Valerie Hoecke, DiaCo COO on Growth to Survival Mode

Valerie Hoecke: At a previous company, I worked with someone who demanded an expanded role, and when I turned them down on that, they immediately fired themselves. And said that I'd be hearing from their attorney. So this was an interesting combination of actions.

Michael Koenig: Hello and welcome to the big 10th episode of Between Two COOs, where phenomenal chief operating officers come to share their knowledge, advice, and crazy stories. I'm your host, Michael Koenig, and I'm excited to welcome our guest, Valerie Hecka, chief operating officer at Dia Co., which is the only retail service dedicated to meeting the plus-size community's full range of style needs and is backed by incredible investors like Founder Collective, Sequoia Capital, and Union Square Ventures. Union Square Ventures. Prior to Dia Co., Valerie was the global chief digital officer at LVMH— yes, that LVMH, Louis Vuitton Moët Hennessy— and has held many other executive roles at the cross-section of digital media and e-commerce and retail. Welcome, Valerie. Thanks for being here. I'm excited to have you on.

Valerie Hoecke: Thank you. I'm excited to be here.

Michael Koenig: So it's worth noting that you're the first guest that we've had on that has the type of digital media and digital marketing background that you do And so that brings a unique perspective. But before we hop into that, just to start off, what was your path to becoming a COO?

Valerie Hoecke: My path was circuitous. I started my career as a web developer and project manager in what was supposed to be a gap year to earn some money for college. And I had a lot of very early success and never made it back to school. So I am a college dropout. Very unusual, actually, in our line of work, I think. Some part of my career, career was really made by some very early experiences. So, um, I was working at a publishing company when the first graphical web browser came out, and I was like, this is going to transform publishing. I didn't think it was going to change the world the way it has, right? But I was right at that moment in time, and a colleague and I convinced that publishing corporation to launch a think tank to decide what to do about the internet. And while we were working at that think tank, we started creating experimental new products. And so we created software that we ended up spinning out via Mayfield. So I was like 20 years old when I had my first exit. You know, that really accelerated my experiences, my career, my network at a time when frankly there just wasn't anybody else who knew what they were doing either. It was like kind of luck, being in a lucky spot and like the wave was coming and there was no choice but to swim or get smushed. So that really helped me out. I launched a web development agency after that, which I had an exit on as well. I sold that a couple years later. Really naturally gravitated towards managing business operations, managing people, managing clients in those businesses. I spent a lot of years running various kinds of agencies in Silicon Valley, which I think made me a really good generalist. I worked with a lot of different kinds of businesses and I did things all the way from more technical projects at some companies like, you know, building e-commerce systems from the ground up, working with some of the first commerce servers out there. Netscape had a very early commerce server that I worked on. I worked on the very first e-commerce site ever launched anywhere. And I worked on a lot of digital marketing initiatives as there became new frontiers in how to market to customers on the internet. And so I think that was like a very good general grounding that helped me, even though agencies are kind of chaotic places to work. I learned a lot by working with so many clients and in so many functions. In those agencies, I was generally like either a VP of Client Services, so in charge of the client relationships, um, or I was a GM, so always an operator or a person on kind of high-level client care. A big career move I made in kind of the late aughts was when I moved to one of the LVMH beauty brands, Benefit Cosmetics. I just, I really wanted to like operate a digital business. And so I went there to run their e-commerce and also build digital marketing programs for them. Subsequently, I had that opportunity to move to the parent company. So I went to Benefit Cosmetics is owned by LVMH, so I went to LVMH to the beauty division and became the global chief digital officer. So there I was really working on strategy and digital transformation across 16 different brands. It was much more of a strategy and advisory kind of a role. I got to work with incredible people and see the way one of the largest, most successful companies in the world works. So that's like my big company experience. But, you know, those— there's 16 different brands and they're at very different phases. So we also had an incubator. So I was staying small and staying big at the same time. But I really missed like operating. I really wanted my hands in a business. And so that's when I had this opportunity to come and work at D&Co as the COO. And I've been here for 6 months now.

Michael Koenig: That's amazing. And I love when you say that was my big company experience. LVMH is like 100,000 people.

Valerie Hoecke: And yeah, now more than $50 billion company. Our division is only one of the— was only one of the many divisions of that company, right? There's more than— it's always hard to keep track— more than 75 very illustrious brands in that, uh, in that organization. But yeah, that was my big company. You know, I, I went from like, you know, billion-dollar company in my early career, very small companies, then a billion-dollar company, then a many-billion-dollar company.

Michael Koenig: It's, it's amazing. And it— the, the career arc that you just described of, of first being an entrepreneur and then moving into this, this agency model, um, one of the things that people who have spent a lot of time in agencies have told me over the years has been, yeah, you really look, you see the commonalities and the generalities of just good operations that transcend whatever vertical you're in. And I wonder how much of that played into what you did at LVMH with those 16 different brands. And if you can maybe tell us a little bit about that.

Valerie Hoecke: Absolutely. Yeah, I think, you know, agency life is a grind. I won't lie. So are startups. So this is very common. You never have enough resources. You're always juggling a lot. In those ways, those two worlds are very similar. But I think agencies are a great learning ground because you work on so many different businesses. And you work, um, you may, you may only work in a specific area. Let's say you're, you do e-commerce development, or let's say you do digital marketing, you know, but you work with— for me, I've just worked with almost every kind of business and almost every kind of business model. I've worked with nonprofits, I've worked with trucking companies, I've worked on, you know, uh, enterprise sales companies at like some of the biggest software companies in the world. And I think working across that kind of range of businesses, you know, other than maybe in financing, venture, there aren't a lot of places where you get to see so many business models. And depending on how sort of strategically curious you are, you have this opportunity to really learn what makes each of those businesses work. And I think that was a very rich learning ground for me that developed pattern matching skills that were then very useful when I chose to focus in a very specific area, right? Consumer goods, beauty. Um, of course I'd worked with a lot of consumer goods and even some luxury companies. Like, there's almost nothing I encounter where I don't have some point of reference, you know? Makes for good dinner conversations. But it really helped me. I think it really helped me see some really important patterns that then I could apply across the brands I worked with at LVMH.

Michael Koenig: It's very interesting, especially because I was so prepared to take more of a questioning line around some of the digital transformations that, that have been taking place at LVMH, a large company like that. And here you are, the perfect person positioned to help them do that, having been in an agency, having started your own companies in the digital sphere. And was that something that was— it was just a natural fit?

Valerie Hoecke: Yeah. I mean, what was— I think the thing that made the transition easy was I worked at one of the brands first. So I was— I think if I'd come straight from agency, there's a lot of skepticism about agency people, you know, what I had done is operated successfully within one of the brands and really built my relationships across the organization and showed that I knew how to translate abstract concepts into what worked for a given brand. And LVMH is very much an organization that rewards performance. And so I think that that time really— frankly, I didn't— until I went to Benefit, I think I learned a lot about theory in the agency world, and I learned a lot about why all my clients never did all the smart things I suggested when I worked at a brand, right? And so there's a proving ground working at a brand and really like taking all these kind of buzzy new things and trying to make them work in the marketplace and living with the long-term results of the decisions you make when you build a website, for example. There's something that happens there that I think was very, very important for my ability to provide value in my role at LVMH. You know, there was this mix of like kind of interesting strategic and agency work in the past, but then there was like been there, done that, did it at a brand that was growing fast that I think probably helped both with credibility but really with learnings that I could apply. You know, I think probably my time at Benefit was even more valuable to the brands I worked with than any of the other time in my experience in the past.

Michael Koenig: And so you've had a seat that very few people have had, which is being in the leadership role of a company that is like LVMH. And I wonder, going from a company, $50 billion, 100,000 employees, to, uh, I believe Dia's around 150, uh, employees, what are some of the, the learnings that you have taken with you from operating at those, at that high level with LVMH and then translating it back to, uh, early stage startup?

Valerie Hoecke: Yeah, that's a super interesting question. I'm very much still a learner on that front. I am very much still discovering, and there's definitely some whiplash. That's a pretty big shift. I think, you know, what I learned at LVMH that was so valuable for me now is this very— I mean, the company has this incredible competency, set of competencies. There is incredible financial rigor, uh, and a very strong focus on results in the business that frankly, like smaller businesses, just, we don't have that kind of financial rigor at Dia and Co, you know, like we're running tight and tight and fast, but you know, it's not the depth of, the depth of expertise, experience, analysis you can bring to the table when you have a very large company with incredible financial engineers is just different, right? But a respect for financial rigor and just like really being very results-oriented on the one side with a very unusual combination at LVMH, which is an incredible, incredible, uh, uh, respect for creativity and for the power of brand. It is very unusual to bring together that like left brain, right brain kind of skillset. And what LVMH is amazing at in brand after brand is like creating brands that will last through the ages and being very long-term value-oriented and doing that through the power of creativity and brand, which is something that I think very few startups know and understand super well. You know, just to have worked somewhere that could have some of the highest order creatives in the world, right? I mean, LVMH, the fashion houses have some of the very best and brightest creatives in the world working at them and the way the organization worked with and empowered those creatives while being this very rigorous results-oriented organization is like a very interesting and sort of powerful lesson that I, that I took away and that I am now thinking about how to apply in a, in a very small company with a very different set of— not small, but comparatively, right? A very different set of resources. But I think there's a tremendous amount of power in sort of the combination of left brain, right brain thinking in an organization. That is sometimes a little bit lacking in Silicon Valley. And it's been fun for me to bring that, those learnings to D&Co and see where, see where we can go.

Michael Koenig: That's phenomenal. You spoke of a little bit of the whiplash from going to LVMH to D&Co. You kind of had to reset maybe both your left and right brain. What is—

Valerie Hoecke: Everything, everything was a reset. Like there was a trough of sorrow months 2 and 3 where I was like, oh my God, am I going to be able to do this? This is such a big change. Change, you know, um, it, you know, I went from having this incredibly efficient executive assistant who did— was literally an extension of me. We had worked together for many years. And so, you know, to suddenly scheduling my own meetings and, you know, switch to, switch to the Google Suite— had been using pokey old Microsoft before that. Like, like everything changed at once. The scale of the organization, the level of tasks that I needed to dive into, you know, LVMH actually at the corporate headquarters level operates quite lean because it really tries to put its resources in its operating companies. So it's not like, you know, it's not like I had a ton of resources, but it was a huge, it was a huge and massive shift. And every once in a while I still trip because I'm still getting used to that shift.

Michael Koenig: I can imagine. Now, what is it that drove your decision to hop back into the, uh, the smaller company startup world?

Valerie Hoecke: I mean, partly the desire to have a really tangible, direct impact. Um, you know, when you're in a strategic role, you help influence. You know, my job at LVMH was all about influence. Um, and, uh, I wanted to pull the lever and see what happened. You know, like, the thing about being an operator is you make a change and almost instantly you have information about whether that is working. And I just really missed that very, very immediate feedback, you know, as opposed to like working at a very big conglomerate. Even if you're very action-oriented and you're working in a data-oriented division, you know, you make a change, it's like driving a cruise ship. You make a change and it slowly starts to turn, and you don't know if you're over-rotated for, you know, quite a bit longer. So I am enjoying the like immediacy, and I knew that I craved that from other days in my career. Um, I just really like being an operator and building teams and solving problems with people. So I think that was part of it. And then of course, like, I think the pandemic, it impacted so many of us in terms of values and, um, was really a time of reflection. And I think for me, I, I realized that I, I really wanted, if I could, to work at a, a very purpose-driven organization and I mean, LVMH in its own way is very purpose-driven. It's about elevating people's experiences in the world and delivering incredible products, seeing what great can really be like. But to do that for the people, you know, to be able to do that for women who wear— who are deeply, deeply underserved, women who wear larger clothing sizes are so deeply underserved and experience a lot of discrimination in the United States. And so and in many places in the world. And so being able to work at a mission-driven company and engage with the level of passion that our teams have, to feel like I'm really making actually a difference in someone's day, giving her something she didn't have, you know, that has been a deeply rewarding, like, additional bonus of this career shift for me.

Michael Koenig: I love being able to, as you said, pull the lever and see how it, how it shifts. It's one of the fun things about being at an earlier stage company. So in terms of Dia, and I'm glad you started to discuss what you're working on there, Dia was founded about 6 years ago in 2015. You've raised $90 million from, as I mentioned before, some of the best venture capital firms in the business. When you came on board as COO, what was the mandate? Because COOs are brought on at all different stages of a company's lifecycle. What was your mandate coming into—

Valerie Hoecke: Sure. I think a big part of it is we have this incredible CEO who I'm very, very honored to be working for. And one of the things you also learn at LVMH is a tremendous respect for founders and for the kind of people that found companies. You know, I have a great CEO. Her name is Nadia Bujarwa, and she is incredibly articulate, a brilliant woman, externally facing, very, very strong, has been kind of the face of the brand in a lot of ways. And I think we really just wanted to give her greater leverage at the things she's great at, you know, and to help her run the— like, help her operate the business day to day. So partly to just to free her up to do what, you know, her true— you know, we always talk about superpowers at DIA to like leverage her superpowers and to complement them with a different set of superpowers. So I think that was part of the mandate. And then, of course, the part of the mandate is to— I mean, my mandate is to build the world's greatest brand for plus customers. I mean, I am here. This is the lesson I bring from LVMH. I am here to solve a pressing customer need. And I am here to make this— help this company be what it was always destined to be because of the dedication it's always had to the customer for PLUS, which is to be the greatest online retailer and to actually revolutionize plus-size women's access to clothing, to give women who wear larger sizes the same kind of access to style themselves the way they want to that every other woman in the world enjoys. And, and I think we can build— I think brands of the future will all be inclusive size. And so this is a transition period. But the first retailer that truly serves the broadest customer segment there is in the United States has incredible potential for the future. And so I'm here to help make that dream for the company come true.

Michael Koenig: And it's worth noting that you also have partnered with Madewell. To start to carry their clothing.

Valerie Hoecke: We're very excited about bringing new brands on board. Yeah, it's something the customer craves, right? She has been relegated to a small rack in a retail store, very, you know, in any brand store. She's had very little choice. She has to find some weird section sometimes where there's only a few items in only a few sizes, only a few styles. She's just really not been able to have the choice. It's like navigating this labyrinth of shopping opportunities just to put together an outfit as a plus-size woman. And so for us, one of the things that's very exciting and is very validating for our customer is that more brands are starting to extend their sizes and be more inclusive. And, you know, I believe in 20 years we will look back and say, how is it that in the United States, 70% of women could not find clothing in their sizes? This is crazy. I mean, it's, it's insane. But, but right now there is a huge portion of the US population that simply cannot find clothing in most stores. And so We are so excited that more brands are embracing inclusive sizes. And one of the challenges is that the customer for plus doesn't even know that those brands are making clothing for them because they have stopped looking to those brands for clothing. They've learned that those brands don't meet their needs. So something unique we can do for those brands is just help the customer. We can aggregate the customer for plus, the eyeballs of customers who wear larger sizes, and we can help those customers understand when new brands enter and extend their sizing into inclusive sizes. And so there's a real like marketplace fit there, right, between the customers who need the clothing brought together so they don't have such a difficult shopping experience and so they can find their style. And then between the brands who either— there's a lot of young brands that are inclusive sizing that have trouble reaching the customer, right? Or there are very established brands that as they extend their sizing, you know, they have trouble reaching the customer as well. And so being able to help those both sides, um, move towards a better future for the majority of women in America, that's like the super awesome thing to go to work for every day.

Michael Koenig: I'd like to focus a little bit on the incredible growth that you all are going through in terms of being an e-retailer, shipping physical goods, but you also have the digital operation behind it, what has been going really well? What do you all do better than anyone else that is making Dia Co such a success?

Valerie Hoecke: I think there is a deep empathy and understanding of the customer for Plus, and I think frankly that's something that all businesses should have, right, is a deep empathy and understanding of their customer. But in this case, because this customer has been denied choice for so long, because she has this labyrinth of, you know, she underspends because she can't find what she wants. Right. So this maniacal focus on understanding this customer, having many employees who are Customers for Plus inside of our organization, listening to the community, you know, and truly understanding what is holding her back from shopping today and her attitudes, I think, is, is kind of one of our superpowers. That's one of the things we do well. Is sort of customer empathy and customer listening. We're also a data-driven company. We have very, very, you know, we, I think you know that we have this style box part of our business. So you can either come and shop direct with us in the marketplace, or you can sign up to have a stylist send you clothing every single month. That helps for people who don't like shopping. It also helps because an expert is helping figure out what clothing will work for you based on a really advanced understanding of fit that we have a specialist team that really understands, you know, fit for the plus customer. So, you know, those, those style boxes, that, that business experience, I mean, there's quite a few businesses out there with membership, but it's a, it's a very, it's a relatively unique offering that we think very specifically serves the needs of the plus customer. And we do it because it's hard for her to find clothes and try them on, and she likes to try them on in the comfort of her home, and she needs to try more things on than her straight-sized counterparts do. Right? Because the reality is there is more range of shapes of bodies in plus customers than there is in straight size counterparts. So we know we're doing something that she needs. But the great thing about doing the StyleBox business is that she gives us feedback on those products when she sends them back. So she picks what she wants to keep and then the rest she sends back to us. It's very low risk for us. It's very low risk for her because she pays a very small fee and then only pays for what she keeps. Right. When she does her returns, she gives us a ton of information about how this item fit and the style and the fabric. So we are a data-driven company that has a— in a lot of ways, I think in the future we will have the largest database of information about customers for PLUS and how their clothing fits in the world. Right. And, and that is very exciting as well. So I think we do data very, very well and we are developing a very advanced understanding of what she needs, which is allowing us to be a better partner to the brands that come and sell sell on our marketplace or sell through our style boxes as well, because some of them are entering sizing for plus and our merchants are really experts in understanding where brands fall down. We have incredibly rich data, right, that we can use. So I think data is one of our superpowers. And then just, just happening like less of a superpower and more just where we're sitting in the marketplace right now is at this intersection of need on both sides. And so matchmaking the great brands that want to serve this customer, right, with the customers that want brands and maybe don't even know which brands serve them. That is like an exciting part of the business as well.

Michael Koenig: Try before you buy, as you just mentioned, is such a key part of the business of being able to find that right fit. And you certainly have this feedback loop where you're receiving as you mentioned, specific details on why this wasn't a good fit, whether it's a shirt, whether it's pants, whatever it may be. What sort of logistical and operational challenges does something like try before you buy introduce? I mean, that is certainly you're shipping product out, nightmare, getting a lot back in.

Valerie Hoecke: It's a, it's, it's very challenging. I'm sure people have read about like the Stitch Fix business model, and so they maybe know a little bit about that. But it's true that offering this service to our customers, both the, the styling box experience where a customer can order a box and a stylist chooses the items and then try before you buy, which we have a marketplace so the customer can either use a stylist and have discovery and curation by the stylist, or they can shop direct on our marketplace. And that's a really fast growing part of our business because a lot of people just want to shop direct, right? If you shop direct, you can use that try before you buy feature as well. So any customer can put down a $20 deposit and order 10 items to try at home, which is pretty phenomenal, right? The customer absolutely has to have it. Like this, we believe this is a very important part of the service that we offer. That's really about like us understanding the unique needs of Plus and building our business around her needs first and foremost. It's also very challenging from a logistics perspective. We had to become very, very good at returns. So we have an in-house— that's why we have our own operations center. A lot of businesses our size might you know, have a third-party distribution center. But we have to be so good at returns, and we are. So we have built this incredible capability at returns, and we're very efficient and very cost-efficient at returns, which very few businesses can say. Now, we, we definitely have some advantages there, right? Because being very good at returns, when we open the marketplace, when brand partners want to sell through us, we can handle returns for them in a way that no other retailer can. And we can absorb those returns instead of them becoming sale items at the end of a season, we often have the ability to move those quickly into style boxes. So the two parts of our business are very complementary and give us really unique benefits for brands that choose to sell through us that are hard to find, frankly. But we— I really think that like winning for plus requires these elements in our business.

Michael Koenig: I would imagine so, especially with just the state of the world right now in, in, during COVID Yeah. And supply chain, the role that e-commerce and e-retail has played over the past, gosh, 2 years now. Can you maybe talk a little bit about the dynamic of switching gears back into that fast growth mode after coming out of perhaps maybe survival phase?

Valerie Hoecke: Yeah. Yeah, that's a great question because for sure, um, like any business, I mean, I think we, we went into survival mode, um, and then frankly, you know, every good venture capitalist at the beginning of the pandemic sat all their portfolio companies down and said it's time for survival mode. And, uh, we did a really good job moving into survival mode. This is such a, um, such a scrappy crew, my team. Um, and so they did a great job, uh, of doing that. And I think What's been very interesting for me to watch as the company comes out of that period of time and moves back into rapid growth is just seeing how much you need a completely different skill set, right? So there's a set of skills that you need to be a survivor through an economic disaster. Well, I mean, much more than an economic disaster, but let's focus on that piece, right? There's a set of skills that you need to survive that. And then there's a set of skills that you need to be a high-growth company. And they are different. There's some overlap in that Venn diagram, but they are very different. And so what's been really interesting is helping the team switch gears and say the skills we have, the resilience we have from survival mode, those are great, but now we need to use the skills that we have from high growth mode. And many of our team members have been with the organization for a long time, so we have people who've been through feast and famine, um, which has been really helpful. But I think like all businesses really, like there's First of all, there's a competitive advantage. I believe if you've been through survival mode and hypergrowth mode, you have a competitive advantage because you have a very different set of skill sets than any business that's only been through one of those. So I see that as like resilience and strength for the company. But I will say that like as a COO, I am working very consciously to help our business shift back into that invest to grow, grow fast, assume great things are coming, optimistic attitude that frankly, like when everybody got knocked on their ass in the pandemic, that, that attitude had to disappear. Right. So kudos to everybody who made it through that time and is in whatever phase they are still recovering, seeing fast growth, seeing slow growth. You know, we made it so far and you've got a set of skills that are going to be really helpful for the future.

Michael Koenig: What have been some of the more successful approaches that you've taken to kind of shifting that gear from survival mode to the faster group?

Valerie Hoecke: Um, a lot of it has been team spirit, frankly, and just like attitude. Um, you know, I think as a leader of the team, you're called on to be different things at different times. You're, you're called on to be the authoritarian and the bad, badass boss that, you know, uh, gives people a lot of tough love when needed. I mean, my attitude very early days coming out of the pandemic was very much about building people's confidence and sense of optimism for the future because we tended to see things as challenges instead of seeing the flip side of the challenge, which is what is the opportunity. So a lot of it is like, frankly, just being the cheerleader, giving people a lot of positive. And I'm a really like, fortunately I'm a really good cheerleader. So, you know, give it, but giving people that positive feedback constant positive feedback more than I would in a normal time, because I just think that's what everybody— I think it's what the world needs right now, you know. And I certainly think it's what employees need, is just a sense of optimism, a sense of constant positive reinforcement when we, when we demonstrate the right behaviors, when we take good risks, you know, when we're willing to double down on a bet. Like, now is a time to make big bets. The companies that are making big bets for the future right now are going to find out whether it works or not, but slow incremental growth out of this kind of economic slowdown for people like retailers and stuff, those people are going to get left behind. So I think it's like attitude and communication more than anything else. I would like maybe— I don't know if there's a place— I would love to hear other CEOs' feedback of how they're dealing with this. You probably do a better job talking to more CEOs than I do. What have you heard?

Michael Koenig: Oh gosh, of shifting. Well, it depends for all different companies, doesn't it? Which is kind of a cop-out of an answer. However, a lot of it has to do with the mind— the mindset shift that you've just been talking about. And for some businesses, if you're in shipping logistics or other remote-related businesses, you certainly had that growth during that time. And so it's almost the opposite effect in some cases. Right, where some businesses that flourished. Exactly, exactly. And so shifting, I think, and I wanted to ask you about this, in terms of, of being that cheerleader, in terms of getting people's morale up, how have you gone about that in probably a remote setting, I'm assuming?

Valerie Hoecke: Oh yeah, we were, we were actually primarily remote before the pandemic. So that was cool in that like we had one thing we didn't have to figure out. We kind of knew we had already, Dia long ago, long before me made the decision that we wanted the best talent we could have across the United States. And we're a very unique business. And so from the beginning we had my chief retail officer, my chief technology and data officer were on the West Coast. Most of the company was on the East Coast. So we already knew how to do that stuff, which was great. But You know, I won't lie, like 6 months ago, it was a little grim. It was a little glum, you know, like just that the endless

Michael Koenig: Is there going to be a time when, uh, more meetups start happening again for Dia?

Valerie Hoecke: I sure hope so. I mean, um, right now we are in a phase where like we pour every penny we have into building the business in a, in a really practical way. Like, you know, the inventory cost of scaling this business is very different. Um, over Marketplace is much more efficient because we don't hold inventory. That's a dropship model, so that's helping us, you know. But, um, uh, uh, we, we don't put a lot of money into getting together as a team physically. Um, we're trying to do like little regional get-togethers, and we had some planned, but then like, God, there's just been so much stop and start, right, with the pandemic, with the latest news. So I was really hoping we were like— I was like, on Q1, I'm gonna get everybody together, right? I don't think that's gonna happen based on the latest news. We'll see. But we just decided not to have our board meeting, you know. I've never had an in-person board meeting since I joined the company. It's only been remote board meetings. We just decided not to do our February board meeting in person again. So I don't know, I think this is the way we're going to be living for a long time. And I think this is the way a lot of businesses are going to do business for a long time. So then it's like, well, what is it that you do for your people, you know, to give them a good life? Because there are some benefits to working from home, but there are some really hard parts.

Michael Koenig: Yeah, absolutely. The hard parts can definitely be, especially for for folks who are also extroverts, who like being around other people, who thrive off of that energy. How do you create that opportunity as well, um, is such a challenge. In terms of— you talked about some of the big bets that are being made, and I'm wondering if you can tell us a little bit about how you all are thinking about the future as far as being one of the leading e-retailers, uh, what's, what's coming down the line? Where is this? I know you don't have a crystal ball, but certainly you have a better concept than I do.

Valerie Hoecke: I sure don't. I mean, I guess one thing to say is that, like, I mean, customers for PLUS have been shopping online way ahead of their straight-size peers because it was the only way to find all the clothing or the breadth of clothing they wanted. So Whereas maybe the pandemic massively accelerated the percentage of sales online for other segments, for us, certainly it's great that more and more people are adopting shopping online, but we don't see a huge change there. In terms of what I think will fuel the business growth for us, I mean, first of all, we believe that building a marketplace for this particular, given the things I've described about how you have brands that need to reach the customer, the customer's almost ad blind to those brands. Assume that brand doesn't make clothing for them, right? As well as customers who are tired of having to go to 15 different websites to build an outfit for, you know, their holiday party. Um, we think there's a lot of opportunity there. So like, for us specifically, we're very excited about building, you know, the greatest marketplace for plus customers that the world has ever seen. And like, it's amazing, unfortunately, how low the bar is for that right now, but we have a very high bar for ourselves. In terms of the breadth and depth of selection we want to offer her at D&CO. And then I think in terms of like industry overall, you know, one of the very interesting things I think is in some ways e-commerce apparel for a long time has been like sell a person a product by putting on a product detail page and, you know, maybe have a cross-sell and, you know, you might also like section below the main image. I think there are two things that are very interesting that we have our eye on, and it's really lessons learned I learned at LVMH, but, you know, one of them is really wardrobing and the idea of offering, which is an expertise we have already from our styling business, but being able to offer customers a whole look and being able to put that together for them. I think people crave style help. So I think there's a big opportunity for wardrobing and for more intimate sort of chat-based selling in order to do more wardrobing for our customers, really. Help her build a great outfit and build a great wardrobe, which is one of our core strengths. But doing it in a marketplace environment as opposed to in the style box environment is going to require a different set of tools. And then I just think the way we help people shop has to change. If you look at the business trends in China, so much of what's being sold is happening via live streaming. I mean, if you want to have a big Singles' Day in China, 11/11, It is absolutely impossible to win 11.11 without having the very best influencers in the country pimping your items on livestream on Taobao, you know, or Alibaba, and fighting for those best spots for big audiences to be able to see your product being sold is, is very important. And the consumer response to, you know, reviews from people they believe in and demonstrations of product is then it is an undeniable critical market trend in that market, which I think is the most advanced, you know, e-commerce and digital marketing market in the world. So I think that's coming to all of us and we're really asking ourselves, we've had some, a few viral hits in this area, right? We've had a few influencers who just did like a great TikTok reel and we've seen that actually convert into really good sales, but it's not, we don't have the code cracked at all. And I think the US audience isn't entirely there. They're not, sitting around watching livestreams all day long for shopping tips. But that is what is happening in other parts of the world. That is what is happening in Asia. So I believe that's going to be a very, very powerful force in the future.

Michael Koenig: Wow. There's so much to unpack there. But I wanted to ask about Nadia and the dynamic that the two of you have prior to joining when you were looking at, at joining the company. How did you figure out okay, is this going to work? Because the CEO and COO relationship is so important.

Valerie Hoecke: Yeah. I mean, like, look, let's be honest, partly it's good luck. I trusted my instincts and I was right. But there are a couple of things. First of all, like when you, you know, I'm 25+ years into my career, I'm almost 30 years into my career. And when you've been around for a long time, you develop an instinct for when an interview is going well, when the connection's right. And you learn to, it's, everybody has the instinct, you learn to trust it and you learn where you need to adapt for your biases. And that is not something that you know early in your career. So number one, like I wanted to work for Nadia the first day we spoke and it was my job to convince her that I was the right person for the company. But then, you know, there was a great, you know, the team, Nadia and Lydia who are the co-founders. I haven't given Lydia all the great credit she deserves too, 'cause she's an incredible co-founder. But she and not Lydia and Nadia asked me to do an exercise to think about the customer journey for the Dia customer and where I thought it could be strengthened. And that's a huge undertaking, right? It's one of those things where like, please don't spend more than 3 hours, but boil the ocean, you know? I felt in that going into that conversation that I did need to show them my strategic thinking. But much more importantly, I wanted to find out what it what it was like to put controversial ideas in front of them. I wanted to see what it was like having a disagreement. And so I spent most of my time like ideating things that I thought were a little out there, uh, because I wanted to see what it was like having a conversation where they had to tell me I was wrong and I had to try to convince them I was right. And that was all I wanted to get out of that conversation, you know, like what's it like when we don't agree, um, you know, what's conflict like here? Is it constructive? Is it interesting? How do these people engage? Because that for me, you know, I think you have to go into these things knowing what you have to go into these things knowing yourself very well. And that's the advantage of 30 years of career experience too. Like, I know what I need in the people I work with, um, and in particular, I know what I want from a boss. And so that was the thing I wanted to hone in on and discover, because I was very confident that I was signing up to follow somebody who was intelligent, brilliant, a great communicator, you know, strengths that I didn't have. Those things that you can tell very early. But I was like, What's this thing going to be like? And so that's how I use that conversation. And I don't know if they even got what they want to do, but at the end of the conversation I was like, well, I got what I wanted to know out of this conversation. And yeah, I'm ready to sign up, you know. So I think those— you got to think about those exercises strategically and say, what's in it for the company right now? I mean, every conversation you have to think when you're interviewing, what's in it for the company and what do I need to give them right now? Why are they asking this question? But what's in it for me and what can I learn about the company? And what do I want to get out of my next question? What do I want to get out of the answer I give? You know, and that's just an extra layer that I think makes those conversations much more effective.

Michael Koenig: So I have to ask, we've all had those moments where we have a new problem and we've at some point thought, whoa, never thought I'd see that. Do you have one that comes to mind that you can share with us?

Valerie Hoecke: Yeah, it's not a Dia Co problem. Boy, I have a lot of Dia Co problems. I mean, I'm running a startup, like, shout out to everybody doing it. It is not for the faint of heart. We have problems every day. But I think, you know, one of the most interesting sets of challenges that you have are crazy people issues, right? So this is from a previous company, but at a previous company, I worked with someone who demanded an expanded role, and when I turned them down on that, they immediately fired themselves and said that I'd be hearing from their attorney. So this was an interesting combination of actions, right? Um, and then there was a, there was a lawsuit. So I think the things— I mean, I think some of the most unusual things you deal with as a COO are people things, right? The business surprises they fall into patterns. You learn, right? But people are the wild card in running a business. People are the magic in running a business because it's people who solve problems for you. It's people who develop customer intimacy and instincts, you know. But they are also the wild cards and for sure the hardest part of the job, right? Managing all the personalities, managing the people, not getting yourself fired or in legal trouble in the process. Getting all those different personalities to work together. I'd say like a huge percentage of the challenges of a COO are in that space. And maybe it's one of the reasons I love the job of a COO as well. You know, I love solving people problems, even though I get a little weary of it sometimes. Solving people problems is a very, is a very interesting set of problems.

Michael Koenig: Yeah, I'm trying to imagine sitting in a room with someone coming to pitch 'Hey, here's why I should be doing X, Y, and

Valerie Hoecke: I was a dog. You know, it's like, what just happened? Okay, like, you know, but what, you know, obviously when you get a signal like that, you couldn't be happier that the person's leaving the organization because that kind of, you know, the one thing you can't tolerate is toxic behavior in an organization. And the one thing not good is crazy behavior in an organization. So I mean, it's always good to check. Sometimes people go through incredibly stressful things, right? Like I want to say, like when something really unusual happens with an employee, the first thing you got to ask is, what's this person going through? Is this a one-off thing? Is there something going on in their life that I can understand to get them back on the right track? But when there's a legal threat, you don't get that opportunity, right?

Michael Koenig: Oh, absolutely not. Now, there is— and this is definitely a meaty topic, um, but I, I would kick myself if I didn't return to it. You had spoken a little bit, very briefly, about the bias that comes from, uh, that, that you see within corporate America around, I suppose, let's say, size discrimination, the size of folks. Size discrimination. And I don't even know necessarily how to talk about this, and— but I— it is something that is, uh, probably pretty important to get out there. I'm wondering, can you maybe speak a little bit more?

Valerie Hoecke: Sure. Um, I mean, we see in our society many different kinds of discrimination, right? Our society— most societies are societies that try to favor the middle of the bell curve. You know, that's just the way society works. Um, and then people in power in the middle of the bell curve define that they want to keep that power in the middle of the bell curve, and they fight changes. There's a tremendous amount of variance in how different bodies want to hold weight, right? Uh, the truth of the matter is that women also typically add weight over years and as they get older. Um, it's a normal part of aging for the vast majority of women. And, um, unfortunately, like, we have a standard— I think it's rooted in sexism to some degree— but, um, we have a standard that says that skinny and small is, is better. And, uh, we don't— you don't see people who are unusually thin, unhealthily skinny, uh, receive any discrimination in the workplace. And yet people who are larger do. Experience discrimination in the workplace, right? People of unusual sizes and shapes and disability receive a ton of discrimination in the workplace. Let me just point out, you know, but, but being skinny— and there are many unhealthily skinny people, you know, they do not have the same experience that people who are larger have. And so, you know, it doesn't take a lot of Googling and research to understand that there is size discrimination in this country. It plays out in, in things like wage. The larger a woman is, the less likely she is to make good money. And straight up, I think we are now starting to live in a society where people are starting to realize that discrimination is not okay. They're becoming more aware that it exists, but size discrimination is one of the least addressed of these types of discrimination. And so, yeah, I mean, my advice to anybody who's interested is, you know, research the topic, learn about it a little bit, and then realize and empathize with First, the degree of bias, like that people who are larger experience, because they do experience a lot of bias. Try to work very hard to correct for that in your own behavior, right? Look to correct for it from a corporate perspective. Look to correct for it in the way you put images in the world. I mean, go try to find a picture of a plus-size businesswoman on any, on any, I mean, this is 70% of American women are size 10 and up, right? 10 to 12 is kind of mid-size. But it's still a massive portion of the US, of the US population. You cannot find pictures of, you know, all those stock images that we put in our PowerPoints that we're constantly replicating, all the images in media. I mean, women of larger sizes are invisible and that creates huge self-esteem issues. It reinforces bias, right? Because we are telling the world what size it's okay to be all the time. And there's a huge opportunity to do better. We should do better. Just like we should in many other important areas. So it is inspiring to imagine a world in which a person can live a happy and fulfilled life and have whatever job their aptitude allows them to have and to have whatever wardrobe they want to have and express their style in whatever way they want. As we start to unwind this issue, and it is deep and systemic and it will take time, time, but, uh, the future is coming and it's going to be a lot better.

Michael Koenig: Thank you for sharing that, and thank you for expanding on it. And it brings a whole new light to what you all are working on at Deere.

Valerie Hoecke: Yeah, it's very exciting to be a part— it's a privilege and an honor to be a part of that kind of change.

Michael Koenig: Well, Valerie, thank you so much for coming on the podcast. Where can people go to keep up with you?

Valerie Hoecke: I'm so bad at external communications. I guess they can find me on LinkedIn @VHecke, V-H-O-E-C-K-E, or Valerie Hecke. And certainly if you're interested in our business, you should check us out at Dia Co, dia.co.