March 27, 2023
Tyler Morrey, a Co-Founder and CEO of Upside.coop, is building a platform to power the ownership economy. His experience as a valuation expert in complex financial instruments and startup consulting led him to see an unmet need in company growth - enabling brands to succeed alongside their customers by mobilizing them with the opportunity to earn ownership in the brand through their engagement.
Julian: Hey everyone. Thankyou so much for joining the Behind Company Lines podcast. Today we have TylerMorrey, CEO of Upside.coop. Upside.coop is building a platform to power theownership economy. Tyler, I'm so excited to chat with you, not only about, yourexperience and your entrepreneurship journey, but also what you're buildingand, and really just the cool and complex ways that you know, you are kind ofaddressing your market and, and really excited to see what the effects of yourplatform will.
A as, as, as we kind of go into thisevolution of, of influencer marketing and all these different types of thingsthat maybe, we didn't have in the last five years or, or way had, but it's kindof increasing the level of sophistication and level of adoption from otherbrands and, and other communities like, so before we get into all that stuffthough, what were you doing before you started the company?
Tyler: Yeah, well firstJulian, thanks really, really appreciate you inviting me on. Ready to have agreat time with you, ready to have great time with the audience. So let's digin. What was I doing before? So yeah, I mean, I, I'm, I'm kind of a nerd. Ilike numbers, so I was know, my background's in finance.
You specifically, I was doing companyvaluations. , yeah. More on the complex financial instruments side. Yeah.Uhhuh, , complex capital structures stuff like that. Worked with companiespretty much across the spectrum, right? Yeah. Any given industry. Small, big,public, private. But yeah, like that, I, I was just very deeply entrenched in,in equity and yeah. Understanding the nuance.
Julian: Yeah. What are someways in, in, obviously I think everyone, equity is kind of this weird shadowwhere we kind of know about it. Maybe we get it in our benefits, our offerletters, when, when we're signing up for a company, but what are the differentnuances of equity that we might not know of?
And, and some, some terminology thatkind of helps set the stage for people to understand if they have equity into acompany, what that even means and, and, and what it means to, to their kind ofownership of the work that they're doing.
Tyler: Yeah. Well, I mean,that's what it means, right? It means ownership. That ownership does take a lotof different forms though, right?
Yeah. Normally if, if, if, you know I'man employee and I'm gonna get ownership in, in the company I'm working for,yeah. Generally that's gonna come in the form of, stock options and orrestricted stock units, right? Options. Are generally just a right to purchasestock at a later date with a fixed price.
Right? Yeah. The interesting thing aboutthat, and this is kind of where my background worked into it, right? I did alot of what's called the four nine A evaluation, right? Which is a, a tax basedvaluation, but is meant to be used for pricing options for, a company beingable to, issue those options.
At the current value so that there's notax implications. So I did, I did a lot of that. The other thing, restrictedstock units know, that, that that can also come in like a variety of forms.Keeping it simple though, generally that just means the right to receive ashare at a later date.
Normally that's how you structureequity. . But there are, a thousand different ways people can do that, andthrow in lots of different, different terms. Probably be important, talk aboutvesting, why that's important to, what it means to have ownership of, of yourwork and, and ownership in the shared success of the business.
Right. Vesting is when you're givenequity, it's not really yours yet. Right. You got, you gotta earn it. Right.And, Generally vesting occurs with what they call a one year cliff, meaning youdon't, you don't get anything if you leave in the first year. And then beyondthat vesting occurs incrementally over generally another three years, right?
So total of four years, you earneverything that you were granted initially.
Julian: Yeah. And, andthinking about, the, the fir when we thought about the vehicle of of, startupsgiving out equity, a lot of us kind of think back to, it was kind of a way tomaybe quote unquote underpay employees, but with the future promise of thesuccess of, of the business.
And, it, it's a lot around not only VCcapital kind of goes into play what your users, what your targeted revenue. .Is it still seen as a way to say, I don't wanna say underpay employees, butbalance out the initial commitment of hiring somebody versus the long-termgains that they'll have at the company?
Or are companies using it as a differentvehicle altogether that, that, has evolved from that initial initialpurpose?
Tyler: Yeah, it, it's aninteresting thought because people view equity. Very differently. There's,there's a pretty broad spectrum of, of what people think of when they hearthat, right?
Yeah. Some people do go straight to the,ah, is it a way to underpay the employees, right? Mm-hmm. , coming from afinance background, I like to think of things in terms of risk. And risk toreward. Right? And what, what it really means to get equity, at a startup earlystage it's because a startup can't, can't pay those salaries that Google orFacebook can, right?
Right. They, they can't pay you as muchas you can get other places, but they need the work, they need the help. And so,equity is a way to compensate you for the risk that you're taking on the riskin lower pay but also the risk in instability, right? Because startups.absolute chaos and yeah.
So it, it, you have to have somethingthere that, that brings people together. Right. And that's why, I mean, that'swhy we use equity, equity is it's more than just getting a better price onsomeone's salary. Right. Like equity is, is. Used to align everyone'sincentives. It's used to, bring order to the chaos, so to speak.
Yeah, right. Yeah. It's, it's used asretention, so it, it keeps people engaged and involved in the work in thatthey're doing and engaged and involved in the overall success of the businessand not, not just their own, little corner of the world.
Julian: Yeah. And in regardsto up upside the anti the catalyst or I guess the inspiration behind theproduct and behind the company, what did you see out, especially with Web3,kind of becoming this whole thing that is so reliant on the people aspect moreso than, than customers, than anything?
I think a lot of Web3 is, is reallycommunity forward and then, we see a lot of companies scramble on, on how.Really whether it's monetize that community, always hear that those wordsthrown out there or foster that community or build products to enable it. Whatwas the catalyst for you to start a company like Upside.coop, where brands arenow connected even more so with the community and the community helps kind offoster and build the brand along, along, their journey.
What was the catalyst for that and, andwhat kind of, what, what, how, how did you think of the mechanics earlyon?
Tyler: There's, there's two,two, converging trends that really, came together that, that as I startedseeing both things happening it, it's what, what catalyzed our little adventurethat we, we are going on, right?
Building Upside.coop. The, the firstthing is that, and, and this is, kind of where Web3 comes into it. The idea ofshared ownership started to become a lot more prevalent. Yeah. People startedtalking about it, people started thinking about it, and people started gettingreally involved and, and honestly they got really excited.
That's why we had such an outrageoushype cycle in, in Web3. And like prices shot through the roof. It's becausepeople really liked the idea. But there's, there's a lot of downsides. There's.There's a lot of unsolved problems too. Sure. So I, I saw a. Equity being usedin novel ways.
Mm-hmm. was going to make moresustainable, more profitable, higher growth businesses, right? Mm-hmm. , when,when it's not just employees, but as many stakeholders as you can involve,right? When your, your consumers and your customers, that community, your fans,everybody can get involved, can. Have that ownership experience psychologicalownership.
They can, they can feel the effects ofwhat it means to know when I do something good for this brand, it is somethinggood for me as well. Right. It also allows people to put more of their ownidentity into the brand that they love because Yeah, because, they, theyactually are involved.
They belong yet Web3, in all honesty,didn't do it the right. That is one of the biggest things that we saw, right?Like, as, when you move beyond regular, what, what the, the, the rest of theworld is gonna, recognize as crypto, right? Like eth Bitcoin. Yeah. E as inether, the currency of Ethereum.
That is its own closed. , those thingsmake a lot of sense. Then we started building all sorts of different productsand protocols and things in Web3, across the spectrum of, of, of industries,right? Like people said, Hey, let's go out and buy a sports team together, orlet's all go out, and, and, and let's, let's co-own a golf course.
Right? There were a lot of movements todo this community ownership. and everyone looked past one of the, to, to me atthe time, glaringly obvious errors in, in that thinking it was that no oneactually owned any of those things. Right? Yeah. When you, when you buy a tokenor an N F T, you don't have any ownership in the company that created thatthing.
Mm-hmm. . And you know what? If thecompany says, Hey, we're gonna co-own, co-own something together, right? , andthen they sell you these digital assets. You take that money, you go out andyou buy the thing. Legally, as it turns out, they, they're the one who ownsthat thing, not the community. Yeah, right.
And I, I know that because lots offriends, coworkers, colleagues, very deep in the space. They, they all desirethe same thing. They want to co-own things, right? Mm-hmm. , they want to bringthat value to community. There's been a lot of things in the way of making thathappen, right? Mm-hmm. , first and foremost being securities law, right?
Yeah. Yeah. So, in, in seeing thatthere, there was so much potential in, in, in, you know, galvanizing communityand empowering them through ownership. But that as we move into the real worldand off blockchain Yeah. You want to use those same yeah. I don't, I don'twanna say tactics, but , you want to use those same motivators.
Yeah. To, to drive value, to drivegrowth. But you can't do that if you're, if you're a retail business or you'redirect to consumer or consumer application like a marketplace mm-hmm. it, itdoesn't work like that. All the value accrues to your equity and, nothing'sgonna change that.
And as soon as you try and transfer someof that equity or that value somewhere else, it, it starts looking a lot like asecurity. Right? Yeah. So, me coming from the background that I did workingwith complex instruments, seeing be, behind the curtain, the crazy things that,that finance people do, the crazy instruments they create that no one, no oneever really knows about unless you're, yeah.
In that industry I knew that there wasdefinitely a way to do this, to do it right, to make sure that you couldactually. , real equity, value ownership into the hands of the community.Mm-hmm. and yeah, that, I mean, that's where our journey really started.
Julian: Yeah. Yeah. It's sofascinating to think about that, that real ownership and I'm curious to, tolearn, and I'm sure the audience as well.
What are the mechanics behindUpside.coop? Tell us a little bit about the user experience. If I'm a user andI wanted to connect with the brand that that is, already connected throughupside, how is that relationship with. The, the, the, the companies that kindof co-owning or, or having some type of ownership or buy-in into the brands I'musing.
Describe the mechanics a little bit moreand, and what that user experience is like.
Tyler: Yeah, we, we tried tomake it as familiar of an experience as possible, right? To understand that, ,you are going to participate in the same way that you participate with a brandevery day. Mm-hmm. . Mm-hmm. . But that, it's gonna look a lot different thistime because Yeah, you're gonna actually have ownership in that brand.
Right. So, you know how it starts. It,it's very brand directed, right? Like, if I I have a favorite apparel brand andthey're, they're participating. They're, they're. Working with us, they,they're just gonna have a link in, in your account on the app or on thewebsite. Right. And when you click that, you go through a, a, very quick, seamlessuser journey, that just takes you to a point where you can join the coop, youcan become a member.
Yeah. And then you could start earningownership through all of the things that you already do, right. Earn and we, wedenominate that ownership in points. Right? Yeah. It's important to know thatthose points those points are your ownership of the coop itself. And the coopdoes.
Own that equity. And we can talk aboutcoop cooperatives, coops in a bit. But finishing that user journey, how do youearn those points the same way that any other brand is going to be giving you,loyalty points right now, right? Yeah. You can earn it off your spend. I getfive points per dollar every time.
I, I, buy on the website. I'm getting apiece of ownership. I'm becoming an actual piece of this brand every time I buytheir products. You can do it through social engage. Right, right. Likes onTwitter reposting on Instagram, all sorts of different, mechanics for helpingspread the word.
You could do it through referrals,telling your friends, your family talking about creator economy, right? Andlike the influencer marketing boom that happened over the last decade. Like it,it has become increasingly more inauthentic. Yeah, the, the interactions thatthese influencers have with their community, especially as their community or,and, I would rather say audience, as their audience continues to grow Yeah.
It becomes less personal and, people buythings because they have personal connections, right? Yeah. And so if you're abrand and you're thinking about what helps my brand grow, but, grow as in getmore customers, but also grow, sustain. Right. Yeah. Get customers that aregonna believe in what we're doing, that are gonna believe in our products, thatare gonna love our products and they're gonna keep buying.
Right. And the best way to do that isword of mouth. And you can't control word of mouth. Yeah. That just likehappens cuz you get lucky, right? Yeah. Maybe not anymore. Right? Maybe you canuse ownership, the, the true best incentive to, to guide your community alongthe path. , word of mouth, and sharing with their friends and family, thepeople who are gonna buy it.
And because they have those personalrelationships, they're more likely to buy, they're more likely to participate,and they're more likely to stay.
Julian: Yeah. And describe, I,it's funny cuz I was part of a coop like grocery store in college and, and itwas pretty much just like if I shopped there, I was able to vote on things thatthey were a, were gonna stock and then I would maybe earn some kind of benefitfor being part of the community.
And it gave me a lot of, I thinkincentive to not only return to that, that grocery store, but also. Think aboutwhat I'm consuming or purchasing even more intimately to my day-to-day and, andhave this different level of attachment to this product. Describe why the coopmodel is it is, does it run kind of system systematically in that relationshipto their customers and what kind of.
Rights, or I guess what kind ofempowerment are, are users are using the users of these different brands, ofthese, the customers of these brands in, in their relationship with with thebrands that they're purchasing from. Describe the coop model clues and, andthen describe it. It's, it's benefits to the customers overall.
Tyler: Yeah. So, acooperative, right? The, the traditional general description of one is that itis a, an entity, an organization that is democratically owned and governed,meaning, the members of the cooperative, they're the ones who own it. They'rethe ones who make the decisions for it, right?
And interestingly enough because ofthat, They're also generally not considered securities. Right. Like ownershipor a coop. Yeah. And that's another topic, but that, that inherently is, it'swhy we use this model, right? Yeah. Because it, under every other statute,there's so many limitations on.
What can be done, how you can actuallyget ownership into the hands of mm-hmm. of people who don't normally get tohave it. Right? Like, how do you get ownership to stakeholders that are notyour founders, your investors, your employees, right? That's what a cooperativehelps yeah. A company to do, to, to share ownership with the people that, thatalso matter that also have a lot of value to provide.
and, interacting with, with Upside.coop,right? Upside Cooperative itself, democratically owned and governed. So thateveryone has a voice. Everyone knows they have a voice. They get to participatenot only in the upside, which is obviously important to us, but they get toparticipate in, in decision making and, laying.
The, the, the future of mm-hmm. of, theorganizations that they love and the brands that they participate with. Right.And we add in another layer, which is, is very different honestly from, thecoops that most people are gonna recognize. Right. Like grocery stores there,there's a lot.
Of cooperatively owned grocery and othertypes of retail. Rei famously, one of the coops that most people know, a lot ofpeople are members and they understand, I go, I shop and maybe someday at theend of the year, not maybe, but someday at the end of the year, I'm gonna get acheck in the mail and it's essentially, a rebate for what I've purchased thatyear.
Right. But, let's flip that and let'slook. An early stage company, someone who really needs their community and, andsomeone who, as a community member, helps that company grow. Yeah. And, know,become something. Right. It a, a rebate at the end of the year isn't, isn'tthat crazy?
Right. It's not, it's not as fun orenticing. That's where, where we come in, that's why we called it upside.because that's actually what you get, right? As a consumer. You, it's not justgetting a little bit of money back at the end of the year for the purchases youmade. It is, it is real true ownership in that company, in that brand.
And if, if I am gonna be a patron of arestaurant right now, I'm gonna, they have one location, it's around thecorner, it's part of our neighborhood, part of our community. I'm gonna eatthere, once, twice every day, maybe during the. I'm gonna give them mypatronage when they grow and they become, franchised thousands of locationsacross the country.
One day what you did for them at thatearly stage is incredibly meaningful, and you can actually get that level ofreward for what you did and how meaningful it was, right? Like it can be notbeing bolder ostentation, but it could be significant sums of money for some.Right. Yeah. Yeah, because I, I think it's something that we don't generallythink about as much how much consumers actually provide in terms of value for abrand.
Mm-hmm. , especially at an early stage.Mm-hmm. , the, the coop and the model that we use, which as a coop we can workwith. Traditional companies who have growth trajectories and can become, very,very valuable businesses. We can, we can use the coop to give their community apiece of that.
Yeah. Which is, it is pretty differentfrom traditional cooperatives. But it's something that's desperately neededbecause it, it's the thing that bridges the gap for what is community owner.And in the real world, outside of Web3, what has been community ownershipthat's been a cooperative, how do you bridge the gap for that to also beingable to get upside in, these brands and companies that, that you provide valueto, but also, that, that as you do that everyone can grow right together,experience, shared.
Julian: Yeah. Yeah. Tell us alittle bit about the, the attraction that you've had. You've, you've been,you've been working on upside for quite some time now, and tell us a little bitabout the, the partnerships that you've created the users that you have. What'sexciting about what you've grown up till now and, and what are you particularlyexcited about in, in the next kind of chapter of Upside.coop?
Tyler: Yeah. Right now we'vehad a lot of wins. It's, it's. quite an experience building, obviously you,yourself as, as a founder. You, you know that. But yeah. We, we've been verylucky in, in, in building what we have. I'd say one of our first biggest winswas getting, partner with kpmg who's the accounting firm, and oric, who's a,very, very well renowned law firm in co-authoring a a paper on the frameworkthat we use, right, for cooperatives where it is, a company plus a cooperative.
Yeah, that was incredibly important, butalso an just, just a great experience to work with, people who are at the topof their field. Right? Sure, yeah. And. , from that we, we saw a lot of a lotof interest, right? Like, there, there was there was a period there where we,we got calls all day.
And yeah, there's still obviouslythere's, there's an educational curve to it, right? Like understanding how, howit's gonna work and how to implement things. Obviously we've gotten a lotbetter at. Over the, past few months. And, that's resulted in, in some prettyexciting opportunities that we have, in front of us.
I mean, we've been talking withcompanies Yeah. In, in every industry we've talked to Web3 companies who,we're, we're providing a solution that helps them solve for some of the issuesthat they have. In Web3. Yeah. We're talking to companies, traditionalcompanies, startups.
Clothing and apparel brands, cookiecompanies. I pretty much all over anyone who's got a good community and they'vegot users that are real fans they're interested in, in using ownership as thatmechanism. Yeah. To, to really drive and empower those people to do, do moreand to help build something together.
It's it's, it's still a story beingwritten. We actually launching initially our, our first eight customers here inthe beginning of April. Yeah. Uh, So we're, we're really excited to see howthat goes. Yeah. But you know, there's, there's certain things that we alreadyknow. Yeah. We are, we already know because there's been plenty of academicstudies, research papers from Columbia Business School and from KPMG as well onwhat.
It can mean to use ownership. Yeah. Onething we know consumer behavior, when someone buys a share, right. In a publicmarket of a company, if they're already a consumer, they generally increasetheir brand spend by 40%. Wow. Right? 40%. Wow. Get this, how much someoneincreases brand spend if they're like converted as a normal consumer to aloyalty program.
now how much? 18. 18. So, wow. It ismore than double the ROI if they buy the stock themselves now, if they earn it.Right? So if, if they earn it, if they're granted that stock, right? Like theydon't have to go out and buy it, if they're, they're granted that it's ahundred percent so they're gonna double their brands back, right?
It's five times more effective in termsof, generating growth and loyalty and re. Than a traditional loyalty program.Yeah. Other things, we know when people have ownership, they, they refer waymore. Right? Like 58% increase in referrals. They, they're gonna be retained,as customers for much longer.
They're more loyal. But you justgenerally, there's also like the unsaid piece of all of it, rather like thebrand story, the narrative. Mm-hmm. that, that also. Just a ton of interactionand engagement, right? The ability to go out as a brand. Say that, say that,our community is, is not just our community.
Our community is us. The community, hasbecome something more, right? Like we, we like to say. Over here in the officeall the time we're, we're trying to change business to consumer. To businessand consumer, right? Yeah. B to C can become B and C. Yeah, because that, thatcan create much, much more profitable, much more sustainable businesses, andyou can do it because the community.
Julian: Yeah. It's fascinatingto see, just hear the numbers that are so surprising in terms of people reallydo care to be attached to products. Not only be evangelist about things thatthey enjoy and, and or are high quality, but also, I think even, even beyondthat, what a company stands for, it's even more so of an incentive from aconsumer standpoint, and even for those that are referring.
To get involved in what that's going on,because I don't know about you, but I think we all want to be, the first to dosomething. The, the first to buy a certain product, to be a part of someone'sstory, to know the journey. Oh yeah. There's a lot of, there's a lot of, Idon't want to like nostalgia in that, that there's just a lot of attachment tothat and I think we all get a lot of satisfaction.
From that experience. And, but I'mcurious, with, Web3, with communities being so kind of, I, I don't wanna saynew, but in terms of how they're being, how they're being fostered and nurturedis a little bit nuanced. What are some of the biggest challenges that you facetoday?
Tyler: I think some of thebiggest challenges, not only we that we face, but that are faced generally. Webtwo, Web3, anyone trying to build. Is, is, creating the funnel, right. It, it'sgetting that conversion cycle and not just not converting, non-customers tocustomers. It's about converting customers to fans.
Yeah. Right. That is a, a, a difficultthing to do and there is generally no playbook for that. Right. . Yeah. Ourthesis, which we think is hopefully pretty strong is, is that if you can take., take those customers and meet them where they're at and convert them intofans by con, converting them first into owners.
Right. Meeting them at the loyaltyprogram level. Say just like any other company with a loyalty program thatyou've engaged with, it's gonna be that easy. It takes that much of your time,but this time it means something very different. Right, right. When they can,when the, when the customer can have that experience.
Right. To. Be just going through themotions of, of joining another loyalty program, but then get to understand whatthat means at the end when they, they just finished their purchase, theychecked out and they joined, and they see those points drop and know that theynow own a piece of that business, as the cooperative they, that that can beincredibly.
And it, it can change. It can change howa consumer views that brand, views that company. Right. The first step that is,is just vastly important. One thing that is overlooked is not about justnurturing the fans, it's about creating them. Right, right, right. Now, onceyou've done that, nurturing fans, there's, there's a a thousand different waysto try and engage with the community.
Yeah. And you know that we leave that upto the brands to decide, right? Yeah. Like we're, we, we are just the, theownership backbone. Yeah. But, we also feel like it, it provides you a muchstronger foundation to, to continue to nurture them. Right. Because they have avested interest. Yeah. It, it's, it's serious business now, right?
Yeah. And yeah. That, that was thepromise of Web3. know, I think that it's to no fault of anyone in, in theindustry that that hasn't been what's what's been delivered. Yeah. It's notwhat people have actually gotten. Right. Yeah. That's the thing that we'retrying to change.
Julian: Yeah. . If everythinggoes though, what's the long-term vision for Upside.coop?
Tyler: Man, I have no idea.Dude. . Good answer. It is long-term vision. I mean, I have I've, I've gotplenty of wild dreams and ambitions. , but long-term vision, the mission, what,what we actually want to accomplish, right? Like, that's, that's just changingthe paradigm. It's, it's changing, I want to, I want see something be adoptedacross the board.
Right? Yeah. I want see a world in whichthe, the ownership that you share with your community becomes competitiveadvantage. Yeah. The way that you engage with them, how much they. Becomescompetitive advantage. It, see a world in which we all start recognizing thepower of the consumer. Yeah.
The value that they do create. And, andI honestly, I just wanna see what comes from that. I just wanna see what what,what kinds of brands can be built. Yeah. When, when people. it in mass, turninto fans from just customers when you can convert customers at a, at a mucheasier rate.
Right? Like, that's another, anotherwild statistic that I missed earlier. But yeah, the, this is, this is fromkpmg. Three and four consumers would switch to a product at a brand with abetter loyalty program. Right? Wow. Yeah. And when you let that sink, thatthree out of the four of, your potential competitors and, and the customers ofyour potential competitors would be willing to switch, right?
First thing is you have to, therefore,how do you prove that it's a better loyalty program? Right? How do youdifferentiate your loyalty program from someone else's? I know how. It's , yougive 'em ownership, right? Yeah, yeah. Like that. That is how you differentiate,right? But like that's, yeah, that's the world I want.
See, that's the world we at Upside.coopwanna see. We want to see people taking advantage of that. Brands takingadvantage of that, and showing that any brand, if they actually care about theircommunity, yet they can grow a lot faster and a lot better than, than most ofus have ever really thought could be possible.
Julian: Yeah, I love that. AndI love this next section. I call it my Founder faq. So I'm gonna hit you withsome rapid fire questions and all right, let's see where we get. First, let'sdo it. First, first question is, what's particularly hard about your job?
Tyler: It's everything ishard about my job, , but the hardest thing for me, like personally has. , likesometimes you just, you just have to pick up and do whatever's in front of you.Mm-hmm. , and, and you like, you never know what's coming across the door oracross the threshold. But, I spent, I've, I've spent over the last two yearsand inordinate and mind numbingly boring amount of time reading.
Law , and, to the point where I atleast, you know, now I can actually speak to it, right? Sure. And I can talk towhat's important, but like, that's not something I really expected, right?Yeah. I I didn't realize that, that attorneys can't innovate for you. . Youhave to do it yourself.
You. What the other thing, and I thinkmost founders would agree well, maybe, maybe most mediocre founders like mewould agree. Sometimes you just have no idea what to do. Yeah. That's thehardest part. Yeah. It's like, where do I put my time? Yeah. What is gonna beeffective? How am I gonna build this? Yeah. Well, so hard questions.
Julian: Yeah. Yeah. And, andanother thing that kind of pops into my mind being that Cooperative Upside.coophas this whole, it kind of, it's this old form of ways to connect to a companyor industry, or. Product thinking about the cooperative model, but adoptingkind of a new technology around it that almost, it accelerates the ability todo so, but it's so new and nuanced that it's probably there's some challengesin communicating the story and the value.
What's a challenge? That you didn'texpect that you see reoccurring in helping companies for other founders outthere kind of adopt an old form of doing something, connecting with customersin a cooperative way with new technology and, and kind of building that trustthat, that old form will be accomplished with this new form of technology.
What are some challenges that you, youcan speak to that other founders might also? In regards to helping clientsadopt to something that's old, but with new technology.
Tyler: I think there's,there's I mean there's obviously a lot of disconnects between something trulynew and innovative and the way pe things have pe the way things work now andthen there's it, there's like a third layer. When you're saying, Hey, let's dosomething new and innovative. But it's also something that isn't what people donow.
It's what people have been doing for along time and used to do, and it's not really something that's relevant to yourindustry right now, right? Mm-hmm. , mostly just corn growers in Iowa. Yeah.That, that do coops. Yeah. I think the important thing as a founder is torecognize when, when there's a, a communication dis.
Yeah. When that means that there's aproblem with your product and your service and that you need to fix it, or whenit is just an educational thing, right? Mm-hmm. . Mm-hmm. . Yeah. I gave anexample. Earlier on as we were building things out we, we were gonna try andset up coops for everybody.
Yeah. Right? , I was trying to tell our,our, our beta clients, like how this was gonna work, how they were gonna runanother company on top of their company. Right. Yeah. . And, although after awhile, a couple of, one hour Zoom calls, they start getting it, it, it takestoo long.
And in the end, it, it's also just a, amassive amount of work for them. Mm-hmm. to be able to do that, right? Mm-hmm.. Yeah. So, it's an example of a time when I recognize that just breaking thateducation barrier, if, if the barrier is too hard to break through, it meansthat there's probably something wrong with the product and the service.
Mm-hmm. And so, we, we went back to thedrawing board. We spent a lot of time with our attorneys figuring out how canwe take over the operation of the coop for them too, right? Yeah. Like, how canwe do all of that? How can we handle the tax implications? How can we handle.Of, paying out to users, how can we handle the equity piece too.
Make it as simple as possible. Right.And we went from trying to set up an entire company secondary to someone else'scompany to in, in a week. I can give you two agreements. You can fill 'em out,we can sign them, and we're ready to go. Yeah. Yeah. Right. And that, I thinkit. I say it's, it's an important thing and, and a difficult thing to recognizebecause it took us a long time to figure that out.
Yeah. To not, not just to figure out howto do it like that, but to figure out that that's what we needed to do. Yeah.That, that's what the market was telling us Because of that, that hugeeducational disconnect.
Julian: Yeah. Yeah. It's sofascinating to think about just, once you're able to get these companies onlineand operating with the coop, the, the advantages, and as you said, if somebodyhas ownership or the rewards program has ownership into a company, it's almosta hundred percent likely that they'll buy another.
Purchase more product and increase theirpurchasing habits. And you mentioned some more about, people would change eventhe, the products that they're purchasing, if they have, an incentive better atother companies. If you can quickly describe a couple other benefits thatcompanies will receive in, in you mentioned that tax implications a second ago,but how can c.
Think about building a, a, a, acooperative and fostering this community in ways that it'll actually benefittheir business outside of the outcomes of increased consumer behaviors. Whatare some other benefits that, that they can expect?
Tyler: There's a lot of benefits.A, a lot of them are about just building a better business and mm-hmm. , youknow mm-hmm. about the community getting a piece of that. , other benefits,huge benefits for founders is the image that your community has of you, right?Yeah. That, that you're not, like, you're not just this dirty capitalist, thatyou actually care, right?
Yeah. That's a huge thing. Right? Andthat's a, that's a, that's a hurdle that is so difficult to jump for, for somany founders because all consumers inherently understand that. Your goal is tomake as much money off of me as you can. Yeah. I really love your stuff, soI'm, I'm gonna root for you.
Right. But like, that's your goal.Sports teams are the best example of that, right? Like, they fans love nothingmore than being there because the value they get out of just being a fan. Inthe end, the sports team's whole goal is it, we wanna. Yo take from you. Yeah.Well, what if, what if we change that?
And what if we say we're not just gonnatake from you, we're gonna give and you are gonna get, get out of this what youput in, right? Yeah. As, as a user, as a consumer, the more that you createvalue for us outside of just, buying things is important too, but outside ofyour purchases, what else are you gonna do that's going to provide value as afan?
Right? And now, You know that thatsituation is just drastically different from what it used to be. You can, you,you have a, a completely different relationship with the fans and consumers ofyour, your brand. I think that honestly, it's hard to say whether or not the,the monetary benefits are better or not.
I, cuz like, that's a pretty, prettycool.
Julian: Yeah. Yeah. Theinsights, and I think most founders can, can, can appreciate the insights youget from your customers, even your early adopters and, and how they help shapeand Oh yeah. Build your brand and your product Is, is an insurmountable interms of, brainstorming session or testing or doing focus groups or anythinglike that.
It's that connection and that feedbackloop that really You can hear 200 episodes that we've done, founder afterfounder talks about that relationship and how important it is. And it's amazingto see. I know we're coming to the, the close of the episode, but I always loveto ask this question cause I love how founders extract knowledge out ofanything that they consume.
Whether it was early in your career ornow, what books or people have influenced you the most?
Tyler: I honestly, I, I, youknow, podcast. Yeah. Right. Like that is cuz I, I have a, I have a 55 minutecommute every day. Cause we, we come into the office. I like to think it'sbecause we like each other, because we, at least I do.
I like everybody. Yeah. And I like beingaround that. I like the atmosphere and I like working together. But that is along drive you. And that's 55 minutes there and it's 55 back. I have a lot oftime I can't be reading cause I'm, I'm driving . So I listen to podcasts who,who has been instrumental or, just maybe, maybe just say influential in, in myjourney as a founder where I've gotten a lot of knowledge from, it's, it's, allover the place.
Lots of industry podcasts. I listenedto, I listened to lots of Web3 podcasts. Mm-hmm. , because that's where, that'swhere, that's the front lines of what it means to build this new type ofcommunity. Yeah, yeah. Seed Club podcast which is, is called Building at theEdges.
Incredible. Just lost, just like, alsojust a very enjoyable host to listen. , yeah. Acquired. Yeah. Listening to thestories of other, mega companies, just incredible brands throughout historythat is, that is always just incredible to listen to, just to hear their story.The things that you can actually get from that story is kind of astounding.
Yeah. Cuz I, I learned so much justhearing what it's been like for other people. Yeah. , and then also for, foreverybody listening Behind, Company Lines. Incredible podcast,
Julian: I appreciate it. Youlearned so much, . I love it. I love it. I thank you for the plug and, and Iappreciate it. And, and one thing that we really love to talk about is, is, iscurrent events.
Why, what are founders dealing withnowadays? And I love those other podcasts. I love podcasts, like how I builtBut I'm more interested in, in, in people like yourself who are in the trenchesbuilding, adopting new products, learning from their customers, and really kindof going. Or, or I guess it's like taking a step back in time, but, but in thepresent tense.
So, I, I appreciate that. And, and lastlittle bit is I always like to give our founders a, a, a chance to give ustheir plugs, let us know where we can find and support them. But before we dothat, is there any question that I didn't ask you that you would've liked toanswer that I should have asked you?
Anything? Anything come to mind.
Tyler: Oh, no. Nothing comesto mind. That's only gonna happen after we're done. Yeah, .
Julian: I love it. I love it.I love it. Well, Tyler, give us a chance to yeah, to learn more about you. Uh,Where, where can we find you? Where can we support the product? If I'm acompany looking to connect with my, my community that I've fostered, where canI find Upside.coop and where can I find you as a founder? Give us yourLinkedIns, your websites, or Twitters give us all your plugs.
Tyler: Yeah, no Twitter@upsidecoop, Twitter for me at, @tylermorrey. I, my dms are open. Hit me up. I,I just like talking with, with everybody. Plus, by nature of what we do, I getto talk to founders all the time, which is super fun too.
Obviously, you know that. Yeah. Bestplace to find us. Best place to, to get the conversation started. Upside dotcoop, right? It's in the name . Tried to make it as easy possible. So upsidedot coop, that's upside.coop. No dashes. There's an interested form. Fill thatout. We'd love to chat with everybody.
Right now we're just all about getting.communities involved. And so yeah, easiest place. I I, instead of all of thethousands of places that you could probably find us, I would just say just goto the website, . Yeah. Just fill out the form. Just come talk to us. Yeah.Keep everyone going through the same, same direction.
Otherwise, you who knows. Crazy. Yeah.But yeah. Anyways, I really appreciate it. This has been such an absolute joyto hang out with you and chat and you'll get to share our story.
Julian: Amazing. Tyler, it'sbeen such a pleasure for me learning about your experience, what you'rebuilding, and and sharing this with the audience.
I hope you enjoyed yourself and thank youagain for being on Behind Company Lines.
Tyler: Yeah, thank you.
Julian: Of course.