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Hey there, freedom fighters, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How does a founder bootstrap a profitable business by putting his mission before his product? Michael Radparvar is the co-founder of Holstee, which sells shareable art. They sell things like letter-pressed greeting cards that say, “Live your dream,” wallets that are up-cycled, and a T-shirt that has a pocket in an unusual place, as we’ll talk about in a moment.
At the heart of the company is a manifesto that the company says has been viewed over 60 million times. I invited him here to talk about it. Hey, Michael.
Andrew: How profitable is the business?
Michael: We’re at a point where we’re not… we have a little bit more buffer room than we did before. We started off… we’re still very, very resourceful, we have to be very scrappy, but we have space for being creative now. When we first started, we got office space from other people. That’s how we literally got off the ground. We went around and asked people if they’d allow us to work out of their office, when it was just two or three of us. As our team grew, we were lucky, because the revenue is starting to scale with us, and we were sharing space. I’m actually, for the first time, for the first week, standing in a space that is our own home. We’re really excited about it. We just moved to Brooklyn. That’s a really exciting time, profitability-wise, when you are able to swing something like that.
Andrew: You guys are profitable, but not insanely profitable?
Michael: We’re not insanely profitable, yeah.
Andrew: What kind of revenues are you generating selling greeting cards and T-shirts?
Michael: Last year, for the first time, we surpassed a million. We’re on track to exceed that this year. So, we’re really focused on doing investments in the future of Holstee, right now. That of course is going to impact our profitability, but we see a vision of what we want to create in the long tail. It’s much more than even just shareable art or greeting cards. This whole [??]. Behind me there’s our line, which is encouraging mindful living through design. That’s our vision, and that’s what we want to create. We want to approach that from many different facets.
Andrew: I want to get into what the manifesto said. I’ve got it here up on my screen and this T-shirt that started it all, but let’s talk a little bit about what you did before, just to get a sense of how you got here.
Andrew: It was one day that you were excited about going to work. In fact, you were videotaping yourself as you were going in to work this day. Why were you videotaping yourself, and what were you headed to do?
Michael: My brother and I had decided we were going to actually go in and give our two week notice at that point. We had been working on a couple different projects, with our co-founder Fabian, at that time. We realized that we were both in a position and a time in our life where we just wanted change, and it was feasible for us to go in and do that. Fabian was still in school at that time. We had been talking the night before. Literally, on Friday, it was just a crazy idea. By Sunday, we had talked ourselves into, “OK, let’s make a pact. Let’s do it Monday morning.” “You’re going to do it?” “Yes.” “I’m going to do it?” “Yes.” Then throughout the whole weekend, one of us was up on it, one of us was down. By Monday morning, we had locked it down. I think we both has this insane nervous energy you get when you’re about to do something kind of crazy, but really exciting.
I remember, I got to the office, and I had literally had just set down my laptop, and was getting ready, and I got a call from my brother. He’s like, “I did it. I saw my boss, and I ….” I was like, “Oh, my God!” He was like, “I didn’t even put my bag down. I walked right into the office…” I was like, OK, the pressure is on. I better not mess this up, because Dave already did it. It was that first week when we, I remember describing it to each other, when we were talking about it as, almost feeling like we’d unplugged from the matrix a little bit. It was like, “Oh, wow!” It was a different form of reality, like we felt like we had much more control, but also we were much more accountable. All of a sudden we better make this work now, because we don’t have a regular income stream. We had to just really rethink. We went into survival mode that week, after that video.
Andrew: The company that you worked for, you had a good job. You got to watch big companies and how they operate. You also got to watch one of the problems in a big company, which was a cultural issue. What was the cultural issue that you noticed?
Michael: In other companies that we worked with, or in general?
Andrew: Yeah, you were working at a company that wanted to make a change, but the culture didn’t jibe with the change that they wanted to make.
Michael: I think that the companies that we were working with, or the…
Andrew: Well, here’s what I have in my notes. I was curious about this. I think it fits in with the direction that you took your company, when you finally launched it. It was, I was working at a telecommunications company and was on a conference call. We had been working with them for three to four months, and they were wondering why we were not seeing bigger results. The problem was, it wasn’t being supported as a cultural change, the changes that you guys were making. They wanted people to get behind a service culture, when they weren’t even embodying that.
Andrew: What was that? Help me understand that.
Michael: This was a really interesting scenario, that I think it’s a lesson that I’ll take with me forever, where ever I am or whatever I’m doing. It was this idea that they wanted to create a true service culture, at least outwardly, to their customers, and from call centers, or in retail shops. As we were talking, interviewing people at different levels within the company, we found that they actually didn’t have a very good service culture internally, in terms of how the relationships between managers were working with middle managers or front line employees. What I saw as a pattern in a lot of different companies was, when that didn’t exist, it was really hard to create an outward service culture.
It really has a very strong trickle down effect. A lot of times, when we saw that there was trouble or not a lot of traction, in terms of improving the customer service on the front line level, the actual interaction between the end customer and the service employees, if you trace that up within an organization, you can see how that might have happened.
In companies, and I think Zappos is a great example, and they pride themselves on that a lot, they have an incredible internal culture. That just explodes out into their call centers, into their service culture.
That was something, even as we were starting our own company, I think it’s a lot within our nature to want to create a culture like that. It’s something that is definitely very, very clear in my mind.
Andrew: I see. This was, you were working at a company called, Achieve Global, is that right?
Andrew: That’s where one of your clients was trying to make this change, but when the culture doesn’t support the change that they want the people to make, it just falls apart. It becomes very thin.
Andrew: OK. All right, so you quit your job and you had a business idea. Was it just a T-shirt idea at the time?
Michael: Yes, it was just…
Andrew: What was so special about this T-shirt, that got you and your brother to quit your job, and partner up with your best friend. Fabian?
Michael: I think we all had this feeling that it would be something more than T-shirts eventually, even though we had no idea where that would go, or where that would lead. That was pre-manifesto or anything. We were all very hungry for a lifestyle change. We were hungry to create a life for ourselves that we could do something that was meaningful and fun, and work with people that we wanted, in a culture that we were more excited about. I think that having that unique project, the holster positioned pocket on a T- shirt, was just a vehicle for getting there for us. It could have been anything. It could have been a digital product. It could have been a lot of different things.
I think that as we learned more and got into that space, we learned more about the process of making things, and creating things. And, just even the impact, if we’re a small T-shirt company, we learned a lot about cotton, and how cotton requires a huge percent of the world’s pesticides, but represents a very small percentage of the world’s overall crops. Even if we’re going to be creating a very small run, we don’t want to contribute to that in any way. We want to be very proud of all the ingredients we always use, and the way we make things, and that kind of set the foundation for how Holstee was going to grow.
Andrew: I see. Okay. So I’m going to ask about what the T-shirt looked like, but you’re saying, “Hey, Andrew, we just wanted a lifestyle change, and we wanted to do something meaningful in the world. If a T-shirt was our entry into that new path, then that’s what it was going to be, but it’s not about the T-shirt.”
Andrew: Okay, but the T-shirt did have something, as I said at the top of the interview, a pocket in an unusual place.
Andrew: Can you describe where it is?
Michael: It was literally a holster position pocket. Sorry if it comes out blurry, but you can imagine if you put in a pocket right here on a T-shirt. My brother actually created the first designs and my grandmother prototyped them. She has since become our chief prototyper. She lives in California. Even when we weren’t there, she would come up with these crazy designs for putting a hidden pocket. We ended up just keeping it pretty simple, but it was just this idea of having a pocket that was functional, because at the time also companies like Threadless [??] were blowing up, and huge fans of what they’ve done, but we thought they may be something interesting about creating shirts that aren’t just another silkscreen T-shirt, and maybe there’s something we can do around the form or the function of it.
Andrew: I see.
Michael: That’s what got us…
Andrew: So it was kind of a functional T-shirt. The pocket was right by the waist where your arm would fall down…
Andrew: … so that if you wanted to grab something out if it you could easily.
Michael: Right, as opposed to a chest pocket, where you bend over and things fall out right away, this you can actually put something in and not worry about it jumping out.
Andrew: Is that where the company name came from? Holstee has to do with T- shirt and…
Michael: Hoster, T-shirt.
Andrew: Holster. Got it.
Jeremy, in the pre-interview asked you, what’s the first step that you took. It basically was you guys sitting together, the three of you, on steps of Union Square. You were coming up with what you stood for. Why do it that point? Why not say, “Hey, you know what? Let’s just figure out how to make a T-shirt, how to get customers. Once we have a little bit of revenue, and some breathing space, and maybe our [??] profitable, then we have the luxury of doing a manifesto.
Andrew: Why do it so early?
Michael: Well, when we first wrote it, we started doing it more as a personal journey than as a manifesto for our company. It ended up going on the about page of our website, because I think we didn’t want to forget it. We wanted to be very connected to it. We sat down and wrote it because we had all done this crazy stuff. Fabian [SP] had been giving up really great opportunities to come and join Holstee. Dave and I had quit very stable, secure, well paying jobs that, at the time, at some point of our time at those jobs, that was some type of a dream job, in terms of what we were getting. We all realized that this wasn’t for us at some point.
We wanted to start. We were like, “Why are we doing this right now? It’s 2009. The recession is in full swing. The company that I was at just laid off over 100 people. Yet, we feel it’s important enough for us to go in and totally disconnect and shake shit up, in a time when things are very unstable already.” We wanted to write down, what is important for us. Our prompt was basically, let’s define what it means to have a successful life in non-financial terms.
Andrew: Ah, so this was internal for you, and then to keep yourselves accountable you put it up on the about page. Then this thing, I’ll ask you in a moment how it took off, but first let me make an adjustment here. I want to read part of this. I’m not going to do it justice. Someone in the comments, please link to the actual image, because it’s beautiful in addition to being inspiring. I’ll just read a few sentences.
It says, “This is your life. Do what you love and do it often. If you don’t like something, change it. If you don’t like your job, quit. If you don’t have enough time, stop watching TV. If you’re looking for the love of your life, stop. They will be waiting for you when you start doing things you love.” That’s essentially it. Boy, it’s actually giving me goose bumps right now as I read this, and I read it in preparation for this interview.
The idea was not even to make it look this beautiful. It wasn’t to make it an object that was a sharable object, as you say.
Michael: We had it on our site, just in a text form, for the first three or four months. We were literally just getting into this whole space. The idea of putting typography to text was something that never occurred to me. My brother, who is much more design inclined, he’s not the lead creative officer, I’d say, for Holstee, everything from product design to web design. He suggest that we start looking to working with a typography designer and seeing what their approach would be with these words. So, we put out some feelers, literally had no cash. We’re just like, “If anyone wants to do this, we’d be really… you know. We got connected with a great typography designer, named Rachel Brush. They had a couple iterations back and forth. Dave was like, “You know, I was thinking something more like this.” Then after a while, they came out with what just felt right. It felt good. It seems like it has presence and power. It brought significance to the words that were also very important for us. Then we put it on the about page of our website from there.
Sorry, I think I didn’t answer part of that question though.
Andrew: No, you did.
Andrew: I was wondering about the evolution of this.
Michael: Oh, right.
Andrew: I see, it started off as just basic text, that made you guys feel empowered and gave you guys a sense of direction. Then someone decided to make it into this beautiful work of art, and then it was shared.
How did you come up with this? It’s not easy to figure out what you stand for. Some people go out to India for years, or travel to mountain tops, and sit, and quietly try to ponder it, and then don’t come up with anything. How did you figure out what the three of you stood for and what your company would embody?
Michael: We spent, actually, even to this day, we spend a lot of time talking about exactly that. Even though having written down that manifesto early on, of what is important for us, that really cemented the type of company we wanted to have, the type of culture we wanted to have, and even the way we wanted to make our business decisions. But, it’s still a little bit of an evolving process, I’d say. So, we continue to have discussions around why does Holsee exist, what’s the purpose of our company.
I think that early on we wanted to write something down, just because for us…
Andrew: How do you do it? Do you guys just all start brainstorming and saying, “Look, we’ll write down whatever comes to our mind. What do you stand for? What do you like? I like ice cream. OK. There are no bad answers. Let’s write down ice cream on a piece of paper. What else do you stand for? Well, quitting your job if you’re not happy with it. That’s what we did and we recorded ourselves going into work to do that. Great. Put that down.” What else? Is that it?
Michael: I think that a lot of people a lot of times ask, how did it spread the way that it did? I think that the most important thing is, don’t write it for anyone else, write it for yourself. Don’t write it with the intention of it going well, because that’s the absolute recipe for it not happening, I think. Be authentic and really, just challenge yourself. Give yourself time and space to think deep, and do it with people that you really feel comfortable with… almost like, taking that journey on, if you will, for lack of a better term.
David and Fabian are two of my best friends. I think that we’re all very, very close. For us, having that discussion together was just very natural. We all kind of pushed each other and challenged each other, like, why is that important, or what do you feel about x, y, and z? We would just bounce ideas back and forth. It really just started as a mash up of different values. What are the things that are important for us. It organically flowed.
I think Fabian was pushing with a lot of the question asking. That’s one strength that he brings very strongly to our team. David was able to take a lot of the different words, a lot of the different lines we had, and I think he got a good rhythm going with the manifesto.
The whole process, overall, was very organic. Nothing felt forced about it, because we didn’t actually even know what we were writing when we were writing it. It was just, let’s just write down the things that are important for us, and it just came together.
Andrew: There’s a sentence right here in the middle. It says, “When you eat, appreciate every last bite.”
Andrew: That’s a little too simple. let’s keep that out.
Michael: Food is a huge part of our culture.
Andrew: It is.
Michael: One of the most important things in our new office was having a place where we can cook. It’s not even a big space. The kitchen probably takes up a fifth of our office space right now.
Andrew: Isn’t it cool when it’s your company, and you can say, “Cooking food at the office is important to me.” I get to do that. Anyone else, any other job would say, “That’s something you should do at home,” but this is my company. I get to do that.
Michael: We even have, every Thursday, we have one person who cooks for the entire team every week, and we rotate that. We just find that bringing together people around food is so, and I think this is something that’s becoming very common, especially in companies of our size. Even larger companies are starting to seem like food-centric. Google has a thing, never be more than 150 feet away from food, or never more than 150 inches from food, I don’t know. We have, definitely, a very strong food culture. We keep food stocked. We’re making food all the time.
I think that also started from when we first started our company. Me, Dave, and Fab [SP], we just didn’t have money to go out for lunch. So, we got a rice cooker. We found the extent of a rice cooker is infinite, based on your own creativity. We made everything from obvious rice, to pasta, to [??], to omelets. It’s kind of continuing.
Andrew: All right, you got your mission, you got your buddies, you got your first product that grandma helped put together. Now it’s time to get some customers, and as I understand it you’re walking from store to store trying to sell your T-shirts to stores. Is that right?
Andrew: Why that direction instead of the internet?
Michael: We were basically trying everything. Trying to see what sticks. We saw a wholesale as not necessarily the ultimate route we wanted to be in the long tail but as a brand enhancing tool so the right stores with the right presence could get us in front of people who might not have just been stumbling on us online. So we also thought that as an online company it’s really important to have an experience of getting that person to person feedback and that would be the best way to get it. We actually learned a lot in that process.
Andrew: What did you learn from going to stores in L.A.?
Michael: Well, I remember we learned a lot about our pricing was first of all way off. We weren’t that familiar with the level of margin people were expecting. Everything from selection size. That a lot of stores would rather have a large line to choose from rather than a couple of one-offs. What else? Even the types of fabrics we were using, the colors. It was just great instant feedback from people who do this for a living. They’re just looking at all different types of stuff and buying for a living so for us we’re able to take those learnings very quickly and apply it to the next round of wholesale tees that we have.
Andrew: I see. What did you learn about the price?
Michael: We learned that we were making probably what was the most expensive T-shirt ever made. We could never get to the price they need for wholesale.
Andrew: What price did they need and what price were you offering it as?
Michael: They want at least a 50% margin so if you’re selling a shirt for 30 they want to be able to buy it for 15 which means you better be making a healthy amount before even then. We needed to cut our costs by 30 or 40% to even get there. It really comes down to the fact that we were using materials [??] even 3 years ago the scope of materials that are available now was very different then. We couldn’t even find T-shirts that were made from organic con that were a good fit. Now you can walk into any American Apparel, pick up an organic cotton tee. At that time they oxide [SP] T- shirts so we had to make our own patterns so they were a good fit.
Andrew: How do you even know how to find the material and then how to find someone to do it for you, to sew it up?
Michael: This was all trial by fire. We went from person to person saying, “Before you get to me, you have to talk to this person about the fabric. Before you get the fabric you have to, before you get to me you have to get a pattern made” so we were like “wow”. We thought we were about 3 months away from getting our T-shirts made, we were actually about 9 months away.
Andrew: It took you nine months to a year to have a T-shirt made?
Michael: When we started doing everything from scratch, it took us that long. That was our first time making it so we had a lot to learn. We just kept realizing, “Okay, this is going to take us a little bit longer than expected. I think if we did it now, we could do it again in half the time and a quarter of the costs probably, but that was just learning that anytime you do something for the first time, it’s going to take twice as long, cost twice as much. That’s pretty much what we found at this point.
Andrew: Planet Money, the NPR show, tried to make T-shirts from scratch and showed their audience the process. Did you hear it?
Michael: Yeah I backed that on Kickstarter, it’s awesome.
Andrew: They ended up going to Kickstarter but they bought their shirts from Jockey because they just couldn’t go through the process. It was too tough to source their own cotton and then to have it made. The same thing that happened to you happened to them except they were going to go all the way back to cotton and make it from there. They just gave up, it was too much. They decided to just get a T-shirt from Jockey and tell the story of how T-shirts are made instead of showing you how to do it. I think it’s Jockey.
Michael: Yeah it is huh?
Andrew: It is a really tough process. Long time. You quit your job so how are you supporting yourself?
Michael: We got really creative. We cut out pretty much every single cost we could. I don’t think I bought a new piece of clothing for an entire year and a half. It was just wearing wholesale stuff. As we were getting prototypes just wearing those and whatever I had from before. We did everything from stop going out to restaurants almost immediately, and we started realizing you could stretch your money out very far if you’re cooking smart. You can actually eat very healthy also. Things like Air B&B had just come onto the scene. I think were one of the first people in New York to use Air B&B and so we got a lot of really great reviews early on and that helped us to just get a lot of traction. As a result, we met the founders, Brian and Joe. They stayed at our place a couple of times. That was kind of cool. That was just perfect timing, because otherwise our biggest expense in New York, of course, is rent. We were able to pretty much eliminate that for the first year.
Andrew: They told me that, in the early days, to figure out their product, they would go and stay in people’s homes in New York, because New York was so popular for them, and ask questions and figure out their product.
Andrew: You were one of the homes they stayed in.
Michael: Yeah. Yeah, totally.
Andrew: It was the three of you living in the same apartment, and also renting it out on [??].
Michael: For a while, yeah, there was a time period where all three of us, it was a two bedroom apartment, so we were all crashing in one bedroom for a while.
Andrew: That’s crazy.
Andrew: There’s an HBO show called, How to Make It in America, where these guys are essentially trying to get into the clothing business, like you. You watch them for episode after episode, and I just gave up on it after a few episodes. I said, “These guys are crazy.” How did you know you weren’t crazy? How did you know that this made sense and that this was a real business, when in nine months you’re not selling?
Michael: We had other products coming on, so it’s not like we had nothing to sell for nine months. We had a round of prototypes that we did, but we were pretty much making no money for the first six to eight months, I would say.
Andrew: So, how do you know you’re…
Michael: …on to something?
Andrew: …not on the wrong track? Not another guy with it, because there are tons of people with T-shirt company ideas that never went anywhere and should have given up sooner. How did you know you weren’t one of them?
Michael: I don’t know. We just had this unbreakable momentum for some reason. I think we were just so excited to be doing this. It was summertime when we started. We just had such incredible energy. We were working on Holstee as a side project before, and when we started doing it full time I think people really changed how, in their minds, how they would support us. Because, wow, these guys are for real now, they’re not just some other side project who want to do this. A great advertising agency on Fifth Avenue, called Arnold NYC, put us up there for about a year and a half, and we just got a great space to work out of, and we started bartering with people. So, even though we didn’t have money, we’d say, “Oh, we have some experience doing some creative work or web design, maybe we can help. The pattern maker, we basically helped put up her website, in exchange for her making a pattern for us.
I feel like we just… we definitely had these points where I felt like shit was just hitting the fan and we weren’t going to be able to get out of it, but there’s a story that Dave tells. Imagine that we were undersea and we’re swimming, and swimming, and swimming, and you’re running out of breath, running out of breath. Then you finally get to a red balloon, and you get a little bit of air. Then you take that and you swim, and swim, and swim. You’d always get to the next red balloon at the last second, but you have to swim like crazy to get there. The last seconds are the most important to swim the hardest. We definitely had those moments we didn’t think we’d find the next red balloon, but we had a mix of working crazy hard, being very resourceful, and a good amount of luck throughout the process. And, we also realized that once we quit our jobs and started Holstee, we could never go back. Once you’re unplugged, it was really hard to ever think about going back.
Andrew: You wanted a lifestyle. One of the things that I know about you is that you don’t have an alarm. You don’t need one to wake up. You wake up. What’s the deal with the alarm? I won’t tell your [??].
Michael: This started about the time that I started Holstee. Unless I have to make sure that I’m up to catch a plane or something, or I know I have an early call, I don’t really use an alarm. I found that if I really concentrate, this is going to sound so hokey and ridiculous, but I find that if I concentrate on a specific time, like I need to wake up at 8:00 a.m., and I know what time I’m going to bed, how many hours I have, I very consistently just woken up, pretty much within like three to five minutes of that time. I find that now there are all these things, quantifying your body, sleeping patterns, and food, and I forgot there’s actually some sort of phrase for…
Andrew: A quantifiable self. [??]
Michael: Yes, a quantifiable self. That’s very big right now. I think what that’s showing is there’s obviously times when you want to wake up, there’s times when you want to continue sleeping, your body can regulate that very well. Once I got into this pattern, I just found that waking up with an alarm is really disruptive, and I don’t feel that great that day.
Andrew: What I was getting at there is you are living, as tough as it is, you’re at least getting to invent your life, and try things like this. You also, in addition to selling through stores, you said, “We were trying everything,” one of the things you were trying was selling online. Do you remember your first customer from when you sold online?
Michael: Our first customer was one of our really good friends from where we grew up in Providence, but I have to actually go back and find… I remember there was a time when our first customer that we didn’t know, and me, and Dave, and Fabian were all sitting at a table, and an order came through. We were like, “Whoa! This name is unfamiliar. Do you know this person?” “No.” “Do you know this person?” “No.” We’re like, “Oh, my God, someone’s buying our stuff. Not just because they want us to eat tonight, but because they actually think it’s cool.” That is a really magical moment for any company I think.
Andrew: I bet. [??]
Michael: When it’s no longer just family and friends that are buying your stuff, but other people, that is pretty remarkable.
Andrew: Who built your online store?
Michael: We use Shopify as our back end. Dave and our lead developer, Tom, they do all of the kind of build that we’re … next, the end of this week, early next week we’re going to be releasing a whole new refreshed look that’s going to better reflect the direction that Holsee’s going now, in terms of encouraging mindful lifestyle.
Andrew: The whole thing is built on Shopify?
Michael: The whole thing is built on Shopify.
Andrew: Why didn’t you build it yourselves from scratch? Why connect with someone else?
Michael: We started off actually… We did the reverse of what a lot of companies do. We jumped right to Magenta thinking we don’t want to pay anyone monthly, we want to own this, da, da, da, da. We realized pretty quickly… Well, first of all the developer we were using built half the shop and then we never heard from him again. We had paid him in full, which is also one of the things you learn along the way.
Then we got stuck trying to figure it out. We brought on some other developers who helped us do it, but even once it was finished, we realized how dependent we were, because it’s very developer focused.
When we first started with Shopify, we didn’t have a developer. We just brought one on, because we wanted to do things that were much further advanced. With Magenta, to do the simplest things, to do little tweaks, you actually had to have a developer. At that time, David wasn’t coding that much. We realized that, OK, it was just really frustrating even to add a new product photo.
Andrew: I see.
Michael: So, we decided at one point, okay, this isn’t worth the headache. Let’s look at other options. We tested Shopify, and we were like, “Wow. We can actually start to focus on our company, and not credit card processing, and the site being up or down, or other things.” We built a great relationship with them, and they’ve been so supportive and helpful.
Andrew: One of the challenges that you have is balancing your mission to create great products, but also sustainable products. There was one issue that you had with a backpack.
By the way, I should tell the audience, you’re still doing construction on this brand-spanking-new office. You asked the construction people to please pause, so that we could record this interview. I appreciate that. Are they coming back in? I know that we’re now at the top of the hour.
Michael: Yeah, they’ll probably be back, I’d say in 30 or 40 minutes.
Andrew: Plenty of time. So, the backpack is a good example of the difficulty of making products that use sustainable material. What happened there?
Michael: It’s been David’s dream, I think, to design a backpack. We had a lot of different prototypes going. It’s one of those products that we were really determined to only use our favorite types of materials, things that we really wanted to see, making our dream backpack. We didn’t really want to make so many compromises along the way. For sure, we didn’t want to use any plastic. We were making out of a really nice hemp canvas, which is also not that easy to source in the U. S. That’s a whole other topic.
As we started getting prototypes together, again we realized that if we wanted to make this backpack the right way, it’s essentially going to be very cost prohibitive. We aren’t sure if we’re at a point where we can actually scale to make this backpack at a price that we think makes sense.
So, we had basically been going around and towards that. I think David still wears the prototype backpack to this day. We’ll come back to it, maybe some time in the future.
Andrew: The backpack would have cost $300 to $400.
Andrew: That’s partially because, let me see what I have in my notes, you wanted the backpack, no plastic, all hemp canvas, biodegradable, all natural beeswax to create waterproofing. In the U.S. though, it’s illegal to sell hemp and to bring it into the country is going to be very expensive. So, that’s the big challenge.
Michael: It’s illegal to grow hemp. Selling it, because they import it all, it gets very expensive, and I think that right now, the tides are starting to turn a little bit. A lot of people are saying that there is a lot of value in growing hemp. And hemp, just to be clear, is very different from medicinal marijuana that someone might smoke. If you tried to smoke just the cannabis hemp that they use for creating apparel you would get sick. So that was just a material that we were really interested in. And from what we learned about crops and which ones are most sustainable and have least impact, hemp consistently ranked at the top of the charts; so we were so determined for a very long time to use it. I think we ended up using, well, I know we ended doing a blend of hemp and organic cotton in the last round of Holstee tees that we made. But it’s something I think we’ll be hearing more about in the future.
We understand now the fundamentals of the business. They’re in place. You guys have a product that you can actually sell at a price that’s reasonable. You got your first customer who you didn’t know, and now it’s time to really build this thing out. How do you go from that one customer you didn’t know to a business that’s now doing seven figures in revenue? Where do the rest of the customers come from?
We got very fortunate, I think. The manifesto is what put us on the map in a very big way. It was funny because…
How did it spread?
I don’t know exactly. I know that it’s definitely kicked off via Tumblr. I remember because I remember we were sitting around, and we got an e-mail or a message from a friend saying “Hey your company manifesto…” I didn’t even think people were calling it a manifesto that much at that time. “…is blowing up on Tumblr, and you should check it out.” And so we went. We were really surprised because no one really even knew about our company at that time. Turns out, they still didn’t because we didn’t write the word Holstee anywhere on the manifesto.
From what I can see, it’s still not on there. It’s just a really nice manifesto. It looks beautiful; it’s copied in so many different ways. It doesn’t have Holstee on it anywhere.
Well, it depends on which one you look at.
OK, so you started to add it on there.
We started to add it on, yeah. So what happened was eventually maybe that had a positive impact because people kind of got curious. Like, “OK. Well, where did this come from?”, and they started to hunt it down. In Google, because we had a lot of text on our website, if you type any of those sentences it would link back to Holstee. About three or four hundred comments down, people would be like, “Oh, it’s this T-shirt company in Brooklyn, Holstee. Check it out.” So if anyone actually got that far they’d find out. It was just insane. Within a six to eight month period, it went from pretty much just people coming to our site and commenting that it was cool to just exploding. It went first from Tumblr, and when it went to Twitter, that’s when I feel like it started reaching to different countries. We’d see people tweeting in all these different languages, and it would just have the word Holstee.
Andrew: My wife who is a do gooder, said, “Oh no, this is Holstee. Oh great, great T-shirt company that is made out of hemp.” Oh, what do I care? But then I heard you talk about the manifesto and heard other people who recognize the manifesto felt like you stood for something that they wanted to see expressed in their companies, companies that they work for. That they want to help spread the word about his idea that you don’t just go to work to make money, but you go to work to make a life that you care about for yourself and other people.
It seems like you started to promote this and to talk about it in a way that other T-shirt manufacturers wouldn’t have. Does that seem right, or am I just making too much out of this?
Michael: I think that we always saw the manifesto. . . We were actually very hesitant to even print it or to sell it. Actually, we had to almost be sold on that idea by our intern who was just watching our analytics and saying, “Hey, there’s a lot of attention and requests around the manifesto. We should just look into. . .” We had been literally getting tens or hundreds of requests to print it up and to build it and sell it as a poster. I think it took us like three or four months of, “No, we’re a T- shirt company. I’m not sure if we want to.” When we finally decided to do that, it was definitely a good call. It quickly became like one of the most requested items on our site.
Andrew: When you decided to do what, sell it?
Michael: To sell it as a letter-press poster. I think it also took us a while because we just didn’t want to do another like a silk screen. We wanted to print it in a very special way. And so we had just been learning about different methods, and that’s when we first started getting to letter- press printing. Letter-press printing, for people that don’t know, is literally when you take a sheet of paper that is made out of cotton rag, paper that has bites if you push into it. Certain parts of it would get indented from the plate that’s made. And so you create like a massive plate, metal plate, and it just goes down on each paper, so it’s creating a literal imprint on the paper for each one. That creates a very beautiful effect on the paper.
Andrew: Holy crap! I am now researching this to try to make a point because I wanted to bolster my statement here about how the message spread, and you guys didn’t just allow this then to be a viral thing that spread and got you some boost in traffic. But you allowed it to be what you stand for and to be what other people stood for. I found this Washington Post articles that says how the Holstee manifesto became the new “just do it”. As I’m reading it looking for that point to show you, I see a quote from my wife, Olivia, that says, “People do look for meaning in a different way in the things that they buy now.” It says, “Said social business strategist, Olivia Khalili of CauseCapitalism.com.
Andrew: They want to feel like, “My product can do more than just be a product.” And that is what I think you did. You didn’t just let it go out there as a message. Even she’s now talking about it here.
Michael: Wow. I didn’t make that connection. Yeah. I think that is . . .
Andrew: So how did you do that because I don’t want to leave people with the impression that it was all luck. Frankly, it was a lot of luck that people on Tumblr picked it up and started spreading it, that others started to use it on Twitter. But what I notice is you made it bigger than luck. You took this luck and you built on it, but I want to understand how you did it. How did you get people like Olivia to understand that this is a company that spoke for them and not just some random thing that was out on the Internet.
Michael: I don’t know. Maybe, I think that it had a lot to do with just maybe the way we were building our company, the types of things that we were putting out into the world. In terms of creating awareness, in terms of my role as chief storyteller, since day one I have had two things That was really important for me. The first thing is create awareness, and the second one is to create goodwill or to generate goodwill, basically.
Andrew: So how do you do that?
Michael: I think that comes from different types of initiatives or the things that you do as the company or the messages that you put out into the world or the actions that you take that are not just necessarily related to selling your products but everything around that.
Andrew: Give me an example of how you do it. I want the person who’s listening to us who says, “You know what, I stand for something in my business, too. I quit for a reason, and it wasn’t just because I didn’t like my cubicle. It’s because I wanted a life that I was passionate about and this message that I want to spread around the world.” Great. They write it down. Now how do they get people to hear about it, to feel it, to understand it? What did you do as a chief storyteller that got people to feel this way?
Michael: We did a lot of different kind of wild things. We did everything from printing out bookmarks and putting them into all the best sellers at Barnes and Nobles…
Michael: … just with message like, read more, learn more, change the globe. That was the way we tried to do some Guerrilla Marketing too. On Black Friday, two years ago we actually decided to shut down our website on Black Friday, rather than, it’s so common for every retailer to try and compete on having the lowest price, and sell, sell, sell. We realized that’s kind of the antithesis of why we created Holstee, and if we’re going to take a big revenue hit, that was the way we wanted to respond.
Michael: I think there’s a lot of different ways to approach something like that, but we took a very non-conformist approach with very atypical decisions to typical situations…
Andrew: I’m seeing some of it. I don’t know that the Barnes and Noble thing would have gotten you, tell me if I’m wrong, a big response, but I do see your Black Friday response in Good magazine. This is something that they’re especially proud is going on. From others, BuyPositively.org seems to have talked about it and other sites. What else did you do that spread the message of what you stand for?
Michael: We did a line of, and we didn’t make any money off this, this was just a fun project, adding another project or not making money at a time when we weren’t actually already making money. We did a line of up-cycled T- shirts, where we went to the Salvation Army, picked up a lot of different T- shirts of all different sizes, that actually already had prints on them. We thought it was really fascinating to explore the idea of those shirts that Salvation Army have a way better story, and have lived much richer lives than some stale shirt that they pick up at The Gap, and for that reason they’re worth more.
So, we made three different prints, three different silk screen prints, and printed them right over the design, or next to, or around the design already on those shirts. So, on those shirts, we had everything from a print that says, “Everything has a story,” to something that says, “Fuck fast fashion,” and all the Fs were blocks. I don’t know, I think doing things that are out of the box…
Andrew: Where did you sell these T-shirts, or how did you give them out, or promote them?
Michael: We sold them on our site. We got some early stage, really good press about it. I think that if we had continued to do our specific… things like that, there are actually a lot of different things that fit into that scope of just doing small projects, or side projects, or initiatives that are more about generating good will, and less about trying to drive a specific sell.
Andrew: That’s what I’m getting at. That’s what I don’t see enough about you guys online, that it’s not just that this manifesto exists, and it’s spread, and now people are buying T-shirts. It’s that you express it in all these different ways. Now, I’ve got to find out, how do you do it? Before I even get to, how do you do it, you’re a guy who’s coming up with creative ways to use a rice cooker, who is bringing people into a two bedroom apartment, which three of you already are in, to make money. Don’t you at that point say, “I don’t have enough money to live right now. Let me just get enough to buy my own space, or to feel like I don’t have to eat out of a rice cooker, and then I could do these projects that are fun.” Wait for the responsible moment. Why didn’t you do that?
Michael: I think that none of us felt like there was anything we were missing at that point. This was exactly, we were literally, and I think one of our family friends, Sally, always said the funniest or the best that, we’re the happiest people, there’s no one happier to eat rice and beans every day. That was literally us. I think we were at a point where we were just like, yeah, it would be awesome to have a little more play room, to have a little more money, but at this stage of my life where I am right now, and I think that we all feel the same way, is we’re pretty lucky, all things considered. We have a life that we really enjoy living. We work at jobs, at companies, that we really believe in. We get to do stuff that’s very creative, hands on, in a collaborative way. I think that, from where we’ve come from, we’ve seen other directions other friends go, we see a lot of people trying to move into this direction, even if it means you’re scaling back on certain things. Those things that we scaled back on, that felt like sacrifices at the time, have just been very positive lifestyle changes.
For example, we stopped taking taxis. Oh, that’s a sacrifice. We got a bike and then we started biking everywhere. That turned out to be an amazing lifestyle change.
Andrew: I see. So, you’re not saying, “Damn it, I can’t believe I have to eat out of a rice cooker.” You’re going, “I can’t believe I get to build this life for myself.”
Michael: Yeah, I can’t believe I get to actually have a delicious home cooked meal on a very regular basis, and that I know how to cook. I think it’s in large part to Holstee that I started to actually learn how to cook, because once we stopped going out to eat, I’d be like, maybe I’ll start cooking. What was that meal that my parents, I come from a Persian family, we do a lot of Arabic food culture also, what was that great dish that my grandmother and my mother always makes? Hop on the phone, get the ingredients, kind of going back to basics. Now I can make three or four really great Persian dishes, but I don’t know if I would have got to that point as quickly, because I would have just been going out to check out awesome new restaurants all the time. I’m really grateful for that, for knowing how to cook. That resulted in us starting to entertain people at our office or at our home much more. Those are things, parts of our lifestyle, that we value very high now. We may not have gotten there without Holstee.
Andrew: I see. All right. So, can you tell me a little bit about your creative process, the ability to communicate what you stand for through art projects, like going to the Salvation Army, buying up T-shirts, knowing what to put on those T-shirts, then making them available for sale on your site. That makes a statement. That’s impressive. Where do ideas like that come from?
Michael: They just come from us. I don’t know. They come up really organically as we’re talking. That was a project that made sense at the time. Now, since then, we’ve started doing things like we created a fellowship that every month we give away $1,000 to help someone jumpstart their dream. The whole concept behind this is, Holstee’s built on this foundation of encouraging people to grab life by the horns, take life into their own hands, and do what drives them, what makes them excited.
We have this quote that we say a lot. Don’t think about what the world needs, think about what makes you come alive, and go out and do that. That’s what the world needs, people who are alive. We really strongly believe that. Holstee has been built around that whole concept. We think that a lot of different things we’ve done in the past we’ve always tried to link back to that. Now that we’re at a point to be able to do this fellowship, we realize how important that is. Sometimes there’s a project, or a small side project someone wants to start, and they need a small nudge. It’s not that a thousand dollars is going to help them execute on it, but it might be enough to get the ball rolling in a meaningful way.
Things like that, and we had our first fellowship run, that every month we do, the first one went last month. We thought we might get like 20 or 30 people applying for it. We ended up getting over 100 people applying for it, and 4-5,000 people voting. Later on, because we tried to make it as democratic as possible voting on the winner, we realized this is something that people really are excited about. That turned into its own, we didn’t actually go out and have to create too much of a campaign around it, because people got excited about it. They drove other people to go and apply for it. Then other people came to vote for it. I think that doing things like that, rather than the very typical, and we still do some ads, some Facebook ads, Google ads, we’re very new to that, we’re still learning about it, but that’s generally not what excites me. I don’t think that’s what creates long tail business. I think that creates a sale at that moment, right then and there, but you’re not going to get a loyal customer because you have a creative Facebook ad.
Andrew: Yeah, I get that. You’re not going to get someone holding up your stuff, and taking pictures of it, and putting it on their Facebook page, unless you have this meaning behind it. I’ve seen people do that with your manifesto.
You also then moved on. We started off with T-shirts in an understanding that this was not going to be a T-shirt business. It was going to be a mission business. I’m looking at your site, at shop.holstee.com right now. I see a lot of letterpress cards. How did you know that, that was the right product to build? Where do you get your product ideas?
Michael: This has been a very big discovery year for us, in terms of where we want to go. We recently realized that it makes sense for us to transition a little bit away from, to do less apparel, and moving more towards home goods. That transition is starting with art, wall art, home art, shareable art.
Having printed many posters at this point, we’ve become very close to the letterpress process. Our letter pressers in L.A. and Boston are two of our best friends at this point. We know them. We’ve hung out with them…
Andrew: Who do you use in L.A.?
Michael: …we’ve had dinner with their friends. Aardvark Letterpress.
Andrew: That’s who I use.
Michael: Oh, really? They’re the best.
Andrew: Yeah, they really are. I was in D.C. I could have found letterpress anywhere in D.C. or on the east coast. I still went to Aardvark, because they’re so good. I watched them make it, when I lived in L.A. These guys really are good.
Michael: They are. They really take…
Andrew: They’re craftsmen.
Michael: They’re true craftsmen of their trade. You know, when we started making this poster, it’s an 18 by 24 print, which is a very uncommon letterpress size. So they actually, when we were like we definitely want it to be this size, for some reason we wanted them that big, it’s kind of ridiculous size to do letterpress, but we were hell bent on getting that size. So, they were like, we think… they know everyone in letterpress… we know a couple people who would have a press that would that size. They started just renting that machine on a regular basis. That was at a time when we were starting to scale. We started sending them larger and larger P.O.s.
Apparently, we didn’t find this out until later, but they actually just went out and bought a machine just for that project. Later on they said, they told us they were so grateful that happened at that time, because letterpresses also started to make a rebound in a very big way recently, and they said that when they bought that machine three years ago, and then they were looking at other ones to get, it cost three or four more times to get it now. So, they were like, when you guys started needing them, that was perfect timing, because we beat the rush, and now they’re much more expensive. That’s pretty cool.
Andrew: I talked to the founder of Minted, Miriam Naficy, I think. She has a company that creates greeting cards, using the model where people design it, their friends and others vote on it, she only makes the card that’s got the highest votes. I think that’s her process. One of the reasons why she uses that process is that it’s hard to predict what greeting cards people are going to go for.
Andrew: You have a problem where you’ve got a big audience now. They’re waiting to see what you’re going to sell them. If you create too much and the concept fails, you’re stuck. How do you know what’s going to work?
Michael: We talk about that a lot. I think that being an online shop, there’s probably much more creative ways that we can start to test products, and we’re starting to do that more and more. I think that Minted has a really brilliant approach. I think we’ll see a lot more people doing something similar to that.
We’ve talked a lot about even, at Holsee, doing more pre-order stuff, Kickstarter-esque type things, and if it gets to a certain point, then we’ll run this print.
Andrew: What’s worked for you as a way of testing out your ideas?
Michael: We’ve done everything from… We have an inner circle at Holsee, and that’s basically some of our closest customers, community members, it’s a private group on Facebook, and [??] just a lot of prototypes, a lot of discussion of early designs. We tend to drop things in there and have really great discussions about it.
For example, this is one of the products that we have coming out soon. It’s a frame made out of reclaimed wood. They’re all made in Detroit. So, it has a really great story behind it too, because Detroit, as everyone knows, is going through a mega-recession. There are rows and rows of houses there that are basically getting demolished, because no one is living in them. They have to almost start from scratch. So, 3,000 homes a year are coming down. There’s one company, called Reclaim Detroit, that’s going in and saying, “Hey, instead of taking a wrecking ball and smashing this house, and hauling it to a landfill, let’s go in and purposely deconstruct it, and we can probably reuse a lot of that material.
They charge the city the exact same amount, even though it takes them a week or two longer to do it. They go and deconstruct it. As a result, they’re able to… the only reason they can do it is because they walk away with $10,000 to $15,000 worth of raw materials they can sell.
Basically, we’re using that wood from that house. It’s like this gorgeous Douglas fir wood that you can really not get that easily these days, and we’re building it back into these frames. We’re going to be launching a Kickstarter on it soon. The whole idea behind the frame is, a lot of letterpress art and prints that people are making are really beautiful now, and it’s kind of the antithesis of the Hallmark card, right? Where Hallmark was the soulless greeting card that’s manufactured for Valentine’s day, I think there’s something really special about sending someone actual shareable art that means something to you, that happens to have a place where you can write a note to someone. When they get it, how cool would it be to have a place where you can actually house it and treat it like art, either hang it up or put it on your desk? So, the design challenge we had was, create a frame that has significance in the way that it’s made and the material that it’s made from. It’s very easy to put cards in and out of, that can help to represent those cards in a form that actually feels like art.
Things like that is [??] This is going to be our first Kickstarter project, so in light of what you’re saying, this is the first time that we’re doing that model. We’re probably a little bit late to the game in that respect, but for this it makes perfect sense.
It’s like a product that has, we have to hit a certain minimum to be able to do it. It’s a new product for us to do. We’re not sure how people will respond to it. We all love, we’ve been using the [??]. We have a couple we gave to friends and family to see what they think about it, but it will be interesting to see what a larger community thinks about it.
Andrew: Before Kickstarter, what you did to test was go to an inner circle of people whose opinions you trusted, and you said, “Look, we’re thinking of doing this. What do you think?” and they’d say, “No, it’s lame. It’s too big. It’s too small. It’s beautiful,” whatever their feedback is.
Michael: “It’s too that.” Exactly.
Andrew: I see. You used this phrase, “sharable art” a lot. I used it at the top of the interview, because that’s how you referred to your products when we were just chatting. Why sharable art?
Michael: I think there’s a lot happening right now with, first of all, just getting something physical, exchanging something physical. It’s great to send your friend a GIF. It’s great to send a GIF as in G-I-F, not G-I-F-T.
Michael: Yeah, email, etc. We’ve gotten to a point where email has definitely hit a saturation point. I can’t remember the last time my email was below 50 in the inbox. Sorry to everyone I haven’t gotten back to. I’m trying my hardest, I promise.
10 years ago you were real excited when you got an email, and you heard AOL.com saying, “You’ve got mail.” You got a piece of something in the mail, and you’re like, “Eh, great. Another piece of mail.” But now it’s total opposite. You get one thing in the mail and you’re really excited and you open your inbox hoping that you have not that much email going on. I think that sentiment is going to continue to grow. I think that’s one side of it.
The other side is that the whole feeling of just exchanging art and seeing something that…Greeting cards are one thing, the Hallmark greeting card, I think that’s one thing, but when you see a piece of art that really touches you or makes you think of someone, people want to share that. You want to give that to someone. You want to give it to someone in a meaningful way, and probably attach a personal note to it.
I think that there’s an opportunity to rethink about what it means to have a card that’s designed so intentionally and so purposefully, so that every card…There’s a lot of these cards that are behind me. They’re probably not very clear, but, we’ve been working with more than 10, a growing number of designers. At this point it’s 10, but we’re doing almost a new one every month.
These are our favorite illustrators and designers around the world, and we’re challenging then with one design prop, which is, “Create art that encourages mindful living.” Everyone approaches that in a radically different way. The whole idea is that you find something that really touches you, and you can then share that with someone else, and hopefully if the frame gets made you have a place to keep it in a special spot.
I think there’s something really powerful about that, and much more meaningful than other traditional ways that we’ve had of sharing, expressing, moments of happiness, moments that would create a deep impression on you, wanted to reconnect with people. There’s something really special about that. That’s become something that we are almost becoming obsessed with, and there’s a growing group of people that I think would be interested in that too. We’ll find out if we’re right or not, I guess.
Andrew: Let me do a quick recommendation here, and then I want to ask you a final question, okay?
Michael: I just want to plug in because I’m at two percent battery, so don’t want to die before it ends.
Andrew: Oh, yeah, go for it while I talk it up. The recommendation is, since we talked a lot about creativity here and because these words in the manifesto were brought to life and shared because of the creative way that they were expressed, I’m going to recommend that if you’re watching this program or the follow-up to it, that you check out Shed Simove’s course on mixergypremium.com, his course about how to be creative.
I came to him with this issue where I said, “Look, I’m not a creative person. I don’t know what to do. I’m a little intimidated by your creativity, Shed. What do I do?” He said, “Okay, you like systems? I’m going to give you a set of processes that you can go through to create products.” That’s what’s there in that course.
I’m also going to recommend that you check out the interview that I did with him. He was so creative that if you look at the comments, you’ll see it blew people’s minds. Shed Simove — get the course, get the interview, and find a way to connect with him. This guy is incredibly creative, and he’s good at teaching his process.
All that’s available at mixergypremium.com. I hope you guys sign up.
All right, the final question is this: Jeremy, in the pre-interview, asked you what question did I not ask you that’s important to address? You told him about this woman who, after I guess her house was demolished, after Hurricane Sandy, and she found something.
Andrew: What did she find that changed so much?
Michael: She wrote this story on this section, I guess that goes under another initiative that helps create a little bit of the depth, and personality, and character of Holstee is. She wrote something on a microsite we created, called My Life, which is where people can go and share their stories of how they grabbed life by the horns, in maybe a tough moment or a challenging moment. Often times, it’s often inspired by the manifesto in some way.
Her house was demolished. She’d live out deep in Brooklyn, in a place that was a red zone. She’d just moved there with her daughter. They, fortunately, were not harmed, but they came back to a house that was totally flattened.
She wrote about how she had just come across… she bought the manifesto and gave it to her daughter not too long ago. She looked back at that and she’s like, “I’m at a point where I can either really feel really sorry for myself, or I can just step up and see this as an opportunity to start fresh.”
The fact that she would even connect Holsee, or those words we wrote three years ago, with her and this unthinkably difficult situation. It’s so humbling for us. I think that was one of those stories that our whole team read, and we’re’ like, “Holy shit. We actually might be having some kind of an impact on people’s lives.” That was a really powerful, powerful moment, I think, on our team.
Andrew: So that manifesto helped her focus on her community, instead of her own problem, and she is, as you said, one of many people finally checking out mylife.holstee.com. It looks like it’s a Tumblr blog, full of stories of people who are impacted by the manifesto.
Andrew: Unbelievable. Congratulations on the success.
Michael: Thank you.
Andrew: Congratulations on the business success, and the success you guys have had on touching so many people. For everyone who’s watching, guys I don’t think I could properly describe what this manifesto looks like, hopefully someone in the comments will link to it on Holstee’s website. Frankly, you don’t even need to wait for someone in the comment section to do it, just go to Holstee.com, and check out the art that we’ve been talking about, the manifesto, the whole way that their philosophy is expressed through the site. H-O-L-S-T-E-E dot com.
Michael, thanks for doing this interview.
Michael: Thank you.
Andrew: Thank you all for being a part of it. Bye, guys.