T-Mobile’s Business Push, Technology Advantages, and 5G Slicing with Daryl Schoolar

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and twenty second episode of The Week with Roger, a conversation between analysts about all things telecom, media and technology by Recon Analytics. I'm Don Kellogg, with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

Hey, I'm awesome.

Don Kellogg 0m24s

I'm great too. So Roger, this week we're continuing our Titans of Prepaid series, where we talk with power players and prepaid. And this week, we've got a really great guest. We've got Aaron North, who's the commercial owner and CMO of Mint. And as I understand it, Aaron, you've been with Mint since the very beginning.

Don Kellogg 0m40s

Right?

Guest Speaker 0m41s

Yeah. That's correct. I recently moved into the strategic advisor role after being with Mint since the beginning. I remember, gosh, my first day at Ultramobile, which is not only a brand that you know in prepaid, but also the company name. The president at the time showed me a PDF that was the beginnings of Mint, which was called Mint SIM because of the SIM card at the beginning.

Guest Speaker 1m9s

And I looked at it and I said, you know, this is really interesting, but I don't think it's gonna work. And the president looks me square in the face and goes, it's pretty bold statement for day one that this thing, you know, we've been thinking about isn't gonna work. And I said, look, let me take these layouts. I taped them up on my wall and then just red penned it all over. And what I was doing was really trying to figure out what was the brand's core proposition?

Guest Speaker 1m37s

What were we trying to sell? What made us different? What made us special? And then also like, how do we get people through the checkout process online? Because at the time, nobody was selling wireless online.

Guest Speaker 1m50s

And in fact, to like see how other people were doing it, I went to all the carriers websites and they would not physically sell you product online. You would talk to them, a care agent through a chat bot, and they would push you to a store no matter what. So it was kind of wild to be the person who helped figure out and invent this direct to consumer wireless channel that is now permeating throughout the entire wireless category.

Roger Entner 2m18s

Well, a lot of people are still struggling with that. You know, I think you guys have perfected that to a much greater degree than anybody else.

Guest Speaker 2m28s

Thank you. It's not because of a lack of hard work. I can tell you that over the last eight and a half plus years, we have put probably hundreds of thousands of hours into conversion rate optimization, media optimization, building the brand narrative, the flows, the stories, and really building this business into the online juggernaut that it is today.

Roger Entner 2m52s

Yeah. And you grew like gangbusters, right? You were acquired by T Mobile and you had like what? A million and a half, 2,000,000 subs. And most recent quarter, it was 3,000,000, which was like right after the integration.

Roger Entner 3m9s

You guys have been growing like bananas.

Guest Speaker 3m12s

Yeah. It was wild, Roger, that when I joined Ultra, Ultra had just come off being named the fastest growing private company in America on the Inc. 5,000 list. They won it in 2015, I joined in 2016. We resubmitted and would have won again for the Mint business, like in 2019, 2020, I can't remember what year, but we were disqualified because we were inside the same company and you have to be a separate entity in order to win the award.

Guest Speaker 3m43s

But we submitted our growth rate and our revenue growth, and it would have won again. So yes, we at one point had the fastest growing private company again in America.

Roger Entner 3m56s

Yeah. So how did you do it? What are some of the things, you know, when you look at this, what made you different?

Guest Speaker 4m4s

Well, I'll tell you, I'm different. And I think that's part of it, is that I didn't come from the wireless category. I was working at Taco Bell before this, and I was working on the team in charge of what's called the brand experience. And that is everything that is a paid consumer touchpoint came through our group. And when I was at Taco Bell, I have my undergrad in marketing, I have an MBA in marketing and entrepreneurship, but Taco Bell was like a PhD in brand strategy, creative efficacy, and building things.

Guest Speaker 4m41s

And we repositioned Taco Bell from a brand that was in the jester archetype to the explorer archetype and got back to food as an experience instead of sort of like food as fuel, did a bunch of repositioning work there and launched some incredible products, the Doritos Locos Taco and all the flavor variants down the line, breakfast, relaunched the core brand itself, and all that work was real training for building a brand that is consumer insight driven. Like you find a human truth, you mine it, you start with the consumer, and then you bring that in and you solve problems for them. And that's really what we did. That was our special sauce is that once we got a little bit of momentum, we started by saying, we know nothing, we will test everything. And we tested, tested, tested.

Guest Speaker 5m38s

And once we caught a little bit of momentum, we started talking to the customer, finding the pain points, and then systematically eradicating category pain points and becoming a brand that was building affinity. And I don't like to say brand love, but like really removing friction and frustration with the wireless products that were out there at the time, creating a very simple and easy to understand proposition, which is buy online and it's discounted. And the more months you buy, the better the rate you get, sort of like the Costco model. So at the time when we started Dollar Shave Club was very popular, Casper mattresses was very popular. So we combined that business model with the Costco model and really saw like wild success straight out the gate and then just never looked back and also had a management team that was very supportive of what we were doing.

Guest Speaker 6m37s

Our CEO, David, is a serial entrepreneur who just loves hyper growth. And I would come to him and say, look, testing this, we're doing this, this is working. Let's double down here. Let's go harder. And he would say, do it, it, do it.

Guest Speaker 6m53s

And I mean, if you think about just the linear calendar to join in '16, and then be buying a Super Bowl spot in 2019, that's a pretty rapid acceleration in media and growth and things of that sort.

Roger Entner 7m12s

Well, buying a Super Bowl spot usually means that you're gonna implode in the next year. So you did not. And I think you're selling yourself a little bit short because a lot of the carriers have been hiring people from from the fast food industry, from other industries to capture a little bit of that magic. And in a lot of places, it fizzled. So can you be a little bit more specific in like what made it really that different?

Roger Entner 7m40s

Because also like the, oh, I can buy multiple months in advance. People have come up with that before you did. Right? Like TracFone had that, but it never became that hit that it has been with Mint.

Guest Speaker 7m52s

It sounds nerdy and probably a little dorky, but we employ the scientific method, observation, hypothesis, test, measure, conclusion. We do that on everything. And what we've been able to do is create sort of this infinite loop of continuous testing. And I remember one of the early tests we did, I was on my way back from CTIA in San Francisco, and our president did not want to do free shipping. He's like, the price is so low.

Guest Speaker 8m28s

You're basically giving it away. No free shipping. And I looked at every D2C brand in the marketplace and nobody was charging for shipping. So I called up my ecom, my head of e com, and I said, we're gonna sneak this test in. And if we catch a bunch of flack, the heat's on me, I'll deal with it.

Guest Speaker 8m46s

But testing that little thing showed us that I'm gonna make it up. Shipping costs you $10. By offering free shipping, we were able to lower our acquisition cost greater than $10. I'm gonna make it up. It was like a $20 reduction in acquisition cost, which gave us more people converting at a better price if we gave away free shipping.

Guest Speaker 9m9s

So I took that back to the management team and said, look, this is what we're doing. It works. It actually saves us money. We gotta stay on this. We gotta do free shipping.

Guest Speaker 9m21s

But it was really that like radical behavior of testing every single thing that we could possibly think of and try and improve performance. And once we saw improved performance, we immediately reallocated the efficiency dollars into scale and grew the brand. And I mean, when we started, we were advertising with very, very small budgets, like $10,000 a month. And the budgets now are- More. Yeah, massively inflated compared to that.

Guest Speaker 9m54s

And the reason we got there is because if you have, you know, an acquisition cost or a cost per acquisition, they call it a CAC of X, and you can keep growing below that CAC, then you have an ability to scale that is exponential. And again, big, huge kudos to David for allowing us to really have the freedom to push this thing to an uncomfortable level and constantly testing and growing and growing and growing, and it just worked. And then we added Ryan Reynolds to the equation on 11/25/2019. And when COVID hit and everybody got sent home and retail was closed, we were really starting to scale the Ryan component to our marketing machine. And it just was jet fuel or rocket fuel to the ship that we had already growing like crazy.

Guest Speaker 10m47s

And we never really looked back and created just this monster growth machine that hasn't really slowed.

Roger Entner 10m55s

Yeah, no, and you were very smart in the way you did your television advertising. I worked for several years in advertising effectiveness measurement before you started. And like all the carriers flighted their ads based on the insights that the company delivered and I helped deliver. And one of the hallmarks that good advertising is, and we can argue about the creative. The creative is taste.

Roger Entner 11m23s

But it's memorable like the same construct, the same elements, a spokesperson, and it doesn't necessarily have to be Ryan Reynolds, as long as it's a consistent spokesperson, who tells the story with humor. That's what's memorable. And people remember these ads, especially when you don't overload them with messages. And you guys did this like to the tee.

Guest Speaker 11m48s

Yeah. I mean, I had spent before Taco Bell ten years at marketing agencies. And, you know, I am a marketing nerd. I love it. I can't get enough of it.

Guest Speaker 12m1s

I'm somewhat of an advertising encyclopedia going back, watching old ads. But one of the things I like to do throughout my career has been really dissect transformative campaigns. And when we started working with Ryan, we worked with his agency Maximum Effort. And George Dewey is a creative genius. He was part of the original Deadpool marketing approach.

Guest Speaker 12m25s

He was part of aviation and bringing that to life. And what we really talked about was the need for, look, our budgets were small compared to everybody. So we needed a simple, repeatable, campaignable idea that had memorability. And we were like, looked at the brand, thought about all the ways the brand was special. And we're like, we don't do this.

Guest Speaker 12m47s

We spend money here. We're very efficient. And that sort of became the brief for the creative team. And we use that green screen background. And the first series of ads featured customers saying, we had a real issue at the beginning.

Guest Speaker 13m4s

And it even is somewhat of an issue today. And that issue is how can the service be any good if it's that affordable or that cheap?

Roger Entner 13m12s

Yeah.

Guest Speaker 13m13s

But we hit that straight on. Like we had Waseem McNabi, one of our early customers in the ads talking about the service. We had Ryan saying that in the ad. People always ask, how can mint be any good if it's just $15 a month? And having that over and over and over again, to me always felt very, if you think back to Mac versus PC with the white psych and the two actors on screen, I'm a Mac, I'm a PC, And it just kept hammering what made a Mac great.

Guest Speaker 13m47s

We kept doing the same thing, but only really highlighting ourselves because we use the category as the enemy and we called it big wireless.

Don Kellogg 13m57s

I love how far you guys have taken it too. I mean, I I actually sat down and spent thirty minutes yesterday watching the midfomercial. Right? I mean, that that's it's hilarious. Right?

Don Kellogg 14m6s

And you guys copied the kind of spirit and feel of an infomercial, and I think you even ran it when at 04:30 in the morning or or so. Right?

Guest Speaker 14m14s

Yeah. Well, that's when it's only running is between sort of, like, 11PM and 6AM.

Roger Entner 14m20s

Run off schedule.

Don Kellogg 14m21s

Yep. But I mean, it's such an entertaining message that people are willing and not just wireless nerds like me, but people are willing to sit down and watch thirty minutes of this stuff, right? I mean, it's pretty fantastic.

Guest Speaker 14m32s

It works for me on so many levels. Like when we were coming up with this idea, we were like, everything keeps getting shorter. There's now six second and skippable and three, all these things, like how do we do the opposite of what everybody else is doing? And that's been centered to sort of the mint approach is if everybody's over here doing this, you do the opposite and you sort of catch attention by the virtue of you just being different. So this long form mint foamersial was something that like we got very, very excited about.

Guest Speaker 15m7s

And we worked on that with maximum effort, Ryan's agency and George Dewey and his team and really have that come to life has been sort of like one of the like things that brings me the most happiness in our ad campaign because it is just wildly different from anything out there. And I guarantee you, while we're already seeing early results and it looks very promising, it's only a matter of time before it gets copied by somebody else.

Roger Entner 15m34s

Well, imitation is the most sincere form of flattery. Right?

Guest Speaker 15m37s

Exactly. Exactly.

Roger Entner 15m39s

And yeah, many others are looking at the meteoric growth that you guys have had, and it seems to continue at T Mobile, and they seem to give you as much of a free rein as you can get in big wireless.

Guest Speaker 15m54s

They've been awesome partners. As MVNO, and now that they own the brand and the business, they're fantastic. Couldn't think of a better partnership.

Roger Entner 16m3s

That's awesome. So what's coming next to you?

Guest Speaker 16m6s

I am a strategic advisor to the new CMO and commercial owner, Andrew Fried, who is my head of direct to consumer. So we're looking at just ways to double down and keep growing Mint. And we've got a lot of like fun things planned for the rest of the year and into 2025. And yeah, I think more of the same for the brand. It's gonna be great.

Guest Speaker 16m30s

And for me, I just wanna keep being there and helping fuel like all these great ideas. It's been really, really interesting for me as a professional because there have been like three times while I've been with this company where I raised my hand and said, look, we're sort of like hitting my skill set ceiling and we need to bring in more firepower to really grow this thing. And every time we've done that, we've had you know, considerable success following it. And I think that's really what's about to happen with Mint and 2025, it's going to be another massive growth year.

Roger Entner 17m6s

Well, I can't think of anybody better than you, especially how you brought this to where it is today, but it also shows about your humbleness and, you know.

Guest Speaker 17m17s

Yeah. But Roger, you you know this. It's not a single person. Like, I get to do the podcast and it's nice to be recognized, but there are teams of people who are infinitely smarter than me. I love being the dumbest guy in the room because I get to learn, but there are so many people that work so hard.

Guest Speaker 17m37s

When I started, I think there were like 90 people at the company and now there's almost 600. And that is the kind of machine we've built where all the groups are full of the smartest people like engineering, product, customer care, supply chain. We're always doing innovative and smart things to either grow or, you know, capitalize on retention and revenue growth. It's a really, really exciting fun place to be.

Roger Entner 18m7s

Yeah, know. And recon isn't 90 people yet, but we couldn't do, and I couldn't do what I without superstars in the company, right, it's the best people I've ever worked with, and, you know, Don is just one of them. We're nothing without the team that we surround ourselves with.

Guest Speaker 18m25s

Agreed.

Roger Entner 18m26s

Awesome. Thank you very much, Aaron, for spending a little bit of time with us. Really appreciate it.

Guest Speaker 18m32s

Yeah. It's always great talking to both of you guys, and, uh, I'm sure we'll be chatting again soon.

Don Kellogg 18m37s

Excellent. Thank you. Awesome. Thanks, Aaron. Roger, we'll talk to you next week.

Roger Entner 18m40s

Talk to you next week.