Social Power of Word-of-Mouth. An Interview with GIST Founder, Walter Haas

GIST is focusing on a big problem: getting Word-of-Mouth recommendations online. Right now, consumers have to rely on review sites or worse, advertising, to discover products. GIST is looking at it in a different way: it visualizes what you and friends have actually bought. No stars, thumbs-up, or comments — just seeing what people you trust have really purchased while making it easy and rewarding to share what you’ve found online. This solves the biggest problem facing online product and content discovery: Trust. 

GIST verifies your purchase history and visualizes it by tapping into email providers and making direct integrations with e-commerce stores. That means there is zero friction to the user — your stuff is just there, or in Apple parlance, “it just works.”

Amin and I had the pleasure of speaking with GIST’s founder, Walter Haas; A Stanford alum and Harvard MBA, he has led marketing at big brands like Levi's and startups like Ron Johnson's Enjoy. He always gravitated towards connecting the world of content to commerce, and ultimately came up with GIST.

Can you tell us more about the product and the company?

I worked in media and in commerce my whole life; and as I got deeper and deeper, I realized that there's something out there that is so important that none of us merchants and marketers have ever been able to get our hands around: Word-of-Mouth. 

Word-of-Mouth is personal recommendations from people you know and trust. If you could quantify, it's actually larger than all of the media industry combined.

From a TAM perspective, Word-of-Mouth is two and a half times larger than all offline and digital media, meaning that you are better than selling a product and the company itself! That's because of your personal credibility, and it's something that we do all the time, whether you're at a cocktail party and someone's talking about how great your eyeliner is — you just “sold” it. I have been running Word-of-Mouth marketing campaigns at almost every job I've done and they are by far the most efficient efforts in the world.

I realized that this sort of idea of Word-of-Mouth has never really been productized and it's something that I believe deeply that the industry needs as we shift more to buying online.

Today’s eCommerce experience is not great for product discovery. eCommerce suffers from choice-fatigue, a lack of trust, and in some cases, outright fraud when it comes to reviews. So our solution is: what if you could access the knowledge of your friends whenever you're buying something online? (Even after they’ve all gone to bed!) To do that, you need to bring the power of Word-of-Mouth online.

How do you bring the power of Word-of-Mouth online?!

We think the best way to know if something's worth buying is to know if your friend has already bought it. If it was good enough for the people I know, it’ll be good for me. 

This is deceptively simple but it’s a completely different way to think about product discovery and content. Knowing what my trusted friends have bought is the most scalable modality for bringing Word-of-Mouth online.

What GIST does is provide this frictionless and asynchronous way to access the shopping history of my friends, through O-Authing with accounts and tapping into our database of over 400 of the top eCommerce providers.

GIST also makes it really emotionally rewarding to share your history with your friends, so that when your friends are shopping, they'll know what you got. This way, they would make much better decisions and ultimately get all the benefits that authentic Word-of-Mouth really has.

To make it feel frictionless, there's a lot of behind the scenes from a technology point of view. That’s because if you're making people take pictures or annotate, that’s not going to work... I'd love to know all the wine and my dad's wine cellar. But do you think he's going to take a smartphone and take 50 pictures? No, it's just not going to happen. 

To allay any concerns about safety, we’re structured to be completely on your side; we do not make money on advertising, nor do we sell PII to anyone. Effectively, what we're doing is taking the data that you already give away to different retailers and give it back to you in a centralized place for you to do whatever you want.

How do you think your product is social?

We are social in the sense that we are creating a new way for self-expression, which is to express yourself through what you own.

What we've created is something that we like to call “The Commerce Graph”, which is to track things that I buy and how they influence my friends.

So to answer your question, our version of social is if I buy something and share it, then you will buy it because I created this connection around my own credibility; the fact that I bought this product and I believe in it makes you buy it too, because you believe in me. That’s Word-of-Mouth brought online.

In our opinion, knowing how your purchase decisions affect people around you is much more powerful than a “like.” For example, If I know that you bought something because of me, that's gonna be a much more emotionally resonant than any other of the traditional tools. It's core to what motivates us as people.

But in GIST, there's no incentive for me as a user if you buy what I have purchased before! Right?

The incentive is 100% emotional. Here's why. We explored a lot of different incentives, getting kickbacks or group-buying and all these kinds of things. But then we discovered it wouldn't be authentic“Word-of-Mouth” anymore because then it’s my friend trying to make money off of me -- it becomes a lot more like a digital MLM. (Those are great businesses, but it ends up being something different).

Our goal is to take something that's happening in real life, which is we're constantly giving recommendations without expecting anything in return, and scaling it online. We do it because it’s one of the many ways we connect with people. Humans are just wired to help people! So bringing those emotions online by reducing friction and doubling down on authenticity makes Word-of-Mouth a more useful channel for online product discovery.

So how does GIST reward you? We get to tell you when friends of yours buy something that you've discovered! That alone is so emotionally validating because what it tells you is, hey, I'm mattered to these people.

What is your go-to-market strategy?

We're still in beta. So it's technically downloadable as you saw, but we've done zero effort on marketing and acquisition and that's because we're rapidly building it. So what you see right now is at the very initial stage of what we're doing. It's not as feature-full as it will be in a few months.

The way in which we've been developing this product to kind of answer your question is we have a college ambassador program. And so we empower a bunch of different students to try the app themselves to get their friends to try it. They're basically quasi-internships where we get them to sign up people and then basically what we have is a constant stream of very high-quality users and product insights. 

So for the users, do they need a minimum viable network to be able to take advantage of the full functionalities of GIST?

That's why we focused on college campuses. We wanted to build something that had a concentrated network so that we could test the social features. It’s very easy to get 28 sorority members who know each other to sign up at once!

GIST also works in single-player mode, as you can see the products you bought. You can share those offline. You can text them to a friend. But then it's obviously much better with friends. And so we needed to create those little pockets of tight, trusting connections.

What are the top products you see that people are talking about?

Within this group of college students cosmetics is number one. Makeup and skincare are perfect for that because it is functional. it's highly personal. What works for your skin doesn't work for her skin, but when you meet someone who looks like you and you're like, Tell me everything that you've learned and she will tell you everything she's learned in an emotional course because it's a big part of it.

We actually do well with clothing, but I never expected it to be our number one place despite the fact that I used to work in apparel and that's because you don't necessarily want to wear the same things that your friends are wearing. It's extremely emotional and personal.

Why do you think people socialize around their purchases?

Along with being wired to help people, we want to re-experience something we love through a person. You're like, Hey, did you go watch that show I told you about? Or, did you go to that store this weekend? We want validation and get friends to follow our paths. 

How do you think your users use this product over time?

Bruce Dunlevie of Benchmark defines consumer products as either Functional or Episodic. We don't want to be like Yelp for products, which is a great company but extremely functional — I go there when I need information. We want to be episodic; I want to see what's going on with the Purchase Graph all the time. Or it's pulling me in when I see something you buy. It's organized. Now you can share it with friends, wherever you want to talk. Over time, you want to make this the mall. wasn't just about buying stuff. It was checking other people out. It was fun. It was all these emotional and community-oriented things! 

Something surprising I heard from a bunch of younger users was around their favorite social network; I assumed it's gonna be Snap, Instagram, etc, but they kept saying over and over again that it was Venmo!

Now I get it! They're not trying to use it for it’s function alone. Venmo is so simple, but it's a signal to me that something actually happened. And when you see a signal, it becomes the most interesting entertaining thing in the world — you can deduce whose dating each other based on how they’ve paid each other back, or by a certain emoji. That’s a big inspiration.

So accessing users’ Gmail accounts for purchase history is a nice idea, but what about user privacy? Have you seen a drop off from users?

We really can't read your emails. The only thing we can see are your receipts and that's because of the way the email provider shares information with us. Separately, we've been through Google’s security assessment and got approved by them. 

It’s also about how our business model works,which is we are not using data in the same way that social media companies are using data. All we care about is that you buy something that works best for you. We do not care about pushing you to buy something that doesn't work for you because this brand paid us to push you. That's advertising in a nutshell, which is all about selling eyeballs — rather intrusively and inefficiently to boot.

The bottom line is we just make money differently than Facebook, Google, Pinterest, or Snap; we make money in the way that stores make money off commerce. Where knowing everything about you is not as important, the vehicle of connecting you with the right thing to buy is the most important thing. 

I think there is a world where by having the consumers be the ones to consolidate all the data they give away and then work directly with brands and stores to decide how they want to interface, we can actually start having an edge over Amazon. That's a long term goal on this whole thing.

Can you tell us about your monetization strategy? 

I think Honey proved that affiliates is not a backwater business. That's why in the short term, we get a little affiliate cut, but down the road, what I want to do is rethink advertising and commerce entirely, which is to create a GIST marketplace for direct connections between brands and consumers.