Who’s Next

MilkCrate CEO Morgan Berman on the challenges of changing her startup

Who’s Next Catch Up: Berman talks about bringing on Comcast, advice from Venmo’s founder and moving out of coworking.

Milkcrate CEO Morgan Berman sits at her desk at her office in South Philly.

Milkcrate CEO Morgan Berman sits at her desk at her office in South Philly.

Jordan Gunselman / Billy Penn
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It’s been four years since area native Morgan Berman founded her startup MilkCrate, an app that was originally meant to connect users with sustainable and environmentally-friendly options around them.

That’s since changed. And it’s now that Berman says the function of her company is finally clear.

Welcome to the second edition of our “Who’s Next Catch Up.” Each month, Billy Penn highlights up-and-coming Philadelphians under the age of 40 as part of our Who’s Next series presented by the Knight Foundation. In Who’s Next Catch Up, we’ll return to various honorees and find out what they’ve been up to since we first wrote about them.

Last month, we checked in with Federal Donuts chef Matt Fein. Our second edition takes us back to Berman, who was featured in our first-ever “Startups” list in January 2015. And Berman’s startup MilkCrate has massively changed course since then. We caught up with this Who’s Next honoree about the big pivot, what it was like moving out of Benjamin’s Desk and what’s next for the app originally dubbed “the green Yelp.”

Has your position, employer or business changed since we featured you?

Well really the big change was a year and a half ago. So I pivoted the company in January 2016, and we turned into an enterprise platform. So we now are selling our software in this new kind of reconfigured way to large groups who want to track and grow impact socially and/or environmentally.

So while our original tool was really geared only at the individual making impactful choices, now it’s the individual in the context of a larger group. And so we work with big corporations, nonprofits, residential management companies and schools who want to engage their people in doing good. And users still download the MilkCrate app, but then all of the content can be controlled and managed by our clients who create challenges in the app for the users.

And how has that gone?

It’s been scary, but it’s been fantastic. I think we learned so much from those first couple years— about what users wanted, how to build technology, how to be a team — that it helped us when it came time to start thinking about a change. We really followed what the user and the client needed and wanted and that was our focus. Instead of us trying to take our mission and starting with that mission and then trying to figure out the business, we almost then had to go in the reverse order and start with business and figure out how to keep it in line with our mission.

What we were able to do was do research around the market and clients and what they needed. And we found that 75 percent of the S&P500 creates a sustainability or corporate social responsibility report. It’s huge. And so for years, when I was building MilkCrate, I would talk to investors and people in the field and they would say ‘oh well, you know sustainability is great, but it’s not big business. It’s not normal. It’s niche.’ And I’m like ‘I don’t know about that.’ I had this hunch that it wasn’t.

And then when we actually did the research around the pivot, we were like ‘oh yeah, this is business as usual.’ And then we said OK, so this is a real market. We have to solve a pain point with our technology. Who is going to care about an app that helps you make better choices and has content around that in the corporate setting, and why would someone want that?

Thats when I started going out and meeting with corporations that had [corporate social responsibility] and sustainability directors, and we got much more concrete either yes’s or no’s for reasons that we could track, which is a really important thing when you’re doing enterprise sales.

So a lot of those conversations started turning into real leads, and some of those leads then converted into real clients. And it’s like wow, this is what a business looks like.

Were you concerned that you had to give up any part of your mission to achieve that business-first mentality?

It was definitely something I didn’t want to do. I didn’t want to give that up. And I’ve actually been approached by a couple people who said this could be used to track anything. Our platform is so flexible, but it’s basically at its core a customizable platform to track and grow behavior of any kind, so it could theoretically be used for something that’s kind of negative. But you can game-ify anything for a large group of people

It was definitely something that I was made aware of, that there could be other use cases. But I’m not interested in building that business. I’m really interested in building a company that’s making it easier for large groups to do good in the world.

What’s the most exciting thing you’ve done, or proudest accomplishment, since we last talked?

There’s been so many crazy things. There was the White House trip. So the White House convened sustainability leaders to come down to the White House to talk about and help advise on the clean energy plan. So that was pretty exciting because it very much was like crossing into the civic world, into policy. That was really exciting and felt really like a big deal.

Other big events? Obviously when we had the Comcast announcement party at our old office. Having Susan Jin Davis, who is the [Chief Sustainability Officer at Comcast NBCUniversal], come and thank us for working with them. And I’m like, no thank you. So that was a pretty special moment, and that all began with a meeting with David L. Cohen [Senior Executive Vice President, Comcast Corporation, and Chief Diversity Officer] in his office a year and a half ago. And that was another kind of, ‘wow, this is a really cool guy who’s really helped shape this city.’ And we hope to be a part of shaping this city, too. So that was pretty special.

Moving into this office too. We just moved in about two months ago. So we finally graduated from coworking two months ago and got our own office. And probably going to be doubling the team by the end of the summer.

How’s the pivot impacted staffing?

We had to go through a metamorphosis a little bit as a team. At one point we had five people including myself, and after the pivot over the last year since we’ve changed the direction of the company, the makeup of the team has changed pretty much completely.

And that’s been sad and painful at times. Because I built something special with these people, and I care about them. But we’ve been at this, it’ll be four years in September. In any kind of a job, that’s a long time to do something, but particularly a startup.

Have you faced any big challenges since we featured you?

Just the physical space thing. When’s the right time to get out of coworking? My teammates loved being in a coworking space, and I liked some things about it, but I knew we needed more space, and I knew that I wanted us to grow up and to kind of cross that next bridge of development as an organization.

Another challenge I guess was just kind of after the pivot. That was like pivot 1.0. We almost had a pivot 1.1 where originally it was just going to be a tool for those corporate social responsibility directors. We were only going to have corporate clients and were only going to engage employees…

What I realized is it’s not that we’re building an employee engagement tool for corporations and we happen to have clients in other verticals. It’s that we are a customizable platform to engage large groups, and some of those groups are large corporations. So what started as a green Yelp turned into a CSR sustainability engagement tool for corporations. Now with hindsight I can see the goal was always to help individuals make good choices and to give them the information they needed to motivate them in the context of a larger community.

You could say that about any stage of what we’ve built here and what our company has been. That sentence is applicable to everything. But it’s that it had to evolve to become clear that that’s what we do. MilkCrate is an all-encompassing, completely customizable tool for large groups to track and grow impact, whatever that impact means for that group.

So that makes sense now. It didn’t make sense four years ago. But it makes sense now.

How has your industry in Philadelphia changed or evolved since we featured you?

Something that I’ve seen is [the startup scene] starting to get its own sub-categories. It used to just be the startup scene. But now it’s like there’s the fintech and biotech and the impact. I think that because it’s grown so much, we’re able to differentiate a little bit and specialize and have sub-communities. So I have my female founder community. I have my impact community. I have my tech software. I now feel like I have different groups that I can go to and connect with and learn from.

Maybe that’s just because I only kind of embarked in this community four years ago when I started working on MilkCrate. So I’m sure there are people who have been around for eight and ten years who would be like, well yeah it’s always been like that. But for me, just as I’ve grown in it, that’s what I’ve seen. And it’s like, the fintech accelerator just launched. Impact PHL just launched. Those are two things I know didn’t exist before that in the last year have happened.

What are your plans for the next year? What about beyond that?

Real estate is going to be a big one. Having these real estate clients growing so that they become a portfolio-wide tool and taking that phase 1 relationship and growing it. Same for the corporate clients where we’re starting in Philly and growing that, so that we can really power the engagement for not just a local experience but a national one. We’re actually launching our first non-local client in the next week.

What else? We’re closing our round right now, actually. We’re almost done. The round’s going to close by August, and it’s looking like we’re bringing on some new groups and new angels. I actually just brought on the [COO] of Venmo on our advisory board. Michael Vaughan officially joined a couple weeks ago. So really excited about what that relationship and relationships like that can bring both for our team and our business growth, but also our software.

And beyond the next year?

I write these little manifestos once in awhile because investors ask for them because they want to get inside my head. So the biggest thing that I really held as a cornerstone of what our software needs to be is it’s as verifiable as possible, and that the content be real and rich and engaging and that it means something. And that it’s not just easy to cheat and feel empty for the user.

So over the coming years, we’re gong to be doing a lot of work to build that up even more so that the data that the app is gathering on your behavior that you consent to is verified and real and useful to you.

 

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