From A People Perspective

Marty (00:00)
Hey, my name is Martin Hawk and you're listening to From a People Perspective. It's a podcast for HR recruitment and operations professionals. If you're looking for a little bit more, you can check out the community at the people, peoplegroup .com. If you're a business owner or if you're HR person or a recruiter and you need a little bit of extra support, we've also got a fractional consultancy called Purple Umbrella. You can check us out at purpleumbrella .co.

Martin Hauck (00:25)
All right, folks, another episode of From a People Perspective today. Today we've got Michael Martocci from Swag Up and thanks for joining us on the show today.

Michael Martocci (00:35)
Yeah, thanks for having me. How many episodes is this?

Martin Hauck (00:37)
You are 29 episode 29. We've been doing this for five years now. and yeah, it's, we're, getting to ramp up to like a lot more episodes per week. So I'm doing about one a week now. So we'll probably be at about hoping to crack a hundred, in the next few years. Yeah.

Michael Martocci (00:58)
I think the HR community could use some good content and more modern content, I think.

Martin Hauck (01:04)
Yeah, that's the goal. That's, that's what the people people groups been been working on for sure. And one, one thing that I noticed when one swag up and TPBG just first partnered was like the response to the partnership. was like the most well received partnership that we've announced. And a large part of that has to do I think with that's just the brand that swag up has in general. But then there's also like

the idea of swag just being such a fun thing. And I'm just curious, like, it doesn't make your job easy, like completely easy, but it probably makes it a little bit easier. I'm curious from like a high level, like how does that dynamic play into running a swag company?

Michael Martocci (01:57)
Yeah. Well, I don't, mean, in general, it's a very competitive market. So I think the fact that the brand stands out and it resonates with people is by design because, you know, if we would have just came out and said, we're, you know, I had a company in college, it's called cheap custom printing.com. I don't think that the TP, you know, I don't know if the community would have been super excited about partnering with cheap custom printing. So we were very deliberate when we started the company of like, we want to build a brand.

Martin Hauck (02:20)
You

Michael Martocci (02:25)
that resonates with more of a modern consumer, know, and people, young people that are working at up and coming startups and tech companies, or maybe they're in enterprises, but they're trying to like reinvent kind of the way that they do things. We want it to resonate with those people because there's all these swag companies out there, but there didn't seem to be like the go-to brand for those folks and, you know, making it simple. And it should feel like when you get on the website, you're buying from like,

you know, they go to these SaaS websites and they're beautiful and they're easy to buy from and use and stuff. And then you go to swag companies and they look like they're from like 2003. So I think it just, it all came down to like the brand name and the way that we present ourselves in the design and the look and feel of things. And then to your point, you know, we've done a pretty good job over the years of, you know, working with a lot of people in HR. So the name kind of is known in that community and people, you know, people are always looking for better ways. Like swag, swag is fun or it's supposed to be fun.

But I think it's been a huge pain in the ass for a lot of people too. Like it's like, I don't want to like work on that swag war anymore as much as I love swag because that vendor has screwed me so many times and the process of getting the addresses and the sizes from people is so hard and they always make mistakes. And I think that people like the idea that we try to simplify it and take off some of that stuff from their plate so that it can be fun again.

I think over time it's become a little easier because the brands out there, but it wasn't very easy in the first few years to rise above. Like the first three years were pretty, you know, slow growing until the pandemic where things really started to take off.

Martin Hauck (04:00)
So interesting, the pandemic is what kind of like turned things around or like sped things up, I guess. The one thing that you mentioned very early on there was like, this isn't your first kick at the cannon in looking at your LinkedIn profile, your entrepreneur by heart. Like what lessons did you learn at the companies previously that you'd built, that you took into building SwagUp? Are there any that stand out for you?

Michael Martocci (04:28)
Yeah, I mean, I've been an entrepreneurial person my whole life, like four years old, five years old, selling things to my neighbors outside, you know, doing kind of snow plowing type of businesses, getting other kids in the neighborhood to help. So I've always had this commercially minded type of, you know, way of thinking. And my dad's an entrepreneur, my mom was in finance. So I kind of just like been around business and stuff for a long time. But

In general, think the main lesson is you have to do something that's different. I've started all these different things and they're mildly successful. The two things that I remember being the most successful beyond their swag up and then there was a business in high school where we sold these hoverboards, those little segway looking things that were super popular like five, six, seven years ago or even more.

And the reason why that did well is because we built like our own brand and they were like at a time where they were getting very popular and they stood out and we had the right materials and stuff. like there's this book called The Purple Cow by Seth Godin. And he talks about this idea of like, need to be remarkable. And what would be more remarkable than driving past a farm and seeing a purple cow? It's like, holy shit, I've never seen that before. And the first thing you're going to do is like call your buddy and be like, hey, you'll never believe it. I just saw this purple cow.

And he says that in this busy world, the digitized world, how do you build that level of like, remarkably into what you're doing? And we really took that to heart with SwagUp because you don't want to just be another one of the 30,000 promotional products distributors in the U S you want to be someone that if they look at you, they're like, Holy shit, this is different than anything I've ever seen before. And it started that way with SwagUp with just focusing on HR teams at tech companies.

And that, know, to a degree had stood out because as you know, like HR teams don't always get the most love and attention, you know, from the outside world. And I think that we showing that we kind of understood them and we built something for them, I think really like stood out to those, that community. but then taking it a step further, those swag boxes and swag packs that we create, we really leaned into that positioning in the beginning to say, Hey, we are the swag pack company. Like nobody had ever taken that position before.

Everybody's just like a swag company and they have maybe the service line that they could put a kit together or something and they could do this. But nobody kind of stuck their neck out there and said, Hey, we are the swag pack company. And that means maybe we're not this bulk swag company or this or that, but we are this. And that was another piece that really helped us kind of catapult because people are like, like I can now people not only know that we can do that. They start thinking of ways to use swag packs that they haven't done before, because now we've made that process so simple. So I think in general, it's like.

You have to kind of figure out what's your unique angle into a market, make that positioning really simple and make sure it's very different than something else so that when people see it, they're excited about it and they want to tell other people because we didn't spend a dollar of marketing for the first like three, four years. And I say that it was slow growing. We were still doing six million a year going into the pandemic. We still got relatively big before that and we had not spent nearly anything on marketing. It was just because we built something that in and of itself, you

spurred kind of word of mouth. And I think that that's what you need to look for. It's like, do you build something that's so different that people want to talk about it because that creates these flywheels that help grow the business efficiently.

Martin Hauck (07:52)
Yeah, yeah, it saves, saves folks from having to, well, if you're creating something so good that other people are talking about it, they become your marketing department, essentially, right. And that's, that's hugely powerful. It's, it's interesting, a lot of company, like every company, I think, from my perspective, especially when when you talk about the HR on the people culture side of things, they're looking to do the same thing that essentially you've done for swag up to a certain extent is like, how do you help

other companies make their companies remarkable in comparison to just the experience from an employee experience perspective. And oftentimes that feels like a bit of a mystery, but if you crack the nut for SwagUp, it looks and feels like you're helping companies make that easier for themselves. Just with swag alone or the employee experience, can you, I'd be curious to kind of like,

take a peek behind the curtain in like how you figured out how to help companies do that for themselves as well.

Michael Martocci (08:54)
Yeah. Well, like I said, I think that swag is fun and swag super impactful. I think, one of the tenants that I have that I talk like to new hires about is like, why does swag matter? You know, it's like, you could be like, it's this t-shirts and these pens. Like who gives a crap? Like think about these kids that go to universities and they join the football team or something like, you know, how excited they are to get the, you know, the uniform and the hoodies and the duffel bags and the water bottles. Like all you do around a college campus is see kids wearing their

college sweatshirt, you know, and it's because they're part of something bigger than themselves and they're proud to be a part of it they want to show other people and you know, they go home for winter break or something and they're still wearing it because they want the people at their hometown to see that this is where they're from and they're excited about it. And when you see other people like at a bar that are wearing a Harvard hoodie and you're wearing a Harvard hoodie, like you're instantly connected with those people. And I think that that dynamic is something that companies want to foster. Like how do I build this sense of connection and community?

amongst the people here that they feel like they're part of something that's much bigger than themselves and they're proud of it. And I think that, you know, employees have a lot more leverage now they could join so many different types of companies. Like it's more companies are looking for great talent. not like great talent has to find a company that is willing to take them on. Obviously that's changed a little bit over the last couple of years, but in general, if you're a talented person, like you can, have so many options of like where to go. So when you go join a company, you're picking a company, I think

beyond just money and the position, like you're picking because you actually care about like what they're doing and the people there and the culture and the mission and values. So swag is just that much more impactful than in that type of scenario because people actually care about where they work. If you were like, you I just work at IBM because they're the only place they gave me a job. You're probably not going to care that much about the hoodie or the jacket that they're going to give you. But if you joined Stripe because you love the mission of like increasing the GDP of the internet, then you're probably going to be really proud to wear the Stripe backpack.

you know, and know, when you're in the airport, and then other people that also like Stripe might see you in the airport and, like you work at Stripe, I love Stripe. And I think that that's the power of swag. companies realize that, but I think some modern companies realize that. But it's been really challenging to like use swag logistically, you know, like, do you, especially in a remote world, how do you get this stuff into everybody's hands efficiently and effectively? And I think that, you know, the companies that understand that swag is valuable in building this sense of

Martin Hauck (11:14)
Yeah.

Michael Martocci (11:20)
camaraderie and culture is valuable, they want to use swag and then they seek out solutions like us that say, hey, we can actually help you scale this up and do it well. And then from there, once we've gotten in the door with them, we just try to learn like, okay, well, where else in the employee experience can we help kind of make this process simpler so that you can use it? like, I think one of the interesting examples I saw was like from Calendly, they were working on with us with putting new hire, putting swag boxes into the recruiting funnel.

Martin Hauck (11:49)
Yeah.

Michael Martocci (11:50)
they

were getting people like after their second interview or something, sending them this box, hey, we really enjoyed that interview with you. Cause they're like, they realized that the power dynamic is in the employees hands and they want to like really attract them. But what happened was people were posting that on LinkedIn, like, Hey, I've never seen that before in the recruiting funnel. Like, you know, I'm super excited to accept this offer from Calendly. And then other people would start to apply to Calendly and want to work there as well. And we saw this too, one of our bigger customers, Northrop Grumman, they're doing,

baby packs to every single new mother and father and people are posting those on LinkedIn, it's creating all this buzz. So we just try to say, hey, people, HR people have had these ideas for a long time, like how can we engage the team? How can we use swag for these things? And then we, think that now that they have a partner like us, we help eliminate the friction actually making that doable. And then they start to get more creative about how can we use swag in these different ways to create an experience that hasn't been done. Because like you said, you know,

Martin Hauck (12:38)
Yeah, it's not a big lift.

Michael Martocci (12:46)
People might have had these ideas, but they don't do it. So then the companies that do do it, they stand out because, wow, like that's different. We haven't seen them.

Martin Hauck (12:54)
Yeah, it's not a, it's not a crazy, like first off the, the lift that is required previously was pretty big, right? Like there wasn't this system in place where you buy the bulk swag and then, and then an HR person is spending two or three days just like shipping and packing stuff that's been taken care of. Right. And that, that felt new when I went through the experience as well, cause I'd gone through the, the other experience previously. that's.

That's great. But injecting it into different areas of the, guess, just from a curiosity perspective, like how much of the business is like, would you call it like traditional HR swag, where it's like new employee stuff and how, how much is like, there's also the idea of just like rewarding customers as well, right? Like, or, or thanking customers to the holidays, obviously you want to send out stuff and like, just thank the customers for being a part of your journey. did like,

Did you start off in the HR? Like, was that your first sort of like ideal customer profile or did you, did you go with other angles as well?

Michael Martocci (13:57)
Yeah, I mean, what's interesting, we were just looking at this data and we're kind of 50-50 split between internal and external use cases. But we were very deliberate in the early days to say HR and internal use cases are the primary focus for us because like I said, most swag companies focus on sales and marketing use cases like conferences and customer stuff because that's where like a lot of the budget is historically.

Martin Hauck (14:03)
really?

Michael Martocci (14:25)
you know, marketing teams make all these decisions. They've got a lot of the budget. And I just felt that HR and internal was such a much more interesting use case that was undersold to because go back to 2017. Like I said, you were getting into a world where companies were constrained by talent, you know, they needed more great people. They needed more great engineers, all this stuff. And you could see that the balance of power was shifting towards the employee.

Martin Hauck (14:36)
Really.

Michael Martocci (14:53)
And companies needed to like amp up their game to make people want to join their company and make people want to stay at their company. know, employee retention has been a big issue. know, people come in for 18 months and then they go to the next company. And that's so disruptive. So I just felt that companies were going to care a lot more about the HR function and the people experience function at the time when we started and that the budgets there were going to grow a lot faster than the other budgets. And it was a more untapped market.

by other swag companies. like, hey, you guys are all focusing over there and that's great, but it's very competitive. We're gonna be the one that focuses on the HR teams and has like very little competition and provide solutions for them. we almost took this a step further and maybe we should have and just orientated around HR. Like the whole brand, the whole positioning, the platform, the wording, the integrations, only HR orientated. And maybe that would have helped us grow faster, but at the same time,

when you start working and you do good work for like HR teams, then naturally you start to spread within these companies because they're like, hey, you know, I'm going to introduce you to the marketing team and the sales team because you we love working with you. So it's kind of hard to just say that you're HR when this is just naturally happening. But HR was definitely a deliberate decision. And we, you know, we didn't really talk about it, but we, you know, we also have 50 integrations with all the different HR platforms to help, you know, kind of streamline even more so some of those different.

things that people want to do like birthdays and work anniversaries and new hires so that they can just plug it into the system and it's just happening in the background as well. So it's not only that you don't have to go pack it and go ship it, it's like you don't even have to think about it.

Martin Hauck (16:28)
It just gets done basically. Interesting.

nerdy question or swag, swag nerd question, maybe I don't know how to define it properly, but what's the behind the scenes? Like, is there a selection process of new swag when you're like, okay, we're going to choose this water bottle instead of that water bottle? Or is there like a committee that decides what swag gets into swag up? like in terms of your inventory or like, Hey, we're not going to do hats with pom poms on it. I I'm just curious to like what the decision making process.

Michael Martocci (17:04)
Yeah, I mean, it's definitely a deliberate decision in terms of what shows up on the website. Maybe the things that are in our back end system, it's a little bit more loose where different people have the ability to just like, like Martin really wants this hat. So we'll probably add that into our system and let you order it. But we're probably not going to show that hat to customers on the website as like an option until we think that one, that's a good quality. We think people are actually going to want to use that. That we've maybe done demos and like

you know, samples ourselves of it and see what it looks like and how it holds up. So that's more of a marketing function within the marketing team. There's not like a whole merchandising team, but the team that runs our marketing is the one that's kind of on the hunt for new products. What's coming out. We also like, you know, I think one of the things that we did well early on was we looked outside of the industry for items. You know, a lot of the companies in the industry go to like these specific vendors throughout the States that are just like promotional products vendors, you know.

Martin Hauck (18:02)
Yeah.

Michael Martocci (18:03)
They all have like the same notebooks and the same water bottles and the same hats and stuff. And what we did is we looked at like retail brands a lot. You we would go directly to like an up and coming backpack company like SoulGuard and say, Hey guys, like we really like these backpacks. We think they would work well for the corporate market. So we started to bring in a lot of non-traditional brands. And I think that's what people want, especially when you're talking about gifting and employees and stuff, they just want, they want the items that they were going to buy themselves anyway.

It just happens to be branded or maybe the branding is subtle, but that's what people really like. And I think that there's been a big shift in this industry over the last few years. And I feel like we helped shepherd it a little bit where people have moved to retail brands. if you look at some of the vendors that we buy from, back in 2017, I would say of their selection, maybe 5 % were retail brands. Now it's probably 40 % is retail brands. So you can just see there's a flight to quality.

in the swag world, people are less inclined to buy a bunch of shit and they're more inclined to buy less things but better things and that's more meaningful. I think that we helped kind of move the industry in that direction.

Martin Hauck (19:09)
You took the adage of quality over quantity, it sounds like.

Michael Martocci (19:14)
Yeah, for sure. mean, I would, we don't do a lot of the, we want 10,000 units of this because we're going to go give it out to a bunch of people. Like that's never been our, our business, even though that's like some of the biggest volume in the industry is like those types of orders. We've always been, Hey, we need a hundred of this, 200 of this, 300 of this high quality stuff. The average order sizes for us are $8,000. Whereas, you know, the average order value of like a four imprint, you know, purchase is like $400 or something.

$300, know, so people are coming to us mostly because there's like some, you know, bigger like purpose behind that and it's like gifting and it's good stuff that they want to give to people that matter.

Martin Hauck (19:54)
Imagine swag up seen some pretty interesting use cases and you talked about, you know, Calendly doing something in the, in the candidate experience portion, which I think is insanely powerful from like employer value prop or just being able to stand out any, any other examples kind of come to mind that, that are like stand out kind of like, that was interesting. Or that was a little bit weird. We're glad to have supported it, but that was, that was interesting.

Michael Martocci (20:24)
Yeah, I mean, it's hard to remember all of them. think, you know, I think offboarding packages is an interesting one. You know, like people that are leaving the company, whether they got laid off or they just are leaving and you know, there's some companies that are so deliberate in the sense that they say, hey, like whether you're here now or you you're always part of this family, even if you're not going to be here going forward, like we want to make sure that you feel that and we're going to send this thing to you and we appreciate the time that you spent here. I think that that's a pretty thoughtful.

way to like help soften that blow and like make people feel like, hey, this isn't the end, know, it's not like we're never going to talk to you ever again. Like you're always going to be part of this community. think there's, you know, companies do some interesting things from like a marketing standpoint. Like we do, we just did something recently with like challenge coins for veterans for a company that's like very kind of, you know, patriotic in a sense. And they do these outbound campaigns and they

They wanted to send like veterans, like a challenge coin that's like similar to like a military coin that you would get when you're in one of the branches of the U S military. but I don't And then you get crazy stuff where people want to like brand bicycles and like snowboards and these types of things. And I don't know what the use cases are always. but I, the ones that I shared before, like in the Canada experience stuff for, you know, new parents, a lot of like pet packages, like a lot of companies like to send stuff to pet owners because there's such a.

deep connection between people and their pets. And if anything, people rather give things to the people that they care about than for themselves. So if you can give swag to somebody that they can give to their kids or they can give to their pets, that almost creates an even stronger bond between you and the company. So there's so many, every day new things pop up.

Martin Hauck (22:08)
There's not, I mean, it's probably one of the more like it's the nice, you know, in terms of like HR person or like a people and culture person, it's the one moment where you get to like really be creative and thoughtful about the candidate experience or the employee experience. That's interesting. on the, on the packs that you would send out, you know, in, terms of off boarding, was there anything that stood out from those ones that you're like, this was done really thoughtfully and well, because it,

For me, as I think about it, like, what would I even send someone in the off boarding to make it, especially if it's like a layoff, like those that's always charged, you know, pretty emotionally and whatnot. Like, how do you make that land? Well, I guess, or did anything come out from that?

Michael Martocci (22:55)
I mean, I think it's, you got to be kind of subtle about it. You don't want to send them this like wild package with all these different things. And it's like, why are you spending all this money when like this is happening potentially? I think if you do like one quality, subtle item with, with like a letter from the CEO that says something that's like meaningful and it's just kind of, Hey, just want to just a token of our appreciation type of thing. And don't make it so like over the top. think that's kind of the key. Cause to your point, it's a, it's a potentially sensitive area.

Martin Hauck (23:05)
Yeah.

Michael Martocci (23:25)
But also, you know, it doesn't always have to be about layoffs. I mean, there's people that leave companies all the time because they want to start their own company or whatever. They just think it's time, you know, they're moving and they can't work at that company anymore. And then you have this boomerang effect where people come back. Like this happens so much at like companies like Stripe and Fair and Shopify and stuff where people leave, they go try their own thing or something. Then they come back two, three years later because like they really love the culture. So I think there's value in just

keeping people connected to the company that they were from, especially if they were great employees that you would love to have back. So I think that concept is probably massively underutilized, especially if it's not just for layoffs, but it's just in general, like to say, there's always a place for you here. We'd love to have you back type of thing. Like let's stay in touch, you

Martin Hauck (24:15)
the alumni group encouragement essentially.

Michael Martocci (24:18)
Yeah, it could be a jacket that says Shopify alumni. Now you're part of this unique crew and you're always going to be part of the team.

Martin Hauck (24:21)
Yeah.

Yeah, yeah. As I mean, how how big is swag up now or or most recently in terms of like headcount?

Michael Martocci (24:37)
Yeah, well, first off, I used to think that headcount was such an important, you know, like, I used to love to talk about how big the company was. that was and it's always kind of like a question that people ask you, especially people, you know, that don't know much about business, they just love to say, like you run this company, like, how big is it? How many people do you have? And at one point, we had 200, I think the peak was 230 or 40 people or so. And that was in the span of zero to like,

Martin Hauck (24:41)
Yeah.

Michael Martocci (25:06)
four years, know, zero to four and a half years or so. So there was a time where we went from like a hundred to two 40 and like 18 months or something. And, and you know, we made so many mistakes when it comes to hiring. And I'm not saying that it's like we hired bad people or it's their fault. I'm saying it's our fault that we, I tried to make hiring like very easy, you know, it's like, let's put TA people on the team full time. Like let's lower the friction. We need more people in here type of thing.

Martin Hauck (25:25)
only

Michael Martocci (25:32)
And like the minute you lower the bar and the threshold and make hiring easy, you know, everything starts to unravel. And we got to like way too many people way too fast. And you know, the business was spending way too much money as a result. We weren't getting that much different results. know, people didn't really, there was not good communication because so many things had changed. There were so many new teams and there wasn't great processes in place. And we didn't have that type of.

you know, autonomous person that can just figure it out in every single role. Cause like you just can't, when you get to that scale, you know, now we've got about 120 people or so, some like half of what that was and the business, you know, we've got, I would say really strong people. A lot of the people have been here for a long time. So they're the people that have kind of that tenure and experience. And, know, I just think that you have to fight the urge to make the team bigger, you know, all the time, because it's just so much easier to run a company with less people. You know, not only is it, you know,

less expensive, you know, and if you have more room for error, that's good. And you don't want to be like where you're spending every last dollar that you have on, on people. have to make investments in people, but like every new person you add to a team just increases the complexity and the amount of coordination that's needed. And I would just say like, Hey, if I was starting over, how do I keep the team as small as possible while still scaling the business?

Martin Hauck (26:51)
Yeah. Yeah. And the reason I asked that more, more just given the audience is curious to kind of get your lens of some of the challenges you faced as you were scaling and growing and, whatnot. And, and what your relation, like almost from the perspective of like co-founder slash CEO, and the relationship you have with you, with your HR team and some of the lessons and like key things that you've learned on this journey. Cause a lot of the listeners,

are going through that as HR people and just maybe what you look for in, in strong partners and that sort of thing.

Michael Martocci (27:27)
Well, I think one of the most important things is like the continuity of your team. Like how do you keep the team intact for as long as possible? You know, those people that have been there for a while, they know the history, they know the context, they know the business and its quirks. Like every time you lose those people, it's really hard to recover, you know, because with them you lose a lot of like...

kind of almost mentorship for the new people that come in and just like the people that are the glue that kind of understand the ambiguities and how to like make things work in a company. So I think like you just need to spend a lot of effort trying to make sure that those people are happy, are engaged, are doing well, are set up for success. And I think that that's, I think so I can play a role in that, but I think in general, you know, being listening to those folks, know, how is your HR team putting in place some processes to kind of get that feedback and engagement from them.

The minute you start seeing people not engaging, like they're not showing up to the all hands, they're not putting a Slack emoji response to things, they're not answering your questions, they're not in the sales wins channel kind of celebrating people. That's when you know you have some issues and I think you got to really make sure that your top people are engaged and do you have an HR team that knows how to do that and knows how to at least like spot when those things feel off and kind of surface them up.

to folks, but, you know, and then, you know, the hiring part is so important. If you can find, you know, I don't think that it's HR's responsibility to hire people. I think it's, you know, you as managers within your teams, it's your responsibility and you know, the HR team's there to help facilitate and help you run processes and stay organized. But if you can find HR folks that really understand like how to spot great talent and

and are able to sift that out so that you only get people that are high quality, like at the stages that you get involved in the hiring process. Like I think that's really important. Like I said, we had a lot of TA folks and I feel like we kind of, we're just looking for good enough people in a way, like let's just get them through. And I think that we've gotten better and the HR team's gotten better at like really being super picky and making sure that people are the right people for us and our culture and what we're looking for and the types of characteristics that we need.

and being more efficient about it. We've been much more selective about hiring. We went to, we might interview 50 salespeople before we make one hire. And the HR team is a really great resource in helping us get to that point to where we've got five, six, seven, eight good candidates and they've already been kind of vetted for our culture.

Martin Hauck (30:02)
Now, and in terms of, you know, partnering with, you know, understanding the culture and when you do need to make a new hire on the HR side, what are some of the like main qualities you're looking for as a leader of the business?

Michael Martocci (30:20)
I think it's curiosity, not just for HR, I think every role we're looking for the same types of things. People need to be self-motivated and curious at the end of the day. Because especially in a startup, you're not going to be there. And especially in a remote world, you're not going to be sitting next to them at their desk, reminding them of the things they need to do or why this is important or what they should care about. You need people that intrinsically...

want to do great things in their life, whether they're here or they're not. And you want the type of people that care so deeply about doing great work that if they're at a company that doesn't hold people to certain standard or isn't doing impactful things, then they leave because they want to go find somewhere else to have a bigger impact. That's the type of people that we're looking for, not the people that are like, you know, this is a pretty...

comfortable place, you know, they've got a fun culture. I like the brand and like, you know, people will respect that I work there because it kind of seems cool. It's like, no, like we, you know, we're not going to babysit you. We're not going to monitor every last thing that you do, but we are going to look at the results and we are going to hold people accountable. And we want people that want to hold other people accountable because they want to do great things. And they want to see the company progress. And they want to see our customers, you know, get more and more.

value. you know, I also I love entrepreneurial people, you know, we hire a lot of people that have side businesses, maybe they're actively running, you know, like we have a sales rep that we hired six, eight months ago, she runs like a half a million dollar jewelry company for on college campuses, and she still runs it. And I love it, you know, and I think that there's some companies that would be like, that's a conflict of interest, we don't want you focused on that you're spending too much of your time. It's like

Those type of people are such hustlers, like they know how to manage their day. You know, we're lucky to have someone like that that is willing to like have a full-time job at our company, you know? So I really like people that are self-starters. And that doesn't always mean that you need to be an entrepreneur, but it's like you've done something from zero to one. Maybe you've started a podcast, maybe you started a book club, maybe you were the president of a sorority in school. Like you just, took initiative to want to do more in life. And those are the types of people.

Martin Hauck (32:01)
Thank you.

Michael Martocci (32:27)
And then it's, you know, a lot of like VCs will talk about, you know, you got to find people that are exceptional at something. Like what's something that people have done in their life that they are just incredible at. Maybe they were the best Boy Scout and they won the soap box card Derby or something, or maybe they, maybe they were, yeah, maybe they're a world-class cross country high school runner and they, you know, they won their state championship. Like they just, they did something where they took it to like,

Martin Hauck (32:42)
Very specific example.

Michael Martocci (32:54)
the end of its limits, you know, and they just, and it doesn't matter what it is, but you want those types of people that they do exceptional work, you know, and they're extreme in some capacity and that'll manifest itself in everything they do because people like that have high standards and they're always going to want to be the best that they can be. And it has nothing to do with their manager doing something or even the HR team putting in place engagement things. It's like, people just want to do their best work if they're those types of people. So I think.

It's similar to like the purple cow in marketing. If you can build something that's remarkable, that'll be a self-enforcing marketing flywheel. Well, if you can hire people that are intrinsically motivated, they will police themselves to do great work. Like you don't need so much structure and bureaucracy to like make those things happen. If you have the right ingredients underlying it and you have to foster those people and make sure that they're happy and, and, and in an environment to succeed and you don't want like.

Martin Hauck (33:42)
Yeah.

Michael Martocci (33:48)
political pressure that's getting in the way of them doing their best work. So that's where I think sometimes the company in HR is about getting things out of people's way as much as it is trying to like help people do great work, you know.

Martin Hauck (34:00)
No, no,

I remember I was working two jobs like this is like 20 years ago, but I was working two jobs. just bought a house and I worked in this call center. So I would go to my normal nine to five job. And then that night I'd like come home for like a few hours. And then I would, I would go to this call center and the person sitting beside me in the call center would fake all of their calls.

And like, care about what I do, whether it's like, you whatever, but they were faking their calls and I could not concentrate because my mind was blown that they were just like, pretending they would just click the next on the button and they were.

Michael Martocci (34:38)
The numbers would hit, they'd hit their numbers. I got on 37 calls and that's it.

Martin Hauck (34:41)
Yeah,

yeah, they were, they were crushing it from their numbers perspective, but they were, they weren't doing it in a way that would like fly off the radar, but I would sit beside them and I would just like, you're not even talking to a person. Like your sentences don't even make sense. and it just was like the most distracting thing. And like, it's, you know, like, so when you lower the bar to a certain extent, when you're hiring talent, or if, you know, that, that impacts your high performers as well, because then, then it's just like,

High performers want to work with high performers basically.

Michael Martocci (35:13)
Yeah. And there's a lot of people out there like that, that they're, put their energy and effort to looking good, you know, like they know how to game a system and play the game. And there's a lot of people that look good on paper and like these corporate companies. And that's where you to be really careful when you're hiring, this person was at Amazon and they got to this role. Like sometimes it's not meritocratic. Sometimes people just know how to navigate and play corporate games to look good and, and, and get up the corporate ladder. And you really need to have that skillset.

to think from your own first principles and something like, does this person actually know how to think? You know, are they actually going to be successful here or do they just look successful? Cause that's where a lot of the mistakes happen. And then the other thing too is like, one of the only other things you could do as a company beyond hire great people is just to set good incentives. You know, like what are the goals? Like do those goals actually mean success for the company? And people will, again, will self regulate themselves to go get to that thing if the incentives are set correctly. So it's like,

get great people, get things out their way and set proper incentives to where they know where they need to go all the time. And if you could do that, it makes it gonna be a lot easier to run. You don't need as many people. You don't need as much management layers. You don't have to be policing people. And then just like, give them all the tools they need to succeed.

Martin Hauck (36:30)
Given that you've been so entrepreneurial in your career, if it wasn't swag, what kind of business would you be running if you could kind of start over or pick a different path?

Michael Martocci (36:42)
Yeah, I I feel like sometimes businesses just kind of happen, you know, you stumble into them and that's, and usually that's like the right way because it's a natural pull versus you trying to like push your vision into the world. There's only so many times in your life or so many people in the world that just have such a strong vision of how things should be. And they just go in and say, like, I'm going to mold the world around my vision. A lot of times it's more reactive. It's like you observe something and then you kind of start something and it leads to the next step. And then you just like.

Martin Hauck (36:45)
Yeah.

Michael Martocci (37:11)
over the years, it's like, I guess I have a big business now. So I've never really, I think I have passions. I really like real estate in some way. And I don't know what that would look like in terms of a business. think that just flipping real estate and stuff maybe isn't the best thing or just renting out single family homes is probably not the most interesting thing. But I think even home services is interesting. Obviously there's so many of these like,

Martin Hauck (37:13)
You

Michael Martocci (37:38)
business school grads that are getting into like, just, own a lawn care company now and I'm going to roll up a bunch of lawn care companies. And I mean, there's obviously something there. There's so many of these types of businesses out there, you know, they're run by, you know, people in their 50s, 60s, 70s. They don't really want to run them anymore. They're not really like investing in the growth anymore, but like the economy is made up of so much of that. Like so much of the GDP is just like small businesses around the, around the country. And like they, they do need kind of consolidation and modernization and scaling.

I also think that there's ways to kind of maybe make these things more simple for the consumer. I don't, this is very esoteric, but I just think that the fact that you have to have like 10 different home care service providers, like you need the lawn care people, then the AC people and the pool people and these people, like, could you like maybe package that up and have one home maintenance service or something? Like, I don't know. I just like, I like things related to homes and real estate and even architecture and stuff, but I don't know. I don't know if I have the,

I'm not at a stage where I found something that like, I'm going to go change the world with this massive, massive idea like robotics or, you know, all the things that Elon does. Like, I, I don't know if that's like my thing. think my thing is like regular, you know, middle of America type of, you know, companies and, and, you know, swag is very easy to understand. You know, people get it. I like physical things more so than I like digital things. but I don't know.

Martin Hauck (39:03)
No, no, that's a fair, fair play. it's definitely still something that, mean, lawns aren't going away anytime soon. AI isn't disrupting, like maybe robots to mow lawns, but you still need people to service those things and.

Michael Martocci (39:19)
AI is a huge,

I tell people like, owning a business in this age is a great thing because it's only going to get cheaper to run and operate businesses over time. And if you know how to wield, first off, if you know how to wield people and like leverage your human capital, then you're well positioned to leverage artificial human capital like AI. And if you can figure that skill out in the, you these coming years, you're just going to build bigger businesses that are more profitable, you know?

I'm excited to see kind of like where that goes and how people yield, wield that power to build interesting companies. Because all the times people are the constraint and if you don't have that constraint anymore, what could you do?

Martin Hauck (40:03)
Are you thinking, I mean, to a certain extent, every company is thinking about it and it's a hot topic obviously, but for very good reason. I'm curious, how is AI being thought of from like a swag up perspective?

Michael Martocci (40:17)
think that obvious stuff for now is just internal operations and workflows. Like how do you interact with vendors and purchase goods and make sure that they're coming to our facility on time and all the data is in the right spot in our systems to just do the thing. So like a lot of the glue of the process, I think is where it's a little bit easier to kind of like train on that stuff. It's more predictable and it's more immediate value. And I think there was always like this idea of like AI and machine learning. It's not new.

five, 10 years, but it's been very basic stuff. It's like, A leads to B. The great thing now is like, there's reasoning, know, like AI can take something that's a little messy and kind of make sense of it and make decisions in the same way that a human would just take information in and kind of use their experience to be like, all right, this looks kind of like that. Let me do that now. So I'm very bullish on like, there's a lot of people that think like, AI will never be able to think like,

Martin Hauck (40:49)
Yeah.

Michael Martocci (41:12)
a human or it's never going to be able to do human things. like, I don't think so. I think it can do everything. And I use it so much. I think right now, like I said, internal processes, I use like chat GPT all the time is like a data analyst. Hey, here's the CSV Excel file. I need you to analyze this. Can you group them by this? Can you create visualizations? I did that all weekend for, I was putting a deck together on like our customer base insights and stuff. So I think it's right now, it's just a tool to make your best people more efficient.

So if you can give somebody like a sidekick that can help them get answers quicker, do analysis quicker, et cetera, it's great for salespeople too to do research on accounts and stuff like that. And hey, what should I do from a copy standpoint for this outreach message? think those are some of the easy stuff now. But in the future, I think AI could be a great sales rep for us to deal with the interaction with the customer on the website. Hey, let me help you.

kind of get the product's design. Let me help you kind of place your first order. Have you also thought about ordering these items? Are you going to be shipping them internationally? Here's some things you should think about. Like it's an omniscient person that knows everything about everything there needs to be known about SwagUp and the history of what we've done and all the different restrictions and all of our support articles. So, I think that we can be able to scale up from a sales perspective a lot faster using that. And I think the design portion eventually will be all AI.

designing swag and merchandise all through AI. And you'll get better outcomes and people will be able to get new things quicker and faster and iterate on.

Martin Hauck (42:45)
For the folks that know this swag experience, is there anything that you guys are working on right now that's like in the hopper that you're really excited about or like even just for 2025, like what are some big things you kind of want to nail as a company?

Michael Martocci (43:00)
think the main thing is we want to create a more robust shopping experience. So right now the website's a little bit more of like, almost like a SaaS company. You go in and you kind of like understand our services, but then you kind of go into the platform. We want to make it more e-commerce driven where you go in and you have like this really robust shopping experience with different themes and categories and a lot better searching and refinement and show more items, but let people find the things that they want to find.

recommendations, more smart search. I think that there's opportunities for AI within the shopping experience. Like, hey, I'm looking for items that make a lot of sense for an employee offsite, you know, that's going to be happening in Aruba. Like, can you put together some ideas or put together some package options, you know? And so I think it's like, again, the whole idea for us is eliminate the friction in this process of creating and distributing brand and merchandise. So it's just like, where is the friction? And I think we've done a pretty good job.

eliminating the friction on the distribution side, managing your inventory, shipping it out, integrating into a system so that you don't actually have to do anything. there's still a lot of friction in the purchasing process. What am I going to buy? How am going to design it? How much do I need? All that kind of stuff. And we want to, we want to make that easier, but we also also want to inspire people to use swag more often for more different types of use cases and help them make those decisions more easily. So I think a lot of next year will just be.

how do we continue to make a world-class shopping experience and make it easier to discover things and create great stuff?

Martin Hauck (44:33)
Awesome. No, no. Any in terms of, guess, what you're seeing in the even just from HR folks and your customers, are they, you know, apart from the friction that you're talking about removing, is there anything that's standing out in terms of like trends that you that SwagUp sees as a company in terms of that other companies should really pick up on or in terms of how

the employee experience is being managed or does that kind of like fall into some of the stuff we've already talked about?

Michael Martocci (45:07)
Yeah, I think we covered a lot of it. mean, one is just, are you doing this kind of stuff? I think you should be, you you should be deliberate about the experience that you're crafting and, you know, make it a place where people want to stay and make it a people where people are excited to be able to join and they're excited that, hey, in two weeks, I'm starting at Calendly. Like all that, all that kind of stuff's important. I think in general, the market is still weird though. You know, it's, you know, the last two.

Martin Hauck (45:30)
Yeah.

Michael Martocci (45:33)
two and a half years have just been very different than they were during the pandemic. There's a lot less like venture capital funding. There's a lot more scrutiny from like boards and investors about profitability and not making stupid decisions and not spending money. So I think it's hard, it's harder for teams to rationalize different things and different spend and they're not hiring as much. And I think that we've seen some of that impact flow through to like swag orders and stuff. And at the same time, when things are kind of choppy and the culture's a little like on edge,

these things become even more important. think you want to make sure that you can continue to justify the investments in your people and the experience irrespective of what's going on in the outer environment. Because at the end of the day, even something simple like, for the holidays, we're going to send a $50 sweatshirt to our 100 employees. It's $5,000. In the grand scheme of things, that's not much compared to what you're spending.

on these people and on the business. And if that little sign just shows them like, hey, we had a tough year this year, we lost a few people on the team, the market's tough, but like we still appreciate what you did for us this year. And like, we just want to send you something. Like sometimes the little things like that just make the whole difference. And we see it ourselves when we give our team merchandise like that. So I think that even though the world is crazy and markets are crazy, especially for tech companies, it's like continue to justify and invest in the things that the team appreciates.

and cares about and don't make them out to be like a second priority. first things first, it's like just profitability. That's all we care about the board and this and that. We're not going to care about these other things until we get to a point. It's like, it's all kind of reinforcing, you know? So I mean, just find ways to be deliberate, find ways to stand out, do the things that other companies aren't doing, and you'll continue to justify investments in your team.

Martin Hauck (47:21)
Purple cow, like that. have a consulting company called Purple Umbrella, mostly because of the emoji was available. And then from recruitment perspective, it's hilarious too, because purple squirrel is sort of like the definitive, like what people used to call a unicorn basically, like that unicorn talent is like, the purple squirrel, the person, or you would say you can't find the purple squirrel, but standing out. that was a really key point that kind of stood out to me, appreciate it.

Michael Martocci (47:48)
I love that

book. We give it to all of our new hires to read. It's very central to the culture.

Martin Hauck (47:52)
really?

Yeah. Does, no, no, appreciate the, appreciate the time today and appreciate the insights and everything like that. And, appreciate swag up being a partner of, of TPPG. Like there's it's, we've got 5,000 members across North America and the world. And, and it's, it's companies like yours that see the value of community and, and, and helping us like build it out is, is really important. So thank you.

Michael Martocci (48:19)
Yeah, we love being a partner, excited to do more stuff together.

Martin Hauck (48:23)
Awesome. Now, thanks Michael.

Michael Martocci (48:25)
Thanks for having me.