As a part of our series called “Meet The Inventors”, I had the pleasure of interviewing Zach Lipson.
Zach Lipson is the Co-founder and CPO at dutchie,a fast-growing ecommerce solutions for cannabis. After successfully exiting three software companies he founded, Zach assumed his position at dutchie as co-founder and chief product officer. He leads the company’s product design, direction, vision and processes, and assists in the overall strategic direction of the company.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
I grew up in a very entrepreneurial household in Detroit, a city known for its hustle. My dad was a business owner from the time I was born. He owned an automotive paint and plastics business and was also an inventor who owned 15 patents throughout my childhood. So, as a kid, I was exposed to both the business and creative worlds, which was incredibly inspirational for me. From a young age I became interested in art, sketching constantly, and my parents took notice, encouraging and supporting my creative side. When I got to college, I started to embrace and develop my business acumen, and found myself searching for ways to merge those two interests.
That’s been my journey ever since. My ongoing mission in my adult life and career has been trying to combine my interests in business with my interests in design. That’s what led me to product design and product development.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Someone once told me, “you don’t know what you don’t know.” At first, that didn’t make much sense to me. But as I’ve gotten older and more mature in my career, that phrase has come to hold a lot of meaning. Entrepreneurs are naturally very growth-minded and goal-oriented, and we tend to believe whole-heartedly in what we’re doing. I think it’s fundamental for entrepreneurs to have this unwavering belief that they’re going to be successful. It’s sort of the base ingredient upon which every entrepreneurial success is built. However, it can also potentially lead to overconfidence, and close you off to guidance and advice that might be truly helpful. So that phrase is a constant reminder for me that you need to listen with open ears to the people around you — they’ve been through things that you haven’t and can share perspectives you don’t have.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Here at dutchie, we’ve taken to one particular book called Blitzscaling by Reid Hoffman. This is something that we always encourage our employees to read because, at dutchie, we’re implementing a pretty unique playbook given how quickly we’re trying to build this company. We’re in an industry that is growing at unprecedented rates. To keep up, you can’t treat your company like a traditional business — you have to do some very unorthodox things. So, Blitzscaling has become our playbook. My brother, Ross, my CEO and Co-Founder, and I picked it up after we started the company and it immediately struck a chord. There was this irony as we read it given how many of the ideas and philosophies we had already been implementing without even knowing it. We’ve now read it multiple times and virtually every page still hits home.
Ok super. Let’s now shift to the main part of our discussion. What was the catalyst that inspired you to invent your product? Can you share the story of your “ah-ha” moment with us?
My brother came from the online food ordering space, and one day he was waiting in a long line at a dispensary and that “ah-ha” moment hit — let’s take what we learned previously in online food ordering, and bring it to cannabis. He called and pitched the idea to me. Immediately it struck me as something that had potential — I just remember thinking, “This is something that consumers will want, no question. Someone’s going to do this and they’re going to build a big business out of it. Why not us?” There was no better person than him to pursue it with his background, and with my product development and design background, it was a no-brainer for us to team up together and leverage each other’s strengths to compliment one another.
There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. How did you overcome this challenge?
I think I had an unfair advantage here, and this circles back to my childhood. We grew up in a household where the pursuit of an idea was never off-limits. The trap that most people fall into is that they’ve been conditioned to believe that “entrepreneurs” are the ones that can take ideas and create a business out of them, and then there’s everybody else. For me, I never knew that distinction. If you had an idea, nothing was holding you back from pursuing it. In fact, it was actually the opposite. My dad would offer to connect us with his patent attorney, and even cover the legal fees, when we were ready to pursue an idea. He would help us find somebody who could do a CAD drawing and source a company to build a mold for the product. We were pushed and encouraged in a healthy way to execute on our ideas and when that’s the environment you’re raised in, you grow into someone who professionally doesn’t see limitations, only opportunities.
Now, that’s not to say that I haven’t had a whole bunch of ideas that I haven’t executed on. When you grow up the son of an inventor and you take to that creative side, you naturally become an “ideas person”. When I see problems in my day-to-day life, I often immediately start thinking of ways to solve them, in my younger years through physical devices and now usually through software. But focus is important, so naturally most of those things I’m not executing on.
There is a unique skill in choosing the right idea to pursue that has to be cultivated throughout your life and career. Dutchie checked all the boxes. I knew without a shadow of a doubt, this was going to be a big opportunity. There was an unwavering notion that online ordering would be the future of shopping for cannabis, it was just a matter of when that inflection point would occur and who would be the company behind it.
Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created?
Chances are that your idea already has been developed in some manifestation, but you shouldn’t let that deter you. Keep in mind that the most successful companies we know today were not the first to do it. Facebook wasn’t the first social network. Google wasn’t the first search engine. Often, it’s somebody who does it better and, most importantly, at the right time. Most of the companies who were the first to execute these ideas were too early to the game and aren’t even around today. You don’t have to be the first, you just have to be the best.
I would argue the same thing happened in cannabis when we started dutchie in Oregon, our home state. There was another software company that offered online ordering, operating in the state, and who owned most of the market. Within 6 months we had swept through all of Oregon, taking virtually all of their customers, largely in part because we built a better product and developed more effective ways to sell it. I would also argue that they were too early and the market, dispensaries, and consumers weren’t really ready for it.
Did you have a role model or a person who inspired you to persevere despite the hardships involved in taking the risk of selling a new product?
I have a number of people that I look up to — people that have inspired the work I’ve done and the perseverance it takes to build a business. Brian Chesky and Joe Gebbia, the founders behind Airbnb, have always been pretty big role models for me. I think their story is incredible because they didn’t have a straightforward path. Their idea wasn’t extremely obvious to most investors and everyday consumers. I remember when I first read about it, thinking “There’s no way people are gonna invite strangers to stay at their homes, this will never work”. But they believed in it and persevered, and fought hard enough that they eventually convinced investors to take a chance, and quite literally changed the way people viewed travel. I also have an immense amount of admiration for the design work they’ve done, and how they’ve built a completely design and product led business at scale.
For the benefit of our readers, can you share the story, and outline the steps that you went through, from when you thought of the idea, until it finally landed on the store shelves? In particular we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.
When we set out to build dutchie, it was very different from what it is today. We set out to create a marketplace concept first, but quickly realized that a marketplace would be challenging to start from scratch, especially in the cannabis industry. We dealt with a very classic chicken and egg problem. How do you get dispensaries if you don’t have consumers to buy from them right away? How do you get consumers to come on your site and place orders if you don’t have dispensaries for them to buy from?
We ended up taking a step back and realized that maybe we didn’t need both sides of the equation. We decided to just focus on the software component so dispensaries could embed our software and start getting orders right away. And that was the catalyst for growth that manifested into our B2B SaaS offering today.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
We started this business with the pretense that selling cannabis online would be just like selling food, and that building software for dispensaries would be just like building it for restaurants — that all the same principles would apply. This notion started to unravel pretty quickly, but as the days, and now years go by, and as we accumulate more and more knowledge about our customers and the industry, at this point that idea is almost hilarious. The big lesson I learned there was that every industry is different and has its unique nuances. It’s highly unlikely that one can simply take what worked in one industry and apply to another. While certain pages out of the playbook can be borrowed, it’s critical that you build your product to suit the specific needs of your particular customer, and you work insanely hard everyday to deeply understand what those needs are.
The early stages must have been challenging. Are you able to identify a “tipping point” after making your invention, when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
The tipping point for us was when we realized that order pickup was a far more lucrative opportunity than delivery. When we initially set out to build this product, it was a delivery service where we would offer a set of delivery tools to a dispensary. When we started to move outside of Oregon, which was the first delivery state, we began to understand the opportunity in front of us with pickup. When we enabled pickup, we started to grow tremendously. It was extreme and the company just completely took off.
What are your “5 Things I Wish Someone Told Me Before I Invented My Product” and why? (Please share a story or example for each.)
That cannabis is different. You need to understand your consumer, and you need to treat them as a unique consumer. That may seem obvious, but you need to have a deep understanding of what they really need and want. For us, one of the unique things is that taxes in our space were extraordinarily high. In some markets, taxes are as high as 37%. So that creates an entirely new kind of shopping experience where it is essential to include taxes in the menu price, which we had never seen before.
It doesn’t have to be perfect. I’m a designer at heart and I’m someone that naturally places a really strong emphasis on visual beauty and creating products that are incredibly intuitive. With too much focus in those areas, you often sacrifice speed and spend too much deliberating, rather than getting the product out the door and iterating.
Hire before you need it. As a designer and product manager, I was able to take problems through solutioning, design, to a developer, and through to launch, all on my own. I liken this to a superpower in our early days, but kryptonite as we began to grow. In hindsight I waited too long to bring on PM’s and Designers to help me with those areas and continue to push our product forward. While we were able to turn it around and quickly build an incredibly talented team, I think the lesson learned was that if you’ve waited to hire someone until you need them, you waited too long.
Prioritize speed. By nature I’m not an extremely fast moving person — I’ve always prioritized doing something right, over just doing it fast. At dutchie, I’ve come to understand that speed is absolutely critical if you’re attempting to build a large business and outpace your competition. In order to stay ahead you have to continue to look for areas to gain velocity and increase efficiencies. Speed is a startup’s strongest competitive advantage.
Build for scale from day one. This is a tricky one, because you have to balance it with not moving too slow, however making decisions, particularly technical ones, that will have trouble scaling can lead you down a very difficult path in the future. Choose technologies, frameworks, and tools that are easy and quick to use, but also can scale up as you grow. On the flip side, steer clear of things that work really well when you’re small, but not when you begin to grow. Attempting to rebuild technology while moving at lightning speed to keep up with customer demands, ultimately leads to inefficiencies, over-resourcing, high costs, and lost velocity.
Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?
Research — you have to see what else is out there. You may see another solution that’s solving the same problem but not doing a great job. Oftentimes researching those solutions can give you ideas on how to expand upon yours.
There are so many people who have ideas but don’t have the ability to build a business behind it. You might have a product that solves an interesting problem, but it may not be super enticing or compelling to the customer. Try to identify if there is market demand for that product and then deeply understand the vertical. Is it a growing market? Is it an industry that’s emerging? Is it something that people are excited about in the future? Digging into the answers to those questions will lead to a more significant market opportunity for your product.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
I would base this decision upon the resources available to you. If you feel like you have a good support network that you can lean on, I don’t think that’s necessary. A good patent attorney can get you pretty far and help connect you with the people you need to surround yourself with to get your idea off the ground. But if you have an idea and you’re completely lost with where you should take it next and don’t have a reliable network you can leverage, then I do think that could be a potential avenue to look at.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
You have to take a step back and look at what you’re trying to achieve with your business. Venture capital is not right for everyone. If you have a pure growth mindset, if you are trying to build a high growth business, venture capital is probably more suited for you. If you are trying to develop more of a lifestyle business, maybe venture capital is not the best route. So, I think it correlates with the type of business that you want to build. From day one at dutchie, we had big ambitions, and we’re looking to grow this company very quickly because we believe there’s a significant market opportunity. So venture capital made a lot of sense for us.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
One of the things that’s very important to us at dutchie is that we’re not only serving our dispensary customers and providing them with the software to power their online ordering, but we’re filling a vital need. There’s a pretty big misconception with cannabis among many people that it’s mostly a recreational and people are just getting high. While that is true to an extent, this is also something that many people use as medicine. At dutchie, we’ve seen a lot of scenarios where cannabis has provided genuine medical benefit, and we strongly believe in this product. I’ve talked to countless consumers that have used our software to get their medication who couldn’t otherwise get it. Being able to order their medicine online and having it delivered provides a huge benefit to people who can’t leave their homes. Maybe they’re not able to visit a dispensary due to a health condition, maybe they have responsibilities that don’t provide for time to go into a physical store, or maybe they’re just not comfortable going into a dispensary. Our software is empowering dispensaries to make cannabis more available to anybody who wants it, and serve these customers that otherwise couldn’t obtain their cannabis, and in many cases, their medicine. As dutchie continues to grow, access becomes more significant, and we can serve more people in more markets.
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
I would love to encourage and foster creativity in the arts for our youth and enable young people to understand that we don’t have to shy away from becoming artists or choosing art as a career. There are so many different ways that you can express yourself creatively. I want to make sure that isn’t stifled when kids are young and that they understand that you can build an incredible career while still embracing your creative side. You don’t have to be a doctor or a lawyer or an accountant to be financially stable. I have nothing against those professions of course, but if you have that artistic side when you’re young, there are ways to pursue and embrace it that can lead to a fulfilling and successful career. I feel pretty strongly that most adults have lost their sense of wonder and creativity that they once had in their younger years, mainly because we’ve been funneled into “safe” jobs and professions. There’s this notion that being a professional artist or creative will lead to a life of instability and not being able to make ends meet. Imagine all the incredible works of art, ideas, masterpieces, inventions that society has probably missed out on because our society steers us away from our creative side?
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
I’m a pretty big fan of Seth Godin’s. I’ve just always thought that he has a really fascinating lens through which he looks at product and software design, as well as marketing and branding. I think a meal with Seth, over some fun, thought provoking conversation, would be really intellectually interesting, and would most likely leave me with some new perspectives and ideas that I could incorporate into my work here at dutchie.