From Growth Guru to Category Creator with Jordan Peace, Fringe

Thanks for joining us today on the Fuel Growth Podcast.

What is the right growth equation for your company? Is it pipeline?

Brand?

Product?

Customers?

Employees?

Join us as we interview CEOs, entrepreneurs and seasoned executives to explore what it takes to propel your business into growth. Welcome to the Fuel Growth Podcast where we explore how to unlock the secrets to sustain revenue growth. Joining us today is Jordan Peace, entrepreneur, podcaster, founder and CEO of Fringe, a lifestyle benefits company. Along with four close college friends, Jordan created Fringe as a way to turn the corporate benefits into a language that anyone can speak. Jordan, welcome to the show.

Welcome to the show.

Thank you, Clint. Thank you, Lizzy. So happy to be here. This should be fun.

I think so too. So Jordan, I want to first start with what what is fringe as a lifestyle benefits company? And why did you choose to create a business in this space?

Yeah, well, those questions are correlated, we created the company because no one knew what lifestyle benefits were. Because they didn't exist. So back in 2018, my friend Jason and I, who's also one of my co-founders, now, one of those close college friends that Clint mentioned, we were in financial planning, working our own fee-only RIA, working with a bunch of clients, talking to them about planning for the future, and talking about their career and some of them were business owners looking to provide benefits for their people. And when you do this stuff enough, you realize that there are kind of black holes of knowledge when it comes to finance for people, the stock market is one of them. Another one that, you know, is less obvious is benefits, kind of understanding what in the world... How does my health insurance work? How does this life insurance, disability? What? Why is there different definitions of disability? Isn't there just one? That's really confusing. And so honestly, we just spent so much time teaching people about benefits that we came to understand two things. One, people don't understand their benefits, and two, because they don't understand them, they don't really appreciate them, at least not nearly to the level that they should compare to the cost that companies are paying for these benefits, right? A guy like me with a spouse and four kids, right? We're costing the company probably $1,200 a month for traditional benefits. I should probably appreciate that. That's a serious chunk of change. And so Jason and I kind of developed this thesis of hey, what if there were benefits that you didn't need to be sick or dead or disabled or 65 years old to benefit from your benefits? What if there were things that kind of spoke into your life right now? That could be way lower costs and much higher perceived value from the employee?

Jordan, are there other companies like you? Or are you at Fringe defining a category?

We have been, I'd say, co-creating a category with some competitors over the last few years, some of which came before us and have not made it and I don't know if I want to bore you with why I theorize they didn't make it. I think it's a business model problem. And then there's some that have come after us that are continuing to build this category. And one thing that's really exciting for us right now is I'm hearing the phrase lifestyle benefits from people outside of—

A phrase you created is now becoming an industry term!

That's really neat. Yes!

Yeah, when Josh Burson's talking about it, or when I'm on a partnership call with a big payroll company and they mention and I'm like, yes, it worked, this category has been created. So now I feel like I've been describing this recently that, you know, it wasn't even a race, like there was no racetrack. There were no horses, no one showed up to watch. It didn't exist. So we had to create the race, and then get on the track and get some other horses with us. And now I think we're in this two, maybe three-horse race to win a race that didn't exist three years ago. Yes!

So Jordan talking about the other horses, tell us how Fringe is different in your space. The lifestyle benefits space.

Sure. There's there's several ways to solve this issue. And let me maybe first describe what the issue is. So when we first began to address HR folks and say, Hey, really just scoping the problem. We hadn't built anything yet. We just wanted to do some market research and understand, is this idea feasible? Are people looking for this? Are they maybe even creating it internally in some sort of manual paper way?And we did find those things. But we thought of three different ways to solve it when we identified the problem and the problem is this: The administrative headache of trying to contract with hundreds of different vendors so that you can give choice to your people. That's huge, right? And then the other piece of, of course, is a demand for choice from your people because as more and more millennials enter the workforce and the generation behind them, we grew up going to Starbucks giving a 17-word description of the perfect drink, right? We didn't walk in and go, I'll take a vanilla cone, right? If it was, I'll take a nonfat coconut milk latte extra hot extra whip. Right now. I mean, you could go on and on, right? And so this idea that the marketplace has such customization and personalization and the workplace doesn't, that that is something you see modernizing in the workplace. And so we wanted to be part of that. But there's a couple different ways to do it. One, you can issue a debit card to all of the people in the organization, say, hey, go out and buy what you like. Or maybe you put some spend controls, which are not very robust yet, that technology is not very advanced quite yet. Because you can't go down to a SKU level, you can go to like a merchant level on that. And just more or less, here's daddy's credit card, go buy something nice, right? That's the approach. We thought, Okay, it's easy to stand up, right? You can give a lot of choice instantly right? Two pluses. The downside is that people buy on marketplaces, right? People go to Amazon, they like looking at options. They like reading reviews, they like seeing ratings and getting that social affirmation of this is the right thing to buy, right? Or it was recommended for me based on all this data that you have about me as the consumer. And we experience that with how we watch TV. Now we don't flip through channels, we go to Netflix, and it tells us what we're going to like and it's right 90% of the time. So we didn't go the card solution. The other solution is even even simpler, which is reimbursement, right? There's no card, you use your own money. And we just thought fundamentally, reimbursement as a benefit is like your employees loaning the company money, and then you paying them back. Which is really what it is, right? We decided that that's not the best.

And then you gotta remember to turn in that expense report and...

That's not a great employee experience. So we know that's the dream that you're creating, and that you're selling. How does Fringe live that within your own company, for your employees? For your team?

It's not. One of the things that we've valued from the beginning is taking this idea of choice, right, which is very prevalent in the Fringe marketplace, the Fringe product, and applying that internally to our people, which is a tricky thing to do. Because you really have to highly trust the people that you're hiring if you're gonna give them a ton of freedom. And that's what we do. And to be honest, we're, I'd say, we're slow to hire, and we're a little bit quick to fire. I know that sounds a little negative. But if I get a sense that I can't trust people with the freedom of unlimited PTO, with the freedom of work where you want, work when you want, all of these freedoms, there are people that are mature enough that they'll overwork and you gotta slow them down. Right, and go, Hey, whoa, we didn't give you freedom so that you could work yourself into the ground, we gave you freedom so that you could have a balance, and you can make wise decisions. But on the whole, the mature folks that we hire, are doing a great job, taking that PTO, coming back, getting to work, working a solid chunk of time, middle of the day, maybe they cut out at three or four, and they get back online from eight to nine, because that's when the kids go to bed. We don't care. They've got a job to do. If they're passionate, hard working, they care about the job, they're getting it done. I don't care when they work, where they were, what they're wearing, none of it. But not everybody can handle that. So it just goes into the hiring process where you're looking not just for a skill set, but for a level of kind of maturity and self motivation, that someone with very little oversight can act like a business owner more or less, and just do their thing.

Great way of putting it.Acting as a business owner, it's an excellent way of wording it. Let's talk about how Fringe is doing, what growth has looked like for you over the past few years.

The last two years have been awesome. We've only existed since the very start of 2019. But, you know, as we talked about, there was no category, right? So we had to go out there and not only not only sell, Hey, we're a startup, but trust us, we can be a good service provider for you, right? We also had to sell what the heck a lifestyle benefit was. And because their mental model was alright, well, if it's not a Wellness Benefit, you know, which it's very akin to, but it's not a Wellness Benefit. It's not a discount marketplace. It's not an EAP. What is it? And they're intrigued by these logos, right? It's like, Oh, you guys just do Spotify and Kiwi Crate? And it's like, that's cool. But what do I do with it? How do I fund it? Like, just just no idea. So it just felt like pushing a boulder up a hill, you know, the whole time. And there's, there's five of us, thankfully. I never would have pushed it up the hill by myself. There's five founders shoving this thing up the hill, we ended up with, I don't know, maybe 15 customers that first year, you know, we were making maybe 200 grand or something in revenue by the end of the year ARR-wise.

$200,000 in revenue in your first year. That's a good start.

It's true. And there were five of us. So that helps, and it wasn't a bad start. But it felt like we had done multimillion dollars worth of work. But then 2020... 2020 was really interesting. It started off, as we all know, scary. And we had several things going on, there was a pandemic, that's just scary in and of itself. But then we actually needed to raise money right around the time the pandemic started. Because it was just like, okay, like, you know, we got to grow, let's do this thing. And we were also just exhausted from the previous year. I'm raising money, I was in San Francisco, March of 2020. Right before all the flights shut down, and all that stuff. I was probably lucky to get home, honestly. We had all these investor calls planned, and we get out there, we get to the hotel, and the emails start coming in, Hey, can we do this virtually? Hey, we're not having people to our office right now. And I'm just like, I just flew out to San Francisco from Virginia to have in-person meetings. And I had every last one of them in the hotel room on Zoom a mile away from their offices. So that's how 2020 started. And our investors and advisors were basically saying hunker down, save cash, don't hire, don't spend a bunch on marketing, and we ignored all of them. And we did the opposite. And we spent money on marketing. And thank goodness, we did, because that was actually the turning point where we got to the top of that hill, and we're still pushing a boulder, but on flat ground, you know. All of a sudden, it was like, oh, man, it's just a lot easier. And not because we necessarily felt like we had fully created the category. But people were looking for something new, the budget and—

Timing must have been perfect for you. Because that time, even within my own company, on the leadership team, we were trying to think of ways to keep keep our newly remote employees engaged and feeling part of the team and happy with the company. And we were all going through an existential crisis, and it was the Great Resignation. And I gotta think you had like, serendipity there, I guess, in kind of an oddly, weirdly, bad way. But at the right time, right, we needed you, your customers needed you.

Yeah, it was pretty neat. And so pretty quickly, you look on our website, and it said, lifestyle benefits were for a remote world. We were advertising specifically to that. And the inbound leads started coming in. And we started hearing from name brand organizations that were much bigger and much more notable than any customer we currently had. And the tide started to change for us in mid 2020. And it's been a great ride ever since. The thing in 2021, that was so cool, is what I mentioned earlier, is that we started hearing lifestyle benefits coming back at us and seeing it in articles and we're like, oh my gosh, the category is created. And that was like the greatest moment.

I'm sure, yes!

So this this year, you know, is is kind of more of the same. We're building big partnerships out, the the inbound interest is climbing and climbing. And it's it's been great. And thankfully we've seen no signs of the economy affecting us yet in just in terms of what's going on. We'll see, nobody's immune, obviously, but we're just we're in a great spot.

Yeah.

So let's talk about putting that growth capital to work for me if you don't mind. Right. So you raised... how much did you raise during during Zoom time?

During Zoom time? Yeah, we raised a couple million at the beginning of that, and then we raised like three, just over three last fall.

Okay, so you've raised 5 million then. And there's always, you know, all the challenges that come with suddenly having a very full bank account. I remember the day that the money hit our bank account, when we raised our first 2 million, we all went to the local electronics store and filled up three shopping carts just because it was a fun thing to do. There's, you know, computers and printers and you know, all that crazy stuff. But what did you guys do with your 5 million? You know, typically, a SaaS startup is going to use those first waves of investment capital to probably accelerate the product roadmap and get the marketing word out there. Is that what you did? Or what's been your approach?

You know, it's funny, we probably under done it significantly on the marketing. And one of the one of the reasons why is because I'm a big believer in spending money there. One of the reasons why is we invested so much in our people right away, that they started speaking out about Fringe on LinkedIn and other social networks and really made a name for us as an employer, which in some ways simultaneously makes a name for you.

Especially for the market you're going after, right? Your going after HR departments, and then suddenly your own team is singing your praises as an employer, it certainly works.

Totally. So I you know, after we had our $1,000 dinner, we we got to work hiring folks. I won't lie, we had it, we had a really nice dinner that night

You have to celebrate.

You got to take those moments and celebrate them. Got a lot of hard work ahead of ya.

I mean, we were operating for a long time with seven people, you know, and it was seven people doing 200 jobs. We were like, we can't hire all 193 that we're missing right now, but we can go out and get another 30. And so we hired 25-30 people after that first raise. And really just started ramping up everything from marketing, to sales, to the product team. I think product was probably where we were weakest at that early point. We had one founder that knew what they were doing, the rest of us not so much on the product building side. We've got ideas and concepts, but we can't sit there and code the thing. And so we really had to invest in engineers and product folks to come in that were really truly experts and knew what they were doing and fit the culture and had the startup bug, that they could take the ebbs and flows of like, Hey, guys, we're going this way. Oh, wait, stop, we're making this turn, actually quick left. And then we'll go back. Because when you're in a small boat, right, the waves just toss you around quite a bit. And so it was it was hiring in all those sectors. And then, you know, we raised again, and now we're up to like 62 people in the company.

So you went from seven to 62?

Went from seven to about 35. And then there was six months-ish gap, and then we we jumped up to 62.

That's hard to hire a lot of people that quickly, any lessons learned in there?

Definitely. I'd say, don't, don't justify that someone might be a good culture fit just because you like the resume. We did that twice. And both people didn't last two months. And I knew it. And I felt it when I was saying yes, that I was just like, huh, I don't know about this one. But the resume was there. And you know, the technical skills and it just kind of looked right on paper, but it didn't feel right. And I kind of should have listened to the feelings a little bit more.

Intuition is important!

It is.

One of my very first hires when I started SugarCRM was a 17 year old kid who had literally just graduated high school two months before. And he didn't have a resume. He came to the interview and there was creases in his buttoned down shirt, because he had clearly just pulled the shirt out of the package and put it on. He was with us for 12 years, went on to be a director. He's gone on to other companies, his company gotten bought by Microsoft, and he's worth a ton of money. And he's hugely successful in his career. And he never went to college and he was just this kind of goofy kid at age 17 when I hired him and it was a gut instinct, and it worked out well. So I like your comment there.

I mean, we just can't rely on resumes. In fact, what I started doing is actually do the interview first and then look at the resume. I wanted to get a sense of the person, you know, before I pre-judged based off of what they, you know, say they've accomplished in the past. And that's that's actually worked out much better for me.

What about the mechanics of actually finding all those people so quickly? Did you go out to a recruiting firm? Or did you lean on your own network? Or a little bit of both?

We actually were 100% focused on our own network, and kind of LinkedIn posts and kind of advertising ourselves. We didn't we didn't go with a recruiting firm. We certainly will. As we scale it, we'll probably just bring in recruiters at this point. I think it's one of the things that… well, you've been on my podcast, BragWorthy Culture, right? So I'm bragging here, but like, one of the things that we've done really well is just create a culture where people want to recruit their friends. They want to tell other people you want to work here, like, get in here with me. And that doesn't always work, because they don't have the right skills. And we're not hiring for the right position at the right time, or whatever. But we've actually had a relatively easy time recruiting, because everybody wants to bring in the folks that they know, or they used to work with, or whatever. I wouldn't say we built a culture for that purpose. But that is a nice benefit to having a culture that people are proud of, and that they want to recruit to.

Yeah. broadening your pool of candidates, right?

Yeah, big time. And then they come in, they're already leaning in, you know, they know something about Fringe. They're not just like, well, here's a job, the salary looks right. The title looks right. I'll apply. They're applying because of what they've heard about what it feels like to work here. So they're coming in, and you just get much better of a read with those folks, you know, in terms of what are they really looking for experientially?

So let me see if I got this right: Five college friends start a company just before a pandemic hits, hit the ground running, don't lean back, but lean in and and grow, grow, grow, finding that your story is matching the issues of the time, you raise $5 million in venture capital, you go from seven to 65 people. This is all like within two, two and a half, three years, right? That's an amazing story. And how's that translated to revenue growth?

2020. That was a 5x, from 2019. And then 2021 was 4x from there, and we're already 50% up from that number in 2022. So we had hoped to 3x this year, but we're on pace to do better than that. And that was really our goal, you know, that whole like unicorn glide path, you're you're supposed to triple triple double, double, double double. And we're a little ahead of that. Of course, it took us a minute to get to that first million. Because, well, several reasons, but, one was, we're in Richmond, Virginia, not San Francisco, California. So there aren't just people with their checkbooks hope and like, You got an idea? Here you go. It's tough. And not that it's that easy. I'm exaggerating. And then the other thing is building a marketplace takes a long time. You know, it's a tough business to build. Once you get it built, it's got this flywheel effect, and all these network of effects of more users equals better deals and better deals equals better users and happier customers. And the whole thing is great, but getting it going is a long haul for sure.

That leads me to my next question: Top three mistakes. What would you have done differently now that you can look backwards with that 2020 hindsight?

Man... It's a really good question. I probably would have... So it's my natural inclination. I was in sales. And I think like a marketer, I think it's just how I'm built. Right? So sales, branding, marketing, captures my attention, and I think it probably captured too much, a little bit too much of our money and our attention and our time in the first year. I think we should have doubled at least our focus on the product in the first year because and I have to credit my co-founder Andrew for this. He bailed us out. I mean, he took us from a product that could not scale whatsoever, and quickly built a version one and we're on another version now but a version one that just saved us. And he wouldn't have had to do that if I would have and the rest of us would have spent more time and effort and energy and money focused on what's wrong.

Tell us as we wrap up here, Jordan, how do people find you? How do people learn more about Fringe and Jordan Peace?

In terms of Fringe, I'd say book some time, book a demo, booke some time, go to our website, fringe.us. Book some time and check it out. Not a high pressure situation, you know, there's also videos you can download, if you don't want to speak to a person directly. But check it out, make sure you really do understand what we're talking about. When we say lifestyle benefits, it is a new category. And so I always just ask, Hey, don't don't put us in a box, you know, learn what it is first. And then in terms of me, I'm pretty active on LinkedIn, that's probably the best place to find me in terms of social. You get a response there probably just as fast or better than email. And then, of course, Clint has been my guest, but I have a podcast as well called BragWorthy Culture. So you can listen to more of these types of topics and talking about just great cultures that folks are building. But yeah, that's, I think, more or less what I would offer.

Well, thank you so much, Jordan. This has been really fun.

Yeah. Thank you, Lizzie. Thank you, Clint.