'Parental leave has been a really important part of our mission and culture from day one': Colugo Founder

Ted Iobst, Founder of Colugo joined Yahoo Finance Live to break down how Colugo is supporting parental leave and encouraging other small businesses/startups to do the same.

Video Transcript

EMILY MCCORMICK: Well, time now to feature a small business as part of our Road to Recovery segment sponsored by Wells Fargo. Today, we have with us Ted Iobst, co-founder of the baby gear brand Colugo. Ted, it's great to have you on with us. And I first wanted to ask you about business at Colugo. What was business and sales like during the pandemic last year? And are you seeing any of these trends changing so far in 2021?

TED IOBST: Yeah, I mean, so part of our core value proposition and as a new brand and a new company for a new generation of parents is, is at our core are a couple of features that we felt were lacking when my co-founder and wife, Kristy, and I started the company. So from day one, we have offered a 100-day risk-free trial. We have offered fast, free, efficient shipping on all strollers, and free returns on that 100-day trial.

So when you think about you have the ability to try something out at home, really understand how it's going to work with your lifestyle in a risk-free way, during the pandemic, you know, specifically in 2020, that value proposition was only more valuable to our customers to not have to go out to the store and, you know, be indoors and, like, touching other strollers that everyone else has touched.

And so, we definitely saw an increase in the attractiveness of our value proposition. And that's really just, our growth trajectory has continued through 2020 and well into 2021. Our biggest challenge right now is inventory replenishment. You know, a lot of physical products startups have that challenge. And we're not unique in that front. So my days are spent trying to figure out how to get more strollers to meet the demand for our customers.

ADAM SHAPIRO: Hey, Ted. Let's back up a bit to the moment you and your wife found out you were going to have twins and you got the brainstorm idea for all of this.

TED IOBST: Yeah, so well, the first thing we did-- we're in a small two-bedroom home. So the first thing we did was measure the second bedroom to make sure we could fit two cribs. Then we went on to the baby gear research process. And we just felt like it was way too time consuming. Brands weren't that interesting or authentic to us. The products were over specced. And, you know, the buying experience left you feeling like you overpaid for products that you weren't even sure were right for you. And it's not just strollers, it's carriers, it's car seats, it's cribs. It's you name it. And so we knew there had to be a better way. And so we invented the better way with Colugo.

EMILY MCCORMICK: And you talked a little bit about demand outstripping supply, something we've heard from a number of companies now. What have your supply chain adjustments looked like in order to try to meet some of these demand concerns?

TED IOBST: Yeah, so it's-- and fortunately enough, you know, we're in our third full year of operation. We do have some scale. So we're really looking all the way back through the supply chain to how can we cut lead times. Can we buy the raw materials? Let's say aluminum, which is a big piece of our stroller components. We're now competing with bicycle factories for that raw aluminum because I'm sure you know bicycle sales went crazy in 2020.

So can we both purchase the inputs? Can we reserve time on the production lines? We've got great manufacturing partners, who have always been there for us and always willing to try and speed things up and do more volume if they can. And then really, it's-- you know, I think from there on, freight's been really tight. So just managing customer expectation. You know, we're currently sold out of our compact stroller right now. We've had it up for presale. And we're going to be shipping out in a few weeks again.

But customers have still been purchasing. They want to lock in their orders to make sure they get a piece of our next shipment. And they believe that much in the product that they're willing to wait. So we're incredibly grateful for all of our customers, especially those who are still purchasing even though we've got a couple of week delay right now.

ADAM SHAPIRO: Tell us a little bit about the behind the scenes as well. Employees are eligible to take up to 16 weeks of family leave compared to the national average of 10 weeks when a new child is joining them. Where did you come up with that?

TED IOBST: Yeah, I mean, another realization we had-- you know, I was in business school at Wharton at the time. My wife was working in big law when we welcomed our twins. And sort of, part of-- we knew there had to be a better way from a product end experience and brand perspective, but we also knew there had to be a better way for, you know, new and working parents. And so, parental leave has been a really important part of our mission and culture from day one.

It's important to me on a personal level because now we actually just welcomed our fourth child about a week ago. So I am actually-- the only thing that I would do on-- I'm on parental leave right now. And the only thing that I would actually do on parental leave is come on here and talk about how important parental leave is. So I'll be back downstairs after this interview. But just from a personal level, it's super important. From a company level, recruiting and retaining employees is arguably more challenging than ever. And having a really robust parental leave policy is definitely a recruitment and retention tool for us.

And finally, it's really core to our mission. I mean, we exist for parents. Every product we bring to market, every experience we bring to market, it works backwards from parent pain points. And because more than half of our employees are parents themselves, this very-- parental leave is super, super important to us. In fact, actually, four of our employees out of our 10 right now are, in some way, shape, or form, making use of our paid leave.

EMILY MCCORMICK: You talked a little bit about employee retention and acquisition. But when it comes to customers, what's been the strategy on that end to really get the Colugo name out there?

TED IOBST: Yeah, so fortunately, our products have really found product market that we have a really high NPS. And that translates to a lot of word of mouth. In this category especially, you know, parents do their research, but they also ask friends, see what other parents are using on the playground, et cetera. So the majority of our customers come through word of mouth, which helps from managing in acquisition costs, but also helps provide social proof and, as a new brand, really help us kind of punch above our weight, so to speak.

EMILY MCCORMICK: All right, thank you so much. Ted Iobst, founder of Colugo.