Money Rehab with Nicole Lapin - Change Maker: Linda Findley, CEO of Blue Apron, on Turning Around Businesses and Being a Boss

Episode Date: March 11, 2022

Today Nicole talks to Linda Findley, CEO of Blue Apron. When Linda joined Blue Apron in 2019, the company was battling the fallout of a disastrous IPO. And yet, Linda stepped up to run the company and has been working on righting the stock price ever since. So… What do you do when it becomes your responsibility to get a project at work back on the right path? That’s what Linda covers today.  See omnystudio.com/listener for privacy information.

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player, GameStop. And should I have a 401k? You don't do it? No, I never do it. You think the whole world revolves around you and your money.

Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. As you know, here on Money Rehab, we feature changemakers,

public figures making change in every sense of the word, and along the way have been in or might still be in Money Rehab. Today, we're talking to a true business genius, Linda Finley, the CEO of the meal delivery company Blue Apron. When Linda joined Blue Apron in 2019, the company was battling the fallout of a disastrous IPO. And yet, Linda was undeterred. She stepped up to run the company and has been working on writing the stock price ever since. So what do you do when it becomes your responsibility to get a big project at work

back on the right track? That's what we're going to find out today. Linda, I'm so excited to have you on Money Rehab. I am such a fan. Thank you. Same. But before we get started, when we do our Changemaker episodes, and this is one of them, we start with a quick round of Money Rehab, Never Have I Ever. So financial never have I ever. Have you ever played? Never have I ever. I have. Okay. Unfortunately, there's no alcohol here. So if you've done something, just say you have. If you haven't, just say you haven't. Okay. Never have I ever negotiated a bill. I have. Never have I ever invested in cryptocurrency? I have not. Never have I ever taken out a mortgage? I have. Never have I ever regretted an investment? I have.

Never have I ever regretted not making an investment? Oh, I have. Never have I ever signed a prenup? I have. Never have I ever taken a mental health day? I have. Never have I ever argued with a family member about money? I wouldn't say it was an argument. I would say it was a stern discussion. An animated discussion. An animated discussion. Never have I ever relocated for a job? Oh, I have many times. Never have I ever for a job. Oh, I have many times. Never have I ever ordered from Blue Apron. I have many, many, many times for many years, even before I started.

And I just had these arrive in the mail last night. So I thought it would be a good chance for you to chime in. Chimichurri, shrimp, miso, honey, tilapia, hand cut parpadelle like our italian producer told me it's not parpadelle but parpadelle and sheet pan panko crusted cod what should i have for dinner well i had the parpadelle last night and it's amazing um i am also a big fan of the miso honey cod that is our more tilapia we've had done it with both so that is one of my favorites i think our fish dishes are just incredible they are incredible i am customer. I'm an investor with all transparency. And I'm so interested in hearing about all of the amazing work that you're doing with Blue Apron these days. But to get a little background on you first, I wanted to pull some threads together from your very impressive career. So before you were the CEO of Blue Apron, you were the COO of

Etsy. And before that, the COO of Evernote. So with Blue Apron, when it went public in 2017, years before you joined the company, of course, it was a ginormous disaster. I mean, that's fair to say. I think one of the worst IPOs in the past 10 years has been reported. So you stepped into a mess. What did you think when you got this opportunity in 2019 to step into all of that? You know, for me, I just think it's incredible when, yes, you step into something that needs a lot of change and definitely is a mess, but you also step into a great product and a great brand. And that's really what I had the honor of stepping into. And when I see an opportunity to connect execution with such a phenomenal brand, such a

phenomenal product that not only has an opportunity to enrich people's lives. I mean, we talk about it all the time about how food is one of the most intimate parts of everybody's day. And I bet if you think back to some of your best conversations and best moments, they happened over a meal, their cultural connections, it's highly linked to sustainability and understanding what you're putting in your body, health. It's just such an important space that when you see a brand and a product with that strength and the opportunity to really bring the execution up to that brand and product quality, it's a pretty attractive opportunity to really bring the execution up to that brand and product quality, it's a pretty attractive opportunity to have real meaning in what you're doing on a day-to-day basis. We all work really hard. You might as well do it for something that's actually going to have

an incredible impact. And for me, I always think that the best long-term companies are the ones who have been through significant challenges because, frankly, they're a lot more real. They're not just relying on, you know, what's happening in the world. They're actually focused on driving real change. And that was extremely attractive to me. The best people, too, have been through a lot. That's true. But that's a different conversation. That is a very different conversation. Since you took over the company, though, you've improved the numbers a lot. I mean, you really turned operations around. I just pulled some stats from the investor section on your website. So for everyone listening, you can

pull all these numbers. Being a public company, you can see all of this. Average order value, so the amount that your customers buy with each order is up 10% over the last two years. Orders per customer are up 9% over the last two years. Revenue is up 13% over the last couple of years since you've been there. What gave you the confidence that you could turn this ship around? Well, really, again, you go back to you start with a great brand and a great product. But then, frankly, it's really just about the customer. We have so much customer data. We know exactly what people are looking for. We know exactly why they come, why they leave, customer data. We know exactly what people are looking for. We know exactly why they come,

why they leave, what they need in this product. And it's an interesting little secret of life in personal life and also in business world. If you just listen, you'll learn a lot. And if you listen and you act on it, you learn even more. So we really just took everything that we already had as assets and said, how do we make this better? And focused on that customer information and how we could use that to dramatically improve the product. There was so much opportunity and so much love from the strong customers that had been using the product that they were very willing to tell us, here's what we want, here's what we need. And we said, okay, we're going to actually build it. It also helps that I was a customer myself.

I was a customer for three years before I joined the business. So I knew the product pretty intimately. I had tried all the different products on the market. I knew where the value was. And what we really wanted to do was figure out how to increase that value for every customer. And we did through those numbers that you just walked through. Especially with these turnarounds, you've done this twice. You were the CEO of Etsy and you led that turnaround. So does doing it twice now make you known as the turnaround expert? You know, I think there's lots of aspects of what I do that

are applicable to turnarounds. But for me, it's really about the opportunity that I see, the passion that I have for the product, the need of the customer and do those intersect. And sometimes it's a turnaround. Sometimes it's a more established company. Sometimes it's an organization where everything's going well, but there's a chance to pivot and accelerate.

And so, yeah, it is something that I particularly love to do, but it's also something that I just think is really rewarding when you take something that has so much potential and you realize that potential, the returns are massive. So I guess there's a difference between returns and what the stock is doing. Can you help us make that linkage? Because even though you've turned around a lot of these results that we've talked about, the stock market isn't necessarily giving the company that much love yet. Do you think there's been a lot of bad memories and trauma from what happened with the IPO? And how long do you think it takes for memories to on Wall Street? Well, I think it's something about memories, but it's also the chance to really drive those metrics and create real change. And I do think it takes time to actually make that turnaround

happen in a sustainable way. There are levers you can pull to make it happen faster sometimes, but they're not always lasting for the company. And we knew that this was going to be a significant long process of systematically saying, okay, let's create value for every customer, bring up that average order value, everything else you just mentioned in the metrics, drive that value per customer. The more valuable each customer is, the more we can then invest into marketing and driving new customers in. And then the cycle starts to feed itself and you build the flywheel. That does take a bit of time. I will say it takes a bit more time when you add a pandemic and a couple of massive macro

economic crises into the mix. But I think in general, if you're really thoughtful about building change, you tend to build it pretty significantly. And I've seen perceptions change very quickly. When I joined Etsy, it was the lowest stock price in Etsy's history. And over time, you just said, okay, let's move this needle and let's really be thoughtful about building something that's going to drive sustainable change in the business and long-term value in the business. Hold on to your wallets, boys and girls. Money Rehab will be right back. Now for some more Money Rehab.

Yeah. For listeners who are thinking about investing for the long run, which we talk about all the time on the show and putting our blinders on through the casual pandemic you mentioned and wars and other catastrophes, and there's always going to be chaos and geopolitical issues. Is there general advice that you would give them that they might not understand without having been a leader of a public company? How can our listeners find the best opportunities to invest? What kind of advice would you give them? Well, you know, I actually think it is very interesting when you think about what's out there in the world and what's happening in stock markets.

There's a lot more participation in stock markets than there used to be. There's a lot more breadth of owners of equities. And that can cause a lot more volatility when it's based on just day to day events. And so I always advise people to think, first of all, I don't think it's a bad idea to invest in something that you love. Invest in a space that you know. I think there's always this thought of, I need to invest in this thing over here. I have no idea what it does, but it looks like it's going to be big. And that's fine. You can certainly dip your toe in new waters and there's nothing wrong with that. But it is also quite beneficial to invest in something that you're really passionate about and that you really love so that you can

follow it and you can think about the strategy of the business. You can think about the strategy of the market and get a better idea for where this might be heading. You as a consumer in particular have the ability to think ahead and say, well, here's what I want and here's where my needs are. There's nothing wrong with investing in those businesses that actually are near and dear to your heart. And then balancing it out with some other ones where through conversations with experts and through asking the right questions, you can say, well, here's my other big bet. Here's something that I don't know as well, but I predict that it will do quite well. The other advice that I would just give is you will drive yourself insane if you

are watching the stock price every single day and watching what happens and how things move. That being said, it's not a bad idea to watch how different macro factors do move broader swaths of stocks so you can understand where things might start to go in the future as you see these changes. When the Fed makes an announcement and how does that impact stocks versus what happens when there's a weather event versus a political event, all of those things and understanding how they move the markets in general and watching for those patterns will help make you a smarter long-term investor. Yes, yes, yes, and yes. Could not agree more. We talk a lot about also index funds and chilling here on the show.

And when we do that, we talk about the S&P 500. Of the 505, which is annoying to me, companies of the S&P 500, only 31 are led by female CEOs. By comparison, 24% of the U.S. Senate, and we talk a lot about how more women should be represented in politics, of course, 28% of the U.S. Congress are women, but only 6% of the S&P 500 are led by women. So how can we make sure that you, as a woman CEO, get the support from us, your fans and champions that you need and deserve? You know, I think that's a really, really interesting question. And I think there is a lot of, you know, there's been all this work done over time on all the different things that

women need to change about themselves in order to make better CEOs. You know, you hear this all the time. You should be more assertive. Don't let anyone interrupt you. Don't use the word just. Don't do this. Don't do that. We're sorry. Yeah, we're sorry. I'll be honest with you. I've used all those words my entire career and it's been fine. I think that we spend so much time thinking about how women should adapt in order to become the model of what a CEO looks like. We don't actually think about the fact that the model of a CEO may need to change. And that the answer actually lies somewhere in the middle. And so I think that there's a lot that we can all do,

and by we, I mean women in general, to break down our own stereotypes in our mind, but also continue to break down our own stereotypes in our mind, but also continue to break down stereotypes across the broader population by accepting and understanding that behaviors may change over time and what a CEO looks like today may be very different in the future and continuing to, as my friends have previously said, lift while you climb. You know, as you're building your own career, bring people with you. Don't step on them, bring them with you. And that's true of men and women.

Always lift while you climb. Support female-led businesses. Support roles and companies that drive diversity in their leadership ranks. And just pay attention to that aspect of running a company because we've seen time and time again that diverse leadership leads to better results. And so how do you help support that both through your investment dollars, but also through your own career as you're pulling people along with you? Yes. Put your money where your mouth is. Your money is a vote in so many ways. And yes, for full transparency, I did invest a very little bit. I was early on public. I really like that platform. And so I talked about investing when you took the helm, because I do really like

to put my money where my mouth is. And I think you're absolutely right about lifting and climbing through diversity. You recently committed that Blue Apron's board is going to be at least half women and half people of color. Amazing. Thank you. Why should our listeners who might be thinking about buying Blue Apron stock or following the company care about your commitment to diversity? Well, I think it's actually extremely important for multiple reasons. And I was lucky enough, frankly, to inherit a board that was already 50% women, which was great and had been for quite some time. And that has continued even as we built new skill sets on the board and continued to refresh and build out the board. one reason you want diversity at the top of any of your businesses is because you really want diversity of thought. You want different concepts and ideas because it is not a black and white world. And by black and white, I mean clear lines. It is not a, everything is either this or this.

It's not right or wrong. There's lots of areas of gray and without having diverse voices, helping guide the way and making sure that you're not always focused on your own mindset, which we all have, you're less likely to make the right decision. The other reason is because our customer base is diverse and it's important that we have representation across everything that could actually help us be better for our customers. And so having a diverse board really brings home that diversity of thought that mirrors what our customers care about. And that's the number one thing that we care about, which is making sure that we're growing our customer base and providing value to them. Yeah. And it's not just the right thing to do, although it is the right thing to do.

It does drive business. So in the end of the day, you run a public company and it does drive bottom line. Another issue that some people think you run a public company and it does drive bottom line. Another issue that some people think is a nice to have and it doesn't matter for the business is going carbon neutral. You have also committed Blue Apron to go carbon neutral by the end, I believe, of March. So that's coming up really soon. As a customer myself, I've seen a ton of packaging, of course, and it was something that I was thinking about when I would unbox my own orders. Why did you make that commitment? And besides just being good for the planet, of course, because it is, is it good business? It is very good business. And I will say there's a couple of important things to note, because you referenced the packaging in the box. Even before we made that commitment, and we're talking, even you go back to 2019,

using Blue Apron represents 25% lower carbon footprint than going to the grocery store. Because a big part of the theme of what you're touching on is overall awareness. And it's very easy to just look at something on the surface and say, here's what's happening. And here's what I'm concerned about. The interesting thing that most people don't see is the amount of food waste in the grocery supply chain and the amount of packaging in the back end of the grocery supply chain. And so the reason that we were able to achieve 25% lower carbon footprint than going to the grocery store is because we are a direct consumer model and we source directly from producers. So 80% of what we put in the box comes directly from the producers, goes into the box, and then goes to the customer.

So we have very little food waste. And of what we actually have in the business, anything that doesn't get used in the consumer's box either goes to a food bank or goes to our employees. So we were able to actually provide more than half a million meals to our employees last year as part of this program. And we were able to provide 1.2 million meals to feeding local food banks. And so that kind of full circle of making sure you're using every single thing you have is one of the critical reasons that food needs such environmental transformation and the ability to drive change there. So knowing the differences in the supply chain, you start to see how even with the packaging that we have in the box, which is very recyclable,

we're partnered with How to Recycle. We're very clear on how to do that. We're the first box to have drain safe gel packs in our box. We're always focusing on improving the packaging. Even with that packaging that helps provide safety and sanitation for the food coming to the customer, we still represent a better carbon footprint than the grocery store because of that reduction in waste. At the same time, there's a lot more that we can do. So we're going carbon neutral by the end of Q1 in order to make sure that we're

able to offset any of our carbon footprint. But in addition to that, we're also systematically driving a plan to reduce our carbon output over the next several years. And we'll continue to update people on how we're actually going to remove carbon from the system in general. That makes sense. And switching gears slightly, we have spent on the show probably the last year trying to educate as well. And we've learned a lot about short squeezing and as well. And we've learned a lot about short squeezing and short sellers. And we've talked a lot about that on the show. Everyone saw what happened with GameStop, of course. Some big short sellers got taken down by this huge number of everyday or retail investors during this historic short squeeze. Now,

some people think that Blue Apron could be the next GameStop. Why do you think short sellers have come out and said this or attacked Blue Apron in that way? And what message would you give to those who are betting against you? You know, I can't really comment on the stock price or on short sellers. But what I can say is we have always been focused on making sure we're driving long-term sustainable growth and pulling the right levers to do that in an effective way. I think that we're very, very careful

in making sure people know we're currently investing and leaning into growth. And that's where we're putting our dollars. And those are all efficient dollars that will pay off in the long run. One of the big challenges, frankly, that we continue to educate people on is we are a seasonal business. And how we choose to invest changes our cash burn profile, changes how we actually invest dollars. So and this is, I think, an important lesson when you're thinking about long term investing is you need to be thinking about the fact that

know the business well. You can't just take one quarter and multiply it by four and think you've got all the numbers figured out because that's not how most seasonal businesses work. So we, for example, have usually high cost and high growth Q1 and Q3, and then Q2 and Q4 tend to be our lower cost and lower growth quarters, just because of the seasonality of the meal kit business in general. But what that means is, for example, last year, we chose to lean in. Last year meaning 2021. I know it seems like it was just yesterday because it almost was. But we chose to lean in aggressively in Q4 and raise our costs, meaning lower our margin, higher than normal because we wanted to lean into growth for 2022 and we wanted to invest in advance. So when you're thinking about businesses and when you're

thinking about building an impression of what is the long term history or future of a business, just taking something and multiplying it by four isn't the right way to think about it. A lot of businesses have seasonality and making sure people understand those ebbs and flows and when you get cost benefit and when you actually add more costs is a big challenge. And so we spend a lot of time making sure people don't do that. They don't just say, oh, they spent this much in Q4. So if you multiply that by four, that's how much cash they're going to burn. No, that isn't how it works. There are other quarters where we'll actually bring cash in and then quarters where we'll

invest more heavily based on seasonality. That makes a lot of sense. So even sophisticated Wall Street investors, it sounds like, need to be educated in this type of business. I mean, we normally think of it for holiday, right? So what would the takeaway be for listeners who are trying to analyze stocks for the first time and take a look at seasonality? Yeah. So an example on our seasonality is Q3. So Q3 is a very interesting quarter in the meal kit industry in general. three is a very interesting quarter in the meal kit industry in general. It's summer. So people take a lot of vacations, which means they might be homeless or they might be grilling out more,

or they might be doing something along those lines. And so that I think creates an interesting dynamic, but there's another dynamic that happens, which we're a food company. We're basically very regulated and we want to make sure the food that comes to your door is safe. It's also hot during the summer. So we take extra care in our packaging and therefore we invest more, even though it's a lower demand quarter, it's a higher cost quarter because you have to invest in that packaging to make sure the food that's being sent out is very safe. And that's all important to the entire ecosystem of the business. Because, of course, in future quarters, it might be colder out and therefore you need less packaging.

But at the same time, you're also leaning more heavily into demand. So that's how that kind of works out. So in each business that you're actually following, some of them do it based on calendar year. They'll move their fiscal year. You see a lot of retailers that have a different fiscal year than the calendar year because it better reflects the seasonality of their business. Get to know that industry a little bit more and understand when the demand comes, but also understand when the cost comes because they're not always at the same time. For today's tip, you can take straight to the bank.

If you're thinking of cashing out on a losing investment, read up a little bit more about how the company is planning on turning things around. If the company has announced plans to hire a new leadership team, maybe hold on to your shares to see if someone smart and savvy like Linda will be stepping up to the plate. If so, you should consider holding on to your shares because the future might be looking much brighter with someone like that at the helm. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy.

Huge thanks to OG Money Rehab team team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.