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In a recent podcast episode, we had the pleasure of interviewing Drew Fallon, the founder and CEO of Iris, a company revolutionizing financial infrastructure in e-commerce. Drew shared insights into his journey from early days in dropshipping to founding Iris, and discussed the crucial role of financial management in the e-commerce industry.
Drew's Equation of Excellence
Drew believes that true excellence arises when you find something you're passionate about and commit to it wholeheartedly. It's about identifying what you love and dedicating yourself to mastering it.
Early Career in E-commerce and Mad Rabbit Tattoo
Drew's journey in e-commerce began during his college years, experimenting with dropshipping. He reminisced about the early days when a dollar spent on Facebook ads would yield four dollars in return. After graduation, Drew co-founded Mad Rabbit Tattoo with friends from college, initially involving himself in the business on a part-time basis. The brand gained traction quickly, especially during the COVID-19 pandemic, prompting Drew and his partners to dive into the venture full-time.
Recognizing the Need for Financial Rigor in E-commerce
During his time in banking, where Drew worked on an equity Capital Markets desk focusing on e-commerce research, he observed a critical gap in financial infrastructure within the industry. This experience highlighted the lack of visibility into business performance, unit economics, and cash flows among e-commerce businesses. Drew recognized an opportunity to address these challenges, which eventually led to the inception of Iris.
The Birth of Iris and Its Mission
Iris was born out of Drew's vision to provide modern consumer brands with real-time profitability insights. The platform connects and centralizes data from various digital platforms like Shopify, Amazon, and social media channels, enabling businesses to understand their financial performance comprehensively. Drew emphasized the importance of having up-to-date financial information to make informed business decisions and navigate the evolving e-commerce landscape effectively.
Challenges and Changes in the E-commerce Industry
Discussing the e-commerce industry's dynamics, Drew pointed out significant changes in recent years. He highlighted a shift in the industry's growth trajectory, noting that 2022 marked the first year where e-commerce didn't see year-over-year growth. This change has put pressure on margins, leading to increased competition and tighter financial constraints for businesses. Drew stressed the importance of adapting to these changes and the role Iris plays in helping businesses maintain financial health and sustainability.
Educating Marketers on Financial Concepts
One of Drew's passions is educating marketers on financial concepts like contribution margin, cash flow, and P&L statements. He explained how these concepts are crucial for marketers to understand, as they directly impact a business's profitability and financial health. Drew emphasized the need for marketers to grasp these concepts to optimize marketing strategies and ensure sustainable growth.
Iris's Approach and Customer Base
Drew described Iris's approach as not just an accounting ledger but a tool that provides actionable insights for marketers and business owners. He highlighted Iris's ability to track metrics like contribution margin, customer acquisition costs, and average order value across different channels. Drew shared that while they initially expected fractional CFOs to be their primary customers, Iris has found a significant user base among marketers looking to improve their financial understanding and decision-making.
Looking Ahead: The Future of Iris
Looking to the future, Drew discussed Iris's plans to expand its capabilities further. He mentioned their commitment to continuous improvement and customer feedback, aiming to enhance the platform's features and usability continuously. Drew invited listeners to try Iris through a free trial, emphasizing that their goal is to empower businesses with the financial tools they need to thrive in a competitive e-commerce landscape.