Subscribe: Apple Podcasts | Amazon Music | Blubrry | RSS | More

Part One Audio:

Part Two Audio:

Michael Jacobson wanted to help his uncle sell his flower shop, but now it is growing like a weed.

Stephen Semple:
Hey, it’s Stephen Semple here and we are without Dave Young today because we have an opportunity for a really, really special interview. I have with me Michael Jacobson from French Florist and we had a conversation, it was probably about a month and a half ago, and I just thought some of the things that you shared was amazing and I was like, “I’ve got to get Michael onto the podcast.”

Now, the first question I asked Michael is, what’s your title? “We don’t believe in titles.” I said, “Are you the founder?” “Well, sort of.” That’s where we’ll start. That’s where we’ll start the story about French Florist in terms of how you came to be the owner and what’s happened in the time that the business has been with you.

Michael Jacobson:
Awesome. Thanks Stephen. This is a generous introduction. I appreciate that. Thank you. When I say we don’t believe in titles, we really don’t. As we get to be a bigger organization, we brought on a Chief Operating Officer who’s a lot smarter in operations than I am. And that’s become my job is hire people that are smarter than you and give them the reins. So maybe, I don’t know what title that is, but whatever that job is, and she tells me we do need titles because it helps with accountability and that kind of important stuff. I thought it was a little boring, but she did convince me.

Stephen Semple:
Before we go on, what size are you at today? You’re large enough that you brought in a Chief Operating Officer, so how many employees do you have now?

Michael Jacobson:
We’ve got just over 100 employees now.

Stephen Semple:
How many locations?

Michael Jacobson:
We have 10 locations now and we’ll have 17 open by the end of the year. We’ll have 60 open by the end of next, so a lot of our employees right now aren’t necessarily for the immediate now, but we’re building the infrastructure to support tomorrow.

Stephen Semple:
That’s cool. That’s amazing growth, so 100 people now, but you’re really looking to go to that… You’re at 17, going to 60 locations. That’s awesome. Going back to the early days of how you found yourself owning French Florist.

Michael Jacobson:
Oh, gosh. Okay, so I don’t know if this will resonate with the audience. Hopefully it does. I’ve graduated college… You hear the statistics of how many startups fail, whatever it is, 90, 95% of startups.

Stephen Semple:
I did, most…

Michael Jacobson:
And I actually joined a few startups in college that I didn’t found but kind of joined their team. All of them but one failed, so I saw firsthand too. And I took a job in super boring corporate consulting right out of college, paid super well, great opportunity. I could work alongside awesome executives at really awesome companies. That was the pitch. I didn’t make it even a year. I made it about one year and it just didn’t feed that fire in my belly. That was the wall that my ladder was leaned against and I could sit there and climb that ladder or if I’m not happy, do something about it.

And so I had my ear to the ground with different opportunities and I got a call from my uncle one day and he says, “Mike, I’ve been running my flower shop for 38 years. I’m working six days a week, 60 hours a week or more, and I’m losing money. I’m tired. I don’t want to run the business anymore.” I studied finance, so he said, “Can you help me sell the business?” I said, “Sure, happy to take a look at it.” That’s how I got in and it evolved. I originally joined French Florist to help my family out and sell the business.

Stephen Semple:
You’re initially there to help with the exit?

Michael Jacobson:
That’s right.

Stephen Semple:
Okay, cool.

Michael Jacobson:
From there I went around and did what any normal exit would look like, where you go and you look at comparables, what are other florists doing well, what are they not doing well? How much are they selling for? Looking inside the business, let’s clean it up a little bit. Let’s get some proper bookkeeping and accounting in place so we have some numbers that we can share with prospective buyers.

You know what I realized really quickly though was there’s such an incredible systemic issue in the floral industry. It wasn’t just my uncle struggling, it was all florists are struggling with the same exact issues, if not the same exact, very, very similar issues. You have the dominant market player… And Stephen, I’ll ask you, this’ll be interesting, if I say french fries, what company do you think of?

Stephen Semple:
It’s McDonald’s. McDonald’s, Wendy’s.

Michael Jacobson:
And you’re in Canada too, so I’d be curious to get your answers here. If I say coffee, what company do you think of?

Stephen Semple:
Starbucks would be top of that list.

Michael Jacobson:
Probably the top one for me too.

Stephen Semple:
Well, for us it would be Starbucks and Tim Hortons, those are the two.

Michael Jacobson:
That’s what I was expecting. Every once in a while you’ll get Dunkin’ for somebody on the East Coast too, but generally there’s a clear player that comes to mind.

Stephen Semple:
Yes.

Michael Jacobson:
If I say flowers, do you have a company that comes to mind?

Stephen Semple:
For me, it’d be like FTD or Teleflora or one of those, but certainly not anybody local.

Michael Jacobson:
You’re right. The top three players in our market, 1-800-Flowers, FTD, Teleflora, those are the three players. All of them have the same exact model and what that model is, they take an order online and they syndicate it to a local florist, fine. The problem they take up to a 40% commission after all of their fees on that order, so you’re paying $100 for the order, the florist is getting $60 or $65 on that.

They’re getting hit so hard and a lot of florists are super reliant on the order aggregators for their orders. And then obviously most importantly, more than anything, that bleeds into the client experience and the client experience, you order… That’s where you get the memes on the internet where it’s like what you ordered versus what you got. And it’s just this massive discrepancy, that’s how that happens. Go to your local florist, that’s my pitch. That’s one systemic issue, but also the lack of technology.

The downside of the supply chain, how we’re importing from the farm is unbelievably antiquated as well. And there are tens of thousands of flower shops in the Americas and 99% of them are single unit owner operator, mom and pop, so it’s terribly fragmented. Nobody has the economy of scales, nobody has a brand. Anyways, all of those amalgamation, lots of issues there. Where do you even start?

But that was interesting to me because I was like, this is a very real problem where ultimately the consumer experience… People, they have such high expectations with Amazon and two-day delivery and now it’s two hour delivery. But when it comes to the floral industry, I don’t know how consumers have been so okay with how the flowers are getting delivered. They become complacent. And when I saw my uncle’s business and I saw what a good delivery could and should look like and that was not the norm for our industry, that’s a really cool opportunity to build a brand that’s creating very real value in the world. And we’ll get into why flowers as well.

Stephen Semple:
And you bring up something very interesting, and this is an ongoing theme from the podcast, it is amazing how we’re over 200 episodes in, and I’m going to say that the vast majority, probably 200, almost all, I can only think of one or two exceptions, these businesses and these ideas have been started by outsiders.

And I think the reason why often it works with outsiders, an outsider comes along and looks at it and says, “This makes no sense.” But the industry goes, “But this is how we’ve always done it and there’s these long list of reasons why we need to do it this way.” Where an outsider says, “I know if we do this differently, consumers will love it and if consumers will love it, they will buy from me.” And I think that complacency not from the consumer, I actually think the complacency comes from the industry because the consumer’s not been given any other choice.

Michael Jacobson:
You’re right. You’re 100% right.

Stephen Semple:
And then when they’re given that choice, they’re like, “Oh, my God. This is amazing. Give me more.” And that comes from that outside perspective, so good for you.

Michael Jacobson:
Nice. And I’ll share one of the things that could be interesting too. The business’s name was French Florist, and I said, “Why are we called French Florist?” And my uncle didn’t have a good answer, but I was like, “We need to have some intentionality about the business. We’re in flowers too. We’re delivering emotions and really powerful emotions too.” It’s like we’re not necessarily saving people’s lives, but we are delivering love pretty much. That’s it.

I’m yet to be convinced that there’s a more powerful emotion that exists than love, so we feel the weight of what we do and we value what we do and we don’t want to mess it up. When somebody is telling somebody that they love them and we’re the vehicle to help them do that, that’s an important task. We do carry that with weight. And so I said, “We need to have intentionality about what we do. We’re an American brand. We’re called French Florist. How does that make sense?”

I really sat down for a really long time and I said, “Why are we called French Florist? Do we need to change our name?” I started to fall in love with the name and I started to fall in love with flowers in the floral industry more and more as soon as I started asking that question. We are called French Florist because while we’re not French, it is a nod to the European and specifically the French way of living where flowers are not viewed in Europe as a nice to have, they’re viewed as a need to have because they’re a reminder that life can be beautiful. Flowers are love. As a matter of fact, I can’t think of a better gift than flowers to give somebody to express love to them. Diamonds? Pizza? Maybe pizza, but I think that was-

Stephen Semple:
Hold on a second. I got a lot of jewelers that sell diamonds, so diamonds are pretty good too. But to your point though, a diamond is also not an everyday gift.

Michael Jacobson:
Exactly.

Stephen Semple:
But I completely agree with you, flowers are very much, that’s the emotional underpinning to it. If somebody is sick in the hospital and you’re sending them flowers, you’re sending them flowers because you’re hoping it brightens their day, makes the room a little bit more special and that when they look at it, they know that you’re thinking about them. That’s what it is.

Michael Jacobson:
I’ll push that a little bit further because I think we saw an opportunity to fix issues within the industry. We also see an opportunity now to take the American mindset and push it a little bit because I think we’re… Especially in this age of technology and automation, which don’t get me wrong, our business is unbelievably tech enabled. We’ve developed a lot of tech. If I’m ever talking to an investor, we’re a tech company. We’re not a tech company, we’re a floral company, but you get the point.

Stephen Semple:
You’re a floral company that’s using a lot of technology.

Michael Jacobson:
We are indeed. Why? Because it provides a better client experience. Ultimately everything we do is for that. It’s all about the client experience. And so if you take American culture for what it is today, people buy flowers if someone’s in the hospital, Happy Birthday, congratulations. It’s sympathy for something sad. It could be condolences, and there’s grief. Grief is the emotion. I might challenge that a little bit and say that is the American culture today.

What the Europeans do that I really fell in love with is they might give flowers to somebody on a random Tuesday. Why? Just because, because they deserve it. And when we’re looking at the two biggest holidays, say for example in America, Mother’s Day and Valentine’s Day when it comes to flowers, I would say if you gave your mom flowers on any other day except for Mother’s Day, I think that that’s going to be a more powerful gifting experience than buying flowers for your mom on Mother’s Day.

Stephen Semple:
That’s really interesting. It’s funny, I learned this in the investment industry, so I used to work in the investment industry and somebody brought me that very idea. Now, it was a little bit different, so we stopped sending out Christmas cards and what we would do is we sent out Thanksgiving cards.

Michael Jacobson:
That’s amazing. Who does that?

Stephen Semple:
Well, and if you think about it, Thanksgiving has a similar emotion to Christmas from the standpoint you’re celebrating together with family and you’re doing all of those things. I’m in Canada and we would find these cards that would have these beautiful fall colors and that’s what we would send out.

But you’re absolutely right. For years, and I would buy really high-end, beautiful, expensive Christmas cards, never got a comment on it. Started doing Thanksgiving Day cards, it was an amazing number of people I was like, “Thank you for the Thanksgiving…” Why?

Michael Jacobson:
Wow.

Stephen Semple:
Because I was the only one doing it.

Michael Jacobson:
Yeah.

Stephen Semple:
To your point, higher impact, not expected. It’s a little bit of a surprise and delight. Cool.

Michael Jacobson:
I couldn’t agree with that more. Sending a card message is up there too and I think they’re so underrated. We actually send a handwritten card to every single first time client that orders with us. I think not to be understated, we started doing it when we couldn’t track the ROI on it, we did eventually start to track the ROI on it and the ROI was always massive on it.

Stephen Semple:
What do you mean by that? What changed and what changed the ROI?

Michael Jacobson:
Literally the only variable that we changed when we did start to test it properly, it was like an 18 or 24 month proper A/B test to try to get statistically significant results, all that.

Stephen Semple:
Okay, great. You let enough time go to really make it… And this is important. This is really important. A lot of times I get people doing these A/B tests. I had this conversation with a client a few weeks ago and he was like, “Well, how long should we do it?” And I told him and he said, “Well, I was hoping that we could just do this for a week.” It’s like, “A week’s not going to tell you anything, dude. I’m sorry. You’ve got to have some patience on this.” You did an A/B test. Is this around the handwritten note?

Michael Jacobson:
We measured customer lifetime value over the next 18 to 24 months on people who received the note versus who didn’t. And we just split our clients down the list. Half the people got it. Now we send it to everybody. But we started out not, it was one of those… I don’t want to follow intuition, but it’s like it’s just the right thing to do kind of a thing. It turns out it’s a pretty virtuous cycle when you do the right thing and the money follows. We learned that a few times. That’s one example of it.

Stephen Semple:
You did this test on the handwritten note and that’s made your lifetime value of your customers more valuable and made them more sticky. And the beauty of a better lifetime value is it means you can spend more in client acquisition and marketing. In terms of this growth you’ve gone through because you had… When your uncle, it was one store, you’ve already taken it to 17, so what’s the key that you did from taking it from that one? Are they all corporate stores or are they franchise?

Michael Jacobson:
Some of them are corporate owned and we are expanding our corporate footprint a little bit, but we’ve shifted into the franchise model type. And I’ll tell you why and when I hear the word franchising, I get a bad taste in my mouth even till this day. But when we were looking at how we wanted to expand, so we had… Can I share numbers, Stephen? Is that okay?

Stephen Semple:
Sure. If you’re comfortable sharing numbers, share numbers. That’s awesome.

Michael Jacobson:
Our first flower shop, I came into the business, we were doing about $600,000 in revenue, so it was not nothing, but a lot of the revenue was coming in from 1-800-Flowers and those types of models. And so it was not-

Stephen Semple:
Okay, so it was doing $600,000. Most of it was coming where you had no control over the customer. It was coming from that outside source where you pay 40%. Okay, great. All right.

Michael Jacobson:
Yeah.

Stephen Semple:
It was 600, but not even a quality 600 is what I’m hearing.

Michael Jacobson:
Yeah, that’s right. Yeah. We were losing money when I came into the business. There was a reason we wanted to sell, right?

Stephen Semple:
Yeah.

Michael Jacobson:
We cut all our relationships with all of those services pretty quickly, and so revenue dropped. We got to a place where we were breaking even relatively quickly. We started investing in operating technology that would help us in marketing and better brand, supply chain for better margin and higher quality product, other consumer experience related stuff. And we started to grow. We started to do well.

Obviously it’s a very accelerated story, but long story short here, 600K to 1.2 million to 2.4 million to 3.6 million to I think it was 4.8 million. And then the next year was 9.6 million out of one flower shop, 9.6 million.

Stephen Semple:
I want to drive this home, $9.6 million out of one flower shop where you’re not using any consolidators. This is all your customers. Look, that’s a big number in any industry to be selling $10 million out of a single shop. I’m going to argue that that’s probably the most successful flower shop in America.

Michael Jacobson:
Yeah, it’s up there for sure. You could say we’re probably the largest floral shop in America now. We’re humble enough to recognize that it wasn’t that hard because we just put in some modern practices and focused on the consumer and the rest fell into place. As a matter of fact, I would go so far as to say we’re actually totally not in control of how successful we are, the marketplace is, so we’re happy that the marketplace has been receptive to our offering.

Stephen Semple:
But you’ve brought in an offer, so what is it that you’ve done different on the offer that is… Because look, you don’t go from $600,000 to $10 million in sales in the six or seven years just by automation, because then you’re the world’s best kept secret. There’s some things that you had to do to become known in the marketplace, so what is it that you did on that front?

Michael Jacobson:
It’s four major buckets. The first one is technology infrastructure. We’re millions of dollars deep into our custom proprietary software right now. The industry-leading tech at the time, a blue and white screen, you have to push F12 to get to the next page.

Stephen Semple:
Just looking, do I still have an F12 on my… Oh yeah, I do. I had to check to see whether they still had that on. That’s how much it gets used.

Michael Jacobson:
You never used it on a Mac. That was the first, there was no tech out there that… We didn’t want to build tech really. If there was something out there, we would’ve. But there was a real pain, a real problem, and we could solve it by building some custom tech that ended up being the heart of how our company operates, we’re incredibly tech enabled.

Why do we do that? When the designers come in, they operate off an iPad, they get to spend more time designing, less time with administrative boring stuff, and they’re the soul, they’re the magic. And so we want them doing that. And that’s honestly where they get their most fulfillment too, so they become happier, they’re more productive and it allows us to pay them better as well.

Stephen Semple:
They’re actually working as florists like what they wanted to do?

Michael Jacobson:
Yeah, exactly.

Stephen Semple:
Because actually designing the stuff. Got it.

Michael Jacobson:
Crazy to think about, right? Like the florist is-

Stephen Semple:
Crazy. They got into it because that’s what they wanted to do and you’re allowing them to do it.

Michael Jacobson:
That’s right.

Stephen Semple:
But that’s a big deal because in many industries what ends up happening is people come into it and the thing they wanted to do, they’re actually not allowed to do. We see this all the time. Okay, so awesome. You’ve done technology too, and one of the great outcomes of that is the people are loving what they’re doing. That’s awesome.

Michael Jacobson:
Yes, and that’s huge because if you’re not feeling a certain way on the inside or however you are feeling on the inside, that’s what’s going to reflect out on the world.

Stephen Semple:
Absolutely.

Michael Jacobson:
And that comes down to we’ve learned in our organizational health too. If our organizational health is not good, then that’s often reflected out in the client experience. If we have a customer service rep who’s feeling like they’re underpaid or they are mad at the company for something, it’s going to bleed into the client experience, right?

Stephen Semple:
It just does.

Michael Jacobson:
We’ve learned that. Okay, so tech is covered. The second one was supply chain. The floral industry is wild, where the flowers grow on a farm in all different sorts of countries, Columbia, Ecuador, Thailand, Canada, Mexico, some in the United States as well, all over. And we fly them in on either… They could do cargo freight on a boat, but we do airplane on cold storage because it’s faster.

We want to try to make sure that by the time it gets to the consumer, the longest base life possible is there, so we fly them on a cold freight. It goes from farm, to consolidator, to a processor, to a logistics agency in the country of origin, flies to the country that is in our facility. Then typically, traditionally it would go to a wholesaler and then to the retailer, and then finally to end consumer. I don’t know how many… I think that was about seven or eight.

Stephen Semple:
I lost count.

Michael Jacobson:
That’s a lot. That’s a couple of days at least that every player is holding onto those flowers. Somebody could be holding onto a rose for 20 days before it makes it to your home, and that rose is not going to last that long, so if we could cut out a massive amount of that supply chain and virtually just order directly from the farm, we knew that not only were we going to get better pricing, because we’re cutting out intermediaries, but we’re also going to get better quality product that holds up way more. What a virtuous cycle there? And we can pass some of that discount onto the consumer.

We don’t compete on price, but we have way higher quality product that is very price competitive in the marketplace, giving us higher margin, giving the client experience and enhancement, so we saw that as a massive opportunity. We put a lot of work into that, so supply chain was the second.

The third is client retention and really looking at marketing from a quantitative lens. Both client acquisition and client retention, there’s a lot of strategy there to unlock conversion rate optimization, SEO, email marketing, those handwritten notes that we talked about earlier was one of those initiatives. And there’s a lot of different initiatives that we do to develop a relationship with our client.

The fourth bucket has actually been the biggest impact for us. And that is awesome. We have a good product, we have good customer service, we have good client experience. How do we go from good to great? A good company does all of those things. We deliver a good product to the marketplace. And that alone did take us really far, honestly. That actually took us to the 9.6 million, so it’s crazy. What’s propelled us far beyond that number is, I guess it’s still within the bucket of marketing, but it’s really the soft, irrational, creative piece of marketing that’s emotionally charged.

When somebody purchases from us… These are somebody else’s words, but they made a lot of sense to me, why does somebody buy a Porsche? To get them from point A to point B? Definitely not. They buy a Porsche because it makes them feel cool. Why do they buy a Rolex? It’s not to tell the time.

Stephen Semple:
In fact, I could actually argue the Rolex is not the best watch.

Michael Jacobson:
It’s not, a Timex does wonders, right?

Stephen Semple:
Yeah.

Michael Jacobson:
There’s an emotional, irrational piece that is actually very, very hard to measure the ROI. But I think when we started understanding how powerful flowers are, instead of saying things like, we have the best customer service, we have the best quality products like we do, but A, that’s super boring. B, that’s not even our place to say that. The marketplace decides that and we earn that reputation. We don’t say that reputation. Or C companies that say that usually aren’t that. This is ironic because I’m about to say it. I don’t say that I’m passionate, obviously, I’m just passionate. We don’t say we’re luxury, we’re a premium brand because of the way we act.

Stephen Semple:
I make fun of that all the time. It’s like if I’m the guy who says, hey, you can trust me-

Michael Jacobson:
Red flag.

Stephen Semple:
… right away you’re like, yeah. Or, hey, you should invite me to party because I’m a fun guy at parties. As soon as we have to say it, it’s actually no longer true. We need to have people feel it. Oh no, no, no, no. In my TEDx Talk that I did, the very, very first slide, the very first slide is win the heart and the mind will follow.

Michael Jacobson:
That’s exactly right. We’re humans. We’re emotion led. That’s exactly right.

Stephen Semple:
Even engineers make decisions emotionally. We are wired to make decisions emotionally and connect with things emotionally. So you’re 1,000% correct on this.

Michael Jacobson:
Thank you. Yeah, I mean, so far so good. So ultimately, the market will decide if that’s true or not, but I tend to believe that that is true.

Stephen Semple:
Well, it’s already voted that way with you so far.

Michael Jacobson:
Yeah, I mean, it’s coming that way. And so we really focus our brand on making the client feel like the hero because they are. Buying flowers from us should feel as good as receiving the flowers. It is a remarkable act to send flowers to somebody. You are literally creating a more loving world.

Stephen Semple:
Yes.

Michael Jacobson:
And I don’t know what the meaning of life is, but when I ask people, a lot of times the response is it’s human connection. Or if they want to go even deeper, the meaning of life is love. And so that’s the business we’re in. And if you’re leveraging flowers, the most meaningful gift you can give to tell somebody that you love them, you should be praised for that. And so we make our centers feel very good about that as they should be.

Stephen Semple:
Well, if you think about it, your business is very, very similar. Let’s just look at the emotional part. Your is very similar on the emotional level as engagement rings. The person who gives an engagement ring, yes, they want the person that they’re giving the ring to feel good, but it’s that I give this beautiful ring to this person. They feel good. I feel good in return.

So you’re absolutely right. The gift of giving when it’s done right both end up getting positive emotional feelings about it. The receiver feels great. And when it’s done right, the giver feels great as well. Here’s the other thing that people discount in gift giving, it now actually creates a shared narrative.

Michael Jacobson:
That’s right.

Stephen Semple:
Because we’ve actually shared in that gift, even if it’s thousands of miles away, even if I never talk to the person, even if the person’s in a coma and it goes to the hospital, I still have a shared experience now with that individual through emotionally taking that act. You’re absolutely 1,000% correct on these things.

Michael Jacobson:
Yeah, thanks. It bothers me because we would not be doing what we’re doing if somebody else was. We never had the ambition. So I want to answer your question on my franchise. We wouldn’t franchise, we wouldn’t even expand corporate locations if there was somebody in our industry that was doing it as well as we thought it should be done. But nobody is. Our market leader is 1-800-FLOWERS, and my job is not to bash the competitors. We shine our own lamp. But pragmatically speaking, we think somebody can do a better job.

Stephen Semple:
For them, it’s a commodity that’s being moved. I want to share a thought with you, and you may have considered this thought, but you’re in an interesting situation because as soon as I hear somebody say, “Hey, we want to educate the consumer on doing this thing, and I want to change the consumer behavior,” I always look at that from a marketing perspective as being a really…

Michael Jacobson:
Very expensive.

Stephen Semple:
Well, it’s expensive and it’s a difficult challenge. However, you’ve got an interesting strategy that you can do. So if I was working with you based upon a 20-minute conversation, so this strategy is worth the amount of time and effort of money that’s been put towards it.

Michael Jacobson:
I know. You can do this for however many years to get to this answer.

Stephen Semple:
Right. But if you think about it, there is a bit of a thin edge of the wedge strategy here, especially where you’ve optimized and worked hard to make sure the customer becomes a repeat customer. So anytime I’m in a situation where I go, I’ve got a good long-term value of this customer, and I’ve got good stickiness, and I’ve got good return, and I’ve got to educate them on a behavior that they’re not doing today, I can do a kind of interesting thin edge of the wedge type approach.

So in other words, okay, my acquisition strategy is not give a gift you’ve never thought about giving. My acquisition strategy is lean into the gift you’re already giving, but then make it so amazing and make it so incredible, and now that I’ve got a relationship with you, I can start to talk to you about gifting in other ways. It’s almost like that I can use the one to acquire and then I can pivot that customer into a different relationship now that they’re a customer.

Michael Jacobson:
Totally.

Stephen Semple:
Is that kind of the strategy you’re employing?

Michael Jacobson:
It is. I’ll add onto that because I agree, and to add an additional perspective there as well because I agree with you. On the surface, it looks like we’re trying to shift consumer behavior to purchase flowers more frequently and purchase for non-occasions. If our culture right now is to buy for happy birthday and we’re trying to say, “No, buy for a random Tuesday,” that is a difficult thing to do.

What we’re trying to do instead is a little bit more like inspire, educate, motivate the buyer into… It’s not educating them on something new. It’s something they already know very deep down. Giving flowers, it incredibly goes back to our ancestors. I mean, it’s been around for thousands of years that act of giving flowers. It’s in us.

Stephen Semple:
It’s not a new thing.

Michael Jacobson:
We view our job as reminding people of that. And so it’s not necessarily shifting. It’s resurfacing something that people already know very deep down, I think. And maybe not deep down, maybe people already really do know that.

Stephen Semple:
Yeah, it’s rekindling that, but the interesting place is the easiest place to rekindle that is with the customer who’s already had the great experience.

Michael Jacobson:
Yes, exactly.

Stephen Semple:
With you.

Michael Jacobson:
Yes.

Stephen Semple:
Because they’ve also now experienced how wonderful it is and how superior your product is and how great the experience was is that, okay, well, now I want to do that again. And you’re able to communicate them about, well, you don’t need an occasion to make somebody feel good.

Michael Jacobson:
Totally.

Stephen Semple:
Right?

Michael Jacobson:
Yeah.

Stephen Semple:
But the interesting thing with that is that type of messaging is a different type of aspirational messaging, and as you were saying, is expensive. Look, it doesn’t fit into where the traditional florist marketing is, which is web-based pay-per-click style advertising, because what you’re speaking to is doing something that a person isn’t searching for but kindling that idea.

Michael Jacobson:
That’s right. That’s exactly right.

Stephen Semple:
There’s lots of really cool ways that you can do it. Look, and this is also how a lot of lux… And I know you’re not a luxury good, but you are a luxury good, but it’s a lot of how those goods are sold because they’re sold around an aspirational emotional idea.

Michael Jacobson:
So I agree with you. I think the perception is that we’re a luxury company. Okay, I challenge the floral industry. I challenge the franchise industry. I think most franchises suck. Can I say that?

Stephen Semple:
Absolutely.

Michael Jacobson:
Most franchises suck.

Stephen Semple:
Sure.

Michael Jacobson:
There are a couple of good franchises. I think Chick-fil-A does it okay. I think Orangetheory does it okay. We’re following a model like when we say we’re franchising, we don’t have to get into it. Just know we’re trying to flip the franchise model on its head and actually run a great franchise system that puts the franchise on first. And even more than the franchise on first, puts the end consumer first.

Anyways, that’s one thing. So we flipped the floral industry on its head. We’ve flipped the franchise model on its head. And now from the consumer perspective, what does a luxury company mean? We need to design some apparel for our team members to wear. Apparel that’s high quality, make them feel really good, really special. I went to Rodeo Drive to get some inspiration. Look at Louis Vuitton and Hermes and all these companies, right?

Stephen Semple:
Thank you.

Michael Jacobson:
Okay. This is what I found. Remarkable craftsmanship, I will say. An unbelievable amount of thought goes into those designs. Then you look at the price tag and it’s $4,000 for a cotton t-shirt.

Stephen Semple:
Yes.

Michael Jacobson:
My mind is like, is there a way, and this is a very difficult thing to do, but this is our current challenge where we continue to push the brand we have and we continue to, can we create an experience that feels like a $4,000 experience, but we can charge $40 for it?

If somebody can’t take their whole entire paycheck and buy flowers, they can only walk in and pay $20 for a bouquet, can we make them feel like they just had a $4,000 experience for $20? So we want to provide the luxury experience and we do. I don’t know if we want to call it approachable luxury. I don’t like that. I don’t like the word approachable. I don’t like the word luxury.

Stephen Semple:
I would say don’t even put a name. You almost don’t even need to put a name to it.

Michael Jacobson:
It’s just a different category.

Stephen Semple:
Yeah. So there’s one thing I want to really commend you on. I want people to really lock in that I love. You went looking for a different way to do it and you didn’t go to flower stores. I want this to be luxurious, so I went to luxury stores. I’m always saying to people, if you want to learn how to do better window displays, go to Vegas and wander the stores in fricking Vegas. No one does it better.

Nowhere is it done better. Now, it’s not that you need the Vegas experience. But if you want to get ideas, you can get them all in two days just wandering through the casinos looking at the retail stores. They’re amazing. Now, somebody who’s taken the idea of applying the feeling of luxury to an everyday product who’s still now been able to do a premium price point, these folks right here, Florets Farm.

Michael Jacobson:
Amazing.

Stephen Semple:
Now look at that book, right? And the photography in this book is amazing, and their story is incredible. And look, you go to buy their… They sell seeds. They don’t even sell flowers. They sell seeds and you go to buy their seeds. If you don’t buy them early enough in the spring, by summer, they’re sold out. Again, they’re not selling seeds at thousands of dollars, but they’re still selling them at probably four to five times the price that you would get normal seeds at.

Michael Jacobson:
Wow.

Stephen Semple:
I can’t remember which streaming channel, but they’ve now even got a streaming series about her story and everything. But if you take a look at it, they have figured out how to take seeds and put a luxury feel to it. And again, for it to be luxury, it will never feel luxury to somebody if it’s not a premium price, but a premium price to other flowers. It doesn’t mean it needs to be $4,000, but it can’t be cheap.

It can’t be the price of the flowers that I get at the grocery store because then I won’t believe it’s luxury. There’s three types of pricing in economics. You’ve got elastic goods, which price affects volume. You’ve got inelastic goods, which price does not affect volume. And then you’ve got, oh, I always forget the name of the third one, but it is literally one that if you raise the price, you actually raise demand on it.

Michael Jacobson:
Right. Oh, I know that concept too. God, this is like econ.

Stephen Semple:
Oh, and it’s an economist who came up with the whole idea, and he’s the economist who invented the conspicuous consumption. I even did a podcast on it. I cannot…

Michael Jacobson:
Oh, that’s awesome. Somebody who’s listening is probably screaming the answer.

Stephen Semple:
Oh, my God, yeah. You know what? I’ll think of it. I’ll email it to you, and I’ll add at the end of this, “That’s the term for this,” but that’s the economic place that you’re playing in. And fantastic for you recognizing it. Here’s the other thing I’m going to say fantastic for you to do. Anytime in the early days, it’s really easy to succumb to these aggregators, Angie’s List and Teleflora. Oh, this is great. I don’t have to market any longer. This is fantastic. They take that over. They just bring me customers. Isn’t that wonderful? It is the road that is paved to hell. It is the road that is paved to hell.

Michael Jacobson:
It is.

Stephen Semple:
Because then what ends up happening is you stop marketing, your margins are low enough that you can’t market, and now you are beholden to them and they own your ass in that moment. So I am always have the relationship directly with that consumer and guard that relationship and nourish that relationship and you now control your destiny. So really, really well done. We’ve been talking for 40 minutes or so. If you’re wanting to give just a couple of messages to people who are entrepreneurs in terms of this journey you’ve been on, what additional insight would you like to share with us?

Michael Jacobson:
Yeah. The one thing that I’ll say is sometimes you got to go through things the hard way and you could listen to a bunch of advice. And I think it’s good. I mean, I listen to a ton of advice still to this day. I mean, I have two business coaches that I work with. The best athletes in the world have a coach. Why wouldn’t I? So I’m always trying to learn. And honestly, that’s where my fulfillment comes from. But I’ll give you advice, but take whatever resonates and leave the rest.

For me, my advice would be to surround yourself with really smart people and lean into them. The problem with that though is in the early days I didn’t have the privilege of doing that, except I could watch YouTube videos. And YouTube videos was my way of doing that actually. I couldn’t afford a business coach. I couldn’t afford even a good manager. I was the manager. So I had to build my way to that.

But I think that as soon as you can afford to do that, that’s been the highest leverage point for me and for our company, is to surround ourselves in the company with people who are extraordinarily talented at what they do and operate from the same vision or can buy into the vision, but operate by the same values and principles that the organization or that you want the organization to operate by.

And I think really smart people that share the same principles, you can get really far just with that. I do want to answer why franchise, and I’ll do it in one sentence more or less. The reason we want to franchise follows that advice where we own a bunch of corporate locations and we run them and we think we run them well, but now we are one owner in the ecosystem.

When we bring another franchise owner on, we vet our franchise owners like crazy. If we hire the wrong person, we could fire them. Pragmatically speaking, we can turn around that mistake. When we bring on a franchise owner, it’s a 10-year commitment, and often that commitment way more often than not gets renewed for another 10 years. And it’s longer than most marriages last. So you better believe we screen our franchise candidates.

That’s our number one job at this point. But we’re bringing on another owner into our ecosystem, and now we’re creating a community of floral shop owners that have the same standards for the consumer marketplace, that buy into our vision and what we think is possible, that operate by the same values and principles, and that we can put our collective minds together and create this meritocratic system, this governance structure even, where the best ideas bubble to the top.

And as an ecosystem of French Florist, we get to execute the best ideas. So while I wouldn’t describe ourselves as humble necessarily, but we’re humble enough to say we don’t always come up with the greatest ideas. They do come from very unsuspecting places sometimes, and I think other franchise owners will bring that to our ecosystem. We’re franchising for no other reason than we think that’s going to ultimately provide a better client experience because we’re going to get more ideas to the table with people who actually care.

We could pay a manager $150,000 to run our store, or we can have the owner run that store. And I think the owner, that maybe 1% difference of that additional commitment and additional dedication, they’re going to care about contributing ideas to the organization, that little amount more. And that 1%, it makes all the difference to us.

Stephen Semple:
Interesting.

Michael Jacobson:
That’s why franchise. And it follows the advice of surround yourself with smart people. Our franchise owners are very, very smart people. We’re really excited to be doing it the way that we are.

Stephen Semple:
And those things of slightly different perspectives and experience and all of those things is amazing. I have one last question for you. When you’ve gone about finding the experts that you wanted to surround yourself with, when all of a sudden you had the financial ability to do it, how did you do the selection? Because one of the things I find is it’s really easy to sit there and say, “Hire good people,” and it’s really easy to say, “Go find experts.” How did you determine it was the right expert for you to work with?

Michael Jacobson:
Whew, through a lot of mistakes. I wish I knew right away.

Stephen Semple:
Yes.

Michael Jacobson:
I put my philosophy around it. My philosophy has evolved, but at the time we still have at the core of who we are, I think we are still this way. We like to move fast. We like to break things. Our philosophy is if it breaks, we can fix it pretty quickly. As opposed to if you plan and if you think about it too much, you could be thinking for a long time. And you probably could have done the thing, did it wrong, fixed it, did it right quicker than if you just thought about it for a very long time and maybe got it right the first time maybe.

I’d probably not even get the first time too. So when hiring people, we did make a lot of mistakes. We hired people too quickly. We had a rose-colored glasses on. But through time what I learned was, again, understand your values and principles. Our organizational values, a lot of the times I see organizational values, they’re just words on a wall and they don’t mean anything other than a check of the box type of exercise.

Our core values are not that. We live and breathe by them. We promote. We hire. We fire. We coach by those principles. We evaluate quarterly how well people are following those values. Our values spell out LOVE, L-O-V-E. L is love what you do. I love what I do. It gets me through the hard times. It’s a really important thing. O is own your impact no matter how big or small the job is.

As a matter of fact, the “small” jobs like a delivery driver, they’re the only person in the organization that our recipient interacts with. Two, that recipient, that one driver represents the entirety of the company. So they don’t represent the company. They are the company. So own that. So that’s O.

V is a value connection. We’re in the business of human connection and we need to value connection inter-team and between our customers and clients. Value the connection that our client has with their sender and the recipient.

And then E is exceeding expectations, and that’s an important one for us too. If you’re going to deliver a piece of work, it needs to be a 10 out of 10. But hold on, before you deliver that work, stop and say, “What’s the one thing that I can add to this 10 out of 10 piece that pushes it over the edge to be an 11 out of 10?”

It’s leveraging the unreasonable hospitality framework where you almost deliver something to an unreasonable degree. So our expectations on our internal team are very high. We’ve had a lot of people that have decided to leave the company for it, and the one thing that I refuse to do is lower my standards, but we found people that, guess what? They align with that value and they only want to work with people that have very high expectations. And we’ve been able to recruit a great team for that.

Stephen Semple:
That’s awesome.

Michael Jacobson:
Understand the principles that you really value and just ruthlessly hire with those principles in mind.

Stephen Semple:
And then I would take it when you’re looking at experts to bring in that they meet those same things. And we have a term that we use around here around that exceeding expectations. You might like this framing, because again, everybody talks about exceeding expectations and people don’t necessarily get it.

We like to talk about it as being surprise and delight. What is the extra little thing that you can do that is unexpected, therefore it’s surprise, and will delight them even if it’s just a little tiny bit. A little bit of surprise and delight is always really nice. The moments it’s expected, it’s no longer surprise and delight.

Michael Jacobson:
That’s right.

Stephen Semple:
Try that out and see how that resonates with people, because exceeding expectations seems so big. A little surprise and delight is small and really, and what you’re saying is it can be a little tiny thing.

Michael Jacobson:
Yes, exactly.

Stephen Semple:
A little tiny unexpected thing that the person’s like, “Oh, that was so nice.”

Michael Jacobson:
You’re right. I have gotten the feedback too where it’s like, this is big, ambitious thing. They don’t want to deliver work because they don’t feel it’s an 11 out of 10, so it never gets delivered. Period. So you’re exactly right. And so a lot of the times that phrasing of it does make it seem like a huge challenge. It’s not a huge challenge. Look at it on a very micro level. As a matter of fact, more often than not, it’s just a tiny little thing that just makes the difference. Exactly.

Stephen Semple:
Try that out and let me know how that works because that’ll be interesting to see how that registers with people. It’s just like, look, we just want a little surprise and delight for the person, a little thing where they look and go, “Oh, that was nice.”

Michael Jacobson:
Awesome, Stephen. Good. Well, that was fun. Incredible.

Stephen Semple:
This has been a fantastic interview, and I’m really looking forward to getting it out there. The thing that I love about this is that these lessons that we talked about, they can be applied to really, really any business. And as we’ve all learned often, often the best ideas and the best inspirations come from businesses outside of your business.

You experience it yourself by going saying, “Hey, I want to do this luxury thing. I’m going to go to luxury stores and see how they do it. And yeah, I’m not going to do it exactly that way,” but that’s where you went to get the inspiration. This has been awesome, and thank you very much for spending this time with us.

Michael Jacobson:
It’s been a pleasure. Thank you. Goodbye.

Stephen Semple:
Because it’s Thursday.

Michael Jacobson:
Because it’s Thursday. Exactly,

Stephen Semple:
Exactly. Thank you.

Michael Jacobson:
Thanks, Stephen.

Dave Young:
Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five-star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.

Latest posts by Stephen Semple & Dave Young (see all)