There are countless stories (including a bunch I've written) about startup launches: When time and resources are in scant supply, and the fate of the company seems to hang on every single decision. There are plenty of stories about exits. (I've written some of those, too.)
But what you don't see as often are stories about the middle stages of a company's life, which in many ways can be more difficult than the startup phase: Expanding a team, maintaining growth, building a sustainable infrastructure, maintaining the right culture... for many entrepreneurs, that's when the leadership and business skill rubber really hits the road.
So let's change that.
This is the first in my series, The Next Stage, where I check in with entrepreneurs and companies I've written about in the past. This time it's Brian Berger, the CEO and co-founder of Mack Weldon, makers of my favorite polo shirts and, although it sounds odd to say out loud, my favorite underwear.
The first time we talked I learned how Berger and co-founder Michael Isaacman started designing and selling their own socks and underwear brands. (Today they offer over hundreds of items of men's clothing: Underwear, socks, t-shirts, polos, bathing suits, active wear, accessories... they've sold millions of units and enjoyed triple-digit sales gains every year since their launch.)
For many entrepreneurs, time passes in dog years: Every year seems like seven. Looking back, what has changed for you and the company?
(Laughs.) That's true and yet the opposite is also true: When you're busy it feels like you never have enough time.
Overall the company is doing great. We're growing really fast. Maybe most importantly we've proven a lot of things to ourselves over the past year that we quite honestly questioned as to whether they would define how we thought about product strategy, marketing, etc.
We're a brand focused on offering as little as possible to our customers so we don't create overwhelming choices and confusion. So whenever we consider expanding into a new category, we have to feel very sure that product are differentiated enough to warrant introducing a new choice to our customer.
That's a tough balance to strike. Growth is important, but at the risk of being Captain Obvious, not at any cost.
A good example is last spring when we launched Airknit fabric in underwear. The customer adoption has been amazing.
We initially thought it would be something customers would only use during at the gym, when they're active, and surveys showed that was true... but 80 percent were also wearing them as an everyday item.
The product category has grown enormously. If you take our underwear fabric, year over year it had grown about 80 percent, and last year it grew by several hundred percent and is a significant part of our total offerings.
Our customer base has a huge appetite for innovation.
That's more of an extension than a new category, though.
True. So we also we stepped into soft goods, polos, sweats... and one of the things we were testing towards the end of last year was what that would look like in relevant hard goods: Backpacks, gym bags, wallets, etc.
We didn't make gigantic inventory commitments, but there was a real question in terms of whether our customers would purchase them -- and would there be confusion or brand dilution, with customers thinking, "Why are you doing this?"
What we overwhelmingly found was that customers were excited by the product category. We sold through all of our buys well ahead of plan. We sold through the travel kit, the gym bag, and the wallet at 50 percent or higher sell-through rate within a quarter, our Ion bag is off to a successful start...
What's great is that shows the fundamentals of how we think about product innovation, how we translate that into adjacent categories of not just soft goods but hard goods... it shows we're on the right track.
That's what every brand aspires to: Extensions that complement and don't distract.
The key for us is having a clear product strategy -- and making sure we never forget that strategy. When a customer considers our Pima t-shirt, they're looking for what's different about it.
If we deliver on that, the next thing we put in front of them better measure up, too.
What about marketing? You're primarily an online retailer.
There were two big stories in 2017. The first was channel expansion. We started taking advantage of content marketing, placing links at the bottom of news articles, referring customers to pieces of content about the brand... that has been a really interesting way to tell a product story beyond what we can do in an ad.
It's not sexy, but it works. That kind of content marketing was 20 percent of our ad spend in 2017.
We also built a home-grown customer loyalty program. Historically we rewarded customers on a transaction by transaction basis in terms of the value of the items in their shopping cart. If you had $200 in your cart, you got 20 percent off. If you had $150, you got 15 percent off, $100, 10 percent.
That was our way to not run sales, something we don't do.
That program worked well. Customers saw the value.
But then we wondered if customers were waiting to purchase in order to maximize the value of the benefit. So we flipped it on its head and made it customer-centric.
If you're a customer and spend a certain amount within 12 months, you can qualify for two levels. First is free shipping. The second is if you spend $200 in 12 months, you get 20 percent off every purchase, and free shipping, and can get special gifts, try out products we're testing...
What we've found is that customers reach the $200 threshold at a 17 percent higher rate than before, and our total number of orders has also increased.
Makes sense: Some percentage of people who decide to wait will never return. Or they'll come back and buy something they didn't really want just to get the discount, or... there are plenty of reasons shopping carts get abandoned.
Time is not your friend in a business like this. (Laughs.)
But in one way time can be your friend. Over time, as the program matures, we feel certain it will help us build even better customer relationships.
That's what we really value. The real juice in the business comes from creating loyal, long term customers.
Plus, at a fundamental level, we want to constantly reinforce our value proposition. Let's say we put out a running tight and you want to try it but your order isn't big enough to qualify for a per-transaction discount... now you're much more likely to say, "Hey, I'll try that."
And that gives us additional touch points with our customers, which gives us additional ways to delight them and to build that long-term relationship.
You continue to grow at a rapid rate. What about people?
We continue to build our team. We added 10 people across all the important areas of our business. But at 30 people, we're still a pretty lean team.
We made building our team a focus in Q2 and Q3. We also worked hard to create an employer brand so we could attract great people and give them a great experience. NYC is a great environment to work in -- and that means it's a qualified candidate's market. They have choices. We want to make sure we're a company great people would choose.
At some point a bigger team means changing roles and responsibilities to some degree; you can't operate the way you did when there were, say, 10 of you.
We're at that operational inflection point where we're trying to create more focus and more definition of roles and departments. People -- including me -- have to get comfortable staying a little more in their lanes.
That's a reality, but it's always an interesting shift. When you're scaling a business, no one can always be in the loop about everything. That's a tough mental shift.
I'm okay with letting go some. What's critical for me is to make sure we bring in the next level of leadership so we can streamline those communications as well.
I'm pretty hands-off in parts of the company, having maybe one meeting a week... and in others I'm much more deeply involved day-to-day.
The goal is to get to a place where our structure allows everyone to operate at their best. When you're growing a company that's always a work in progress. (Laughs.)
You've recently started creating some retail partnerships.
Third-party retail partnerships have created really interesting opportunities to put physical product -- in the right environment -- in front of customers. For example, we have a partnership with Equinox; we launched Airknit with them, did joint creative, did a photo shoot with their gym trainers, we co-branded packaging...
We also have a small partnership with J. Crew with some of our core products in 9 of their top men's shops, mostly in NYC and on the West Coast. That will evolve into something more substantial, with unique products only available in their shops. And we have a partnership with Todd Snyder, the acclaimed menswear designer. He has a lot of credibility in the menswear space.
Those partnerships aren't huge needle-movers in terms of units... but they're great in terms of branding, credibility, etc.
All are situations where we're making money, but our principle driver is really market awareness.
Keep in mind we exist because shopping for underwear and socks is an awful retail experience. So, if we end up on a shelf with 20 other brands... that's counter to why we started the business. If we can be featured in a unique way, if it puts our product in front of the right customers, we're happy to explore that... but it has to fit our brand.
Where we do it matters, but how we do it matters most.
If you had to sum up the last year, what have you learned? And what's next?
We're working on expanding internationally. We're in product categories that definitely translates globally.
We're in Canada now, and we're thinking about places where we can have a lot of success, like western Europe, Australia, etc. The logistics need to be addressed, but they aren't overly complex... and certainly are issues that other businesses have worked through.
What have we learned? It's definitely not a new lesson: You have to keep your head down and grind it out. There are no freebies in this business. There are no freebies in any business.
You always have to stay true to the reason you started the business. For us the original thinking was to choose a product category that had been overlooked or had become a commodity and provide a specific upgrade.
When you do that, when your customers realize you focus on product innovation, utility, comfort and fit... and you provide those things across a broad range of products... then you have a real chance.
And then you have to keep your head down and keep doing exactly what you set out to do.
That, ultimately, is how you build a brand.