00:00:00
You mentioned Barbara before we uh before we started recording about the shoulder issues and I mentioned my
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shoulder issues and we were saying how we're all broken. Uh actually behind me
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you'll notice most of the art in my home and I've got some surfing stuff but most
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of it is Kugi pottery. Uh Kugi the Japanese art form uh archetypal of wabishabi representing the beauty in the
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repairing of the brokenness. even more beautiful that that real beauty in life comes from that, you know, uniqueness
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and how we shatter and and build back stronger. And I think that for me, groove is so much tied to this idea that
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what makes us different shouldn't make us hurt in our shoes, right? What makes
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us different should be amplified and celebrated. And I think that, you know, we as humans are better when we as
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humans are all acknowledged and recognized and supported in our own way. We're not an insult company trying to
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figure out technology. We're a technology company trying to revolutionize how we wear shoes.
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>> Hello and welcome. You're listening to Marketing Matters on the Wharton podcast
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network, which is our weekly podcast where we analyze the latest in advertising, marketing, customer
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behavior, new product launches, retailing, branding, anything marketing. I'm Barbara Khan, a Patty and JHB Baker
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professor of marketing and I'm joined by my co-host Americus Reed, the Whitney M.
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Young Jr. Professor of Marketing and the brand identity theorists. And today we are so happy because we have one of our
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own, a very successful Wharton alum coming back on the show to talk to us about a very interesting product that he
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developed. We have Dan Katali, um, founder and CEO of Groove. And Groove is a footwear technology company that
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develops customized services designed to determine the ideal support for your body and something you can insert in any
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shoe. Yes. And it gives you comfort, performance, and fit. What a terrific idea. Dan, welcome to our show.
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>> Hi, Dan. Thank you so much for having me on, guys. Uh and before we get started,
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ladies and gentlemen, I would like to make a quick uh uh announcement here. And that is, let me tell you the story,
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Barbara. Many, many years ago, Dan, my podiatrist, I remember I remember him basically putting my foot in plaster and
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doing something and then waiting four months to get this thing that showed up. It was $500 plus. And I was like,
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there's got to be a better way. This was a This was over a decade ago, Barbara.
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And here we are today with this incredible product which I will show you. Uh this is called Groove. Dan's
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going to talk about it. Let me tell you something, Barbara. You You are the guru, Barbara, of packaging. So look at
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this packaging. >> The you look that my name, ladies and gentlemen, my name is on this. So that's
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pretty cool. And then the other thing, Barbara, look at this. This is really cool. It opens up
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>> in this. And then there's a mirror that's there that says made especially
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for you. Ah, I love it. Barbara, what do you think? Start us off. >> Excellent. Excellent. Excellent.
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Excellent. Did you pretest it? Did you test it or did you just go with your gut?
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>> Something in the middle of that. You know, I'm you you got to make a move to
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have something to test, I found. But as much as possible, I ask everyone around me what they think about my stuff
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because a lot of it sucks. And it's important for me to know which one of it
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is that. >> So what's your metric? It's like wow. If somebody says a wow, then I think a lot
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of founders, you know, like to uh mythologize themselves, put themselves on a pedestal and and and take an
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approach that suggests that they're like built different. Uh I I'll never suggest
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that. I'll suggest I'm a weird dude. And I think for me, my ability to commit
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myself to things that I'm not personally interested in as like a user myself is
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just limited. And so for me, I also uh you know build a lot out through the lens of myself as a consumer. And you
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know that's as someone who went to Wharton is kind of like fauxa number one and number two.
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>> I picked that in my first class. It's called confirmation bias. >> Yeah. And I think for me, you know, the
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real job is for me to take a hard look at what it is I'm building for myself
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and try to really separate, you know, what is it about this that actually applies to everyone and what is it
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that's just Dan. So this is the Groove logo. Um, this was something that was
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developed on three principles, right? Very much influenced by Nike. Well, this one was different than Nike, but I
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wanted it to be one syllable and a word that people already knew. Um, which I know is also counter to everything I was
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taught at Wharton. Um, but I wanted it to be something that they could quickly take to. I wanted it
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to be something that had both a, you know, subtle connotation to the foot, but not a direct one. I didn't want to
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feel footy, but the groove of the foot and also have its own energy to it. And then I wanted it to be, and this was
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directly from Nike, something that could both stand alone as an icon or utilize the full kind of word mark. And so we
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developed the infinity soul here. And the infinity soul represents uh you'll
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see it looks like a soul. It looks like an infinity, but most importantly, it represents uh the full circuit
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connection created when you've got a personalized interface between you and the ground. And more importantly, the
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infinity soul represents the number of different shapes and sizes that we make our products in.
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>> Ah fingerprint >> in the shape of the infinity soul. And I'll do one last thing. Uh cuz I know
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Americus, we mentioned this. >> Yes. >> In my ear right now. >> Watch this. Barbara
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>> is an earring in the shape of the infinity soul made by Fiama. a class of
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mine. >> I know her. Yeah, we have company >> and I wear it extremely proudly.
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>> Oh, that's very cool. >> Six degrees of separation. Barbara Famea
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listeners, FTA we interviewed on July of 25. You can check that out on the podcast. Another wart. I I love the way
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the universe brings great things together. >> Let's look let's look at the motivation
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for the product. And I'm I'm pretty sure it's what America said because I've been
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through that same situation, too. I didn't go to you. I have to say you're
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going to have to convince me to do that. But you go, you have something wrong with your foot. You go to a podiatrist
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or somebody you trust and they tell you to get these things for your shoes because it's gonna help, right? And then
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the first thing you can do is you can go to CVS and buy stuff and the customization is you cut it out in the
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shape of your shoe. That's how customized it is, right? So, how what how did you know there was a need for
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something better than what's sold at the gra grocery store or, you know, at the
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CVS? And how much competition is there out there? And >> yeah, growing up, my father sold
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orthotics uh my whole life. >> Oh my god, what what a background. >> And but plot twist, I had no interest in
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them whatsoever. He would always say, you know, let me make you some orthotics. And I said, "No." Right? My
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posters on my wall were Dr. J, not Dr. Scholes. It seemed like a medical solution that I didn't want for problems
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that I didn't want to have. Uh, and so I had no interest in it. Um, I was a division one athlete. I wrestled at
00:07:40
Brown and, uh, you know, as I said, weird dude. Studied theoretical math and poetry while there as well. Um,
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>> that's a good combination. >> That is. >> Yeah. Yeah. Typical one. you know, the
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wrestling, theoretical, math, poetry, combo. >> Exactly. They all go together.
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>> Yeah, exactly. >> Um, and I finally let him make me a pair. Um, shout out, Dad. You're the
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reason I'm doing all this. I hated it. >> Uh, you know, I got it. It >> I had to cut it, which felt like a
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strange thing. Then it didn't even fit in my shoe. I had to get some like big
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bulky, you know, old man shoe to wear them in. And then when I did, they didn't even feel good. And I kind of
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like trusted him. If you I wear them for three, four weeks, maybe they'll start
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to feel good. They never did. I never took >> Wow. How did he get that? That's like
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That's pretty profound rejection from his son. >> I wasn't his easiest kid before that,
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you know. Oh, that's good. That's good. >> Um, I, uh, I try to not, you know, I
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think for me, as somebody who's been in therapy since I was like 8 years old, I
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I take a brutally honest approach with myself that I try to soften for the people around me who I love. Um, but I
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didn't want to wear it. And, you know, I wasn't going to tell them I was wearing
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it. Um, and so that was it. You know, I was validated. This has nothing to do with me. It's for geriatric people,
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diabetic people, you know, people with issues that require medical treatments. Not
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>> wrestler poets certainly, >> whatever that is. Um, and then when I
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was in my mid20s, you know, I was no longer in wrestling shape, feeling a little worse on my feet, and eventually
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I threw out my back. And in throwing out my back, I became desperate to do anything I could uh to get myself back
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mobile. I went to an orthopedist, an orthopedic surgeon, a physical therapist, a massage therapist, a
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chiropractor. Um my father, >> did you buy acupuncture? >> I didn't. Maybe I should have. Um my
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father's a chiropractor and that's kind of a wild wild west of a world. And so,
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you know, his recommendation to me was if you're going to try one, look up who
00:10:02
the pro sports teams in DCU. At the time I was living in BC, I worked on a small
00:10:07
team that kind of jointly served as effectively the chief of staff function for the founder and CEO of Capital One,
00:10:13
Rich Fairbank. >> Cool. >> And so I looked up who the Washington Nationals had uh on their team staff. I
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went to see him and you know, at this point I was open to anything. um not for my feet, for my back. And he insisted on
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making me a different pair of orthotics. This one was outstanding. And you you know, I did
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a lot of things. My back got better. I can't isolate a variable and tell you
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which one, but I can tell you that all of a sudden >> I felt lighter on my feet in a way that
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I never had and never realized I could have had access to. >> Interesting.
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>> And all of a sudden, my brain starts thinking, you know, what's going on? Uh,
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but fast forward to this experience, I'd kind of stopped skiing. I'd put on some
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weight in my 20s and, you know, the boots felt less comfortable. I was kind of like, I don't know if this is for me
00:11:03
anymore. Uh, I think I invested in like a $1,400 pair of Surefoot boots that are
00:11:10
fully custom, but the insert that's custom is just something they heat up, you step on, and then you walk out with
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it. For me, someone who's flatfooted, that just means it squishes it. It leaves me with a flat platform and I get
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nothing of what I need. Right? Groove is all about determining that optimal rest
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position so your foot doesn't have to work unless it's putting in work >> and so that you can rest and be in your
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most protected, comfortable, and ready to perform position at any moment. >> Um,
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>> and so all of a sudden, you know, I'm wearing this product and I try it in a
00:11:44
pair of rental ski boots, like $30, probably 20 years old, beat up, and it feels 10 times as good as the Sheroots.
00:11:50
Now my mind's spinning because I'm trying to think like >> the delta between the first experience
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and the second >> my intimacy with this industry. You know what's going on here? There's something
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here that just changed my entire sort of notion of how I can feel on my feet and
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I'm trying to understand it. And as I'm looking I notice something really really
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interesting. Right? I I I was born in 92, which I think was that was the year of the dream team, right?
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>> Yes. >> So, you know, it's always been like Mike, like LeBron, basketball is
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footwear. They're the vanguard of it. What they do, everyone else does. And I
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caught on to this, which is that when LeBron James gives away his shoes to his adoring fans, every single time
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he takes out his custom inserts, he's willing to shoes. >> That's a very cool video.
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>> But it's not just LeBron. Here's Jannis Antento at a home. >> Get these videos
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>> on the internet. Anthony Davis, you'll see Jason Tatum. You could find Novak
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Djokovic doing it. >> I love that. I love that. >> That's quite a collection of videos you
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have. >> That's cool. That's very cool. >> And it's just a small sampling. And and
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what I realized in that moment was that there was a disconnect between what the footwear industry was selling to
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consumers and what the footwear industry was proposing is what its top athletes should be using.
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>> And for me, then the question became, how do I sort of wrap my head around all
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this? And to be clear, this is all kind of coming together in the first quarter or the first half of my first semester
00:13:36
in Sergey Netison. >> Before we go into that, let me just ask you something because I'm curious about
00:13:41
what America said and your father and this wizard guy in in DC. So when you did it with your father and the way
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Americus did it, was the process of measuring your foot the same that you had to step into clay or something or
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had the process changed? >> Love that question. When my father made a pair for me, he used something like
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this, >> which is hilarious. It's what you were describing, right? >> Yeah. Yep. Yep. Yep. Memory foam, I
00:14:04
think, is what they call that, or something like that. >> Yeah. So, this is actually it has even
00:14:09
less elasticity than memory foam. This is impression foam. So, a memory foam is going to, and this gets into, you know,
00:14:14
the actual construction of the different groove models. A memory foam is going to
00:14:18
have a very low elasticity. It'll very slowly return to its position. As opposed to like what we have some of our
00:14:25
basketball players wearing, which is super bouncy, high elasticity. This has no elasticity. You step into it, it
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holds that shape. >> Got it? >> Here's the issue. Quick history lesson.
00:14:35
In the early 1970s, Mertinroot, kind of the founding father of podiatric biomechanics, started making orthotics.
00:14:41
And what he would do was he would put your foot in a stirup into what's called
00:14:45
a subtailor neutral position. It's just a neutral position. He would take a plaster mold of your foot to see what
00:14:51
that rest position was. So he knew the optimal position your anatomy wanted to be in and then he would do an assessment
00:14:58
of the dynamic range of motion, what happened when you put pressure on it and determine how to keep you in that top
00:15:05
position. Now, this isn't a healthc care podcast. I I know Wharton had some of
00:15:11
those, but it turns out that long, personal, really intimate care approaches aren't
00:15:21
super good for billables. And over time, the industry moved from something that took two hours to do per person to
00:15:29
something that took the amount of time it took you to step on a thing. Now, we've moved from these to like scanners.
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>> But here's the thing. I'm flatfooted. That doesn't mean I don't have arches in
00:15:40
my feet, right? I evolved arches to propel myself over rocks and roots and gravel. You know, we didn't evolve to
00:15:48
wear shoes. We wear them now and our feet have adapted to them. For all the best, I don't want inch thick calluses
00:15:53
on my feet to be able to walk around barefoot. Um, but what that means is ultimately when we put our foot in a
00:16:00
shoe, uh, we're kind of locking it in a cage in one position and we're asking
00:16:04
those arches that evolved to be dynamic to instead be weightbearing infrastructure like the arches in the
00:16:11
coliseum and that's not what they're made for. So when you stand over time
00:16:15
it's, you know, starting to collapse and then all the small stabilizer muscles in
00:16:20
your foot get recruited and then they fatigue real quickly and it creates this downward vicious cycle of fatigue,
00:16:26
discomfort and eventually pain. So all that is to say, I step on something like this, my arches collapse into it. As I
00:16:35
said before, they get a compression. >> Yeah. And then they see anybody else
00:16:42
with a size 11 foot that also has arches that collapse and they're going to have
00:16:47
the same data. >> Ah, interesting. >> That's all they have to work with.
00:16:51
>> Interesting. >> What we do is we capture 30,000 data points in three different positions. One
00:16:58
in a non-weightbearing position like Merin Root would do in the early 70s, but we do it in seconds.
00:17:04
>> Yep. >> Then we capture in a weight bearing. >> You do it with your phone or something.
00:17:07
So, Barbara, can I just jump in and say that I, you know, I have my grooves because I did
00:17:13
>> I've done this, America, so you can tell her. >> I Barbara, it was amazing. First of all,
00:17:17
I had to borrow the iPhone from my daughter, but nonetheless >> Oh, yeah. I forgot we were a green guy.
00:17:22
>> I know. I ladies and gentlemen, I apologize in advance. I >> This is a no shame podcast.
00:17:28
>> No shame. Listen, the Androiders, we are okay. This is a safe space. All right.
00:17:33
So, >> the Androiders build our tech infrastructure. >> That's awesome. But it was it was cool,
00:17:38
Barbara, because I'm doing the thing and I'm just what do you what Dan said? I
00:17:41
just did it very quickly and boom and the next thing I know the box shows up and I was just like, "Wow, this is
00:17:47
cool." So to your point, Barbara, integrating that tech >> pictures, you take all different
00:17:51
pictures from >> So we were not even taking pictures. So uh with the iPhone 10 or the iPhone X as
00:17:59
they called it, they released uh Face ID, right? you could unlock your phone um without having to touch the thing,
00:18:06
just looking at it. Most of us never really took much time to wonder how that worked. And for a long time, I didn't
00:18:12
either. Uh it turns out when you set up your phone or or sorry, I'll take a step
00:18:17
back. They built into the phone the Trueepth camera system up here. And what the True Depth camera system has in
00:18:23
addition to cameras is what they call the infrared dot blotter. It shoots out over 30,000 infrared beams a second. And
00:18:30
then it has a sensor that can pick them up. So it acts like radar but on a smaller scale with more precision. And
00:18:36
so when you set up your phone and you do that thing, if you have an iPhone where
00:18:40
it says set up your face ID, it's storing a local model of your face that it can run against every time you try to
00:18:48
log back in locally. Now what we've done is hijack that hardware to be able to
00:18:53
use on feet. Now, this is a video podcast, so I'm gonna assume nobody needs to see my feet here.
00:19:04
>> That's probably a good assumption, Dan. >> The way it will work is you actually put
00:19:07
the phone on the ground, you hold your foot above it, it detects the f the foot, it tells you if you're in the
00:19:12
wrong position, it instructs you to reposition, and then it gets a high precision 3D model. to show you how that
00:19:19
works quickly on my phone. What's super interesting, we can't see infrared
00:19:23
beams, but you can unlock your phone. It Barbara, do you have an iPhone? >> Yes, of course.
00:19:31
>> She said that as a true Apple loyalist, ladies and gentlemen, >> you can unlock your iPhone in bed in
00:19:36
pitch black, right? >> Yeah. >> The way you're doing that is because
00:19:40
it's illuminating your face, you just can't see it because we can't see
00:19:43
infrared beams. >> Oh, yeah. In the middle of the night when I open my phone and I have to do
00:19:47
something. So, yeah. Right. Exactly. Supposed to do that, but I do do that, >> of course.
00:19:51
>> That's that's a whole another podcast. >> Um, >> but uh so what's really interesting, and
00:19:58
I just discovered this doing video calls, is that the uh camera on my MacBook actually has a slightly larger
00:20:05
uh range of uh visible light that it can pick up. And so, it actually sees the infrared beams. So, do you see those
00:20:12
beams shooting out right there? that purple. >> Oh, yeah. >> You can see it flickering.
00:20:20
>> Yeah. >> So, anytime your phone's trying to unlock, it's doing that. But we can't
00:20:25
see that with our eyes. >> Got it. >> But it enables us to pick up depth,
00:20:33
right? So, it sees my hand as opposed to what's behind it. >> Show you on my face so you don't have to
00:20:39
look at my feet. But remember, this isn't made for faces. Apple made it for faces, but our app's made for feet. But
00:20:45
just to show you. >> Wow. >> So, just like that, we get a high precision scan in three dimensions.
00:20:55
>> We're talking millimeter level precision. >> Oh, wow. That's super cool. It looks
00:20:59
just like you. >> Wow. >> Just like me. And And so, we're not taking photos and stitching them
00:21:04
together. We're actually capturing uh a scan where every pixel isn't just in X
00:21:12
and Y, but it's in the Z dimension as well to bring it back to some of the theoretical math side of things.
00:21:17
>> And and can you patent it or can you like is it proprietary or can people
00:21:21
copy? >> Everything's built from scratch. Everything's proprietary. Our patents
00:21:25
are pending because the US patent and trademark office is about two and a half years backlog right now and we applied
00:21:30
about two years ago. >> Got it. So, one, you know, it's about agility.
00:21:35
>> Agility. Yeah. >> Two, it's about production. I think that Nike is extraordinary at the old school
00:21:44
method of last base manufacturing of footwear at scale. >> Y >> and would really have to kind of undress
00:21:51
everything, you know, they know about how to produce things. Um, and I say this as like Nike is of of all the
00:21:58
companies I take cues from and try to learn from how to build an awesome thing, Nike is right up there. Um, but,
00:22:06
you know, they come from, you know, they're they still, you know, make shoes
00:22:10
to a standardized last and and they're >> okay. So, but could another more nimble
00:22:17
company copy you and do it? I mean, you get these patents. I guess you're protected then. Is it just that you have
00:22:23
a real head start and it's a complicated business and so you'll be the big
00:22:26
companies won't be as nimble and the small companies will take a long time to
00:22:30
catch up. is that kind of >> and also to before you answer that Dan I want to layer on top of Barbara's point
00:22:35
as well because I think this is a big thing that I definitely want to make sure you cover on this podcast and that
00:22:39
is Barbara layering on top of this the Groove brand right so one of the important things here is like yes
00:22:46
perhaps someone can catch up and like do copy the thing in terms of features part
00:22:51
of what Dan's secret sauce is is this notion is this brand so so answer Barbara's question Dan but answer it in
00:22:59
the context and brand identity theorist. >> And she's always busting my chops, Dad.
00:23:04
Like, he's got to get identity into this somehow. But talk to answer answer Barbara's question, though, because I
00:23:09
think >> Yeah. How Yeah, that's it. It's the marketing, it's the technology, it's the
00:23:13
speed, it's the talent. >> Yes. And and tell us to Barbara's point,
00:23:17
tell us about the Groove brand, the ethos, what what does it mean? How did you come up with it? All that stuff for
00:23:22
protection purposes. >> Yeah. No, that's a great point. and and there are a lot of other things on the
00:23:28
technical side that I didn't yet get into. So much of what we've built is not
00:23:32
just patent pending, but like proprietary and trade secrets and would be hard to figure out. We've got some of
00:23:38
the world's best computer vision engineers working for us. And don't get
00:23:41
me wrong, Nike could pay him more, but one of the things that we've been able
00:23:46
to do is really build a team around a brand, and that even includes our manufacturing partners. some of our
00:23:52
relationships uh you know are are are are really really tight throughout the world and you know I'm a fifth
00:24:00
generation old school New Yorker. I'm a relationship guy and we've got all of
00:24:03
our contracts tight. Um but in terms of getting this produced like everything would have to be recreated from scratch
00:24:10
at this point. It would cost Nike way more money than it would cost to buy us, but we're not looking to be sold because
00:24:17
we've got such a brand emerging on top of this as Americus was saying, right?
00:24:21
Um, one of the faces of our brand has become Von Miller, Super Bowl 50 MVP. That's actually to tell you a real cool
00:24:30
story about how that came together. Um, I met somebody who suggested that Groove
00:24:35
could be an interesting thing uh to bring to the uh NFL sack summit in Las Vegas where a bunch of the defensive
00:24:43
ends and pass rushers get together to, you know, drop the animosity of being on different teams, come together as
00:24:51
similar positions and learn from each other. And when I was there, you know, I offered to make some people some free
00:24:57
pairs. Uh, I met Von Miller for about 60 seconds. 59 of them were used to scan his feet. The other one second was used
00:25:05
to tell him, "Hey man, if you try these, like I'm going to send you them. I know
00:25:09
a lot of people send you stuff. If you try these, you're going to like them.
00:25:13
Like, trust me, it's worth trying." And I left, you know, we made the pairs.
00:25:19
I've increasingly as I, you know, work harder and harder and have more and more
00:25:23
stuff going on around me, I've actually found myself splitting time in Costa
00:25:26
Rica to be able to, you know, balance out appropriately. And I found myself waking up one morning about 3 weeks
00:25:35
later in Costa Rica. Probably had 150 notifications on my phone, which was not normal for me at that time. Uh, but I
00:25:42
clicked and I saw this. >> You know what I'm reckoning, man? Groovy. >> Nice.
00:25:51
>> Me right, man. These mugs are so comfortable. He told me they was going
00:25:54
to be comfortable and I just turned my favorite shoe >> into my favorite favorite shoe.
00:26:00
>> They feel great. >> Nice. That's awesome. >> Wow. >> Word of mouth marketing advocate as
00:26:07
opposed to quote influencer. Very different thing. >> Wow. Ex. You know what? We are out of
00:26:12
time now, but that is some interesting origin story. And we didn't even get to
00:26:18
the Wharton class that helped you produce this, but but I think we should end. And then
00:26:24
we can have people look you up on on the web. >> Uh all we do is you go to groove.me g
00:26:30
ov.me. You pick the model you want. Uh we've got a bunch of different models and uh
00:26:36
the ones we have up right now are the everyday which is going to be your comfiest pair uh with a memory foam on
00:26:44
top with the perfect contour for yourself. The response model which is going to be our most explosive model
00:26:52
uh which you can put into any shoe that doesn't even have a removable insert
00:26:55
from a >> I got to do this. You know I do have a podiatrist. I did buy Dr.
00:27:02
Scholes. I cut them out. They fit my shoes. Americus and Nina, who works for us at Baker Retailing Center, they are
00:27:09
such advocates of you. They've been yelling at me forever. And I think I'm
00:27:13
convinced. These are quite some stories. It sounds like a great product. Thank you.
00:27:18
>> Is one of my favorite people in the world. And just lastly, >> if you want them, they're not out yet
00:27:23
publicly, but if you want them, uh, we've also got a ski boot model. and our
00:27:28
hockey skate model, the Blade, is now being used by almost half the New York Islanders.
00:27:33
>> Excellent. Beautiful. >> That is so great. >> Congratulations. Thank you guys so much
00:27:38
for having me on. >> And that is all we have time for. Thank you all for joining us today. We'd like
00:27:44
to thank our producers, Erin TR and and Marissa Rena and Dion Simpkins. Thank you all for listening today. We'll be
00:27:52
back next week. Till then, this has been Marketing Matters on the Wharton Podcast
00:27:56
Network. I'm Barbara Khan here with America's Reed.