The Power of Local Influencers

guest: Emily Steele
company: Hummingbirds

This episode dives into the world of Emily Steele, co-founder of Hummingbirds. Hummingbirds acts as a bridge, connecting local businesses with social media influencers in their own communities. These influencers, the hummingbirds, are everyday people with a passion for sharing their experiences. Emily and her team have found immense value in connecting these influencers with brands to grow their business.

Episode Transcript

Thanks for joining us on the Mind Your Own Marketing Business Podcast. I’m Joe Barsanis from web and software development team Fjordge. And today on our show, we’ll be talking with Emily Steele from Hummingbirds. Welcome to the show, Emily. Hey, thanks for having me. I’m excited to be here. Yeah, I’m excited to learn even more about Hummingbirds and you and how it all came to be.

So, um, as we always do on this show, Uh, talk to me a little bit about where you got your start kind of in the, in the business world and, and where you are now and, and where you’re headed in kind of your own career and, and how you ended up, uh, starting Hummingbirds. I love it. I feel like every year that passes, the story gets like meteor in here.

So I’ll just like give some themes. So right out of college, I have a marketing PR degree. I went to work for nonprofits. I was like, I want to make a difference. I want to get plugged into my community. I did a lot of like. Neighborhood development, community development, work, and really fell in love with the small business world because small businesses are so instrumental when you think about community health and local economies, et cetera.

So I was like always finding a way to help the small businesses like think about their marketing and like build an email list back in the day when that was like a newer thing. Um, had so much fun that I kind of started. Spun up my own kind of local brands. I did a pop up yoga brand that was like before, you know, how like you can do yoga with goats and cats and beer and wine.

Like we were bringing that to market, um, to make yoga more accessible, spun up a women’s networking group to hundreds of people. And I had a lot of fun building brands. So much fun that people were like, Hey, Could you start doing this for my company? Like, you’ve figured out how to do it for yourself and this non profit work you’re part of.

Um, so I started an agency and really focused on clients that were trying to drive local behavior that were interested in kind of like the community centric approach where you really get to know your customers, you get them to be your advocates, your champions and that kind of led very organically to Hummingbirds, which is the company.

That is like kind of a standalone brand and product today. So I, you know, had this curiosity around word of mouth marketing. Like everyone, you think about your neighbors who are like, hey, uh, you should absolutely try out this restaurant. They have the best happy hour. You’re gonna, you’re gonna listen, right?

Like you’re gonna be excited. So I’m like, how do you capture that authenticity in those? Um, word of mouth moments and, and harness it for your brand. And so I brought together my peers in Des Moines, Iowa, it’s like, Hey, can you start talking about some of my clients offerings? I want to see if it moves the needle from them, from social media growth to trying actual products.

And got a lot of success. I mean, brands were like, Oh my gosh, this like feels like influencer marketing, but these are just local people. And I’m like, I love this. This is so fun. As a creator myself, I was having a blast creating the content too. So got enough traction with it, you know, built some really basic software and really had this like curiosity.

I’m like, could I do this in other cities or is this like an Emily magic thing? Because I’m a community builder, right? I just, I had no idea. So spun up a couple other cities in Omaha and Milwaukee realized it was really easy to get other creators on board. You just send a DM and you’re like, Hey, you want some free stuff to try local brands?

They’re like, yes, I do. Um, and I ended up kind of going down the venture capital path, raised a million three seed. Scaled the cities to 15 cities, grew the team, did the whole thing, and then did it again in November. Raised another round of capital and now we’re opening 15 more cities. So I’m very much the like nonprofit person who went to small business who’s now running kind of a venture backed SaaS company.

So seeing the whole like gamut of things, which is, is really fun and, and cool. Oh, that’s so cool. And the fact, um, you know, we’re, I’m in Minnesota, obviously. Yep. Being in Des Moines and hearing about this and, and, and I’m sure there’s, uh, there are many, but not as many. Venture backed SaaS companies in the Des Moines area.

You know, um, turns out, yeah, this is a very like insure tech kind of place. We have the, all the big insurance companies. So yeah, the marketing tech is like, we are one of, we’re one of one, I think. Here we are. Yeah. But you’re also, and I think we learned, I learned about this from, from a little bit of prep is that you have kind of a distributed team as well.

Obviously the individual influencers are, are citywide, but even your employees, you’re kind of. Doing more remote type work, correct? Exactly. Yeah. We, we primarily, I mean, initially started hiring in Iowa, in Des Moines, we really had that kind of small team where like, let’s work together. Let’s be close.

Let’s collaborate. But as we started to grow our leadership team and really think about like, how do we, you know, exponentially grow revenue? Like that is the name of the game. When you get venture capital dollars, like we want, we want people to have been there, done that in terms of. Bringing them on the team and like, you can’t be too picky when you’re in Des Moines, Iowa, right?

You have to like, we were like, let’s go beyond and higher outside of here. And it’s felt very natural. We love, we love the remote distributed team. Yeah. Yeah. Wonderful. Wonderful. Okay. So now I’ve, I want to learn a little bit more about hummingbirds and the value that it brings to brands. So break it down to us from the simplest, the simplest way, at least for me, I’ll say us, but I mean me cause I need simple, um, in like, How it works and the value that it adds to, to potential, I guess we’ll call them brands instead of clients.

That’s, I think how you refer to them. Yep. Yep. So we’re building a two sided marketplace, like the Ubers, the Airbnbs of the world. So we do the hard work of finding local creators in the cities we’re in, and we add those individuals to our platform. And when brands come to us, they’re trying to drive local behavior and really looking at people as the distribution channel.

You know, they might be doing like, billboards, print, Google ads, meta ads, but they’re like, how do we do something in the word of mouth, like influencer creator space? And it turns out when you’re going that kind of local creator path, there really is no solution other than DIYing it or using our platform.

And so essentially what we’ve done is, you know, we give brands access to our platform for a fee. So they’ll essentially purchase credits, be able to create a campaign, like, Hey, stop by our new, like. We’re opening the doors at our new retail location, you get a 50 gift card to come buy some products and share about your experience on Instagram, and essentially the matchmaking occurs inside of our platform.

So it’s really like a SaaS enabled marketplace and, um, The hummingbird. We call them hummingbirds, which is kind of fun instead of like true influencers because they’re everyday people who have local influence, but probably would never call themselves influencers. And so that’s kind of our take on the world of driving local behavior.

We look to our peers. We don’t look to influencers to show us what to do in our own backyard. And so we really spin up this approach of, Hey, you can get 20 to 30 people in a specific geo talking about your product, your, Okay. Like moving it off the shelf at a retailer, et cetera. And it has some serious impact for the bottom line of their business, as well as kind of top of funnel awareness.

Got it. Yeah, I mean such a cool concept to do it So locally and creating kind of that like it seems like it’s a little bit of like a self service sort of platform Yep, where you’re kind of doing the you’re just creating the space for them to connect. Yep. I know from Um, from, from working with, uh, not similar, but marketplace organizations that, that working on both sides, and I’ve also done own a staffing company, so like the supply and demand in those areas can be really tough.

Have you seen, um, one side that’s easier, more difficult than the other to engage? Or have you actually seen it flip? I had a seasonal business and it would literally flip. The supply on one side would be crazy for six months, and the supply on the other side would be crazy for six months. And, you know, the demand was flip flopped exactly the opposite as well.

Um, so that was interesting. Yeah, and you can kind of like build some predictability around that once you learn that, right? Yes. I would say for us, like the supply side, so the creators super easy for us to get a few hundred into the platform within a couple of months. So that has been something really important to prove out.

The unit economics are incredible on that side. From a scaling standpoint, I would say, you know, when you think about brands that I’ve been doing local advertising for years. Like, this is a newer concept to them. So for us, it like, it does require getting in front of them, using a sales team and marketing dollars.

So that side, like from a CAC, like acquisition, that’s expensive, but we know as we get going in every city we’re in, we start to build that awareness, just like your classic, like flywheel effect you look for when you’re building a marketplace. And we know small business owners and these brands we work with, we’re like, this is They talk to each other.

So we’ve had, for example, some really good luck in the CBG consumer package goods space. So one of our customers, um, is Olipop and they’re kind of this canned prebiotic probiotic soda and they need to move product. off shelves at Costco’s. It’s still doing things in your own backyard, but they’re having a good experience.

So they tell their peers in the CPG space. And so we see a little bit of that. Um, yeah, that kind of snowballing happened. But I would say from when we look at the marketplace, what’s harder is definitely the demand side, because those are the people that ultimately who are writing the checks and, you know, paying the bill.

Yeah, I had my first Ollipop, uh, last weekend. Yeah? What kind did you get? Oh, man. It’s like a root beer? I feel like that’s a classic. No, it wasn’t a root beer one. It was like, I want to say it was strawberry or something like that. Oh, that’s on my list. Like strawberry and cream or something. Yeah, something like that.

Okay, okay. I didn’t, I wasn’t the one who purchased it, so I just got to try one and so I wonder if they were influenced by anybody at Costco. Oh, I hope so. I hope I have some of our hummingbirds. Yeah, up in Minneapolis, right? If you got any, maybe give them an extra little credit, uh, right there, so. Love it.

Um, No, that’s, it’s such a, it’s such an interesting, uh, concept and, and, and process. Now, as far as you mentioned, CPG, are you, um, have you noticed any other synergies that make, uh, like that are clients are coming from, whether it be, you know, B2B or some other vertical where you’re finding a lot of success.

We find a lot of success in kind of like the tourism, attraction, the brands that need to drive. outside residents into an experience and they typically have budget or like a marketing director. So we love working with marketing teams that already kind of have like a plan in place or a person to report to.

Um, so that’s really good. We also like beauty services. So Some of the best customers like our hummingbirds love are like cleaning services or laundry services Or like a med spa like go get a facial or whatever it is So the things that we hear too from that those types of customers in the service space is that this is totally a customer acquisition play as well as like a reach because I always like to say, like, a billboard can’t become your customer.

No advertising can become your customer, but a creator can. They can come in and have an experience, like, I got my house cleaned, they just did the kitchen as part of the campaign, and I was like, this is so good, I’ve hired them. So you can think about, like, The credit they paid for me as a hummingbird is now like at this point, like five to 10 X, um, because I know what I pay for my house to be cleaned and I certainly enjoy it.

So when we can work with those customers who are a little bit more sophisticated in tracking all of a sudden they’re like, okay, month one, here’s the ROI month, two, three, four. They’re like, Oh wow, this paid for itself in just a couple of months because of the repeatability of the, the creators. And so. It really depends like a CBG brand is looking for sell through data or my products moving off shelves faster in the zip codes We want And some like those bigger companies I think it all like kind of rolls up like reached impressions and engagement all bubble into like a campaign like sure as part of this This channel performed here here and here so we get to play that like the content engagement Uh, piece two, it’s just fascinating how people value marketing.

Some are like, this is brand, this is performance. We don’t love the performance space because it’s offline behavior, as you can imagine. When you’re trying to get someone to do something, it’s very hard to track. Like there’s, people are pixeled, right? So we can’t always track that conversion in like, the precise way that every, every marketer wants.

But like, such is life in 2024, right? Like, the tracking is just harder than ever. Yeah, yeah. No, and, and, but it is, it is interesting that you, I think there is a little bit more. I mean, when you, when you It’s not perfect, but you place a billboard out there. Yeah, um, it’s you know This could be somebody from two states away that drives by it and then goes by his alley pop, right?

I think if you you can make some better assumptions that if you ask Joe in five five three four zero Yeah. To do a post and he, that person has 400 followers that the majority of them are going to be in that zip code and you should expect to, or near that zip code and you should expect a, a bump from specific, you know, enrollment or whatever it might be at your place of business.

Totally. Is it black and white? No, but there’s just general like, Hey, thematically, this is kind of what we tend to see from like a result standpoint. Totally. Um, and I imagine some of them can do a little bit of tracking when somebody, let’s say it’s a salon. I’m sure a lot of salons, the first question they ask you when you’re a new client is how did you hear about us?

And, you know, they might say, Oh, from my friend Joe, but you might know that that campaign is going on. You might not know that it’s Joe or whatever, but that, that all of a sudden the word of mouth is growing and that’s, that’s probably that growth is probably from the efforts of some hummingbirds. Yep.

Exactly. Um, talk to me a little bit. Uh, one of the things that I learned was that, that, that at least right now, and I don’t know if this is ongoing, that the hummingbirds are, and you mentioned, you alluded to this, but hummingbirds are not being paid, um, for this because it’s smaller influencers. So this is not Kim Kardashian getting.

whatever millions of dollars per post that she or they get. Um, talk to me a little bit about the strategy and the excitement and how the compensation rolls that way for those folks. Yeah. I mean, it was never intended to be an influencer play. It was always about how can like local people. Help out the businesses in their own backyard by using their voice.

And so we’re really looking for people who actually cared about trying new experiences and sharing it versus like, Hey, do you want to make a living? Being an influencer, join our platform. And so the, you know, while I definitely respect like the platforms that pay people, and I think like creators should be paid if they’re doing great work.

It’s just never been our. It’s never been the value prop as we reach out to, to, uh, to creators and like who we call our hummingbirds because we’re kind of like, do you want to try new things and get free things? And they’re like, yeah, that’s good enough. Like I already have a full time job. I’m like, I’m doing this as like on the side as, as something that’s just fun.

I like creating reels or TikToks or whatever it is. And so, um, I see a day where we do incorporate a bit of that, like pay, Compensation. A majority of our creators are totally content with the PERC model. So why introduce something in our product that completely, and it completely changes our, how we fund the business too.

Cause then you’re paying someone, you get a take rate, or right now it’s all credits. There’s like high margins. So it just fundamentally changes the model of the business. So we feel really confident about what we have today, but We’ll see in the next couple of years. The creator economy is just explosive, so if we can really own local influencers at all tiers of paid, unpaid, and like ambassadors, I think we can really build something pretty, pretty magical.

Yeah, that’s so cool. Um, how have you decided what the initial 15 cities were and how you pick the next 15 cities? Are there any? qualities or demographics that you’re looking for in, in those areas? Or are you just like, Hey, you know, it’d be great as if I got a, like, what I do is like, you know, it’d be great if I got a client in Arizona in the winter, so I can go down there and see them.

Um, really should have thought through that more. Um, I would say, you know, started in Des Moines, super organically. It wasn’t like, this is going to be a startup that scales out of Iowa. Um, and then I just, I wanted to test a city that was, semi close, so I knew I could drive to Omaha if that was needed, and I knew I couldn’t get to Milwaukee, it’s hours away, it’s like a 7 8 hour drive, but that was to me interesting, and I had a larger enterprise client at the time that was like, if you open these cities, like, your contract That will grow.

I was like, that’s logical. And what we continued to hear is like, Hey, there’s just multi location business owners that were touching some of these Midwest cities that just so logically made sense. And we started to look at like, are there overlapping qualities that make these kind of midsize cities work?

And you know, when you’re, you’re really early stage startup, like we have limited funds, we really need to focus. Or like if we go to Boston and we go to this side of like, How do we just, like, own the Midwest? No one plays here. You know, everyone goes to SF or New York City to launch their marketing and tech companies.

Everyone. No one comes here. So it’s kind of a black box for brands to figure out how to infiltrate. And so when we can really lead the charge and say, Hey, we’re pro We’re pros. We get the Midwest and you want to come to us because we know what we’re doing here. It’s really been like an advantage. We, we over index on.

Um, so I would say like the next 15 cities will definitely cohort. We’ll be like, okay, well maybe it’s a Southwest Southeast, like kind of do a blob because we know like the big grocery stores, like the big gas, like they all concentrate similarly regionally. So that’s definitely a part of our strategy.

And then again, like smaller cities just work really well for this model. People feel really connected to their own backyard versus like your really, really, really big cities. It’s just fundamentally different. Yeah. Yeah. Yeah. No, good. That’s, that’s cool to know. Um, let’s talk a little bit more about the, the business aspect.

Like, how did you in, in Des Moines, and I guess, I don’t know if that’s like a handicap or not. I keep talking about like it is, but I don’t feel like it is. Um, but how did you end up? You know, thinking that you really wanted to scale this going out and finding, um, raising capital and like doing that in particular in the last year or so when it’s been a little bit more difficult, like what.

What influence, was it a person, was it a vision, was it, how did you come about to that solution here? I mean, I don’t necessarily recommend people raise capital, like, in the Midwest, if you, like, if you live in, like, the Bay Area, I think your chances are high. I mean, you’re probably going to have access to more capital to you.

However, like post COVID world, like we did everything over zoom in terms of meeting people when it got down to kind of the final two to three that we were getting term sheets from last fall, like we met all of them. Some flew in to meet us from different cities. So it’s not a barrier. Just really isn’t typical.

It’s like Miami, Austin, SF are like the places, the hubs for startups that you expect to see founders raising capital from. But, I mean, like my co founder and I, she lives like a mile down the street. Like, we’re not gonna pick up and move our family and our lives just to raise capital. Like, we don’t live in a world where you have to, so.

Like my family’s here. Her family’s here. Like why? I don’t want to disrupt that. Um, so it, I would say like, that’s a bit of a barrier. Obviously we did it. Um, but I think one of the most fascinating things I’ve learned through this process, and I would have no idea unless I was raising capitals, women raise like two to 3 percent of all VC dollars.

And so we were it. I mean, we’re pretty much set up to fail based on that percentage, right? So we had over a hundred conversations with investors last fall. These were like, if we do the math, we can maybe get like one to two term sheets out of this. And turns out the math mathed itself. So it was intense.

It was a lot, um, of time taken away from building the company. But I mean, at the end of the day, like this model building a marketplace, you really, really need. capital, you know, so it was worth it. And to now work with investors, we really, really like who are also Midwest based. Um, that was really purposeful for us because when we win at the end, when this company is acquired someday, it all funnels back to the Midwest, right?

It’s not like out on the coast. Yeah, yeah, yeah. No, that’s awesome. Such a, such a really cool like story and, and, and, and where do you, where do you, where do you see yourself in, see your team in Hummingbirds in three to five years? Like what are your goals around that? Yeah, so I would say, it’s funny because I like was totally doing this as a solopreneur.

I had one contractor helping me back in like, Summer 2022 when we were really getting this going, I was starting to raise money and now we have 25 full time employees. It is like, Stark that what happened. I also had a baby in between all that. I’m like, oh my goodness. What is my life become? This is nuts.

Um, but I love it and so when I think about team like we will be raising more capital probably next spring or summer like we will Be growing our team probably significantly with that. But at the end of the day We have really set our vision to be acquired. Um, and like, same with investors, right? This isn’t just a, here’s a check.

Good luck out there. It’s like, no, we all want to 10 X or more. The investment that investors have put in and, you know, be able to. To build kind of generational wealth is really exciting for us. So, yeah, that’s the goal is like, get this big and get this sold. Good to see that you have a vision. Yeah. Very big for sure.

Yeah, yeah, yeah. And it seems like, and this, how deep do you think you can go? So like, let’s talk breadth versus depth is kind of, to, to, to think about. So like. Is growth just more cities or is there room? I imagine there’s some room to grow within the cities you are in as well. It’s a simultaneous play. I think like what we set out to do this first half of 2024 was go deep in the cities we’re in.

We’re like, how can we, like, we have a presence here. How do we get more customers here? Like let’s really double down, but we also are like, okay, CPG brands that can double their contract when we’re in double the cities Why would you not do that? So yeah, you are. Yeah. That’s an interesting thing. So logical, but I think like what I think a lot of failing startups that are marketplaces They try to solve their issues by opening more cities.

They’re like, well when we have more cities, it’ll work. We already have some networks. We already have product market fit. So it’s not like a running away From failure. So I think it’s just that to us is like, that’s the conversation we’re having with investors of like, well, why are you opening more cities?

And so when we can lead the conversation and know the model and what we’re doing, like it makes sense. Yeah. I mean, it’s, it’s, it’s a lot, the strategy with the, Hey, let’s open a city because we know we’ll get a big contract right away when we do is very hard to pass up versus other things. It’s like a lot of freelancers start.

when they, when they have one client that they know they’re going to get when they leave their job or whatever it’s going to be. And that, that gets them to some comfort level that then they can fill in with the rest. Right. And yeah, so I’m sure that at the same time, it just, there was some of that goes into where you’re going next as well.

Like in the general area. Yeah. We’ve opened this city, like We’ve got, you know, five figure check we can write you. I’m like, okay, like that, that literally pays for the cost of opening a city. So those are the things we can push and pull on, which is exciting. Yeah, that’s so awesome. Well, thank you, uh, Emily for joining us.

Unfortunately, that’s all the time we have today. Thank you so much for being on the show. We really appreciate it. Thanks for having me. It’s been a blast. Of course. And for our listeners, uh, you can find out more about hummingbirds and Emily at, uh, hummingbirds. com thank you 📍 for joining us.

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