Tech Talk: Cloud Computing Lifts Clothing Company
Within seven years, Mountain Khakis, of Jackson Hole, Wy., went from a concept for pants drawn on a cocktail napkin to competing with such brands as Patagonia and North Face in the market for rugged 'hips-down' outdoor apparel. As the company was growing, executives upgraded from QuickBooks financial software to a cloud computing solution that allowed expansion into numerous retailers in a growing assortment of countries, CEO and co-founder Ross Saldarini tells IncTechnology.com.
Elizabeth Wasserman: Tell me about Mountain Khakis.
Ross Saldarini: Seven years ago, it was a water color drawing on a beverage napkin inspired by the observation that the folks in Jackson Hole were wearing designer sweaters and shirts and marrying them with traditional western pants, such as Carhartt and Wrangler. When you think about the price points on those sweaters, one could observe that this demographic could afford to pay whatever price they wanted to for a comfortable pant for the lifestyle they were living. But it didn't exist and it was a niche to fill. That was what inspired us to launch the original mountain pant.
Wasserman: How quickly have you been growing?
Saldarini: That was in 2003. We spend two years developing the product and preparing to sell it at retail. In 2005, we actually tested our product in three stores in three different parts of the country and it sold really well so we launched to 75 stores by end of 2005. We focused on specialty outdoor retailers. Those are the places where you traditionally go to buy a tent or canoe or jacket from North Face. Since 2005, we've grown from that initial 75 stores to about 1,000 stores that we ship to today in every state and Canada and Japan. Our future growth plans will include Europe and Australia in 2011 and 2012. We expect to double our distribution in part internationally and in part domestically by then.
Wasserman: What type of technology did you need?
Saldarini: To give you some context for the scale of the operation, there are 20 full-time employees today. There are 100 people who probably work on and touch the business around the world. We have a warehouse that until very recently was run out of Texas. We do product development in Jackson Hole. We do back end, sales, marketing and finance from Charlotte, N.C. I have an agent in Seattle who is a principle point of content to manufactures who are in China, Cambodia and Vietnam. And then I distribute products all over the U.S., Canada and Japan. For such a young company, we were touching a lot of different corners of the globe and we had people who had to be coordinated. You can not do that efficiently and cost effectively without technology.
Wasserman: What did you start out using?
Saldarini: We started off using Microsoft Office and QuickBooks, which drove a lot of our business. We were small and had a fax machine we took orders on. It was pretty much a "keep it simple, stupid" philosophy. What really happened that forced us to go from a phase 1 early stage company that was not spending a lot of money on the back office to performing like a global organization was when we went from 75 dealers to 300 dealers almost overnight in the early stages of the business. At that point, we knew using QuickBooks for order management, inventory, customer relationship management and so on was not going to work. We needed to have a system that would allow parties all over the world to operate on the same page using the same data to effectively scale the business. My experience had been that any stepping off point from QuickBooks meant a major drop in our reporting capabilities and a major increase in cost. I was not excited about stepping away from the simplicity of spreadsheets and simple programs. I thought we would be facing hundreds of thousands of dollars for SAP or PeopleSoft or one of the mid-tier platforms that would have also taken months of implementation time.
Wasserman: What did you do?
Saldarini: A mentor of mine recommended we look at NetSuite. It was great advice. We evaluated it versus some other software and ERP systems, not any of the major league systems but against what Peachtree or Microsoft had.
Wasserman: That's a cloud computing solution. Did it take a while to adjust to having your information hosted someplace else?
Saldarini: That was never a concern or a question or an issue to us. We weren't caught up in any notions that we were somehow losing control of customer data. That was not a major hurdle for us to overcome. We only viewed it as an advantage to us.
Wasserman: What have the results been?
Saldarini: The results have been that we've been able to grow our company to ten times its size in the last five years without having to create a major back office operation to support the business. A lot of that is because we do have a piece of technology that allows all our data to reside in one place. Employees and independent contractors anywhere in the country have access to data at any point. Access to information has been increased dramatically and that has helped our business be able to grow without having tremendous staff and spending a tremendous amount on technology. This tool is highly customizable.
Wasserman: How much did it cost?
Saldarini: I don't think we've spent more than $20,000 on the system in any year. That's the highest number we've grown to. They charge by the seat and they upgrade the system twice a year. We take orders from our customers online, orders over the phone to customer service center, our customer service center logs calls and complaints. If I log into our system and pull up all the recent transactions, all the notes from sales reps are there. I see their recent history, what have they been ordering, returning, what their payment terms are, how quickly are they or aren't they paying. It's real-time data at my fingertips.