Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I do interviews with entrepreneurs about how they built their businesses.
I had a whole other intro set up for this interview. And then we were about to hit record and Sam, who you’re about to meet said, “I run the whole thing myself.” I said, “Sam, the whole thing yourself?” He said, “Yeah. If there’s an error on the site and I know how to do it, I’ll have to do it myself.” That took me by surprise, so much so that I want to change not just the intro, but the whole angle of this interview.
How does a guy who’s working on his own, doesn’t have a team create a clothing company that’s going up against giants? We’re talking about a crowded field, a mature industry. One of the things I remember learning from my business classes at NYU is when you’re in a mature industry, you’ve got to take business away from your competitors. It’s a lot harder. It’s fiercer, especially when those competitors are so much bigger. Here walks Sam Mazumdar — am I pronouncing your last name right, Sam?
Sam: That’s correct.
Andrew: Sam walks in and says, “You know what, guys? I’ve got a new idea, a new thing I want to introduce into the marketplace. It’s athletic clothing, and I’m not afraid to take on the big guys.” I don’t know how you’re doing it, but you are, you’re doing well, and I invited Sam here to talk about how he’s doing it.
Sam is the founder of Y Athletics. They create sportswear that’s made with silver, and that silver is important to the product. But also I’ve gone back and seen so many of his submissions on Hacker News and Reddit, where he was trying to figure out the marketing and the product. The fact that he’s highlighting silver I think came from all these questions he was asking on different message boards. It’s like the community and the world is helping him build his business.
So we’re going to find out how he did it. It’s all thanks to two great sponsors. The first is this contest, well, the company that created the contest that I’ve been running. It’s called ViralSweep, and you can enter that contest at Mixergy.com/win. And the second is a company that will help people like Sam hire great developers. It’s called Toptal.
Sam, first, welcome and also thanks for sending me this package. I’ve been waiting for the interview so I can open up your products and try them out right here in the interview. I’m excited to see what you sent me.
Sam: Fantastic.
Andrew: I wanted to keep this a surprise. Good to have you on here.
Sam: Yeah. Good to be here. Thanks for having me.
Andrew: What platform . . . well, actually, forget the platform, forget the details. Let’s talk revenue. What revenue did you do in 2016?
Sam: 2016, we did about $800,000.
Andrew: Okay. When did you launch?
Sam: We launched in 2015, like January of 2015 was when we were [inaudible 00:02:41] on our website, and we launched our first product on in December 2013. And 2014 was our first year just basically getting our hand into the production of the first product. In 2014, we didn’t really make any sales. It took a year for us to deliver the promise of our first product.
Andrew: So fairly young company. First quarter this year, I know the numbers, but can you tell the audience what your revenue was for the first quarter this year, 2017?
Sam: Well, I don’t know first quarter, but —
Andrew: Can I say it?
Sam: So far, we’ve done about half-million this year.
Andrew: Half a million, so you’re on pace to do $1 million more, actually, considering how big the holidays are going to be for you.
Sam: Right. November/December is always the biggest.
Andrew: What percentage of this comes from Kickstarter?
Sam: Of the $500,000, about $250,000, $240,000.
Andrew: Forty percent?
Sam: So I would say —
Andrew: We completely lost your audio.
Sam: [inaudible 00:03:42] percent came from Kickstarter.
Andrew: Sorry. Can you say that again? I lost your audio and then it came back. What percent?
Sam: I said 40% to 50% came form Kickstarter.
Andrew: Got it, 40 to 50 comes from Kickstarter. And I asked you before the interview started if you needed to go and change your website, like I if I pointed out that there was a typo on the homepage and I haven’t found one, but if I did, who would go and make that change?
Sam: I’d do it.
Andrew: You would personally go in and do it. You know how to work the Shopify store, and you don’t have someone else you can say, “Andrew says we should change the copyright date, go update it,” there’s no one to do that?
Sam: No. But if it’s something complicated, then I’d reach out to a developer and I’d ask them to make a change.
Andrew: How do you find a developer who’s going to do that? Do you have a network of them, or did you find them in the Shopify marketplace?
Sam: I have two guys I know, a few guys that I know who do Shopify development.
Andrew: Okay.
Sam: I could reach out to them if I need help.
Andrew: But basically, you’re by yourself. Do you have any contractors you work with on a regular basis?
Sam: Yes. I have two people who look after some of our production, and they’re the guys who get on the contract. But the plan is once we’re bigger, we’re going to bring them on full-time.
Andrew: What do you mean by — by the way, the reason I’m fascinated by this is I think physical products are hard. It’s hard to actually make a physical product. It’s hard to sell it. You come up for software, you can just say, “Try it free for 30 days. If you like it, you keep it and keep using it, if not, cancel.” That alone is a tough sale to make. But you can’t do that. You have to say to someone, “Trust me, this will fit and look right on you. Trust me, I will get it to you in the mail,” and then you send it out to them and you have to deal with all the logistics that go into that. It’s really hard.
Then for all that work, your margin is nothing compared to software, nothing compared to software. It’s no surprise that the guys from Zapier, for example, are working from home killing it with cash, doing well with their customers. It’s an easy market. It’s an easy business compared to this, I think. Here, you go into that space and you’re by yourself. Do you have any funding? No funding, right?
Sam: Say that question again.
Andrew: Do you have any funding?
Sam: No funding, no. Besides Kickstarter, no funding. We look at Kickstarter as preorders, but no outside funding.
Andrew: So that’s why I want to understand how are you doing this by yourself? How did you come up with this idea? How did you get your customers? How did you figure out the hook? It seems to me it comes with these Hacker News conversations and Reddit conversations that I spent a lot of time reading about you. But why don’t we just get a full sense of where you are right now. You’re saying there are two contractors that you’d like to bring on full-time. What do you mean by they help you create the product?
Sam: So basically, whenever we make a new product, let’s say I’ll give you an example of a product that’s in the works. We’re making a jacket that’s going to come out in the next six months. To make the jacket, first we have to develop a fabric. One of the unique value propositions of our brand is every product we make is made from scratch based on the functionalities we want.
Andrew: Okay.
Sam: So, first, we have to basically target a few factories who are able to make fabrics. Now, I don’t have the resources and contacts of, let’s say, 50 different factories, but I know somebody who does. That’s somebody who helps me basically source the fabric, the components. Then we work with another factory who puts those things together. They make the products and send it to us so we can review it, and then we basically keep improving until we’re happy with the product and then we go into our testing phase.
Andrew: So then this person is the go-between between you and the factories. They know the factories. They know how to work with the factories. They smooth the process back and forth of getting prototypes and iterating, am I right?
Sam: Yes. It’s a three-way conversation. We’re all in it together. It’s just that after I give my high-level overview, I let the light work be handled by them. So I would call this person as more like partners in business. Like I said, they will come on full-time, hopefully sooner rather than later when we can afford to do it, when we have enough business basically.
Andrew: What’s the title of someone like that?
Sam: Title of . . .
Andrew: Like if I wanted to find someone like that or someone in our audience says, “I want to get into clothing or other manufacturing,” or something like that. Is there a role for it? Is it like a factory project manager? What is it?
Sam: I don’t think there’s any role for it. I just think I got a bit lucky in this sense, where I was able to network with people who knew other people who are in the business of making products for high-end customers.
Andrew: Okay.
Sam: So this person, he also makes products for other very, very top end brands. I’m not going to name the brands, because of confidentiality reasons, but they do work with other companies, other big companies and make products for them to.
Andrew: Okay. If you came up with an idea, let’s say we came up with an idea and said headbands. No one’s wearing headbands, but it’s going to come on and be big and they need to have silver in it because that will keep the thing from selling like sweat. Who comes up with the design of the headband? Who comes up with the design of it? Who thinks through what it’s going to look like, what size we need, etc.? Is that you?
Sam: So, initially, we’re going to go buy every possible headband we can in the market. When I say every possible, the highly rated ones. Then we’re going to go through reviews. We’re going to see what their customers are saying about their headband.
Andrew: So you go to Amazon, for example. You go to other stores that have reviews, you buy the top-rated ones and you look at the reviews and you see what people like and what they hate about it.
Sam: Yes.
Andrew: Okay.
Sam: That’s one of the things we do.
Andrew: What’s next?
Sam: So, when we make a new product, we’re going to look at all the reviews, see what people like about it, what they don’t like about it.
Andrew: Give me an example. Sorry, I’ll follow up afterwards. I’ll take notes so I don’t interrupt.
Sam: Then we look at what we like about it, what we’d change about it. One of the things our customers like about us is our sense of design and minimalist approach to clothing. One, we look at everything that’s in the market. Then we kind of have a sense of what we need to do to take this product to the next level. Then we try to find a, in the case of headbands, first we’d need a fabric, the material.
So first, we’d want to work with somebody who would be willing to make a custom material just for us. That’s something a lot of factories won’t do because they’re already making so many different things. They don’t want to make something completely new for a customer. So we have to work with very specialized factories who are willing to make a small batch of specialized fabric just for us.
Andrew: Okay. That’s basically the lengthiest process.
Sam: Finding the material?
Andrew: Developing the material.
Sam: Right. Just to give you some more — just to give you an insight —
Andrew: We’ve got such a lag. That’s why it sounds like we’re talking over each other. I don’t know what the lag is, but there’s definitely a lag here in this conversation. I want to explain to people, I’m not stepping over his words and he’s not on mine. It’s just kind of a little awkward right now. Go ahead.
Sam: Okay. So what I was saying is that just to give you some insight, we talked about this person who handles the production for us. It wasn’t this way all the time. This developed in the last one year after we’d become a more established company. Initially, when we started, it was just me trying to go and find a factory who worked with me to develop a product for me directly without any person in between.
Andrew: Okay. Let’s go back in time and just understand how you got here and hear the full story as it developed. In fact, I’m going to go even before this to your childhood. Apparently, you were a crappy student, but you were the kind of person who loved engineering. Talk about what you did with your toys and how that factors in to who you are.
Sam: Yes, I was a very bad student. I was always in the bottom 20% of my class all through high school. But I remember I used to like building things. I liked breaking my toys. When I got a toy, I would break it up, taking the motor out, put some batteries, connect wires and try to make the motor spin. Yeah. I liked putting things together and building it, and I feel like I still enjoy doing that very much. The building the product part is the favorite part of my job. I’m not very much into growing the business. Making the product, that’s where my heart is.
Andrew: You said making the product. You mean, you actually will take some material. You’ll start cutting it yourself with scissors, sewing it at home and start to look at it. Is that what you mean? Or are you more distant and doing this via email and other messaging apps?
Sam: No. It’s very hands on. I don’t do the sewing —
Andrew: Cutting it with scissors?
Sam: I’m not cutting and sewing myself, because we have people to do that for us.
Andrew: Okay.
Sam: I’m looking at the fabric, looking at other products, explaining to them what stitch to use, what construction to use, and then basically making a video sending it to a factory in China who does cut and sew for us, and they do it and send it to us in a week. It’s easier to — I don’t have the time right now to physically cut and sew everything myself, and I don’t have the skills for it.
Andrew: Okay. So I see how hands on how you and I can see the background you have in it. You then grew up and you had this interest in starting a company. In fact, because you’re a foodie, you said, “Hey, look, the restaurant industry could use something.” What was the idea that you had for software?
Sam: So, for software, it was a few ideas, but the main idea that I still want to pursue at some point is an app for a food restaurant, for a restaurant menu. So basically, when I go to a restaurant, I get overwhelmed with the amount of choices that they have on the menu. If I could take the top — if I knew what the top three dishes of the restaurant were, I would always order from that.
Andrew: Yeah. It makes sense. I could go to Yelp and find restaurant reviews, find the top restaurant in my neighborhood for sushi, but once I’m in there, they’re selling food that’s really good and some that’s okay. What you’re saying is you had an idea for an app that when you sit down at the best sushi restaurant in tow, you could see what’s the best meal there? What’s the thing that everyone recommends? Maybe it’s not even on the menu. Maybe it’s something that’s off the menu. Still, you had this idea and you said, “I can’t do it.” Why couldn’t you do it? What was the reason?
Sam: Well, at that time, the excuse that I came up with is that I need funding to get my idea off the ground. I haven’t been able to get funding yet and, to be honest, I wasn’t really doing anything about it. And that was the wrong approach, because that was just an excuse. Ultimately, I thought about if I did have $500,000 of funding in my bank, I would not know how to spend it. I would not know where to start. So that changed over time. By the time I got around to Y Athletics, I had a different kind of philosophy about starting a company and what needs to be done to do that.
Andrew: So this is what our producer said after having talked to you, that because you didn’t start that business, because you used lack of money as an excuse, when you had the idea for Y Athletics, you said, “I’m not going to let anything stop me. The fact that I’m doing this on my own without a cofounder, screw it, I’m not going to let that stop me. The fact that I have no funding. Screw it, I’m not going to let it stop me. I’m going to find a way here so I don’t fail to even get started the way I failed to get started with this app.” Fair to say that. Was that a good analysis on the producer’s part?
Sam: Yes. That is a very good analysis. But at the same time, I think that you have to feel strongly about the thing that you do. So, from every step at the very beginning, there has always been the failures, which could have been an excuse to check out, but basically those failures motivated me more to solve it and go to the next step and that kept on happening until it became something that I was able to rely on for a living.
Andrew: I see. Where the thing started was you going out and shopping for a pair of shorts and when you went out to shop for a pair of shorts, did you see that there was Under Armour in the store? Did you see that Nike makes shorts? You did. You’re nodding. So what was the problem? Why not just buy a Nike pair of shorts and move on with your life? What stopped you?
Sam: There were just too many of them. The initial idea was more about the experience of shopping rather than the product itself. I go online to UnderArmour.com and they have like 10 or 15 different pairs of shorts that I can purchase. I can’t really tell which one I should get. At that time, it occurred to me, what if there was a company that made only one pair of shorts that was really good? It’s basically taking on the Apple approach, what they did to computers. You have Dell giving you 100 different configurations and then Apple comes and says, “We have a MacBook and a MacBook Pro, pick one.”
Andrew: Yeah.
Sam: Can you do the same thing to clothing.
Andrew: So your vision back then was what if somebody, instead of walking into the Nike Store and being hit with all these different options for pants could walk into a Y Athletics store and see one pair of shorts that’s just the right kind of short that has the right aesthetic.
Sam: Right.
Andrew: Got it. That’s the idea that set you off on this path.
Sam: Yeah. It won’t be for everybody, of course, but it will be for people like me. I would enjoy going to that store. I’d love to go to a store where they had just 10 products and I can look at a product, look at the history of a product, look at the product, how they’re manufactured and then purchase it if it’s the right fit for me.
Andrew: All right. Let me take a moment and read this email that was sent to me by a guy in my audience named Ronald Gerba, because I like it. I sent out an email about a sweepstakes, a contest that we’re doing on Mixergy. He hit reply on the email, which I freaking love, and he said, “Resorting to a sweepstakes, Andrew? What happened? Are things going downhill that fast for you? Time to turn this puppy around,” meaning Mixergy.
“Has Mixergy failed so much,” Ronald is saying, “that you have to resort to a contest?” I freaking love my audience for saying stuff like that. Everyone else would just kind of go. . . But he had that thought and he had to share it with me. I like that. I like that kind of attitude, because that’s the kind of attitude I bring to my interviews.
Well, I’ve got to tell you something, Ronald, and I’ve got to tell everyone else who’s out there listening, yes, I’m doing contest and there are lots of reasons for doing it. One of them, Sam, you should know this. I was at a friend’s office and he was running a contest. I had the same exact response that Ronald did. I said, “Dude, what are you doing running a contest? Aren’t you better than that?”
“Andrew, shut the fuck up. Look at these stats.” He starts showing me how he’s growing his freaking mailing list because of a contest. Contests, I would never have guessed, still work. He showed me his numbers. I go, “Okay, that’s interesting for you. You probably have this audience of people that somehow respond to contests, but not everyone else.” Then he cursed me again.
Then he showed me this private chat that a bunch of big brands have that he somehow finagled himself into where they’re all talking about partnership contests. I’m talking about big brands, big Conde Nast magazines. I don’t know if Conde Nast is specifically the publisher of it, but that style magazine. Big brands, they’re doing these contests where they join together, they run the contest. So then I said, “All right, this actually makes sense.”
Then these guys from a company called ViralSweep said, “Andrew, you should do a contest.” I said, “I don’t know that I need it. What do I need more subscribers for?” They said, “Here’s how it works. Here’s how it worked for other people.” They gave me a few examples like a company called Jewel Scent. They did a contest where they got 27,555 entries, 6,411 Facebook likes. I can keep telling you how many tweets and so on but who cares. The bottom line is they got $15,000 in revenue. I thought, “Interesting.”
They gave me a bunch of other case studies of their people who were actually selling from contests like a company called LostGolfBalls.com. I guess they sell lost golf balls. They did a contest. They actually show all their stats publicly. One contest got 12,283 entries and so on, Facebook likes. Here’s the thing. The contest that got all those entries that I just mentioned got $27,000 in sales. Let me be exact, $27,988.41 in sales because everyone who enters the contest is a potential customer.
I said, “All right, you guys have my attention. What do I do? What software do I use? I don’t have time for software.” They said, “Good. ViralSweep, we do the whole thing for you. You say you want a contest. We’ll come up with the idea. We’ll put the whole thing together for you. We’ll help promote it. We’ll make sure that it works and we’ll tell you what to do.” I said, “I like that. I don’t have to do it myself. Great. I trust you guys.”
I happen to know the founders. They worked for my good friends. I think interviewed one of them and was interviewed by another. So I’ve known them for years. I said, “Here’s what I have. You take it and you run with it.” So they created the contest and now our contest is running.
In fact, if you guys want to go and check it out, you can just go to Mixergy.com/win and what you’re going to win is a basket of stuff that makes my office great, like a standup desk. I’ve been using a standup desk and I like that I get to move around as I talk. You guys can see Sam is using the new AirPods. I freaking love these things more than any new thing that I bought in years.
Sam: I love it.
Andrew: So good.
Sam: It just works.
Andrew: Did you set the double tap to Siri, or double tap to pause your audio?
Sam: Pause my audio.
Andrew: That’s what I set it to now too. The reason I do that now is when I shave — I shower with them, by the way, I shave with them in. When I shave, I take one AirPod out, I double click the other so it continues to play the audio, then I shave that side of my face. Then I put the AirPods in, I take the other one out. I double click it so it plays the audio again and I shave. If I’m in the shower and I don’t want to wake up the kids, because I’ve been exercising at night and it’s like 10:00 when I shower, I will put the AirPods in my ears and shower with them. They are freaking amazing.
So we have this collection of tools that I like, that I recommend to you guys and you get to win it. Frankly, I know all of you people can — maybe not all, many of you can just say, “I’m going to go out buy a standup desk, the journal, everything else that Andrew is offering,” and you could buy it. Yeah, you could. But wouldn’t it be nice to win it, number one? Wouldn’t it be nice, more importantly, to see how this contest works from the point of view of an entrant so that maybe when you’re ready to do one, you can go to ViralSweep the way that I did and partner with them?
All right. So the contest is at this URL, Mixergy.com/win because I want you to win it. And if you want to know the company that put it together for me, it’s called ViralSweep. You should check them out. I really, really like the people behind it. I like that they do all the work for me and I like that I can just sit back and watch all the entries come in and they feed me stats and give me some advice on what to do to promote it. I’ve been doing this for years. I highly recommend them. Go check out my contest at Mixergy.com/win and thanks to ViralSweep for putting that thing together for me.
Sam: Has it paid off so far?
Andrew: Sorry?
Sam: Have you been able to get results from it?
Andrew: Yeah. They’re feeding me the stats from it. Hang on. So after I think it’s a day of doing it, we got 262 entries. That means 18.5 people who go to the website end up entering. We got 17% of everyone who enters ends up subscribing to the podcast, which is really good. I care about that because podcast subscribers are number one for me. Okay. I don’t care about the Twitter followers, referrals, 12.6% of all entrants come from referral. So we’re getting a good number of people who are then sharing it with their friends and their friends come in and enter. There you go. There’s some of the data.
Sam: Great.
Andrew: That’s after I think one day of running the contest.
Sam: That’s solid.
Andrew: Yeah. All right. Now we’re also buying Facebook ads to help promote it. Frankly, I told them, “I have to get my Facebook guy to buy this ad?” He goes, “No, we’ll take care of it.” It’s like a whole we’ll do it for you service. I like that.
All right. So you walk into the store. You say, “This is way too much. I’ve got to have a better idea. I’m going to create this thing myself.” Then you start to do what? What’s the first step that you took?
Sam: The first step I took was basically figuring out what [inaudible 00:26:06] and how I wanted to — part of it was, “Let’s build one product and let’s start from there.”
Andrew: What’s the product that you want to start with?
Sam: We started with a t-shirt.
Andrew: Okay. Why a t-shirt and not the shorts?
Sam: For no particular reason. It was just what’s the most common item that people can buy. Let’s start with a t-shirt.
Andrew: Never estimate the American public’s appetite for t-shirts. We always need more t-shirts.
Sam: Exactly. Yeah.
Andrew: So t-shirts was going to be the first thing.
Sam: I was like okay, t-shirts, for this to work, for us to have just one product, one t-shirt and make it do really well, what do you have to do? We have to make the best possible t-shirt in the world. That goal was we have to make a t-shirt and it has to be the best performance t-shirt in the world. How do we make that? I wasn’t going to figure it out overnight. The first thing I did was I went out and started buying t-shirts from other companies, lots of t-shirts from a lot of brands and reading a lot of reviews on each of the t-shirts.
Then I could see what people were talking about. I could see what people were talking about when they said they liked certain parts of the t-shirt and didn’t like certain parts of the t-shirt. The other thing was I wasn’t stingy when it came to spending on the product. I was like if you have to buy something really good, you have to spend a bit of money to get something that’s really good quality.
Andrew: I see.
Sam: I look at all the high-end brands out there, buying t-shirts from them, buying like Nike’s, not just their bestselling t-shirts, but their highest price t-shirts just to get sense of what’s the difference between a $20 t-shirt and a $70 t-shirt. So that was all market research for me, buying things, looking at things. The next step was to find a company that would be able to make a fabric.
Andrew: Let me pause right there before we go on to the fabric. When you were looking at reviews, what are some of the problems that you noticed that people had that you were able to fix with your shirt? Do you remember any of the negative things that come up?
Sam: Right. So one of the major negative things was people say their synthetic shirts smell after a period of use.
Andrew: Smell?
Sam: Yeah. The people say that even after I wash it for like 10 or 15 times, the products develop a permanent smell.
Andrew: Sam, let me pause you right there. The reason I’m saying let me pause is because we still have this bad — I use synthetic shirts all the time. I used to believe in pure cotton for running and pure cotton for cycling, because I thought everything else was fake. Why would I put it on? I put one on. It breathes so much better. The sweat doesn’t make the shirt stick to me and get heavy. I finally got convinced the synthetic shirts are the way to go, the ones that will wick away the sweat and everything, but you’re freaking right.
The goddamn smell from these things is so bad that my wife will smell it from the other room. If I fart in the room, she won’t notice it, because she doesn’t have that refined sense of smell. I’m going to open up because you’re tapping into something I really care about. The stink from these shirts she could smell from the other room. She will not let me put them in the laundry with her stuff because it’s so bad.
I finally had a friend send me a link to an article about how if you put it in with vinegar and water for half an hour, then you put it in the wash, it actually will clean it. I did it myself. It actually helps. But you’re right, the stink from the synthetic stuff is so bad I have to interrupt you to just rail against it. It is so bad. All right. That’s one thing you noticed. I cycled last night in my backyard using an app on my iPad and a stationary bike. I get it. So as a guy who does this a lot, the smell is a big problem. Give me another problem that you picked up on.
Sam: I think you already mentioned it. People are saying cotton t-shirts become very heavy after a run. You need t-shirts that are actually able to wick moisture away. All synthetic shirts won’t do that the same way. There are so many different qualities of material that go into the synthetics that it makes a difference what product you’re buying in the amount of moisture it can wick and how quickly it does that.
Andrew: I see. You started seeing if they have a cotton shirt, it’s going to stick. It’s a problem. If they have a synthetic shirt, it’s actually going to smell, which is a really big problem. And now all synthetic shirts handle the sweat the same way. You were starting to pick up on these issues that people had.
Sam: Right.
Andrew: What site did you go to that you were looking at all these reviews? The reason I’m pausing this, for anyone who’s listening is because I notice that there are a lot of entrepreneurs who do this. Tim Ferriss, I think, told me he did this too. Before writing a book, he didn’t say, “What does the world need to know?” He said, “What sucks about what the world already knows?” He went into Amazon and started looking at reviews of other people’s books and saying, “Okay, here’s the problem with other cooking books. I think I can fix it with my book.”
What you’re doing is you’re tapping into a process that’s worked with other entrepreneurs, and we should all be listening to. If someone is going to create a podcast, for example, they should look at all my negative reviews and based on that and other negative reviews and based on that, figure out how they can make their stuff better. Why don’t we go onto the next step? What’s the next step you took after you realized the problem? How were you going to solve it?
Sam: The next step was how do we create a product? Intuitively, I thought the first step of creating a product is to create a fabric that would have all these features that people don’t like about other products. So I took a day off at the company I used to work at, at the time in California and I looked into New York, where they have a fabric tradeshow, where you have manufacturers from all over the world coming in to show you what fabrics they made.
So I go to that tradeshow with a few products in hand. I tell them, “This is what I like about this product. This is what I like about this product. Can you make me a fabric that combines this, this and that?” They look at two of the shirts that I have in hand. They’re like, “We can’t really do this because this is a seamless t-shirt,” and I wasn’t understanding what they were saying.
So, basically, two of the t-shirts that I had taken with me, they were made with this technology called seamless technology, where the fabric development is part of the t-shirt itself. So a machine makes the fabric into a tube, which is the size of a particular t-shirt. Then all that needs to be done is the sleeves and collars need to be sewn on to that tube. I guess I got I wouldn’t say lucky, but it basically narrowed down — going with a fabric manufacturer, I have to go with a seamless fabric —
Andrew: When you say seamless, you mean this shirt has a seam that connects the front part of the shirt and the back part. You wanted to not have that? Why didn’t you want that?
Sam: Well, that’s exactly right. But two of the shirts that I had in my pile of shirts were using this. The fabric was very nice, but you can also make a fabric that’s not seamless and very nice. But it also makes it more simplistic and the seamless process allows you to draw up ventilation holes in the garment itself without having it be stitched separately. So it reduces the bulk of the product. It gives it a more streamlined look and you’re able to make a more technical t-shirt.
Andrew: Okay. So you showed it to them and they said, “This actually is really tough. We don’t know if we can make it for you.” So did you give up on that? Did you decide first version doesn’t need it? What did you do about that?
Sam: They were like, “We don’t do seamless. We make fabric. You need to talk to somebody who makes seamless.”
Andrew: Okay.
Sam: Then I came back from New York with the idea that okay, I need to find a seamless manufacturer. Then I start — so one other thing was even after New York, I reached out to a local factory in Los Angeles and took the shirts to them, and this guy, he said the same thing. You need to do a seamless product. But at the same time, he also gave me a tour of his factory so I get a better understanding of what the difference is between a seamless and a regular circular knit fabric. These were all research [inaudible 00:35:49].
After that, I look up seamless manufacturers online, shoot emails to the VP of development to basically everybody I could find. I think I found about 15 or 20 different suppliers globally. There are not too many out there. No one would get back to me. So, for one of these suppliers, who are in Israel, I see that they have a U.S. distribution center or something.
So I called that center and no one picks up. It goes to the voicemail. I called them again and a guy by the name of Mac [inaudible 00:36:36] picks up the phone. I tell them, “Mac, I am trying to create a men’s seamless line and I’m looking for a seamless manufacturer who will be able to make me products in men’s t-shirt sizes.” Mac was like, “We can do that for you. I’ll put you in touch with somebody who will be able to make some products for you.”
Mac is like — that was one of those, “Yes,” moments, like, “Yes, I found somebody who will be able to help me out.” All this wouldn’t have happened unless it was for Mac, because the factory themselves, they never got back to me. I emailed them separately a few weeks ago, but it was because of that phone call I made to this U.S. guy, Mac, who helped me connect with their design team to start the creation of the first product.
Andrew: I see. So it’s basically you Googling for a person who can make this for you, making endless phone calls until you found the right person. Was the company IKAR? Did I lose you again? Was the company you hired IKAR?
Sam: Yes. Say that again.
Andrew: Was the company you hired called IKAR?
Sam: No, I didn’t hire any company.
Andrew: Okay. I’m Googling as you’re doing it. I wanted to see what’s it like when you’re starting to Google for seamless manufacturing. If I was to reproduce what you did, is this doable or are there issues that come up? It is doable. I’ve come up with a couple of companies that I could potentially hire if I were trying to do this. I could see how you would then call them up. You said, “At this point now, I’m going to start doing a Kickstarter campaign.”
You do what a lot of other people do, which is you shoot a great video. In fact, I think your video cost you $2,000, and for a guy who has $10,000 in the bank, that’s a significant portion of your money. You shoot the video. Then I went to Reddit and to Hacker News and I’ve got to links to that and you said, “Guys, I’m so proud. I just recorded this video for my new product. What do you think?” You linked them to a site that was dead, like Preview.YAthletics.com and the feedback was not very strong. What was it that they were reacting to? What was it that the said, “Nah, not good?”
Sam: So, basically, after I quit my job — I quit my job with $10,000 in the bank. The plan was we’re going to launch a Kickstarter campaign next month and then we’re going to raise $100,000 to make this product. So I hired a guy, paid him $2,000 to make a video. I put that video out on the preview. The reaction was nothing great. That video is not out there anymore because we never ended up going with that video.
Andrew: What was bad about it?
Sam: I don’t know what was bad about it, but we just didn’t test it enough. With the video, we learned you need to keep testing. That was the first lesson. We made a video in two days because when you hire somebody, they want to get filming done like every day is money, so you need to get filming done in one day. They go and edit it, and they send it to you and you can make one or two revisions after that and then you’re done.
In that video, we basically talked about how great this t-shirt feels, about the seamless part, and then we go into it doesn’t smell because it has silver. Basically, that’s about it. The comment that people were saying was that, “It’s okay but the interesting part is the silver part.” We put silver in the backstory rather than the hook, because the silver was not the most difficult part for us. For me, the creation of the fabric, the seamless, the construction of the shirt, the yarns, those were the difficult parts and I wanted to focus on that. People did not understand that.
Andrew: You know what? I’m interrupting out of passion because I’m passionate that I did the research and saw this. There’s one guy who 1,440 days ago on Hacker News said this. Here’s what he said, “You spent too long in the beginning talking about your shirt. I have to spend the first 45 seconds before you start posing problems just hearing you go into the announcement. Your video is good, your narrating is good, but the fact that you have a soft shirt isn’t a big concern for me. You hit on some great points a few times.”
But here’s what he says, “To me, the problem is the stink. Because you fixed the stinky problem, that’s big for me.” I’m kind of summing it up. Then you say, “Thank you, the silver, which breaks down the odor causing bacteria and allows for multiple use has consistently been voted one of the most attractive features. If I make a new video, it will definitely focus more on that particular feature.”
So this guy who calls himself articulate basically said what you’re telling me right now, “Shirt is great, I don’t care that you give me a soft shirt. I’m not bothered by the fact that my shirts are rough, but I do care about the stink.” So you went back and said, “All right, enough people have said this that I have to rethink the way that I promote this. What did you do with all that feedback? What was the next video?
Sam: At that time, I was basically bankrupt. I had to let go of my apartment and move to, not move to but just fly to where my parents were for a short-time and I just started living with them. So, for the next video, first it was a call I made to a friend in California — sorry, I’m going back in time and I’m thinking about what exactly happened.
So when I go to Boston, there are, of course, a few Kickstarter campaigns that you look up to at any time. At that time, I didn’t make any Kickstarter campaign, so I was looking up to a few other big apparel Kickstarter campaigns. One of them was a company called Ministry of Supply. They came up with the Apollo Dress Shirt. They’re in Boston, so I emailed one of their founders. I was like, “I’m trying to make a video for a Kickstarter. We made a product. I just want to have a conversation with you and see how you guys were so successful.” So he was like, “Yeah, sure, this is our office, come on in at this time. I’ll have a chat with you.”
So I go there. I sit down with him, and we look at our products. He looks at the product. He’s like very impressed by it, and then I start asking some questions. It turns out that the video they made, which was fantastic, one of the founders shot the video himself. He’s like, “Yeah, we made the video ourselves with a DSLR camera and I edited it on Final Cut.” I was like, “Okay.”
That gave me a lot of courage to learn how to make videos and just do it myself. So the next call I made was to a friend in California who I knew had a DSLR camera and I was like, “Hey, I need to make a video. Do you think you can help me film it?” He was like, “Okay, sure.” So two weeks later, I fly to California. I crash with him for more than I should have. We take about a month to create our next video. We go out. We film. We come back. We put it into Final Cut. I’m learning editing. He’s learning filming.
We just put together piece by piece, highlight silver. We changed the name of the shirt to SilverAir. Silver was the most important feature that people like.
Andrew: The thing about silver is it prevents the smell, right?
Sam: Yes. The silver — well, there are a few ways to prevent smell. Most companies use treatments. They basically dunk their shirts in a chemical, which provides anti-odor solutions, but those wash away over time because it’s just that, it’s just a treatment on the surface of the t-shirt. Silver doesn’t wash away. So that’s basically a part of the fabric itself and the silver breaks down the bacteria in the sweat which causes odor.
Andrew: I see. That’s why based on the feedback you got from the first video and your reminder, “Hey, people are about the odor more than they care about anything else,” you said, “We’re going to add silver to the name of the product,” so it’s called SilverAir and the title of the Kickstarter is SilverAir Shirt: Odorless Shirts Made with Pure Silver to really hammer home that one thing. I’m looking at this video you shot. It’s a guy running down the street with you doing the voiceover. That’s you doing the voiceover, right?
Sam: Yes, correct.
Andrew: At times I see a flashback in to you guys, you at a whiteboard demonstrating how you’re going to do that. It’s basic like that but with nice editing. Here’s the other thing that stood out to me in this video — five seconds into the video, you show a dirty shirt going into a hamper and you talk about how it stinks. You show the guy running, it’s great to run, you feel good about yourself, but here’s the thing that sucks about running, here’s the thing that sucks about being athletic. The shirt will stink to high heaven, and you show someone tossing it away. So you immediately hammer in the point that you learned from the feedback.
All right. I have the product right here. I’m going to open it up in a moment. I’m so eager to do this, especially now that I see the smell problem. Let me quickly talk about my sponsor and then we’ll come back, I’ll open this and we’ll talk about what happened when you launched this Kickstarter campaign, how it did and also what happened when you were legally assaulted by a competitor.
First, the company that I want to talk about is called Toptal. You guys see that Sam is an independent entrepreneur, one guy. For me, when I saw his website, I thought, “This is an interesting big operation.” I didn’t realize how small he was. I have stats. I have research. I didn’t realize he was a one-man operation. I got a really generous gift from him in the mail. I didn’t realize it was a one-man operation. But more and more, we’re seeing that big companies are actually run by small groups of people. In Sam’s case, it’s just one person and in other cases, we’re talking about like five or six people can run multimillion dollar empires today.
One of the reasons they can do it is they can hire great people on to their team and have those people act as if they’re part of the team, be the best possible contributors to the team without fully being on the team. That’s what Toptal has noticed, that this is where the world is going.
So Toptal said, “How do we make it better?” And Toptal’s founders — by the way, it’s Toptal, top as in top of your head, tal as in talent — said we’re going to put together a database of the best developers on the planet because developers are so highly sought after. So, when a company that needs outsourced developers needs the best of the best, they can come to us, we’ll quickly match them with the right developer or team of developers and they could get started often within days. Boom. That’s what they noticed.
If you’re like Sam, small operation but you need more talent, people who are phenomenal at their job, not just people who are going to do exactly what you tell them to do, not just a pair of hands, but people who can think through the problem and come up with a better solution than you ever could, you want people with experience, with know-how, people who have done this multiple times and that’s why you need Toptal.
I urge you to go check out not just their website, but a special URL on their site. It is going to give you 80 hours. Let me emphasize this because people keep saying I signed up and I didn’t even realize I was getting this. It was great. I wish you would have told me about it. I’m telling you about it, but I want to read it slowly so you realize how powerful this is. They’re giving you, a Mixergy listener, 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no risk trial period of up to two weeks. All you have to do is go to Toptal.com/Mixergy. I’m grateful to them for sponsoring for so long.
All right. Should I open it?
Sam: Yeah, go ahead.
Andrew: All right. Let me see my own video here. I’m opening up the package that Sam very generously sent over. Look at this package. Who makes your packaging? This is really nice.
Sam: Yeah. It’s a manufacturer in China who does packaging for us.
Andrew: Really? They put the product in the packaging too?
Sam: No, it’s a separate manufacturer.
Andrew: You buy this package and who puts the underwear in this package?
Sam: We send it to the underwear factory, and after they finish making the underwear, they put it in the package, they seal it and then they sent it to us.
Andrew: This is a nice impression. I like this a lot. Even your name is subtle on here, very Apple-like. These are boxer briefs you sent me. This is another boxer brief. I wonder if you got my size right.
Sam: I sent you two sizes of everything.
Andrew: Sorry?
Sam: I sent you two sizes of everything so if one doesn’t fit.
Andrew: How do I see the size? Is it the last number right there?
Sam: Yes.
Andrew: I see. Everything is so subtle. I like it. I like your design sensibility. Look at this. I’ve got the backpack and now we’ve got a shirt. Do you think that — I think I’m going to take my shirt off right now. Is it too inappropriate for me to take my shirt off with you watching and everyone out there watching?
Sam: No, not at all.
Andrew: I’m kind of hairy. I didn’t buzz. Are you hairy? Did you buzz?
Sam: I don’t buzz, but I’m not too hairy.
Andrew: You don’t buzz your chest hair. I should. I’ve got socks here. Socks are really important. These are running socks?
Sam: No. That’s not the packaging for the socks. These socks are not out yet. We just finished a Kickstarter campaign for that sock. So it’s in its prototype packaging.
Andrew: Packaging makes a huge impression. This is the way you package up your socks?
Sam: That’s the original sock. That’s our current sock.
Andrew: Hang on. Let me tee off a question for you here about how you got the Kickstarter to do well. While you do it, is it too weird? We’ve known each other now for an hour. Can I take my shirt off in front of you?
Sam: Go ahead.
Andrew: Can I take my underwear off in front of you? It’s not going to be on camera. Is that going to be too weird? I’m kind of excited to try it.
Sam: Go for it.
Andrew: Okay. So what did you do to get the Kickstarter campaign to do so well?
Sam: We got lucky.
Andrew: Hang on a second. Sorry. I’ve got to tell you, this material feels really nice. Sorry, go ahead. I’m going to take my shirt off now.
Sam: Is that the shirt or the underwear.
Andrew: I’ve got the shirt in my hands. I’ve seen it online. I didn’t realize it was going to — this feels kind of soft. It feels a little like the material I’m supposed to clean my monitor with or the stuff you’re supposed to clean your iPhone with, so delicate that it doesn’t scratch the screen. Go ahead. What did you do to get the Kickstarter campaign to do well?
Sam: So, to be honest, we just got really lucky with the Kickstarter campaign. Yes, we did put a lot of effort into creating a video that we tested rigorously until we knew that it would work. Then once we put it on Kickstarter, we just started getting organic traffic just from Kickstarter.com.
Andrew: You didn’t do anything else? You didn’t have some sort of email campaign? Nobody told you how to manipulate the numbers in Kickstarter? You did.
Sam: No. At that time, it was not as sophisticated as it is now. Right now, when anyone runs Kickstarter campaigns, you can’t just lucky anymore. A lot has changed about Kickstarter in the last four years. When we initially launched it, we did have a small email list that we built out of a post on Hacker News. That’s basically another post we did. Instead of the first one, where we didn’t see any sign-ups, after we made the new one when we posted on Hacker News, we got almost 100 sign-ups.
It was not even a post. It was just a comment. The topic was, “What are you working on?” And I just wrote, “SilverAir, this is what we’re doing. Here’s a preview.” And we started getting sign-ups. I knew at that time that this video is working. We finally cracked it. Then we put it up on Kickstarter, the same thing. People just started coming. We ran to the top organically and it kept that way. The $250,000 that we raised, $225,000 came from organic traffic from Kickstarter without us having to do anything. The remaining came from just press, organic press that picked us up.
Andrew: What about today? Do you do anything today to get your Kickstarter campaigns to take off?
Sam: So, by now, we have customers already. So everyone is basically lined up to be the first to purchase. That gives us a boost. That puts us on the front page within a few hours after launching a campaign, whether it is good or bad, even if our video is bad, we’ll still get that initial boost. But after that, we do spend on Facebook advertising through another company to buy traffic to the Kickstarter campaign and if that traffic converts, then we can make it a very good campaign. If it doesn’t convert, then we can’t.
Andrew: Can you tell conversion rates? I thought that Kickstarter doesn’t let you pixel, so it’s hard to tell what’s working and what’s not with Facebook ads.
Sam: We can tell conversion rates from the — we can look at the amount of money that came through from particular sources on the Kickstarter dashboard and Kickstarter gives you access to Google Analytics too.
Andrew: Oh, really? You can track it back to a specific ad on Facebook?
Sam: Yeah, you can.
Andrew: Okay. I didn’t realize that. I thought the advantage of Indiegogo was they did that.
Sam: Indiegogo gives you Facebook pixel. So you can look at your Facebook ads through the Facebook pixel on your Facebook dashboard. On Kickstarter, you have to basically create a unique link for every different ad and then you look at your Kickstarter dashboard to see which link is driving traffic and sales. We don’t do it ourselves. There are two other companies we work with.
Andrew: Who do you hire to do that for you?
Sam: It’s two companies. One is called Jellop Crowdfunding. The other is Funded Today. They’re both Kickstarter marketing companies. They specialize in Kickstarter marketing. They’re the ones who run ads for us.
Andrew: I know Funded Today. I remember when I interviewed the founder or the founder was brought to me for an interview. I thought this does not seem right. Something feels a little bit off with this. I never heard of this guy before. I’ve done a bunch of research afterwards and realized he’s the real deal. Why do you use Jello? What is it that you like about Jello versus Funded Today?
Sam: Jellop? So it’s Jellop, J-E-L-L-O-P.
Andrew: Oh, Jellop, okay.
Sam: It’s two different models. Funded Today, they take care of everything. Basically, they pay for the ads and then they take a percentage of the revenues that they drive to your campaign. It’s different. Every deal is different based on the campaign, but that’s the basic model. With Jellop, you pay for the ads, and then they take a percentage of the revenue that comes from those ads.
Andrew: I see. So you must be paying a lot. Since you don’t do anything directly yourself, it’s a lot of expenses. What kind of margins do you make at this business?
Sam: In the Kickstarter campaigns, we don’t make money.
Andrew: You don’t make money from the Kickstarter campaign?
Sam: Well, we make money to fund our inventory.
Andrew: Just to pay for the product you’re sending?
Sam: To pay for the product we’re sending and to stock up on inventory for the next six months.
Andrew: Okay. I see.
Sam: Then we make money on the product that we sell on our website.
Andrew: Okay. I see the advantage of it. So what is your net margin? Did you make money last year?
Sam: Yeah. All the money we’ve made we’ve put back into inventory, but yes, we try to keep a — I’ve never calculated the net margin because sometimes I don’t even pay myself because I want the money to be in the business, so our gross margins are about 50%, 50% to 60% depending on the product. The underwear is our lowest margin product. The sock is our highest margin product. The shirt is okay margins.
Andrew: The shirt looks good. Look at this. Let me tilt the camera down. What do you think? Is this the right size? It looks good on me?
Sam: I think so. Is the length okay? Is it too long?
Andrew: I think the length is a little long. What do you think? Let me take a look.
Sam: I’m not being able to see it, but try the other one too.
Andrew: I’ll try the other one too. What about shrinkage? Do these shirts shrink?
Sam: No, they’re pre-shrunk. The shirts are pre-shrunk. Yeah.
Andrew: All right. So you had a whole thing. It started to work. Life is good and then a little company called Lululemon comes along. I see you’re smiling. Let’s talk about that. While you talk about that, I hope no one comes into the office, but I’ve got to try this on. I’ve got to tell you something, not just for you, but for anyone listening. If you have a product or software and you’re being interviewed by someone or a reporter, send them the product. I’ll tell you why.
First of all, we’re all human and when someone gives you something, you feel the need to reciprocate. Robert Cialdini will tell you, right? If you give me a flower, I have no interest in flowers. I don’t even like flowers. I’ll toss it away as soon as you’re gone, but I’ll feel a sense of appreciation towards you and goodwill, so anyone out there, really, if you’re being interviewed by someone, just give them something, especially low value something because then you don’t feel like you’re being bribed, but you can appreciate it and want to reciprocate. So that’s number one.
Number two, the package looks just really nice. I want to see what’s in the freaking package. And number three, I actually care that my running clothes stink.
Sam: I’ll tell you just for the audience, my reason for sending Andrew the product, to send anybody product is I can tell you that my company is doing well and people love our product, but until you actually wear it and see it, then it all clicks. It all makes sense. That guy that said you can tell me it’s so comfortable, but it doesn’t matter, I just care about the odorless part. But the reason people come back to us is not for the silver, it’s because it’s a great product. When I send that product to you and you wear it, you can judge for yourself what the difference is between this shirt and a regular athletic shirt.
Andrew: I can see it. I never understood the value of silver until — there’s a long-time Mixergy fan, Michael Alexis, who decided at one point that he was going to become a minimalist. He only had one pair of pants, I think, and one sweater and one t-shirt and he was traveling the world. I go, “How are you doing this, Michael?” He said, “Silver.” I said, “What the hell you are you talking about?” He said, “There’s silver in these clothes, so it doesn’t smell and naturally it’s really smell-free.”
So I’m kind of a jerk. I start to smell him to see is he really stinky? Maybe he doesn’t know that he smells. People who smell don’t know it. He actually did not smell. So for him to have traveled all the way from China to San Francisco, which is the trip that he took when I saw him and not stink, pretty impressive.
All right. Let’s talk about Lululemon. What happened with Lululemon? I’m going to take my pants off now.
Sam: Okay. So Lululemon makes great products. I have a lot of admiration for the brand and their designers. They also use silver in their products. That’s initially where I saw silver. At first, we were actually using the same supplier. Their supplier was the same supplier who supplied silver to us as well. Then we launched the Kickstarter campaign.
Andrew: Yeah, kind of weird, right? I’ve never taken my pants off in the office before. I guess when I change into running clothes.
Sam: What size are you wearing, by the way?
Andrew: I’m going to go for the medium.
Sam: Go for the large. What’s your waist size?
Andrew: My waist size is 32.
Sam: I’m a 32 as well. Wear the large.
Andrew: Large. Okay. I like that. It’s also flattering that it’s large. Sometimes 32 is small. I hate to buy it just because it’s small. I don’t want my wife to see that I took off my small underwear. I’ll wear the size underwear that’s three times too big. I don’t want to look like a child. I once hired a personal shopper to come with and buy clothes.
I noticed something. She never said, “Get him a smaller size.” It would always be a phrase like, “A size down.” I forget the phrasing that she used. I said, “Who talks like that? Why are you saying that?” She said, “I’ve worked with enough men to know that if I say a smaller size, they feel insecure and they fight whatever it is I’m about to show them because I said it’s a smaller size. So I’ve learned to use other words, that way they’re less resistant and more open.”
Sam: That’s interesting.
Andrew: Oh, look at this. I like that it’s boxer briefs. This interview has become a whole other thing, hasn’t it?
Sam: It’s become a product testing.
Andrew: Also, you’re not slapping your name all around the waistband. Okay. Did we just miss your video? I am a large here. This feels nice. This feels really good. It kind of feels like I’m not wearing anything. This feels good. I’m running in place here for anyone who’s listening. I think I found a new favorite kind of underwear. I was wearing ExOfficio before this. Good underwear, but it’s a little loose.
Sam: ExOfficio.
Andrew: As a brand, I’ve heard that’s one of their problems.
Sam: This is merino wool, ExOfficio would be a poly nylon blend. It’s completely different material, completely different feel.
Andrew: Why do you have seams in the front? Why so many seams up here?
Sam: Your video is stuck.
Andrew: It’s stuck? We’re losing people, between the stuck video and me getting undressed in the interview, I’m sure we lost a lot of people.
Sam: Now you’re clear. Show me what you were showing me.
Andrew: Okay. Why so many seams in the front? I remember talking to the founder of SAXX, another underwear brand that did really well, and he said that one of the problems that he had with the earlier versions was too many seams in the front caused issues for people. Why do you have seams in the front like this?
Sam: Well, you have your basic seam which creates the pouch, then you have one seam down the middle, which actually does not exist on the inside of the underwear. It’s only on the outside. There are two fabrics and the seam is created to make a 3D pouch. So you put a seam so it contours around it. Then there is a double fabric on the inside so you don’t feel the seam on the inside. That’s the continuality of the front seam.
Andrew: I see. So you’re protecting the inside. So, bottom line, these guys, Lululemon said, “This new competitor is coming into the space. He’s got some silver in his clothing too. We’ve got to shut this down.” So they sent you a letter, no lawsuit. You get the letter. At that point, you don’t have a lot of money. What do you think and what do you do?
Sam: Okay. So that’s not exactly how it happened. So we finished the funding of the Kickstarter campaign in December. Then we paid a deposit to our manufacturers, and we were supposed to have everything delivered by June. So January, February, March, April, May, May comes around, it’s almost June and our manufacturer gave us an update that everything is on track. We’re going to ship your product soon.
All of a sudden, I get a call from the CEO of a company in Israel who’s our manufacturer and he called me up and he told me, “Sam, we have a problem. We’ve got a letter from Lululemon and they’ve threatened to sue us if we ship these shirts to you.” I’m like, “Can you tell me more? What’s the reason?” He’s like, “I cannot tell you anymore. I cannot share the letter with you. All I can tell you is we cannot deliver. We are not going to send the shirts to you.” This is like two, three weeks before delivery is supposed to happen. I’m like, “Oh shit, what just happened?”
So what we do — and at that time, I have another friend of mine who’s joined the company to help out and together, we decide that okay, our first step is let’s try to talk to Lululemon to see what the issue is. Our manufacturer won’t tell us what the issue is. What we do is we go to a lawyer in California and together, we draft the letter. We include our prototype shirt in that letter.
We send it off to Lululemon. We tell them, “This is our shirt. This is our product. Can you tell us what objections to have? If you have any intellectual property rights or anything like that, we don’t want to violate that. Let us know what the problem is and we want to solve it.” We also sent a copy of that letter to our — we posted on Kickstarter to our backers. So we can be transparent about it and we can tell them, “Okay, this is what’s going on.”
So Lululemon calls back our lawyer and they’re like, “Okay, we’re going to talk to you only on the condition that all our conversations will have to remain private and you cannot share it with anybody. You have to sign an agreement that you’re not going to talk about our conversations.” We’re like, “No, we can’t do that. We’re funded on Kickstarter by backers and customers and they deserve to know what is going on. So yes, we can agree to keep it confidential, but we have to share it with them.”
Andrew: “We can keep it confidential, except for telling the world.”
Sam: We told them we’d keep it private. You can make your updates private on Kickstarter. So we told them we can keep it confidential, but we cannot promise that — we have to disclose it to our backers, the people who funded this product to begin with. They’re like, “No.” So that didn’t go well.
In the meantime, it’s been almost five months since we funded the product. We’re working on our next product. I have more connections than before. People know about us. So, through the connections, we found another factory in the U.S. who was very eager to bring us on, take us on and make the product for us. So the factory in Israel is on hold. Then we started working with a new manufacturer in the U.S.
We still don’t know what Lululemon’s issue was with the product. They would never talk to us directly. Most likely, the guys, the factory in Israel, they made products for Lululemon a few years prior to that. When we started working with them, they did not have any relationship with Lululemon, but they did have the know-how and expertise and they were really, really good.
In other words, our product being made was better than any product that Lululemon was making, and I can’t say whether they were threatened or whatnot. They didn’t like the fact that we were using silver. They didn’t like that we were using a manufacturer they had worked with in the past, and they didn’t like the fact that we raised $250,000 on Kickstarter. That’s my best guess.
Andrew: I see. So they can’t come to you. There’s no real case against you, but if they threatened your producer, the manufacturer might want to work with Lululemon and doesn’t want to ruin that relationship.
Sam: No, they still don’t work with Lululemon. They have not worked with Lululemon. They just felt scared that they did not want to — they would rather sacrifice a starting relationship with Y Athletics in order to not get sued by Lululemon in the future.
Andrew: Yeah.
Sam: But they did not have any case.
Andrew: Yeah.
Sam: No real argument there.
Andrew: All right. Well, congratulations on the success of the company. This feels nice, by the way. You know what I like on the bottom of the boxer-briefs? I like the little rubbery thing that kind of hugs my leg. I’ve never had underwear that did that. That’s a really nice touch on it. It feels good. The company is called Y Athletics, by the way, because you just kind of liked the name and the URL was available.
Sam: That’s the URL. There’s no sexy story behind it, to be honest.
Andrew: You should make up a sexy story.
Sam: I know. I’ve been looking for something.
Andrew: You really should.
Sam: I did make up a sexy story, we just never marketed. So I don’t know if it’s going to work or not.
Andrew: I see. You want to test it on like a Reddit, “Hey, guys, what do you think of this origin story?”
Sam: Right. Yeah.
Andrew: Is that really what you do?
Sam: Well, we have our own customers. So instead of — we have about 15,000 to 20,000 who are willing to share their feedback with us, not all of them, but we get about 10% response every time we send something out.
Andrew: You’re just kind of trying out ideas and seeing.
Sam: We just send a survey. Now, we’re getting into the process where we know that we can’t fail once we make a product. So we make the product, it takes about a year to develop it. Then we make about 100 pieces, and then we send it to 100 special customers and they give us the feedback and then we go from there.
Andrew: This feels really great. I appreciate you sending it over. Thanks so much for doing this interview. The big takeaway for me from this interview is this. Number one, manufacturing still is hard, actually. It’s tough. You Google. You do all this. But it’s still a really tough process. Number two, it can be done, even if it’s a one-man operation with no outside funding. We’ve talked about the process for doing it here. I like that it starts out with a Google search, with no insider information, just I’m going to Google around, I’ll make some calls until I find the manufacturer that I can work with.
Number three, I just like constantly hearing how people start out by understanding the pain and frustration that their customers have with existing products, like the fact that you went to look at other people’s reviews to see what they were frustrated with and that became part of your ideation process I think to me is really interesting. I was doing it as you talked to see what came up.
Like you said, I don’t see stink so much in the ones that I looked up. I do see heavy. Here’s an example of a review of a t-shirt. “White shirts are not heavyweight as visible product picture.” I see. These t-shirts are too thin in this case. All right. Thanks so much for doing this interview with me.
Sam: Thank you for having me, Andrew.
Andrew: Cool. Thank you all for being a part of this. Remember, the two sponsors are the company that actually is frustrating Ronald Gerba that I’m using because it’s a contest, but it’s working out well and it’s worked out well for other people and I want to try it. I think it’s worth it. If you want to enter my contest, it’s at Mixergy.com/win and frankly, if you want to use this company that’s worked with so many other businesses to help them grow by using contests, go check out ViralSweep. And second is the company that will help you hire your next great developer. It’s called Toptal. Check them out at Toptal.com/Mixergy.
All right, Sam from Y Athletics, thanks for doing this.
Sam: Thank you.
Andrew: Bye, everyone.
