Young entrepreneurs are combining cutting-edge technology with old school manufacturing techniques to forge a compelling business model.
A 20-something business student with his eye on the self-employed life in the Bay Area, Mike Maher seemed like the prototypical young entrepreneur itching to follow the Facebook-age tech start-up frenzy and pursue a digital fortune in Silicon Valley.
Instead, he decided to sell high-end, handcrafted custom shirts.
Just because Maher went into one of the most old-school niches doesn't mean that he totally renounced his status as a member of the digital-native generation. He and business partners, Barrett Purdum and Mike Armenta, are helping their business, Taylor Stitch, thrive by marrying the latest back-end technology with traditional manufacturing techniques. And they're not the only ones.
Across the San Francisco Bay in Oakland, Rachel Saunders had a similar idea while laboring over batches of homemade jam. With a tech-savvy partner and design whiz friend behind her, she spun her passion for hand-crafted preserves into Blue Chair Fruit, a rapidly growing purveyor of $12 bottles of jam now being snapped up by fruit-loving foodies both online and in 150 William Sonoma stores across America. Both businesses are examples of a clever new type of entrepreneur who is taking advantage of twin trends—the rising interest in artisanal goods and the increasing availability of agile tech products to bring them to market.
"All of our sales are through Shopify, which provides a really accessible storefront for online customers. We use Xero for all our accounting," explains Kate Shaughnessy, the director of marketing at Blue Chair Fruit, who also keeps track of the company's impact online with Google Analytics, Facebook, Twitter, and Pinterest. All of this allows the company's six-man team to spend less time dealing with logistics and more time making tasty stuff.
"The kitchen stays very traditional but in the office we're definitely always looking for ways to make things run quicker," Shaughnessy says. "Honestly, to stay successful these days, even if you're a very small company, you need to be fairly tech savvy. We simply couldn't achieve the results that we do otherwise because frequently we have to drop everything to prep 500 pounds of nectarines. All the streamlining we do on the backend enables us to keep focusing on making good jam."
Maher agrees that, paradoxically, technology is central to his company's ability to do things traditionally, allowing them an edge over what he dubs "old man stores" where proprietors "are using pencils and paper to take people's information and write up receipts." The ability to build a great online presence is also a huge advantage, widening the market for his products exponentially.
"I grew up 15 minutes from L.L. Bean," he says, "and the way he started his company was sending a letter to everybody that registered for Maine hunting licenses that year [saying] that he thinks they should buy his shoes. Now you can do that via the internet. You can really get in front of a lot more people than you used to be able to."
Both companies also feel they've benefited from a bit of a cultural tailwind as interest in traditionally crafted products surges. It's trend that, somewhat ironically, they see as linked to the troubled economy. You'd think a recession would be a terrible time to be selling $250 custom shirts, but Maher feels that the lean economy has actually made people more willing to invest in well-crafted albeit expensive goods and more focused on what sort of system their purchases promote.
"For a long time, because there was so much money flying around, people didn't care, and I think with the financial crisis, the younger generation really started to look at the way things are made, what they are made of and how that would affect us going forward," he says. "I kind of like to parallel it to the organic, slow food movement."
Which is a movement Blue Chair Fruit knows well. The founders, too, see their customers as more focused on value post-recession. "I think consumers, especially food consumers, are starting to think more about the economy that their money supports and wanting to put that money back into their local community and buy something they can fell very good about," says Shaughnessy.
Nostalgia doesn't hurt this type of business either. "There's a romanticism surrounding artisanal products," according to Shaughnessy. "Globally people are interested in not letting old techniques die." Maher also banks on that the aura of authenticity and the desire to preserve tradition, inviting his customers to meet the craftspeople behind their clothes at pop-up markets.
In the end though, these are just two companies both operating in close geographic proximity, so does the fashion for young entrepreneurs blending artisanal products with tech-heavy business models extend beyond limited urban enclaves?
"It definitely starts with hipsters in San Francisco and Brooklyn," concedes Maher, but "it's growing. You see even just from our online orders. You get orders from deep in Alabama or way off in Montana, so there are people that are paying attention to this. Obviously it's not as great of a market, but you see blog posts pop up about people starting shops like ours in Cleveland, Ohio."
Blue Chair Fruit's customer base is also broadening. "Rachel teaches classes nationwide and we've only seen a growing interest in her coming to different parts of the country to teach classes. She just went to Montana this year. She's been to Seattle twice," says Shaughnessy.
"I think it really is this movement of well made, back-to-the-roots things, but I think the part that does make it so much stronger right now is we do have all this technology that we can add to it," says Maher. The folks at Blue Chair Fruit, however, have a much simpler reason to be optimistic about the future: "Once you taste the best salami or the best jam you've ever had, you're not going to want to go back."