A brand can't be everything to everyone. Successful businesses hone their positioning as they discover their true audience.
For Fran, our guest on this episode of Shopify Masters, focusing on just one product line—underwear—helped her solidify her brand and the problem her products solved, while tripling the company's revenue.
Fran Dunaway is the co-founder of TomboyX: a store that went from selling t-shirts to selling underwear that’s "not for everybody, but is for any body".
Women that work blue collar jobs wear loose fitting clothes...traditional women's underwear doesn’t work. It rides up. It’s constantly a problem.
Tune in to learn:
- How to determine the right mix between manufacturing versus private labeling.
- How to determine if a manufacturer can scale with you as you grow.
- Takeaways from barely meeting a Kickstarter fundraising goal.
Listen to Shopify Masters below…
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Felix: Today I’m joined by Fran Dunaway from tomboyx.com. It’s T-O-M-B-O-Y-X.com. TomboyX sells underwear that’s not for everybody, but is for any body. I love that tagline. It was started in 2013 and based out of Seattle, Washington. Welcome, Fran.
Fran: Hi, thank you very much. I’m happy to be here.
Felix: Excited to have you on. Tell us a little more about your store and what are some of the, obviously you sell underwear, like I said, but are some of the more popular products underneath your brand that you sell?
Fran: We started with just two versions of boxer briefs. Initially, we were making boxer briefs designed for curvier bodies, women and quickly found out that they actually work for everyone. Hence our tagline. We also were the first company to come out with boxer briefs that weren’t designed for men. We got rid of the extra fabric in the front and came up with two different links and came out with those. The four and a half inch boxer brief remains our best seller but we’ve also added a nine inch boxer brief that is doing extremely well. We have a full line of briefs, boxer briefs, everything from a brief to a nine inch boxer brief that we offer right now.
Felix: I gotcha. You refined the, I guess, products offering that you had in your store, discovered that the boxer briefs that were not designed for men or the more popular products that you were selling, how did you uncover that? How did you stumble into this particular, I guess, design of products?
Fran: That’s a great question, because we didn’t start in underwear. We started this underwear company because I wanted a cool shirt. That’s how we got our start. I wanted a cool, button up shirt for women, like a Robert Graham or Ben Sherman that’s button up with fun features that had a hidden button to keep it from gaping open in a meeting. That’s where we started. This was just a little side business that was going to operate out of our garage. We picked the name TomboyX because we thought it was a cute name.
Then we did a Kickstarter campaign and we raised $76,000 in 30 days, but about a week into the campaign we recognized that the name was really resonating. We had an instant brand. We had women and girls from all over the world reaching out to us because of this Kickstarter campaign saying just, “Where have you been all my life? What a great brand. Finally a brand for me.” We thought, “Oh, dear. What? This is about more … This is bigger than a shirt.” How do we find a product that can really speak to all of these people because so many look different on the outside or what they wear on a daily basis than how they feel on the inside. That was kind of our quandary. Then we kept hearing from customers. We obviously got our shirts made from the Kickstarter campaign, but we put our logo on t-shirts that we didn’t make, just some blanks and hats.
Then we found this little type of underwear, just a brief. It’s like a guy’s whitey tighty, but we didn’t make it. We put our logo on it. That quickly became one of our best sellers. We’d also been hearing from a lot of our customers as well as a close friend who is a police officer. They kept saying, “You guys should make boxer briefs.” We kept saying, “Really?” Finally looked into, did some research and found that no one was doing it. We felt like that was a great opportunity. Our friend the police officer, Karma, brought her stack of men’s boxer briefs in and said, “Look, they don’t … Any people, women, that work in blue collar, where loose fitting clothes, traditional womens underwear doesn’t work. It rides up. It’s constantly a problem.” That’s why she had been buying men’s boxer briefs for years.
She, I call her a connoisseur of men’s boxer briefs. She knew everything. She told us this waistbands works, this is why. You need to make a solid quality waistband that lasts as long as the underwear and really went through and told us the secret ingredient or the way that we should design these boxer briefs to be successful. We took copious notes. We worked with our, at the time, she was a contractor. She’s now full time. Julie Nomi, who designs our product and she took great notes. We got samples made, tried them on all types of different bodies. We also knew it was important to us to … My wife and I are co-founders. It was important to us, as far as our values, that we were a company that included everyone. We wanted to make sure we could do an extra small to a 4X. That’s typically not done, either. It’s hard to find companies that have that range and that, at the same price point, and that fit so well.
We worked tremendously hard to make sure that all of those things happen using quality products that make product that will last, that isn’t fast fashion that ends up in a landfill in a few months. That was our goal. Then we introduced two styles, two links, and at that time we were naming them after people that we cared about or that had been helping us. The first pair were called the Good Karma after Karma the police officer. We’ve since gone through a rebrand and have a very different … Those are now called the 6"Fly.
Felix: Cool. Lot’s of great details in there that I want to unpack a bit. I want to start with the validation that you were going through. You already launched a Kickstarter, which we’ll go into in a bit. You found, I’m assuming, some kind of white label boxer briefs that you branded yourself and discovered after talking to, Karma in this case, about the need for boxer briefs, again, not designed for men. You found out that no one else out there was really making this. No one out there was really selling it. A lot of times you’ll hear entrepreneurs say that they are looking for markets that already have competition because it means there’s already demand, there’s money to be made in that market. You found out that there wasn’t anybody in that space. Obviously, you’ve created the market yourself. Was that ever a concern for you that there wasn’t already competition in this, serving this particular problem?
Fran: First, I want to clarify that the white label underwear that we started with, that we weren’t making was actually a brief. It was like a guy’s whitey tighty. It wasn’t a boxer brief. We were hearing from customers that was a need within the industry. Excuse me. Anyway, so we recognized that there was a need within the industry because a lot of our customers had been telling us. What we knew, like when we started with the shirt, when we started the company and we wanted to start with a button up shirt, we recognized that there was a tremendous underserved niche, if you will, within the fashion industry. That’s the people that we started hearing from during the Kickstarter that had felt under represented for so long, actually ignored. That’s this whole segment of women who don’t … That prefer not to dress traditionally feminine, but also don’t want to shop in the menswear department. There’s this midsection.
There’s also, then, because of the name, there’s also this spirit, underneath it all. Underwear became the ideal choice for us because it’s that layer between who you are on the inside and how you present on the outside. We love the independent spirit of the tomboy, what it means to be a tomboy is independent and strong and doing your own thing. There are a lot of women that identify with that spirit but may dress more feminine or more masculine. There’s a whole cross-section of how people may present on the outside but it’s that inner part that we really wanted to represent that was important to us.
Felix: Very cool. Makes sense. You mentioned that you wanted to create this underwear, that you wanted to create a clothing that matched all body types. You’re saying that you don’t see this too often where there’s such a wide range of, I guess, offerings from, I’m not sure what you said, but much, much smaller size to much, much larger sizes. What kind of challenges do you face when you want to cover that kind of breadth of all body types?
Fran: When I started this company, I didn’t know a knit from a woven. I have learned every step of the way about how this all works. I think that’s part of what has been our success, because rather than saying, “It’s just not done that way,” we say, “We do it this way.” That takes us into a whole different journey. Absolutely adhering to our values and saying, “No. We’re going to make this for everyone and we we can make this work.” You have to really get in there and try it on different body types and then make adjustments and be smart about the fabrics that you’re using and whatnot.
A typical company, there are ways of grading. You start with a typical model, for example. When a clothing company is designing clothes, they’ll start with a fit model. They might start with a size two and then they’ll grade up from there. By the time you get to a 12, a 12’s body is very different than a size two body. It becomes a much different fit. We wanted to make sure that we went that spectrum and beyond. We didn’t start with a size 2, our fit model is a size large. Then we go up and down from there, but we make sure that we make adjustments. We have recently launched a luxury MicroModal version of our underwear and we’ve been learning a tremendous amount of information about how that particular fabric fits bodies than what our previous fabric had been. We’re making adjustments and making notes on that. We’re also coming out with some new product in the spring that we’re very excited about and running into the same challenge. We just keep at it until we get it right for the vast majority of different body types and people.
Felix: When you first started were you manufacturing your own products or were you finding these white label products like the briefs that you found, or was it a mix of both your own manufacturing and the white label products?
Fran: We started by having a mix. We kind of wanted to, at that time, we said, “Create, curate and cultivate the tomboy look for all women.” When we had our stuff in production, we would get white label things and put our logo on it, but we also were selling things to finish out the look like accessories. Our good friend down in LA, at the time, we didn’t know her, but she reached out to us and said, “I’ll drop ship stuff for you.” It was Lucky Dog Leather so we were able to have a vast assortment of bracelets, all of a sudden, on our website. There were a lot of ways that people were coming together. We got some denim. We were buying wholesale shoes and completing a look.
That was doing just fine. It was the decision to move into briefs that [pivitable 00:13:04] because we actually tripled our revenue in six months with the introduction of the boxer briefs. We saw a huge spike. That was when we had to decide, okay, are we an underwear company or do we keep going down this curation path and decided that it was a much better move for us to focus in and get really good at what was obviously successful for us. In fact, we didn’t have the money to pay for the boxer briefs. At this time it was just Naomi and myself. We had a contractor, Julie who was doing the design and the production and the sourcing of the materials because we didn’t know anything about that. We weren’t getting paid. It was a very lean operation, just keeping things afloat. I was doing the product photography. Naomi was doing the back end on the website.
We still had jobs. We still had to keep our lights on. When we were prepared for another, we had a this big long meeting and we were going to do another Kickstarter to help pay for the boxer briefs and then decided, “Wait a minute, we don’t need a Kickstarter. We’ve got a big following. Let’s just pre-sell them and hope that by the time they arrive we can have the money to pay for them.” We announced the pre-sale two weeks prior to the first shipment arrival and sold out before they got there. That was our indication that we had taken the right path and that we should continue on that path. Now we don’t sell … We may have a few things. We have some hats and what not that we don’t make. The 98% of what you see on the website now is stuff that we manufacture and produce.
In fact, we introduced our first signature print just a few months ago. We have a lot of new prints out there that we’re designing. Which is really exciting, that you can wake up one morning and say, “Oh, my gosh. I would love to see octopus on underwear.” Before you know it there are octopus on underwear. They’re super cute. That’s kind of how we got here.
Felix: Gotcha. When you are, today obviously you said that you manufacture and produce pretty much everything, all of your entire catalog yourself. When you were first starting out or when listeners are listening in, they’re starting out and they’re trying to figure out this mix of manufacturing themselves versus what you’re calling curating, how do you, I guess, think through that process? How do you decide what you should be manufacturing yourself versus what you should be curating or you know, buying, white label and then branding it yourself?
Fran: I think that there are, you have to pick a lane. You have to pick a lane and choose what direction you’re going to go. Traditionally if you’re manufacturing and creating your own stuff, you can either sell it via eCommerce or you can go wholesale. Those are two very different business models. They’re so different that to try and do them both together is near impossible. It’s really hard. It just requires a whole different back end in the way that you operate. That’s one piece of it. The other piece is really just what’s your vision and what is it that you want to, what is it that you’re doing? There are a lot of companies that there’s the one stop shop where you can go and find a lot of things that you love. They might be bringing in brands from a lot of different company or a lot of different brands and just picking the stuff that works for a certain look.
There a lot of companies that are going that route. Then they end up making their own. For example, [inaudible 00:16:53] did that, ModCloth did that. Then they started, after they’d been in business for several years, although [inaudible 00:17:00] is declared bankruptcy. Their path had been pretty significant success story up until the last couple of years. They waited until they had been around for awhile or very firmly established before they started creating their own product because it just takes so much capital. You have to pay for goods up to three to six months in advance. Very capital intensive. It’s a very different thing. In our case, I mean, the cash flow situation has been a continual challenge because, for example, we introduced bras and they sell out in ten days and they’re sold out and then you got to make more. It’s just this constant running after the inventory and keeping it in stock. That’s been our biggest challenge of all is keeping inventory in stock and having the cash to pay for it in advance.
Felix: Mm-hmm (affirmative). While you’re making this transition from a mix of creating your own products versus curating it, how did you prepare? How would you recommend others prepare when they’re making this transition. Like you’re saying a lot of times it’s a lot less risky, worst margins but less risky when you’re just curating or private labeling products that you find, but the margins aren’t as good. You don’t have as much control over the entire production process. There’s pros and cons, obviously. A lot of times people will make this transition from curating to manufacturing, producing it themselves.
What kind of tips do you have to offer? What kind of pitfalls do you want people to look out for when they make this transition from, again, curating to manufacturing on your own?
Fran: Surrounding yourself with people who know what they’re doing, if you don’t know what you’re doing. If you do know what you’re doing, then it’s typically, it’s the same thing that you’ll always run into where a product isn’t, or fabric isn’t delivered or it’s flawed. You’re going to run into unforeseen circumstances. My practice is to try to take care of or foresee what we can expect and try to be ready for those things so when the unexpected happens, you have the bandwidth to react to that.
I think that especially if you’re first going into manufacturing, you need to find some manufacturing partners who you trust that are willing to work with you, that understand that you’re a small fish in a big pond at first. Finding people that understand that startup mentality, but that will be partners with you, that want to grow with you. We were very fortunate in finding a factory owner up in Vancouver, Canada, which is a couple hours drive from Seattle, that we could go up, meet with her, tell her our vision. She had worked in mens underwear before, so had a vast knowledge. She also had a good eye for marketing. I think that the biggest thing that we do is we listen. We listen well. We ask a lot of questions. I am known to ask a lot of questions on … I say to people, “Look, I don’t have any answers. I just have lots of questions.”
That’s how we listen and gather information and then make decisions based on that. I think it also becomes about what is your brand, what is your company represent, what are you trying to be to your customer. That really kind of frames the business decisions that you make as well. We recognize that there are a vast number of people around the world. We’ve shipped to 49 countries that need and want this product that we’re making. We want to be able to speak to them from an authentic place. It is who we are. That has worked really well for us as well. Yeah.
Felix: What are some of these common bumps along the way? Like you’re saying, some of these are unexpected, but I’m sure that after going through some iterations of this, of producing your own products, you probably run into some common hold ups, common issues that you expect every single times. What are they? What ways have you found to mitigate these kinds of issues, again, when you’re producing your own products?
Fran: Oh, one of my favorite stories is when we were expecting our first shipment that was coming via container. We were waiting for it. We’re excited that we’d have improved margins because we had the time to actually ship it. Then we heard that it was delayed because the iPhone 7 was shipping and Apple got priority containers. There were so many that were coming. It became just this funny thing of, “Wow, okay. We just got booted because of the iPhone 7.”
There was also a port strike here in Seattle. That kept us from being able to make pajamas two years ago. Our flannel was stuck on a container and it couldn’t get into the port. Those are unforeseen things. We have, for example, there’s one factory that typically over promises and under delivers. We now adjust for that. Okay, they say they’re coming on the 7th, so we’ll be ready for it on the 14th. See if that can give us the time that we need. It’s relationships. That’s so important. Paying your bills on time so that people want to continue working with you, but also kind of knowing what the limitations are. We’re facing an interesting dilemma right now in that as we’re scaling, we’re looking at our business partners, vendors that have been working with us and trying to determine if they have the capacity to scale with us. Or do we keep doing kind of smaller projects with them and then find larger factories that can scale with us because our growth is so incredible right now?
Felix: Mm-hmm (affirmative). I think one of the really important things, I’m sure you faced this with Kickstarter, too, is that when there are these unforeseen problems, they obviously will cause one of the biggest issues that they cause, delays in the delivery of the products. This means that not only do you have to be prepared for yourself but then you also have to kind of prepare your customers, too, right? You have to manage these expectations with your customers.
What ways have you found that that works well when these issues come up where and iPhone shipment delays your apparel shipments, which seems really unrelated, but when you explain it, it makes a lot of sense. How do you explain something like this to your customers?
Fran: That’s a really great question, because it’s something that we’ve faced early on because we got our customer very used to the idea of pre-sale. We knew that we would hit a point where that was no longer going to fly. I’d say that was probably a year, maybe a year and three months in when it was not only causing problems from the customer facing point of view, but also internally, being able to handle pre-orders on top of the orders that are already coming in. It created some logistical issues where we finally had to say, “Okay, we’re putting an end on the pre-order type of selling and we’re just going to announce things as they arrive.” Our customer had grown weary of that. Up until that point, our customers, because it was such a pent up demand and they loved so much what they were doing, they knew who we were, what we were up to. It was a pretty small customer base compared to now. They were very accepting and supportive and understanding and recognized, I think, partly because of things like Kickstarter, recognized that we needed the money ahead of time in order to keep producing it.
It has been a journey. We’ve transitioned from that piece. Again, it was because our customer was willing to do that. I think that there a lot of things that you could try to sell, pre-sell, that people won’t buy. In our case, because they’ve been waiting so long for a company to address these issues, that they were willing to wait.
Felix: Yeah, I guess if there were a lot of alternatives or a lot of competitors in this space, they’re not going to wait, I mean, extra months. They can just go and buy from a competitor instead. Like you’re saying, because you’re the only ones that are serving this particular audience, this particular problem, they were willing to take their time and wait for you because you’re delivering something that doesn’t exist yet.
You mentioned earlier that you couldn’t continue going down this pre-selling route. Can you tell me more about this? Like why did you feel you couldn’t continue just pre-selling the products?
Fran: Our customers were wanting it now. That became much more of a … They weren’t as willing to pay for it and then so it caused a lot of customer service issues. When is it coming? People don’t read a lot of people don’t read. They wouldn’t recognize. As we did this brand refresh in May of this year, and we attracted a whole new segment of customer. Our customer base is really growing. We have this perception of being a much bigger company than we are. People don’t really look into it. They think that we’re on par with the Amazon of the world. Why isn’t my underwear arrived? It created a lot of customer service issues, but also on our logistics end, if you’ve got 500 pair of underwear that are coming in, then you’ve got to be ready for that shipment to arrive, but then you’ve got to get them out as fast as you can. That’s in the midst of your regular shipments. We were also, if there was a two week delay and they ordered stuff that we do have in stock, versus one item later, then we would have to be split shipping and that was an expense that really just felt like we didn’t need to incur as we were trying to cut expenses.
Felix: Okay. When you are going with, when you first started pre-selling your products, how do you communicate a pre-sale differently than a product that they can buy immediately? Do you have to build up the buzz for it? What’s your launch, I guess, approach to selling a product that doesn’t exist yet?
Fran: We typically didn’t introduce a product that didn’t exist per say, but that was a few weeks out of arrival. We would put in big red letters, pre-sale only, shipment by, once we had a delivery date, we would put a date that that’s when it would ship. We tried to make it bold and red and say, “Hey, it’s not shipping.” At the beginning, we would also follow up with an email to people who placed a pre-order and email and say, “Hey, wanted to let you know the item you ordered is on pre-order. It won’t be here for a couple of weeks.” We tried not to push it out beyond two weeks. Maybe three weeks in some instances. For example, when we introduced our bra a few months ago, it’s a bralette, not a sports bra, but we introduced it. We did a sample run. We weren’t sure how they were going to sell. We wanted to get them out there and start fitting them on real customers and get feedback.
We placed an order offered them three weeks out, pre-sale. They sold before they arrived. We had 100% sell out before they arrived in house. That was on a three week pre-order. That was one of the last items that we’ve done like that. Because, again, it was a pent up demand. We have a trusting customer. They know that they’re going to get quality product that fits them well. They’re going to have an attentive customer service experience that’s speaking to them. They can support a brand that really represents their values. It’s who they are. They’re more willing to, “Oh, look. They’re introducing a bra. We’ll wait three weeks. Yeah. I’m going to go ahead and pre-order it.”
We have some new products that are coming out that we will probably do a similar thing with, just to kind of gauge the appetite, to make sure that back then we were able to take that information. These sold out in 10 days, we need to order more. In fact, we had to call our factory and had to have them stop making some underwear and get back on bras because they became such a big hit. We kind of weigh those things before they go out. We’re not going to introduce, for example, if we have a new print coming, we’re not going to introduce that in pre-sale anymore. We did initially. It doesn’t fulfill the same purpose for us, because we know that prints are going to sell well. We know that people are excited.
It’s the new stuff that we can kind of pre-sell. That way the customer that’s been with us since the beginning recognizes what we’re doing, they’re excited about it. They want to get it before it sells out. That was one of our bigger problems in the beginning was selling out too quickly and having broken sizes in our product assortment.
Felix: What happens when you have 100% sell out in a pre-order? Do you recommend taking orders for more than you have in that initial shipment?
Fran: Yeah, it depends on how much we’ve got coming in. We don’t want our customer to be disappointed. We may put a limit on it, if we know we’ve got enough coming in by a certain date, but if we know we can’t get it for three months, we’re not going to let them over purchase. We put a limit on it based on what’s coming in. It’s a terrible customer experience. I’ve made calls to people personally to say, “I’m sorry, but we sold out.” We’re trying not to do that as we grow and mature.
Felix: Mm-hmm (affirmative). Speaking of capacity, you mentioned earlier that you’re at this stage where you’re scaling up the business rapidly and you want to make sure the vendors and these manufacturers that you’re partnering with can keep up with it and can match the demand that you’re getting. How do you determine this? How do you determine if a vendor or manufacturer can scale with you?
Fran: That’s a very good point and something that we’ve had numerous conversations. I’ve mentioned Julie Nomi who is our head of product development and sourcing. She has over 30 years of experience. She understands the relationships and that piece of it, but also is able to … It’s really about who the people are behind the company that you’re working with. If you’ve got someone who you feel like is very professional and knows how to scale their prompt, they’ve got the capacity to expand, then you know that that’s a good partner. You may have someone that’s more of a mom and pop shop and they’re great for doing samples for you or helping you get the fit right. They’re not really set up. That’s not really what they want to be. They don’t want to be much bigger than that. They like their particular niche of that piece of it.
It’s basically figuring out what people are capable of and then what they’re willing to do. For example, the way that we operate, we perfect our product up in Canada, in Vancouver. We work with two factories up there. Both of them are women owned. They’re extremely important critical partners and our partnership means a tremendous amount to all of us. Then as we scale and we start … We realize we’ve got another hit on our hands, okay, well we need to make triple the amount. Then we work with factories in China that these companies, these women work with. They have preexisting relationships. We’ve gone to China. We’ve met with the owners. They’re all medium to small sized companies. We’ve met their workers. We’ve been through the factory. We make sure that they practices in terms of how they treat people but also in the chemicals that they use. We use only certified, there’s a certain certification to make sure that no harmful chemicals were used on our product. That type of thing where we’re actually going in and making sure that they have the capacity.
There’s this one particular company over in China that is growing with us. For example, we were having a slow down because there’s this certain type of stitching on some of our product that’s very important to the wear and the fit and they only had one machine. They recognized that that was slowing them down which was slowing our delivery down. They went out and bought two more machines. That tells us right there, okay, we’ve got a partner that wants to continue working with us, that wants this to be a long term thing. They’re making investment in machinery to accommodate us. That’s a good partner for us. That’s a person that we want to keep working with.
Felix: One thing you mentioned in the pre-interview questions was that one of the key things you want all entrepreneurs to learn or to recognize is that you should stay focused and relentless but don’t miss the opportunity to change course. I’m assuming this kind of goes in line with your idea of having the cash to make these investments. Can you give us some examples of, I guess, this happening for you. Was it that discovery of the boxer briefs, the underwear being the key, I guess, driver for your business?
Fran: Yes, I think that pivoting from this curated and look and making our own shirts that was about how you looked on the outside and pivoting into underwear was a very important move for us. We struggled with it for some time, for a few months. Then finally said, "Let’s make the transition. Let’s focus in on what we’re doing. That was a hard decision, but we haven’t looked back. It was the right decision, absolutely.
Now, in a few years, can we get back to those cool shirts? Maybe, we hope so. We had zero returns on them. We know we created something that is there’s a demand for. We’ve tapped into something that there’s a much bigger demand for and a lot of people wear underwear. That was a good business decision for us. Again, in keeping with the brand and who we want to be that we have something for, not for everyone, but we are for anyone, mentality. We’ve been getting a lot more male customers. We have a lot of trans customers. We want to be that brand that is inclusive, that’s welcoming, that is about being who you are. We want to celebrate the cool factor in individuals. We don’t want to tell people how to be cool. We really do appreciate and value how cool they already are.
Felix: That’s beautiful. I think one of the other potential issues with having a lot of success is that there are just too many opportunities for you to pursue, too many potential places you can invest your dollars, invest your time. Like you were saying, over the years, you’ve especially kind of groomed your catalog. You took things out, you changed the focus onto underwear. You removed those shirts, like you mentioned. What was that process like? Like you were saying, there were no returns on these products. Obviously people loved them, you were selling them, but and I’m assuming they were profitable, but you decided to cut them out anyway to focus exclusively more on the underwear. What was that process like?
Fran: It was basically looking at the numbers. We were fortunate to be accepted into an accelerated program based in Boulder called MergeLane. It was really during that time when were forced to really look hard at the business, at what was working, what wasn’t working and what the opportunity was. I think that that’s the real turning point is being able to recognize the idea of what you want versus the idea of what’s working. Looking a that opportunity, it’s a different category. Lounge wear, underwear is a very different category than shirts. It’s not easy to do both at the same time, especially for a start up because you’ve got to start somewhere. I remember talking with one of the founders of Tommy Bahama and he said, “Our entire company was built on a zip up hoodie,” or not hoodie, “zip up sweatshirt.” That that was how they built their entire company because they found the one thing that was resonating and they pumped all their energy into getting that out there and then that, in turn, fueled their growth.
That was how we looked at it. It just became a numbers game, looking at what’s working and what makes the most sense. People have an average of 30 pair of underwear in their drawer. That was an opportunity for a lot of repeat customers. It was a lot less design time, development time. It just seemed like the right thing and the fact that no one was making boxer briefs for women and now that we’ve expanded into everyone, there was just a much bigger market. Again, it was recognizing the opportunity.
Another thing that, especially start up businesses and companies struggle with is recognizing, especially in fashion, that you can’t expect to be profitable for three to five years. That’s how long it takes to get ahead of the curve to where you’re actually able to make enough money monthly to pay for your operating expenses and you have a margin that’s healthy enough to sustain your business elsewhere. We basically have been making underwear for two years. We’re hoping that our finances will continue along the trajectory that they have and we can continue to grow the company. Recognizing that we aren’t going to be profitable when a company is starting up and they say, “Okay, I’m not going to be profitable for three to five years,” then you’re looking at that and knowing that there are going to be a lot of decisions that you make that are going to effect the growth of your business.
We’ve been fortunate in that we have a lot of, all of our employees and contractors really believe in what we’re doing and understand business and startup environment. They’ve come on at a reduced rate. We have people that we have exceptional terms now with all of our vendors. We have other outside companies that are helping us, everything from law firm to accounting, every one that is part of this, recognizes that they’re betting on the come, they’re betting on waiting to see where we get to. They’re believing in us every step of the way and they recognize that that means dollars. We may get, “Okay, yeah, we’ll pay you two weeks from now.” They’re, “Okay, we’ll give you fourteen day terms.” That’s our agreement because they recognize this. Knowing that a few years down the road from now we won’t have that problem. We’ll be able to just pay everybody. We’ll be a wildly successful, profitable company. It takes time to get there.
Felix: Mm-hmm (affirmative). The focus on underwear seems to be the turning point that is leading you down this road of success. Can you give us an idea of how much, I guess, success or growth came after this change or this focus on underwear?
Fran: When we introduced underwear in September of 2014, so we tripled our revenue at that time in six months. That, we also started the accelerator program and recognized that in order to seize the opportunity, we needed to open a fundraising round and raise the money to fuel our growth, to get infrastructure set up, to move our warehouse. We’re moving our warehouse in two weeks for the fourth time since we started. That’s how fast we’re growing.
As I mentioned, we had five x growth since January of this year. We want to continue that growth. Knowing that underwear was the path for us, it just proved itself. That’s how it played out. Knowing that we hear from a lot of customers about what else they want and need. That’s what we’re working on next. Some of the things that do or don’t make sense. We have a captive customer audience that knows we’re listening, that knows that these things that they’ve been wanting their entire lives.
I mean, we get handwritten letters from 70-year-old women that are saying, “I waited my entire life for underwear that makes me feel comfortable in my own skin.” That’s a big deal.
Felix: For sure. That’s amazing that you have customers, such a wide range of customers. Speaking of fundraising. I want to touch a little bit on the Kickstarter campaign. The goal for this campaign was $75,000. You ended up raising a little bit over $76,000 from 665 backers. This came really close. I believe with Kickstarter, if you don’t reach your goal, you don’t get any of the money. Everything gets, essentially, it goes back to the backers. Was that, I guess, a scary time, when you’re coming or edging right up to that goal right before the end date?
Fran: Gosh. I’m having a little post-traumatic stress thinking about it. Yeah. It was, I lost 10 pounds and slept four hours a night. It was intense. You’re absolutely correct. If we did not raise 75, we raised zero. It was down to the wire. We hit 75 on the 30th day. We had been watching it. We learned so much. I can’t even. What we know now, as opposed to what we knew then, it’s just incredible what the three years have, how we’ve grown individually as a company and personally.
We learned a few things. One, had we started with at least a Facebook page several months prior to launching our Kickstarter and gathering emails, that was a big, big miss for us. We didn’t have the following, the network that we could have had had we done a little bit of work before we launched.
We, in fact, launched our website, our Facebook page, our Twitter account, our Pintrest board and our Kickstarter all on the same day. That was craziness. Then we basically, every day, come up with a new marketing ploy to get it out to our network. Then our network would reach out to people. That was when we started recognizing that what was resonating was bigger than the shirts. That was about the brand.
That was interesting in that people were buying a lot of our lower priced items with just our logo on it. We did almost as much as our button up shirts that we made. It was really the lesson that we knew it was palpable. It was this fervor. We knew we had a brand. That’s not what we had set out to be. We knew we had to just kind of get through the Kickstarter, raise the money, get that stuff into production, regroup about what we were going to do now that we had this instant brand.
Felix: Awesome. Amazing story. Thanks again so much for your time, Fran. Tomboyx.com, again, is the website. Where else can the listeners follow along with what you and I guess your business are up to?
Fran: We’ve got an awesome Instagram following. It’s tomboyxstyle. You can follow me on Twitter @fdunaway or our tomboyexchange is the Twitter handle. We’ve got a lot of really exciting stuff coming in January. Watch for not only new designs and new product, but we’ve got an incredible video with a celebrity that we’re coming out with, that we’re very excited. That will be kind of our anthem film. We hope to get into a lot more video stuff. We will remain online. We’ll remain an eCommerce place for now, because, you know, it’s all about margins. Yeah, we love hearing from people. Feel free to check us out online and firstname.lastname@example.org if you’ve got any ideas or suggestions. We are, as I mentioned earlier, we are great listeners. We want to hear from people.
Felix: Great. Thank you so much for your time, Fran.
Fran: Thank you.
Felix: Thanks for listening to Shopify Masters, the eCommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit shopify.com/masters to claim your extended 30 day free trial.
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