#125 Locker: The Future of Online Shopping

Neal: Pitch 3, day 3

Ahhh, shopping. The great American tradition. From leaving Thanksgiving dinner and busting down the doors of a Best Buy for a cheap TV, to the endless stream of Amazon boxes arriving on our doorsteps. From sea to shining sea. We love a shopping spree.

But shopping has changed a lot from the mall trips of our youth. You don’t just go to Journey’s for a pair of Converse anymore. Now every shoe brand in the world is available to you online, this instant.

How do you make a decision?! Google, Reddit, TikTok, Pinterest, the group chat, all those Chrome tabs and screenshots you’ve been saving??? 

Online shopping was supposed to make things easier, but now things are more fragmented than ever. 

What if you could take this overwhelming shopping experience and whittle it down to something personalized for you? That’s what today’s founder is doing with her new app, called Locker.

But when investors aren’t in your target demographic. How do you sell a solution to a problem they don’t even have? Will our investors get over their decision fatigue and make their way to checkout, or abandon this startup in the cart?

I’m Josh Muccio, welcome to The Pitch, where real entrepreneurs pitch real investors for REAL MONEY

Hey everyone, I’m Beck Bamberger, managing partner of Bad Ideas Group

Hi I’m Al Bsharah, the managing partner at Interlock Capital

Hi, I’m Jillian Manus, managing partner of Structure Capital

I’m Howie Diamond, managing partner of Pure Ventures

The pitch for Locker is coming up after this. And if you want to watch the video of this pitch, go to pitch.show/youtube. Episodes premiere on Wednesdays at 7pm eastern.

Beck: What happened to you?

Howie: I got fired, I guess.

Beck: Ah shoot.

Jillian: No, you didn't get fired! We have -

Beck: He's back now.

Howie: High five on the way in.

Jillian: Hello.

Kristine: I'm Kristine. It's so nice to meet you.

Howie: Hi, how are you. 

Al: Nice to meet you. I'm Al.

Kristine: Okay. Hi.

Howie: You can do a different handshake for all of us.

Kristine: It's so nice to meet you. 

Kristine: Hi everyone. I'm Kristine Locker, I'm the founder of Locker, and I'm excited to be here today to share more about why I left my successful career in real estate to build the future of ecommerce and social shopping. So as y'all know, the way that we shop and consume content has fundamentally shifted. Inspiration can strike at any time Maybe you saw a link two weeks ago, now you can't remember who sent it to you or you took a screenshot on your phone and now that screenshot's lost on your camera roll. So our consumer journeys have become incredibly fragmented, not to mention the abandoned carts and the billions in lost revenue for the brands involved. So Locker's productizing these unmet needs for both consumers and brands. Locker started as a Chrome extension, and we quickly expanded into a mobile app where users can save and organize their favorites anywhere that they shop online. There's an element of curation to the platform, so users can browse the discover feed, and they can also follow other users on the platform to get inspired by what they're shopping for. So Locker is equal parts utility, curation and community. Our 40,000 users have organically saved over one million products to the platform, and so we are raising $3 million to invest in the people and the product that will continue to capture the $1 trillion online shopping market. Thank you.

Howie: Very cool. How do you make money?

Kristine: Okay. So we monetize two different ways right now.

Jillian: My first question.

Kristine: The first being affiliate revenue and the second being direct brand partnerships. So we turned on monetization three months ago. And in those last three months we've generated 300k in GMV 

Jillian: Can you talk a little bit about the technology here. 

Kristine: Mhm. the Chrome extension, how it works um on desktop is locating keywords on pages that have 'add to bag' or 'add to cart' and so it doesn't pop up on any different image or page on the internet. Locker's technology only identifies the product detail images, which guarantees that anything that's saved on the platform is 100% shoppable product. 

Jillian: doesn't Pinterest do this? 

Kristine: If I could've used Pinterest, I wouldn't be here today.

Jillian: Yeah.

Kristine: Pinterest, because its core focus is inspiration, so if I go to my Pinterest home feed, I'm getting married in two weeks, so I see getaway cars and cakes and all these different wedding inspiration. But none of it is shoppable or it's intermittently shoppable. And so if you go into Pinterest, let's say you saw a picture of a woman in a dress that you were like, I like that, and you click on it. It might take you to a blog post from 2010 and you can't get to that dress because not everything on Pinterest is shoppable. There's a lot of - users can upload any picture they want to Pinterest.

Howie: Okay, so the main distinction between you and Pinterest -

Kristine: We are 100% shoppable.

Howie: Everything is shoppable.

Jillian: 100%.

Kristine: 100% shoppable.

Howie: If I click on something in Locker - 

Kristine: You can buy it.

Howie: - it'll take me to the -

Kristine: Brand website.

Howie: - the purchase page.

Beck: It sounds like it's a memory bank, too. And for a consumer who can't buy everything they immediately see or hear. 

Jillian: Couldn't Pinterest make theirs 100% shoppable? 

Kristine: They've tried. Pinterest has tried to have a shop tab. But Pinterest allows brands to upload their data feeds, so it's much more brand driven when you go to the shop tab on Pinterest, it's Nike putting a product in front of me, or Madewell putting a product in front of me. And so it doesn't have that element of what is my best friend shopping for? 

Beck: I would think brands would be very into this too, because imagine if you're a Nordstroms -

Kristine: They love us.

Beck: - and you could say oh wow, look at all the - there's 47,000 shoes in Lockers right now.

Kristine: Brands love us.

Beck: So I could see a very strong B2B play.

Kristine: Yeah. Let's say, Essence has a dress and Nordstrom sells the same dress, how do they get in front of that? And so with this raise, the discover feed will become a place where brands can put paid placement in front of their target consumer.

Al: the conversation has led down a path of you sound like you are Pinterest for shopping. One, I'm curious how that makes you feel. And then two - how do you get past that and go to market with it?

Kristine: Yeah. So people do call us the Pinterest for online shopping. It's the easiest way that our users relate to us as well. And I don't feel negatively about that at all. Our go to market strategy at the very beginning, since I was bootstrapping, we used influencer marketing One of our go to market strategies for post-raise is to democratize influence. So platforms like LTK, Shop My, have gatekept who gets to be an influencer and curate and earn off of their recommendations. And so if I can curate a collection and share it with my family or my friends and somebody buys it and I make $5, that's incredible. And so in September is our timeline for turning on democratized affiliate. 

Beck: And who is this shopper? Is it a Gen Z out of college Is it an older millennial professional? Who are we talking about?

Kristine: Our core group is 18 to 27. We skew 95% female. And our secondary group is 28 to 34. 

Al: How long you been at this? And what's your revenue look like?

Kristine: Yeah. So we started building the platform in March of 2020. I started as a solo founder, and I used independent contractors to build the initial version of the platform. So I put 250,000 of my own money into the company to get it to our first 10,000 users. Then I raised a million from an angel investor who was a user of the platform in June of 2022. And then I was able to hire my first full time employee, who is an engineer. Revenue, we turned on revenue three months ago. In the first month of turning on revenue, we generated 9k. In the second month, it was 11. And in the last month, it was 13k. 

Howie: Do you have anything you can share in terms of engagement from the Chrome app?

Kristine: Yeah. So we have 2000 daily active users. We're at 11,000 monthly active users. And of those users, the engagement we know is that they come to the platform and spend an average of 30 minutes a day, whether they're browsing the discover feed, their own profile, or other shoppers' profiles. The app doesn't launch until Monday the 12th, so we've got just a half a week left until we can start doing some cohort testing and analysis on the app. 

Howie: Does anyone know if that ratio is a good ratio? 40,000 users - Is 20 - is 2000 DAU and 11,000 MAU a good ratio? 

Kristine: Um, to be honest - I don't know. 

Al: So like 25% are using it once a month, which is certainly not horrible. The trick is - that's great, do they convert, like, the lower part of the funnel is -

Kristine: To buying.

Al: - where the rubber hits the road.

Howie: I don't even care so much about the conversion into an actual purchase, but if - if like Pinterest, there's people who go on there every day four times a day and never purchase anything, but that engagement is really powerful.

For a company like this, the numbers are everything. Does Kristine have enough people shopping on Locker, to get a deal done in the room? Or will she need some retail therapy after this pitch?

You’ll find out after the break.

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Welcome back to the mall of America, online edition. Kristine Locker is pitching her app, Locker as THE online shopping destination. Big if true. Can she and her team pull it off? Here's Jillian.

Jillian: So tell us about your team. So you have this engineer. He's now what? He’s a cofounder? 

Kristine: He's a founding engineer. I'm a solo founder. And then I have a director of growth. So it's just the three of us.

Jillian: Where's the director of growth from?

Kristine: She lives in New York. She's moving to LA next week.

Jillian: No, I meant - I'm sorry.

Kristine: Oh sorry!

Jillian: Professionally.

Kristine: Oh yeah. Sorry. She came over from a company called Nate. So Nate was our key competitor in this space. They started in 2018 as a way that you could pay $1 transaction fee to check out and not have to put your information in. They raised over $50 million and closed their doors January of this year and laid off their entire team. 

Jillian: So what did you learn from that?

Kristine: I learned a lot from Nate. Nate spent a lot of money to acquire their customers. You could create an account on the app and you got $50. So they got a lot of users, because why wouldn't you sign up -

Beck: Why would you not?

Kristine: - to get $50.

Howie: That was like the PayPal model in the early days.

Jillian: Uber. Like the early Uber. 

Kristine: So the strategy wasn't built community-first. It was let's go pay a bunch of people to download the app and the conversion wasn't taking place. Nate also required you to check out on the app and you could only buy one product at a time. If you wanna buy a swimsuit and it's two pieces, you have to buy the top and pay shipping on the top and then you have to buy the bottom.

Beck: No. No. This is why it's gone.

Jillian: Come on! Who would invest in a company like that?

Kristine: He sold a big dream of like this technology is incredible. 

Beck: Five years from now, what does this look like?

Kristine: So our goal with Locker is to be the destination that when you think about shopping, it's the place you go first. Whether you already have an idea of what you want or you don't know what you want, you come to Locker and that's your destination. Like you said with Pinterest - if I need inspiration for something, if I'm decorating my house, that's the first place I go. If I'm saving a recipe, that's the first place I go. We want Locker to come to the front of their minds. I think democratizing the platform is gonna be incredible for our retention, our consumers, our acquisition, and the platform will then really encompass an entire consumer's psychology and needs, and that's our goal, is to be that destination for them.

Beck: So if I'm shopping, I'm going to Locker.

Kristine: Mhm. 

Al: Do you have any commitments on the round? Do you have a lead investor? Have you set terms?

Kristine: We just started the round. So we don't have any capital committed. Given the state of the market, I am not setting terms. I am going to let the market tell us what the terms are. 

Howie: Why'd you pick $3 million to raise right now? Versus something lower?

Kristine: It was what we need plus 50%, because that was kind of what was advised to us given the state of the market. 

Howie: I'll give you my informal advisor opinion. I think it's gonna be difficult to raise $3 million. I mean, not impossible. I mean, I've seen crazier things happen. But in this market environment, based on where you are, raising 3 on a 10 or 15 is gonna be tough. And so part of me is just thinking just sort of unsolicited advice here raise a smaller round now, like a million, a million five, be super scrappy, be super capital efficient, at a lower valuation, - six to eight million. 

Jillian: Yes.

Kristine: I'm completely open to doing something like that. I think, in terms of being a founder and worry of the market, it was if you can raise 3 -

Beck: Do it.

Kristine: - kind of like, buck up and then you can keep building, and you don't have that stress of - what's the market gonna be in six months but I respect that.

Howie: Yeah. But raising three, and like talking about raising three, and actually raising three -

Kristine: They're very different things. 

Jillian: and also raising 3 four years ago is different from raising 3 now. So I'm out. And I'll tell you why. I don't have a grasp of this category, in order to add any value or be able to assess it properly. I think you're an excellent founder. You obviously know what you're all building, but what I can bring to you is not going to be of value. Because I'm that stupid in this space.

Kristine: I appreciate that.

Al: Um, so I - I like you a lot. I like what you're doing. I think you have your head wrapped around this industry really, really, really well. I also think there are a lot of companies that have tried certain things very similar to this and a lot of them have failed. And my - I think one of my bigger concerns is how you become sticky. I think shoppers, they're fickle. They go to the next shiny object when something comes along. And I haven't seen that thing that makes you that like - that locks these people in in a way that they don't wanna leave. And so for that, like, I - this would be a pass right now.

Kristine: Thank you. One thing I'll say to your point of the stickiness factor as well is that once you capture a user and now that's their memory bank of all the things that they wanna buy, to then have them switch over to a different platform, it's - I've got all of my favorite things that I shop in there. So now you have -

Howie: It's hard to leave.

Kristine: - a hundred links. Like, it wouldn't be as quick of a - lemme go try this other platform, because they've created a community and there's a trust in Locker that they've already established. And I think that's been kind of part of our secret sauce as well.

Beck: I'm out as well.

Kristine: Okay.

Beck: It's not you. Cos you're sharp, you know this market, you've done the research. That's great. We've worked with many retail tech companies. It is a tough space. It’s just not my juice. So that's just my only reason for being out. But you're great.

Kristine: Thank you. 

Howie: My whole thing is, I don't know. And I wanna see - there is more you need to prove out. And I think with when you launch the mobile app and you're able to track, you know, metrics in a more targeted way -

Jillian: And conversion.

Howie: Conversions, engagement. I mean, this is all speculative. Do you have the secret sauce or don't you? The numbers will tell us.

Kristine: Yeah.

Howie: It's too early right now to know. Just to be clear, I'm out for this round. I wanna see all those things kinda come to fruition.

Kristine: Thank you.

Howie: But would love to stay in touch and happy to talk through more about fundraising strategy cos - it's - I think that's gonna be an important piece of this.

Jillian: Yeah. 

Kristine: Thank you guys.

Jillian: Thank you.

Howie: Thanks.

Al: Great meeting you.

Kristine: Likewise. Thank you guys. 

Jillian: You're welcome.

Beck: You're welcome.

Jillian: Breaks my heart every time. 

Howie: She didn't seem like a crier. I was actually surprised. 

Jillian: Well, she's also put 250 of her own money in, guys. 

Howie: I thought she was solid. There's something here. I mean, there's something here.

Al: She's got something here. I think the problem is with this kind of business, you need more proof points. You need to have that formula for success to say that, okay, you're not gonna be like all the other hundred others that failed over the past few years. You've got a formula that's different and you're showing me that math, so I don't have to do it. And I - instead I'm looking at this investment as why wouldn't I invest versus why would I invest. And I feel like we're all looking at it from the why would I invest, because we don't have those proof points yet.

Beck: It'd be totally different a year from now with way more traction to be, listen, this is the Gen Z's Pinterest. Let me tell you why. There's 500,000 users on here.

Howie: That's why I want to wait.

Beck: Buying 100,000 products a day. Don't you want to invest?

Howie: That's exactly why I wanted to wait. 

Al: The top part of the funnel was good. For a Chrome extension, you've got 25% of people who've ever downloaded it, like they're actively every month. That feels pretty strong. But everything below that was missing, right.

Howie: Yeah. 

Beck: Josh.

Josh: Hey . 

Josh: So Howie, if she'd come in here saying, I'm raising a million, a million five, would you have invested?

Howie: If she came in and was like, I'm raising a million on six or seven million cap, and we are going to get to half a million users 

Jillian: And here's how we're gonna do it!

Howie: And here's how we're gonna do it, and she had that conviction, I would, I would, I would be more inclined. 

Jillian: Can't stand making people cry.

Howie: I didn't think she was gonna cry. She didn't seem like a crier. 

Josh: Am I a crier?

Jillian: Yes.

Howie: Yeah. You're a crier. 

Jillian: Yeah, you are.

Josh: I did cry during my pitch, so I guess -

Howie: I almost cried when you hugged me. I haven't had a proper hug in so long.

Josh: I should have held on for a little bit longer.

Beck: Oh Howie.

Jillian: Well, that - then stop being this bachelor, this serial bachelor.

Howie: I'm trying. Do you know how hard it is to date?

Howie, we’ll bring a dating app on season 11. Just for you.

After The Pitch we were confounded. I couldn’t understand why the investors in the room didn’t see something here. We’re talking about the future of online shopping. 1 in 4 people on the globe shop online. That’s 2B people and trillions and trillions of dollars. 

Surely there are investors who get this business. Even if those on the show, did not. Two weeks after her pitch, Kristine got married. And then -

Kristine: we received a term sheet while I was on my honeymoon from a fund.

Josh: mhm

Kristine: The one thing with the term sheet is that the terms were not agreeable. It was a million dollar term sheet. For a 5 million valuation. 

Josh: [sigh]

Kristine: So we ultimately ended up walking away from that term sheet, but it did ignite additional conversations. So then I went into like some really deep due diligence with another fund with like their associate and VP. And then the last call was with the managing partner of the fund. 

Josh: mhm

Kristine: And she just kind of tore me to shreds in terms of, we had completely different views of how shopping works and like how a consumer engages in the shopping experience. And so we just weren't gonna see eye to eye on the vision and the experience. And so it was best, I think, for both of us at that point to just kind of walk away. 

Josh: yeah, you don’t need to be tied to a VC that’s like, you need to build it this way. You're like, no, I'm going to build it the other way. 

Kristine: She told me she hated the name Locker for the business. And I was like, okay, well, I'm going to take that one kind of personally. 

Josh: What?!

Kristine: Yeah

Josh: I think it’s a great name Cause it like implies what you do with the app. 

Kristine: Yeah. 

Josh: You save things in your locker. What? 

Kristine: So I was like, okay, now we're really not going to see eye to eye. 

Josh: We are not vibing.

Kristine: yeah, we were not vibing. 

Josh: Can you say more about what you did not agree on, like I really want to talk about what you think is the future of retail and online commerce.

Kristine: Yeah so her thesis was that people only use Google to ultimately search for something. And I was like, well, that’s never going to change. Like Consumers are always going to have that, like, googling for the product. That’s not necessarily Locker’s role in the consumer journey. Locker role is, you find the best XYZ. You put it in your locker until you’re ready to buy it. Or maybe you find 4 or 5 of whatever the internet says the best XYZ product is. and then when you’re ready to buy it, it’s keeping track of all those links for you. Or if you have best friends whose product recommendations that you trust. Now you can go on Locker and search from what they’re shopping for. 

Josh: Is that why you think investors so far seem to not understand your product? Is it because they don't shop the way your audience shops? 

Kristine: I think, I think that's definitely part of it. 

Josh: I guess I'm saying because they're old? 

Kristine: yeah, one piece of it I guess could be age. The other piece of it is gender. a lot of the conversations I've had have been with male investors, and they aren't, I mean, 85 percent of consumption in America is like driven by females. So it's the woman buying for the house. It's the woman shopping for her partner. And so it's definitely not speaking to the pain points per se of those investors. So I've had multiple investors say like, I'm going to get my wife on this and like give you feedback. I've had introductions to investors because their wives found the platform on social media. And were like, you need to talk to this girl. 

Josh: Yes

Kristine: and so that is a big piece of it too. 

Josh: Any other leads on VCs that you're working on? 

Kristine: so where I'm kind of at is we got a 500k check from another strategic angel. They’re a silent angel. They're just a high net worth individual one of my dad's friends. and I was talking to them about the platform and I was showing them how it worked. And I like, Was explaining and he was like, this is genius. I want in. and he ended up investing 500 K. And so where my mind is, is I'm going to build the vision and bring it to life and then be able to actually show them tangibly because a lot of the feedback we got from investors that passed was, we just want to see you have further traction points, which is bullsh$$t. We have 75,000 users. 50 percent of our burn is covered with our monthly revenue. So like we are capital efficient. We have users, they're doing what we want them to be doing. So we've created these inclinations of initial product market fit which is what the seed stage should be.

Josh: Right

Kristine: And all the feedback is get to this next point. And then we'll have that conversation. So I'm like, well, I can't get there if I don't have money. 

Josh: You know what? Forget those guys. Locker's awesome. I'm pretty hyped about it and I'm not even a crazy online shopper. 

Kristine: Thank you. 

Josh: Do you think you'll just end up building this company without venture capitalists?

Kristine: To be honest, if I can, I would love to. I think my experience with VCs so far, I think they're all like great people. It's like, they don't want to say something mean or they don't want to say the real reason of like, Hey, we just don't believe in this. Like something about it isn't working for them.But they don't tell me what that is. It's just, more traction, more traction. We'd love to stay in touch. But I think my thought process is I will raise the money on my own. I will prove you wrong. And then when you want to come in in the future, the valuation will be not as nice as it would have been. 

Kristine: Thank you guys for all of your support and everything. It was so fun to do the pitch. I feel like I learned so much about myself even doing that. 

Josh: really? 

Kristine: yeah I'm obviously very attached to my business. It is like my child. But I think removing some of their commentary, for example, like Jillian saying, she just didn't understand it. Like you feel that on a personal level because you're like, how do you not understand this? But then to just be able to come back and look at it now and say, okay, if she doesn't get it, it's not for her. And she's probably then not the right person for my cap table. Like I think I've learned there has to be buy-in on both sides.

Josh: I can’t believe you pitched 2 weeks before your wedding

Kristine: I was like, I need to get the app out and then I need to get married and then I'll be back. Don't worry, I'll be back.

Even if investors haven’t caught on to it yet, I think Kristine’s on to something. But it’s hard to pitch a solution to investors who don’t understand the problem.

This next generation shops very differently. And Kristine knows this, because she built this app for people like her. Hopefully she can find a VC that she ~vibes~ with. 

Next week on The Pitch… a college student sells his first company for 300k. And then drops out to start another.

Mark: Why continue to do this thing instead of going through college? 

Chase: I love the process of building a company. 

Mark: Mmmm

Chase: I also just love capitalism [laughs]

We’ll see you next week in the pitch room for our LAST EPISODE OF THE SEASON. We’re gonna do something crazy for this one… play the WHOLE PITCH unedited. You asked for it. We’re delivering

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This episode was made by me, Josh Muccio, Lisa Muccio, Kerrianne Thomas, Anna Ladd, and Enoch Kim with casting help from Peter Liu

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