
I know that you’ve since moved on into this role of more of an advisor and investor. So I’m curious, do you examine the systems in the companies that you’re interested in investing in? Do you audit them in any way? Do you let entrepreneurs develop their own? How do you kind of think about your active role in your investing?

Kat Cole (16:11):
You know, it’s a big, giant asterisk. It depends. If it’s pre-revenue, and an idea, and I’m investing in the founder, then of course I’m not evaluating frame. But there are no frameworks, right? It’s more can I use the frameworks that I have applied and the resulting set of outcomes as a frame of reference through which to see the opportunity? So the frameworks are more about my experience and my filter. And how do I connect with the founder, the market opportunity, and then how those two things are converging to create whatever this business.

Kat Cole (16:46):
It’s very different at early stage pre-revenue or just post-revenue seed stage than it is something much later. And even then as an investor, because I’m not an institutional fund leading a round. I am typically a contributing angel, a follow on investor, or strategic advisor being brought in. I’m being brought in to help them learn these frameworks. So I don’t expect nor do I judge if someone early in the journey doesn’t have these things in place. For the founders, and funds, and companies that I’m heavily involved advisor, these frameworks are a lot of what we talk about and spend time discussing how they can put their own version of it in place if it’s what’s needed where they are in their journey.

Trey Lockerbie (17:31):
Do you have a rudimentary framework that you would start with? I know it’s objective, but is there something fundamental that you think every leader of a company should enact and it’s kind of a basic principle for you?

Kat Cole (17:45):
Yeah. Ask answer act. Quickly, in proximity, often. That’s it. Every one of my frameworks fits into that framework. It is a question looking for answers. The goal of ensuring that there is an environment in which the answers flow freely and candidly, or that you are able to give the answer freely and candidly. And then action on what you learn. Rinse, wash, repeat. Every one of my frameworks is a series of questions, and then the answers guide the actions. And the actions are what make the difference and progress.

Trey Lockerbie (18:21):
So as I understand it, you were placed as president at Cinnabon right during or right after the financial crisis, essentially. The Great Recession that incurred or ensued thereafter. This turnaround was incredible. It kind of reminds me of when Buffett invested in American Express because there had been a controversy of sorts. People had lost faith, but the brand was so strong that he knew it would recover. And Cinnabon seems to follow a similar narrative there. The brand was incredibly strong. I’m curious when you took the reins there, what were some of the biggest challenges on day one? I imagine there was a lot of ancillary just because of the environment, the economic environment. Were there cultural challenges as well? Were there any other things that stood out to you that you had to address on day one?

Kat Cole (19:10):
Yeah, none of them that I could address on day one. I’ll tell you that. Day one, you’re looking for the back room and trying to meet people. But one, in terms of the economics stability of the business, they’d had multiple years of high single digit, low double digit top line sales declines because of not only the recession, but in particular being primarily based in malls and airports during the recession. And when people don’t have money, there are two things they stop doing, shopping and traveling. So you just lost the humans. And this had nothing to do with eCommerce yet. Right? It was just like people had no money. So they were saving it and not doing these things, and the businesses and those venues were hurting. Then on top of it, there was this just overall shift with the few people who were coming in, and consumer preferences, even for indulgent businesses.

Kat Cole (19:59):
And we were a premium price dessert, which is not the best place to be during a recession. And at the time, the business model was a highly infrequent visit, like 1.4 times per year. So if you miss people that 1.4 times per year, you don’t have another chance. So there weren’t alternative channels of revenue outside of the base business. There weren’t alternative for the franchisees. There weren’t alternative channels that we would eventually lean into like grocery and other massive markets that have a far higher frequency rate and much more opportunity around the world. So just the brand was beloved, but the business model was flawed. And it had become broken over time relative to the evolving environment.

Kat Cole (20:45):
The other element of the business model that was challenged at the time is we sell food. That’s part of what we sell, but we also sell franchises. And in order for franchises to expand, you need lenders. Well, I’ll tell you who a lender was least likely in 2010 to loan money to. A first time business owner for a concept based in the mall at the heart of the recession serving a cinnamon roll the size of your face, famous for sugar and fat at the height of the Atkins craze, which we joked was the Atkins crisis for Cinnabon.

Kat Cole (21:13):
So now there’s this lending crisis broadly, that definitely was particularly detrimental and exacerbated for a potential Cinnabon franchisee. So both growth levers, growing units, and grow sales out of the units were depressed. So you had that sich. It was very interesting.

Kat Cole (21:32):
And then on the culture side, you have very tenured franchisees, incredibly tenured employees who love the brand, but they were tired. They had been beaten up, losing. Whatever you want to call negative sales. It’s not winning. Losing that many you in a row is hard. It’s hard on your heart. It’s hard on your pride. Especially because in the years prior, you are used to all I do is win. It was the biggest brand with the highest volumes. Everybody loved it. So that’s a big crash from an ego perspective, not to mention franchising as a business model. These are small business owners that have their life savings, most of them in these businesses. So it’s particularly emotional. I also had the largest franchisee who owned a third of the units was essentially insolvent because he was running a borderline Ponzi scheme out of the restaurants. It was so crazy. And had to deal with that. And then our reputation with the malls and developers as a result.

Kat Cole (22:24):
So you just had all this mess of legal stuff, franchise stuff, optics, emotions, culture. And then the business model needed to be fixed. And we needed to go into channels that we really had only begun to explore. So that was the diagnosis.

Trey Lockerbie (22:40):
What I’m hearing is that because you then ventured on to different channels, you must have seen this optionality of the brand that wasn’t apparent to the people before you. And that’s what’s so interesting. I’m wondering if it’s where that comes from, what led you to think outside the box. And I’m remembering right now, you mentioned that Hooters at one point had a airline. They were definitely doing what Jim Collins would call the bullets and cannon balls sort of approach where they’re firing bullets, seeing what sticks, and then going bigger into this. So I guess I’m just curious, is there something that you applied in this scenario that was like, “Okay, we got to think outside the box here and optionalize this brand a little bit more”?

Kat Cole (23:16):
It was just so obvious. Maybe that was the gift of fresh eyes. To your point. I had grown up in an omnichannel brand before omnichannel was cool. We had a hotel, we had an airline, we had a casino, we had our own merchandising company. We were fully vertically integrated. I grew up with a brand that was far beyond the places it belonged, just because it was in places, doesn’t mean it was successful or the right place. But my belief of where a brand could go was certainly in part shaped by my experience at Hooters. And I was just a young consumer.

Kat Cole (23:49):
You have to remember, I’m 31. When I’m taking over Cinnabon. I’m a consumer, I’m a fan. I am of the modern era. I’m on Twitter. And none of my president peers of brands were even on there. It’s just a different mindset when you’re technologically name representing literally a different generation, and came out of a brand that was expressed in so many creative ways. And to the credit of the company and the leaders who came before me, they had begun the journey of alternative channels.

Kat Cole (24:19):
They had a little bit in grocery. It was just no one put on the gas. And in order to put on the gas, you had to step back and really deconstruct the brand, figure out where it had permission to go. And then in order to go there, what do you need? And are you going to rent that capability, build it, or buy it?

Kat Cole (24:37):
So there were little sprouts of the opportunity already in the company. I didn’t start licensing and omnichannel at zero. They had played. There were one or two lines of business that were clearly material and had tons of opportunity like Pillsbury, but it was so linear. And it wasn’t a model being applied across that brand, much less the other brands, which I would later go help do.

Kat Cole (25:01):
So that was the magic was both who I was as a young consumer, what I believed was possible for the brand. And then it’s all about execution just because I had these ideas and saw the potential and so did some others in the company, clearly it hadn’t been done to that extent before. And execution was part of the challenge in a franchise business. Getting franchisees to appreciate the opportunity for the brand and how it actually served them as opposed to competing them. And that was the art part. I brought the art and heart that is needed to build a branded ecosystem across channels, because doing it just on the science and compliance doesn’t work. Not when you have that many stakeholders. So it wasn’t just the vision to see what was possible. It was the ability to test, learn, bring it to life, build trust, resource the organization appropriately, and have the humility to decide when it was time to not build the capability, but partner with someone else that already had it.

Trey Lockerbie (25:59):
I’ve been speaking with a few investors, and they’ve brought up this potential of optionality as more important that I ever would’ve thought, especially when you’re making an investment. Just knowing how much of an advantage it is to have a lot of optionality. Amazon comes to mind, other brands that have ventured into other spaces. And what it’s got me thinking about a lot lately is mission statements and how important they are. So for example, Tesla’s is to advance the adoption of sustainable energy, right? It’s not to make the best car. It’s to advance the adoption of sustainable energy, which means that it does make sense for Tesla to now do solar panel roofs and to do big batteries, etc. Is there a mission statement or was there a mission statement for a brand like Cinnabon that you said, “Okay, this can be applied in these markets or through this lens”?

Kat Cole (26:50):
Yes. But I will say, most companies that are well known today that have mission statements that seem so inspirational and obvious, that was not their mission statement when they started. Right? It was like, I don’t a case for Tesla, but I’m sure some car companies, it started as make a better car. Get people to where they need to go in a classier way.

Kat Cole (27:09):
And then as they mature as a company and realize what they’re doing is more than their product, that’s typically when the mission statement levels up a couple notches and becomes this umbrella under which many things can sit. So for anyone earlier on the journey, don’t beat yourself up if your mission statement doesn’t give you the permission to become Amazon.

Kat Cole (27:30):
And yes, Cinnabon had a tagline that was a statement of inspiration that helped guide where we could go. And it was life needs frosting. And it was about giving people an indulgent moment wherever they are, because life is hard. And then that had to be then interpreted. Well, what does that mean in cereal? What does that mean in coffee? What does that mean in a fresh bakery? What does that mean in visual creative? What does that mean for how we talk to our franchisees? Right? This brand voice, brand truth, brand approach. It’s more than a mission statement.

Kat Cole (28:08):
The mission statement typically is the why we exist, what we are here to do at kind of a platform level, because you do want to give yourself permission to extend. But most product companies don’t have that stated really beautifully in the early days. It’s once you realize what you’re actually doing with the very linear thing you started with, and you’re like, “Oh wow, we’re bringing people moments of joy.” But the mission statement is important in that it helps ground in the why we’re here, and it will evolve over time. It is not the key to the brand of the business being successful, but it is a helpful piece of content that allows for a more consistent understanding of what is behind the approach to the business, and what it’s trying to do in the world.

Trey Lockerbie (28:59):
I love life needs frosting. It really does highlight how powerful a brand is, and what it brings up in your mind. And the question that came to my mind is what are you really selling? Yeah, you’re selling cinnamon rolls the size of your face as you put it. But what are you really selling? And you’re really selling that sparking of joy as you mentioned, that moment for people. And you realize that. Would you consider that at least part of the secret saw that makes up what these billion dollar brands that you’ve now managed? I mean, how does McAlister’s Deli, how does that compare to something like that in the portfolio? And are there similarities?

Kat Cole (29:36):
You know, there are similarities in that what you’re hoping for and what is likely you have built at least at some point if you are a scaled brand, because otherwise you wouldn’t have been successful is some emotional connection. Because most things in their product form are replicable, and you could argue are commoditized. So then what is a brand? And it’s a lot of things. It how you do what you do. It’s why you do what you do. It’s what you say. It’s how well you deliver on those statements and promises. It’s the consistency over time. It’s every touch point that the customer has, which at the beginning is a single product and some marketing messages. But over time, has more to do with their interaction with mistakes, and humans, and all of that at scale.

Kat Cole (30:18):
So what was true at Cinnabon is we were so that life needs frosting was also then well, what does that mean we deliver? We deliver irresistible indulgence, and that needs to be true relative to whatever channel we go in.

Kat Cole (30:32):
So is the coffee with green mountain Keurig, the Cinnabon license partnership as indulgent as a classic cinnamon role baked fresh in a bakery? No way. You can’t even put them on the same sweetness scale. But relative to their category, that Cinnabon coffee was irresistible indulgence. It’s the work that went into the flavor profile and the aroma to make your eyes roll back in your head to be like, “Oh yes, the perfect note of yeast, and butter, and cinnamon, and dough that coming through in a light roast coffee that is gluten free and fat free is different,” but it’s the same things are true relative to that category.

Kat Cole (31:11):
For McAlister’s, for anyone who doesn’t know, it’s literally a cash machine. And one of the most successful franchises in all of food franchising, and has very large and sophisticated franchisees. And it came out of Jackson, Mississippi, and they sell sandwiches and salads and are known for huge baked potatoes and delicious soups. It’s Americana at its finest. It is not the sexiest, trendiest, juice, dessert, whatever brand. It wins because of its model of hospitality. They’re famous for their sweet tea, and you get free refills. And the portion sizes are enormous. The value proposition in terms of value for money is like high top decile of all restaurant brands. And this Southern inspired hospitality that transcends no matter where it is part of what makes that brand special. It’s community connection. So big groups go eat there. Families after a soccer game, a whole church group will go and have a lunch there. It skews families and it skews older, but it’s also very close to college campuses. So college kids love the value proposition.

Kat Cole (32:16):
So that is about home favorites that you remember, but better. It’s like baked potatoes, and sweet tea, and club sandwiches, but better. No offense to moms, our moms that have made them, but it’s plussing up a classic. So super different from life needs frosting, right? It’s like community connections, home favorites done better. But consistently at scale over time. Which is a credit to the franchisees, a credit to the original recipes and brand.

Kat Cole (32:44):
And then you have Carvel Ice Cream, almost a 90 year old brand that has a very different value proposition. Jamba Juice, which is one of the largest smoothie and bowl chains in the world. Very different value proposition and mission statement.

Kat Cole (32:59):
Now there are similarities because you’re affecting communities, you’re serving food. You’re doing it in generally accessible price point. These aren’t aspirational Uber premium brands, nor are they value fast food brands that kind of live in this middle tier. So there are similarities, but there are distinctions, which is what’s allowed these brands to become most of them, billion dollar brands.

Trey Lockerbie (33:21):
Something came up a minute ago. You mentioned community and how that impacts brand. And that’s a word that I’m hearing a lot lately. Community, community, community, this Web 3 development, etc. And what I’m marking back to in my mind lately is when I was a kid, there were all kinds of let’s call it communities or whatever. You see something on a cereal box, and you cut it out, and you mail it in. And you become part of this sort of membership of sorts. There’s a loyalty element to it. So these ideas are not necessarily new, right? As far as creating exclusivity, there’s such a movement happening right now around this idea of community and getting brands to be so interactive with their customers, especially digitally.

Kat Cole (34:06):
You’re absolutely right. What we’re seeing with Web 3, the evolution to the ownership economy, where people are not just participants, but creators, owners, shapers of companies and brands and economies through DAOs, and crypto, and NFTs. And just the overall mindset. It is an advancement of old forms of loyalty, rewards, ownership, and community. And whether it’s old school like points and rewards programs that are being brought into a modern era with far more transparency and traceability, or the idea of a digital good, which is not new. People have been buying coins, and things, and games for literally decades. We’ve been buying things that allow us to play in a universe. Now it’s just the universe is our life. And it’s the metaverse. And the why is one, the technology has advanced to such a degree that it is unlocking the opportunity for the individual to have the power, as opposed to the few who were able to build those technologies and capabilities. Whether it was the search engines, or large industrial complexes, or companies, it’s an individual.

Kat Cole (35:22):
I can go mint an NFT right now, publish it on chain, have it tied to a course or a community, issue regular rewards, allow those people to stay with it if they want or sell it to someone else, have proof of attending an event. So affiliation, the desire to connect. The ability that this technology brings for any individual to find their people, to have a voice and find their people. I mean, I am pretty deep in the Web 3 space, at least as corporate types are concerned. And I do subscribe to the theory that the future of cities are being formed right now in these mini communities, DAOs, and NFTs. If people have gotten into NFTs, if they own a cool cat, or an ape, or a punk, right? The IRL get togethers are already happening. The building of cafes and bars for membership are already happening. The idea of future of cities. I mean, if anyone’s heard what Marc Lore is building with the idea of designing a city with a particular life in mind, that of course requires physical land, but long before that requires a digital community to come together, and develop governance, and common interest in ways of working. I mean wow. We are living through such a wild revolution to shift power to individuals.

Kat Cole (36:39):
And as it relates to brands, that represents not only an opportunity, but what will become a foundational requirement to respect and cultivate community. Otherwise, you are literally a commodity. Anything, almost anything can be duplicated if you have the capital. And capital is certainly not limited at this point. So if anything can be duplicated, then what differentiates? It’s brand. What is brand? Culture, a promise of how we’re going to do business. What we’re going to do and how we’re going to do it. And now that can be shaped and voted on. People can vote with their wallets, their digital wallets, as opposed to just with their feet. And of course, this is revolutionizing work. It’s revolutionizing community. But Web 2.0 is more about audience. This is now community, and you’ve seen these power businesses, power brands seemingly come out of nowhere because they obsessed over a tiny core customer cohort that became community. And then that has exponential growth around it, because then they market and attract many rings out of customers. And you see these 10X, 20X, 50X, 100X growth stories of brands and sectors that are not solely software, which is credit to people who know how to build community.

Trey Lockerbie (37:56):
Couple questions come to mind from that. Do you think brands will be defined by the communities in the future? Meaning right now, the companies have the power to define what their brand is. But you start giving ownership out to your community, and they start building upon that and iterating on it. Will brands be more democratized and the brand meaning of something over time?

Kat Cole (38:17):
I mean, the short answer is yes. But the is brands have never been the sole driver of their brands. You make the thing for a customer. You build community around that or audience. It was audience before. You listen to them, you evolve based on their needs. If you do it well, you grow. If you don’t, you die.

Kat Cole (38:35):
So the foundational truth of brand being shaped by community and audience before has always been there. It’s just shifting to a more literal truth now, because the community, or the consumer, or the participant has so many frictionless options for alternatives. So if you don’t get it right, your death is accelerated. Your business death is accelerated.

Kat Cole (39:00):
So I just believe this has always been true for the brands that have endured. And certainly in the recent decades, the brands that have not only endured if they were legacy brands or come out and then real winners. And taken a ton of share, an even created market, are the ones that have built brand identity through community and given their community power and voice. Think about Nike, think about Patagonia. Think about Tesla. Think about Peloton, right? These are communities that people jokingly call cults. It’s because they’re communities. And not every user or customer is part of a deeply engaged community, but there is a powerful enough community fueling the business. And the smart brands know how to feed that community. In the case of Peloton, they make their instructors stars, right? They make their stars stars, and they reward the community for being on the journey and staying on the journey. I mean, it’s one of the more literal business cases of seemingly out of nowhere, community centric, community driven versus audience and marketing. The old CPG big company playbooks of the ’70s and ’80s, billboards, mass marketing, put it out there. You see it. It’s not a crowded enough marketplace for something else to creep into your mind. Therefore you buy.

Kat Cole (40:16):
The more we spend, the more you buy. Then the kind of creeping evolution of growth hacking and performance marketing still if you see it, but now it’s digital, see it. And digital ads. And again, performance marketing. I can buy my customer, but you still have to have community and something that’s differentiated indoors over time to have low churn and a lowering cost of customer acquisition to have a valuable customer cohort over time. And now, especially with recent changes and data laws, and Facebook, and the whole growth hacking performance marketing approach alone doesn’t work. You literally have to have community that has a voice that can help you keep your brand healthy over time.

Trey Lockerbie (40:56):
I’m recalling a question from earlier, especially when you brought up NFTs and things like cool cats and apes. What are they really selling? Right? What does a cool cat afford you when you buy it? You have the NFT, you’re part of the community. What is that saying about you? And where does that live in the metaverse?

Kat Cole (41:16):
It’s actually just so beautiful. Because one, it’s a media property. It’s an asset, it’s IP. And it’s art, and art is in the eye of the beholder. But in the case of cool cats, literally is an artist who has been drawing these types of figures as an illustrator for years and years. So there’s truth to the art [inaudible 00:41:40].

Kat Cole (41:40):
And then there are a group of co-founders partnering with the artist to turn this into community and something that endures as an enterprise. And that could mean gaming, apparel. Literally think of Marvel, or Disney, or universal, and what these characters brought to life by illustrators become in our lives as a franchise.

Kat Cole (42:06):
Now add to that the community that is inspired by social media, inspired by IRL activities like Pokemon, right? And gaming. And you’re literally bringing together elements of ’80s, ’90s gaming culture, with what we already know and love with media franchises. With in many cases not widely known, but deeply respected artists and creators. And then with all of that coming together, there’s actual functionality, which in the Web 3 world is called utility, where you do things with it. And it actually, if you’re buying it and you’re participating, not always because things can go to zero. But often, has the potential to be liquid, right? And if you need to get out, you could sell it. And if you have a few, you could sell some and keep some, which keeps your membership in the community. And yet, even people like cool cats for an example, you don’t have to have a cool cat NFT to be a part of the community and the Discord. Sometimes people hear about it, and engage, and find their opera opportunity to engage in the community through the community. But they don’t have the NFT.

Kat Cole (43:18):
So they don’t have something that unlocks other utility and value add elements. So it is community. It is franchise. It is IP, it is utility. And it’s just becoming identity for some people, right? The fact that some of these things were in this era of almost celebrating anonymity, and you see people with a Twitter handle that is their crypto punk. And many don’t know who that person is. And that’s kind of fun, right? You can just be your crypto punk.

Kat Cole (43:50):
When I had my cool cat NFT as my image, there are a lot of people in the NFT community who see me tagging in different cool cats, Twitter things, or in the Discord, they have no idea who I am. And that’s really cool. We’re all just entering because we’re celebrating the art and we love the vibe, and there’s this exclamation vibes. I’m part of the cryptoads, and creatures, and cool cats. And they’re all a vibe man, their vibe. And they have very different vibes to them. The creatures NFT being a bit more like quirky and funky because that’s the personality of Danny Cole, the artist, and cool cats being just adorable and family friendly, which they insist on in their Discord. Right? And that’s attracting a particular type. And the toads, I mean, they’re like vibes, vibes. It’s just super cool, chill people. You almost picture reggae music playing.

Kat Cole (44:43):
So there are these cultures, these vibes that develop that are one just so exciting to be a part of as a fan, and as a member, and as a consumer. And as an advocate. You can tell you’re a part of revolution of the next version of the internet. You can feel it. It’s really rad.

Trey Lockerbie (45:02):
I think I know the answer to this. But as I understand it right now, there’s more or less two options. A brand could either create a social coin of sorts to token, right? Or go NFTs, right? And create their own content of sorts.

Kat Cole (45:18):
So many more options. The world of opportunity is unlimited. We’re all building the plane as we’re flying it. And no one’s an expert because it’s changing so quickly, and everyone who’s experimenting is stumbling on the next thing that is the future. And that’s just important to remember. It is so early. Which means it’s messy. It’s fringe. When you’re in it, it doesn’t feel fringe. But practically speaking, there’s only I think 2 million people in the world, I don’t know what the actual number is, but with a wallet where they could even buy an NFT. Whatever that number is, it’s a teeny fraction of the global population, still a small fraction of the developed world population. So it’s early.

Kat Cole (45:57):
My advice to brands, what brands can do and some counsel is be a fan first, be a student first. Buy an NFT, which means you have to have a human. A brand can’t buy an NFT, right? A brand can buy it because it can come from your account, but a human needs to engage. So have someone on your team. Can be on behalf of the brand or just someone as research get into a project that seems to be aligned with the brand. Read the Twitter threads on Web 3, and DAOs, and NFTs. And just learn and be a customer. Be a fan.

Kat Cole (46:33):
Then there is a continuum. So that’s the least you should be doing. Buy an NFT, celebrate an artist that you think is cool engage with the community, and do your homework. Then from there, you could partner with an existing NFT project, right? You could literally get in the discord, DM the founders and say, “Hey, I’m such and such brand. I love what you do. Here are some of our ideas. Do you have any? We’d love to support you beyond being a member of the community.”

Kat Cole (47:00):
And that’s happening. That could be a co-branded drop, airdrop to people who are already NFT holders. It could be a public basic campaign. There’s just a bazillion things. It could be a giveaway, just ship it to everybody’s houses if they want to put their physical address somewhere. So then there’s CoLab, right? That’s asset light, not a lot of risk, but you are tying your brand to a project.

Kat Cole (47:20):
Then there’s getting into this world that you described, which is what can you then go do as a brand. Going all the way to issuing a token, which is making a promise of some membership and utility, my recommendation is if you’re not ready to commit to culture and community is don’t go what we call red pill Web 3.0, go purple pill Web 2.5. You can issue a token, but it’s not an actual NFT token. It’s like an upgraded version of a loyalty and rewards to the point of our earlier conversation. Just modernizing what’s already done out there, but give it more meaning, more utility, more community. But it’s not an actual token powered by the blockchain. So make your choice. Make sure you’re prepared to support your choice.

Kat Cole (48:07):
But if you’re not going to do a token, you could still create and mint a digital asset, a digital property. An NFT, a non-fungible token. That could be an image or it could be a POAP. It could be like a proof of people being a part of something with your company. And it’s a digital proof. And you can sell it or you can give it to your existing customers. You can allow them to mint it and sell it. But then it’s like okay, but why? What does that do other than, “Okay, cool. I have a Cinnabon NFT. Does it unlock discounts? Does it make me a part of a community that can give feedback? Do I get special early news on things? What does it do back to community?” This being the community economy and the ownership economy. Does it give me literal ownership in some way, in terms of just rewards? Again, modernizing loyalty. Or does it actually give me ownership like a dow in an organization where I have a vote stopping short of a security and a shareholder? But it acts a lot like that in some ways. That is not tax advice or financial advice.

Kat Cole (49:12):
So you can see how established companies would get pretty cautious when you start getting into this launch a token, launch an NFT world. I really encourage brands to do it, and play, and explore, but don’t do it if you’re not going to resource it properly. You need someone to facilitate the resulting community from a token or an asset. And if you’re going to do that, then make sure you have great devs, developers who understand Web 3 and dedicated resources to facilitate, and listen, and fuel, and love the community. And if you’re ready to go there, there’s plenty of us who are here to help. But for many companies, going Web 2.5 and purple pilling versus 3.0 and red pilling is a better step in that direction. It’s like the spirit of web three without the tokenization, and kind of the full backend infrastructure of Web 3. But first be a fan. Just go learn and be a fan.

Trey Lockerbie (50:07):
I love this discussion because I consider you to be a master of brand. And it speaks also to how you and I have come to this conversation, which is that you’ve been building the Kat Cole brand. And I’ve noticed that. I mean, it sounds a little funny. But I think I first noticed you on things like Clubhouse. And I just remember Kat Cole, Kat Cole kept popping up in every room. She was talking, she’s here, she’s there. You’re on Twitter. You’ve been very active in this role, in this space. And I can tell how excited you are about it, which is really cool. What drove you to this? Because you seem like you could have easily retired, I guess is what I’m kind of going. It’s like given your career, I guess a lot of people probably would have been like, “You know what, I’m,” but you seem to just be getting going. What is driving this interest into this new role that you’re entering into as an advisor/investor?

Kat Cole (50:55):
I mean, I’ve been doing a lot of these things in the background for a long time. In a moderate way of course, because my priority was running the company. But I’ve been angel investing for eight years. I’ve been leaning into social media from the early days. I’ve been advising founders and growth stage companies. Not many, but a few. Along the journey, I had to focus on my own business, but I made the time to help others. So it is like all things that seem sudden, not. It is just under a decade of helping other people build their businesses, experimenting with technology that has built a muscle of loving to learn, never being worried about being the noob or the plebe in the room. And that means it’s always going to look like I’m into the latest thing because I’m very comfortable being the least experienced person in the room, even though I am typically the most experienced person in many rooms in certain industries and verticals.

Kat Cole (51:53):
And it is where people are spending their attention and their time, which typically ends up leading to their money, and where the economy goes, and where brands go. And I am a student of commerce. I am a student of humanity. I love people. And I love to continue to be on a journey. I also have two kids, a two year old and a four year old. And I don’t ever want to be disconnected to what is shaping their future. And when my kids become older teenagers, this is the beginning. We’re at the beginning. Whether it’s driverless cars, and Web 3, and NFTs, and DAOs. Some of the biggest businesses in the world are going to have started as DAOs. Some of the biggest media brands in the world that they are going to grow to love like we do movie franchises are starting right now as NFT projects. I see the future. And I’m wrong about it. That’s what certain. But I like being in it so I also can put my thumbprint on it. And that that’s the leader in me. That’s the brand shaper in me. So it’s both the desire to learn and lead. And you cannot lead from the past. You cannot lead from the past. So I am a learning leader.

Kat Cole (53:09):
So wherever I can go that allows me to do both optimally is where I go. And that has led me to angel investing quite some time ago, to advising earlier stage founders. So I’m part of an earlier in the S-curve than the businesses I was running at Focus. Certainly it led me to lean into social audio and Clubhouse, literally right after it launched when there was nobody on the platform. And it’s what led me to be a part of the NFT community and the Web 3 and crypto community. So I’m still learning. But that because I started learning early, it now also allows me in a way to be a leader to some. So I’m still able to be a leader, it just is something that is still, the clay is very, very wet. And I feel like I can feed my desire to while also exercising my muscle to lead.

Trey Lockerbie (53:59):
I love it. And I’m a big fan of what you’re doing. So please keep it up. I really enjoyed this conversation. Thank you for this opportunity. It’s been a blast. I’ve really enjoyed seeing your passion in person. And it’s really exciting making me excited about the future. So with that, before I let you go, I want to make sure I give you an opportunity to hand off to our listeners where they can learn more about you, where they could follow along, anything you would share.

Kat Cole (54:23):
Yeah, the usual suspects. I mean Twitter. For one, that’s where I amplify and celebrate a lot of other creators and thought leaders. And it’s definitely the NFT space. Instagram is where I share a lot of lessons in my personal life. My newsletter called checking in which is just Kat Cole on Substack. And certainly I can be found on Clubhouse holding rooms on leadership and thought experiments in big ideas.

Trey Lockerbie (54:49):
And you have a book coming out.

Kat Cole (54:52):
And I have a book coming out next year.

Trey Lockerbie (54:55):
Amazing. Well, let’s have you back next year and see where we’re at. It’ll be fun.

Kat Cole (54:58):
That’d be great.

Trey Lockerbie (55:00):
All right everybody, if you’re loving the show, please go ahead and follow us on your favorite podcast app so you get these episodes automatically. Kat and I originally connected on Twitter. So if you’d like to get ahold of me, you can find me there at Trey Lockerbie. And if you’re really looking to 10X your investing skills, I guarantee you’ll find a ton of value at theinvestorspodcast.com, or simply Google TIP Finance. And with that, we’ll see you again next time.

Outro (55:23):
Thank you for listening to TIP. Make sure to subscribe to Millennial Investing by The Investor’s Podcast Network, and learn how to achieve financial independence. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.