Bonobos Founder: Slow and Steady Growth Always Wins
If there's one thing Andy Dunn has learned building the men's clothing brand Bonobos, it's that you can never be too sure of your own success. As he told Inc. last year, Dunn once came close to losing everything over one mistake.
That may be one reason why he's taking such a cautious approach as expands the e-commerce business into the women's market with a new brand called Ayr, which the company announced late last week.
It's the first time Bonobos has entered the women's clothing space since Dunn founded the company back in 2007. While the decision may seem like a long time coming, Dunn says it's necessary for brands to take a measured approach to expanding, no matter how well they've performed in the past. "We don't believe that just because we did it with Bonobos for men that this is also going to be a great brand," he says. "We don't have that hubris. We've got to earn it."
I spoke with Dunn about why the timing is finally right to expand the brand and what lessons he learned from Bonobos that he thinks will serve him well this time around.
You've been running a men's only brand for seven years. Why are you just now getting around to women's?
I didn't want to start a women's brand with a bunch of guys in a board room. I wanted to find a woman to lead it who felt there was a problem to solve herself. I always thought when I meet that person, I'll do it. I met with [Ayr co-founder] Maggie Winter for coffee on a Friday in September of 2012. The auspices were she was going to help me think about the women's business, but I heard from others that she was one of the most charismatic merchants out there. So I had ulterior motives to see if she'd be interested in joining us.
You've decided to start with a 1,000 unit test of Ayr jeans this month. Can you explain the thinking behind that limited rollout?
It took a couple years at Bonobos before we were making a good, high quality product. With the women's market, we're going to have to be better faster. With Bonobos, we were educating men to care about fit. Women already care about fit. This isn't a customer education process. We have to be good sooner.
We've also had a really liberal return and exchange policy with Bonobos. Some guys are lazy about that. Women aren't like that. They don't like our jeans? It's coming back. That will be a struggle if the product's not fantastic. We're trying not to pretend we know everything right away.
An iterative, communicative, feedback-driven approach feels more humble than saying, "Here it is!" We’d rather it wins long term than get huge volume years one and two. I want huge volume years six through 10.
Why start with just jeans?
A great brand starts with a hero product. Denim is one of the most crowded markets, but if we do well there, we know we've got something exciting. At Bonobos, we started off a little too early in categories that weren't relevant. We moved into swimsuits and polo shirts early. The focus here is on getting a great start in denim, and then we'll go into sweaters and tops slowly. We want to establish credibility in one product first.
What other mistakes did you make with Bonobos that you'll try to avoid with Ayr?
We got overly into spending online marketing dollars at Bonobos, and we got overly into using promotions to acquire customers. We'll skip that era, I think, with Ayr. It doesn't work. You can drive your top line, but the quality of customers you're acquiring deteriorates. If you're not careful you erode your margin and your brand, because you diminish the full price integrity of your brand. Instead, we'll leverage social channels. Pinterest, for instance, which is largely irrelevant for men, will be a bigger deal for Ayr.
The flip side of that question is: what good decisions did you make with Bonobos that you hope to repeat with Ayr?
We know what to do now if and when it's time to think about opening a brick-and-mortar store. With Bonobos, we have a perspective on how stores should be built in the digital era. We have eight revolutionary retail stores that are 1,000 square foot e-commerce showrooms. We think that's how retail's going to be done in the online area. It'll be highly experiential, and inventory-free.
What does your day-to-day involvement in Ayr involve?
I sat on my Facebook page today and invited all my friends to Like the page and spent a few hours with Maggie getting ready for our friends and family event. I couldn't be more immersed, but hopefully in an appropriate way, which is as a coach.