Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. Joining me is an entrepreneur who said, “I’m going to go into clothing. I’m going to go into undergarments, specifically.” And when I first heard about it, I said, “It might be an interesting, cute little project. She’ll do okay.” But really, can you do well competing against all the big undergarment brands in the U.S. thinking like Victoria’s Secret? And actually I don’t even know what they are. I don’t know. I don’t even know what they are, but it always feels like they’re just intimidatingly large.
And then, since the time that we were first scheduled to do this interview, she has launched an active wear brand too, which means he’s taken on Lululemon and Nike and all those other guys. And she’s smiling and doing well and amazingly well. I invited her here to find out how she’s doing. And her name is Megan Grassell, She is the founder of Yellowberry. They specialize in undergarments and apparel for tween girls. I don’t know how they’re doing so well in a world with so many competitors. We’re going to find out in this interview how she’s doing it and also how any of us who are interested in selling stuff, physical products, how we can especially if we’re in apparel, how we can learn from her and do well.
This interview is sponsored by a company that will help you do your email marketing right, it’s called ActiveCampaign and a company that will host your website right, t’s called HostGator. I’ve been holding off my cough till the end of that. I don’t know if you’ve ever done that where like you want to cough and you go, “Give me a minute to finish”?
Andrew: Megan, how much revenue are you guys producing?
Megan: So we don’t share any of our financial information, but we’ve grown a lot in the past six and a half years or five and half years, halfway through year six now.
Andrew: Is it ridiculous for me to ask if it’s over eight figures, which is what I have in my notes?
Megan: It might be ridiculous. We don’t share our information.
Andrew: I do have pretty solid info here. But I understand that you don’t want to reveal it. Can we say it’s a multimillion dollar business?
Megan: Absolutely. Yes.
Andrew: That’s ridiculously understanding that I feel. You’re doing really.
Megan: Thank you.
Andrew: You know what? When you started out, did you have this thought that I did which is, “Look at this. There are all these different companies already. What am I going to do coming into the space?”
Megan: Not at all. So when I started the company, I was 17 years old. And I started it because I took my younger sister shopping to buy her first bra. I mean, I grew up really competitively ski racing with a goal to like make the U.S. ski team and go to the Olympics kind of have that be my life. Never thought I would end up with an apparel company. And so I took my sister shopping to buy her first bra. And we went to all these different stores and I kept seeing the same kind of like super sexy, padded push up bra. It was kind of weird because she was 12 and it didn’t really even fit her. And I remember very specifically her walking out of the dressing room and what was suggested as a really popular first bra that was literally like this leopard print push up thing. And she walked out and she was like, “Oh,” like didn’t really know what to say. Like was very kind of embarrassed about it.
And I was like, “This is not . . . like where is a better option for a girl? This is bizarre. I really don’t like this.” And literally two days later, a part of the story that I often leave out with my dad was in this like adult ski racing league. And he won this bra as a raffle like kind of a gag prize gift. And he was like, “Megan, you take that. That was not for me.” And I held it in my hands. And it was the first time I ever saw a bra that wasn’t a sports bra, but didn’t have any padding. And I had this epiphany and I was like, “Oh, my gosh, this is exactly what Mary Margaret needs, is this like colorful, cute thing.”
And I don’t use the word lightly, I was obsessive. I was like, “How can I make bras for girls? Like this is a really, really, really good idea.” And I never thought twice about it. And I was like, “Okay, I guess to make a bra you need some fabric.” And I went to a seamstress and I had unknowingly ordered sailboat fabrics to go on a boat in the ocean to make our first couple of samples out of. And I used my sister and her friends as the product like fit models. Figured out how to build a website, kind of launched about a year later. And at this point, I was still a junior and then a senior in high school.
And the whole premise of the company was really building this product that was basically a non-sexy bra for girls. But also like I felt like the brand was always a much bigger than just a bra. And so if I was going to build something to support girls as they grow up, the whole aspect of the brand had to kind of bleed through this message of like celebrating girls as they grow up rather than rushing through the process. And I’ll pause because I don’t if you have questions.
Andrew: I’m curious about how you even found a seamstress. If I had to go find a seamstress, I wouldn’t know where to start. Was it just Googling and find a local seamstress?
Megan: So much of this I attribute to Googling. I grew up in Jackson, Wyoming, and ironically, there was a seamstress that was next to this lingerie store. And I just walked in her office. I didn’t call, she didn’t really speak English. And I was like, “Can you make a bra for me?” And I had these 10 different colors that I thought were so exciting and I was so proud of and she was like, “Oh, these fabric suck.” And she was like . . . no, not really. But then she asked, you know, she’s like, “Do you have a pattern?” And I had borrowed my dad’s yellow legal pad because I thought it would make me look very professional. And I showed it to her and she started laughing. She’s like, “That’s a doodle. That’s not a pattern.”
And so like all that stuff, I look and I laugh now, but it felt so kind of important and it was important, but like I think it was just stumbling because you don’t even know what questions to ask, you don’t know what you don’t know and what you do know. But the process of building a product was fun.
Andrew: I don’t mean to sound so like out of it, but a seamstress is just someone who makes clothes. There are enough people who need a seamstress that there’s a seamstress at a store that you can go into and show your stuff, too?
Megan: No, it’s not a bad question. And I actually I use that word. I mean, mostly what she did actually was a lot of alterations. And so I think she was trained and that she could build patterns, but even the patterns from her are paper patterns. So typically, like now there are factories, you know, we’ve got a pattern maker, or there’s somebody in-house to make adjustments. It’s all digitized. But when we worked with her, we had paper patterns that were cut out that I had to mail to the factory that they would then like digitize for our first couple of samples.
Andrew: And she made those . . .
Megan: But I do believe it’s antiquated but . . .
Andrew: She did those paper patterns for you. Then she created the first versions. You took it to your sister and her friends. They tried it, you adjusted. They tried it, you adjusted. You had what you wanted. Then you took the paper, you mailed it to a factory and that’s how you got your first . . . that’s right?
Megan: Pretty well. Well, but finding the factory, remember I’m in Wyoming and there’s not a lot textile industry going on here. So I went back to Google and I was trying to find the factories and at this point, you know, my job and my resume was . . . you know, I’m a junior high school. I worked on a ranch because I grew up on a ranch but that was what I did in summers and I bussed and waited tables. And so I had this my life savings was $4,000. And I was like, “Okay, I could basically afford to make 400 bras at $10 a unit.” And that’s such a small order for a factory and they would just hang up the phone because they weren’t going to make any money.
And so I happened to find this guy and he was like, “Sure, whatever, I’ll do it for you.” And he made my first 400 bras for me. I had two styles, two colors each, 25 per SKU so like a small, medium and large. And I got to my doorstep in January 2014. And I was so excited. I was like, “Oh, my God, these bras are going to take over the world.” Because the other thing and I kind of skipped over this, but so much of my excitement on the brand was more than just the product but really about like what this meant for girls. So if you think about the name, Yellowberry, before a berry is red or purple or ripe. It goes through different yellow stages, which is synonymous with the yellow years of a girl’s life. So going back to this like girls grow up at their own pace and not really rushing the process.
I did all the photography from the back which working with that photographer, she was like, “This is the opposite of what you’re supposed to do.” And I was like, “Well, it feels really not okay to photograph young girls, you know, that are 11 or 12 years old and put them on the internet. Like there’s going to be people out there that maybe not very conscientious.” And from a branding standpoint, I was like, “How cool is that we can sort of stand behind them and support them as they go out and take on the world?” And then we had like all the packaging, everything was to arrive like a present so it was really special to make this first bra experience really wonderful. And then we also, when I was writing they copy to put on the tags, I was like, “I don’t know what words to write here, you know, like, “Go Yellowberry,” or something.
And I actually lost a sister a very long time ago. And when she had died her godparents shared this list of 10 things that were kind of, you know, in her memory, but the essence of Caroline and they’ve always been up in my house. And I was walking home from school into my bedroom and I looked at them and for some reason, I just stuck out and I was like, you know, “Some of these are more than just Caroline but really what it means to be a young youthful exuberant girl. So it’s like go barefoot, love the outdoors and nature. Seek and find a hug when you need one.” And I put them on ties. And now they’re actually like sewn into the garment, which is kind of a special like company mantra sort of thing.
So all these branding elements, I was like, “This is what’s so amazing. This brand is going to take over the world.” So when I launched I was like, “This is happening. Like this is it.” And then 30 seconds later, I had my first sale and I was like, “Here we go.” And it was my dad in the living room who bought the first Yellowberry bra. He was just really proud. And literally for the first like the next four or five months, I sold I think like three or four products. And I was like, you know, I was so frustrated because, one, I didn’t know what I was doing. So I didn’t really know why I was frustrated. But so much of it was it was so much more than just this cotton bra. And I felt like I had to figure out how to articulate why the brand was so important and meaningful for girls at this moment. It’s like buying their first bra. And so I launched a Kickstarter campaign to try to raise $25,000 and . . .
Andrew: Let’s pause there before we go to the Kickstarter campaign. Because you had some sales before then beyond your dad. How did anyone else find you? How did they go to your site and buy?
Megan: Oh, my other customers? My mom and my sister and my friends. I mean, really it was . . .
Andrew: That was it. It was just friends buying because you were talking about it?
Megan: Yeah. I mean, I remember making a Facebook page. And there was this woman who bought three bras in his chocolate chip color. And I think she sent them all back. I can’t really remember but those first orders were all friends and family. And that’s to where I also was like, you know, the website wasn’t great. I mean, I didn’t even know the difference. I remember asking somebody what the difference was between marketing and branding because I didn’t get it. And I, you know, was in calculus, which wasn’t really applicable to like a cash flow statement or, you know, a P&L or something.
So I look back and I have to sort of laugh because so many of my problems were just very juvenile. And I think I had been where I am today at 23, crazy, you know, old and mature now, but I think I would have just had much more knowledge around sort of how to go about those things. But it really was when I started with this Kickstarter, that was kind of a much better launch, if you will.
Andrew: Because I know that helped you. You had 400 different bras that you paid every dollar that you had to that point in your life to get. How many of them did you sell? Was that like 50 before the Kickstarter campaign?
Megan: No, maybe 10.
Andrew: Oh, wow. Okay. And then you are hunting to say, “What can I do to actually to get more sales?” And you went to Kickstarter?
Andrew: What were you offering on Kickstarter that was different from what you were already offering on your site?
Megan: What’s crazy to me, I offered nothing different on Kickstarter and the bras were actually more expensive, which is textbook what you’re not supposed to do. And so my first bras were really expensive. And then once I added in like the shipping costs, they retailed at $38 and $42. Because I think I actually ended up . . . there was some like additional like charges and things I don’t really remember. But basically, I was like, “If I needed 50% margin, this is kind of where I need to price them.” And the bras on Kickstarter were $50. So you could buy one for $50 or two for $100. I mean, I think maybe . . . I can’t even remember.
I should go back and look at that because everything could probably just make me happy. But I launched at Kickstarter, and honestly, so senior and high school, I was embarrassed to go to school for the first four, five days because you could see there was like, you know, zero dollars raised of this $25,000 goal. And I didn’t really have a . . . you know, I knew that I needed money to like market it or maybe hire somebody, but I didn’t really have a great plan. I already had the product.
For me, it was really, I felt like you needed to test if people would even care about this idea of bras for girls. And I probably cold emails like 200 and some people, and one person responded and shared it on their Facebook page. And it’s this wonderful community called A Mighty Girl of like girl entrepreneur and like just amazing, like girls and women’s stories. And it was my campaign was fully funded in the period of 24 hours.
Andrew: Because of that?
Megan: They shared it. I mean, I had a massive following. But that was the moment where I felt like I finally found people that understood my brand because the average donation was like $10 or something. It was so small that people were like, you know, “I could have been fun straw.” With this idea that draws for girls and have to be sexy, you know, was crazy. And I think, you know, now six or seven years, a lot of things have changed in that regard. But like really focusing on this moment, it’s such a pain point for moms and girls, for whatever reason, I I’m not a mother, but as someone who’s watched my sister go through it and gone through it myself, really kind of found this vein that was a really like intimate experience with customers and products, which was amazing. So that was kind of like the real launch of Yellowberry. And then we had all of this incredible press and PR over the next three months I was on the “Today Show,” “Good Morning America,” “The New York Times” . . .
Andrew: How? I’m going to write a note down here to ask you about the press, the PR that you got. The thing, by the way, that stands out for me on your Kickstarter page is in the end you ended up with . . . what was that number? It was $40,000-some odd.
Megan: Forty two. Yeah.
Andrew: Almost $42,000. What stands out for me is I was going to correct you and say, “No, no, you sold the brand for $25, 190 people bought it for $25.” No, you sold stickers for $25 plus a 20% coupon. And 190 people bought that.
Megan: I think we had like people don’t even use the coupon. I mean, that’s why . . .
Andrew: Why? Why would 190 people paying $25 to get a sticker and a 20% off coupon?
Megan: It goes back to the strength of the brand. They weren’t buying the product . . .
Andrew: That’s what it was. They just said, “This is the way the world should be. Stop selling sexy bras to girls. Let’s care about them for who they are. I don’t really need one right now but I’m going to support you because I need that.” That’s what it was?
Megan: Yeah. So this funny that you said . . . my dad, he was like, “I don’t believe this. They’re giving you money.”
Andrew: Yes. That’s exactly the way I felt about it. That obviously the $1 people were giving you money. The $10 people you can say, okay, fine. Virtual high five via Skype feels like you’re offering a lot for the $10 people.
Megan: Which we didn’t even do the Skype calls. And that’s why it was insanity. For me, I mean, I had worked on a company for almost a year and a half in my bedroom, which my parents called my dungeon. I never left. I don’t know what they thought it was doing down there. But like I’ve been by myself, obsessive about this idea bras for girls. And it finally felt like people understood what I was trying to tell them and there was such a clear need for this product. And that was . . . it makes me emotional to talk about it because it was such a special moment. And the part of the story that I often sort of leave out as we get into this, I have no idea this was happening because my campaign was 30 days. The first four or five days I was in town and it was my senior year in high school in the spring. And so I actually ended up on this 10-day Habitat for Humanity a trip in Guatemala with like little to no cell service and Wi-Fi.
So I remember my mom dropped me off before I went to the airport. And I was like, “Maybe I’ll raise, you know, like $2,000 by the time I get back. Try not to throw a number that was going to make my head spin and then I would be really disappointed.” And then when we landed in Guatemala City like 12 hours later, I was like, “Oh, we have Wi-Fi. Let me see if I got one more donor, maybe grandma kicked in.” And I sat down in the middle lobby and started crying because it was at like $15,000. And my mind all of this time, all of these text . . . I didn’t even know what had happened but it was just that was the first little glimmer of this PR that just really took off. Sorry, I could talk about that for a long time. It’s really, really fun.
Andrew: Before we get to the care, I’m wondering about you. You are someone who is a competitive skier, right? Rodeo rider? Is that what it’s called? The rodeo rider? I don’t know. I’m from New York.
Megan: I was a barrel racer. I did a lot of barrel racing and pole bending in my day.
Andrew: Okay, you were going to go into the Olympics. How much did that help you? The fact that you are somebody who is so competitive, how much did it help you at this point in your business the first year or so?
Megan: You know, I thought about that a lot. Because I’m not going to college I’m like, you know, “What did I miss out on in a classroom setting that I should have learned that could have learned?” And I think without a doubt, I mean, obviously there’s probably spreadsheet and Excel things I would have learned. But the time and energy and the commitment and passion that that I’ve put into basically 15 years of my life for skier racing, there was no better training for Yellowberry because I feel like I would have continued racing who knows what would have happened? You know, some of my old teammates are on the U.S. ski team now, which is amazing. I know that that would have been me. I was still quite young.
But I basically had this massive void in my life when I retired or quit racing and that was immediately filled with Yellowberry. And I think for me personally, like I am just kind of, you know, a passionate or almost like obsessive person. But those are the two things in my life that stuck out like I was living, breathing, eating all things ski racing year round. And now that is Yellowberry. And I think that understanding like the work ethic was not something that I learned in like a history class but I learned that from sports events.
Andrew: I didn’t think of that. I was thinking about the competitive spirit that came from that. But you’re right. It’s just the work ethic.
Megan: Yes. Oh, hey, that goes without saying [inaudible 00:18:21]. Yeah.
Andrew: Are you a numbers person now? Are you somebody who has the big number up on your board somewhere in the office and you’re trying to beat it?
Megan: I’ve had to train myself I think to be more that way. Like when I think about Yellowberry, I’m like, “How can we just make the product in this experience in this customer relationship as wonderful as possible?” And so I think in that way, I have to push myself to be more numbers focused. Because I’m so much more on like the brand side of things just in the way that I think about it. But I also like I’ve always been really good with numbers and I love, you know, running through and modeling and like figuring out, you know, what to do, where to make them really grow and move forward.
Andrew: You know, I have noticed that you’re really big on design, even from the very beginning. And I don’t know how much of it was thought out or where it came from. But I’ve looked throughout your site’s evolution. Let’s go back to the very first Kickstarter campaign. There’s a bit of a girl holding balloons up in the air. You’re not showing the product right away. As I scroll, yes, I do see one . . .
Megan: I haven’t looked at that page in so long.
Andrew: There’s a lot of it. There’s the girls who are just like smiling and looking at the camera fully dressed, not like even the back of a bra, looking up in the sky with flowers in their hair. You’re not representing product, you’re representing the brand. And that’s a gutsy thing to do. Where did that come from? Was that [professional 00:19:42]? Because it seems like you couldn’t afford photos. So was it bad that you just . . .
Megan: No, no, definitely not.
Andrew: You couldn’t afford photos is right, right? But that’s not the reason.
Megan: No. I think those to me, and I think this is where, you know, as a young person and a young woman, I’ve struggled to sort of own things I’m really good at, but I’m really good at branding. And those things were very intentional because to me, it was never just about company, it was really about, you know, to be a brand for growth to grow up with. And I think finding the word to articulate that has taken years to really understand. But like now the way that I think about Yellowberry is there are girls . . . are prime age group is anywhere from like 8 to 16.
And if you think about those years in girl’s or boy’s life, like there are so many first thing that happens and we obviously started with the first bra, but there’s also your first day of middle school, your first school dance, your first locker, your first kiss, maybe it’s the first time you moved into your own bedroom, you know, your first car, whatever those things are. And from a brand standpoint, as we’ve really expanded, where do we see Yellowberry in the next year or 5, 10 years? It’s like, you know, to be the brand for growth to grow up with, we should be the place to go to, you know, be building the products for girls to experience these moments in their life and to have them, you know, the most positive and empowering as they can. That make sense?
Andrew: It does. And then I think about Ruth Handler, the founder of Barbie doll, who when she first came out with Barbie doll, it was too sexy. And a lot of people told her it wasn’t going to sell. But what she understood was the girls wanted to be women, wanted to think ahead of where they were. And here you are bucking that specifically saying, “Yeah, I see that they are going in that direction. But no, I’m going to go in the other direction.” How did you know that that actually is what they wanted?
Megan: Well, I think it’s a really interesting point that you’ve hit because we talked about that a lot in the office of like how do you not remain a brand that I wear when I was eight? Or like that’s a little kids company. And I think it’s really challenging. And that’s why this tween apparel space or tween space in particular can be girls are finicky and they change their mind. And I think we really approach it from, you know, what are girls . . . So we have the customer of the girl and the mom. And so you’re oftentimes selling and speaking to the mom. But that’s so driven by what the girls are actually know what they were. And I think for these first bras, there’s typically girls roll in two categories.
And one is they’re really shy and embarrass and have a ton of anxiety about it and they’re just really nervous. And the other category is the girls that are like, “Give me the purple bra. I wanted to go do cartwheels around my house. Like this is going to be great. And I think from that moment is like we want both of those girls to have a really positive experience. And so they continue to stay with the brand. On a monthly basis, we have a 50% returning customer rate. I mean, that’s insane. So that’s 50% of our customers coming back every single month, even as we grow, and it’s really amazing what . . .
Andrew: Wait, what does that mean, 50% of your sales come from past customers, right?
Megan: Yeah, every month.
Andrew: Every month, 50% of your customers are past customers who at one point over the last five years have bought.
Megan: One point typically in the last six months to a year.
Andrew: Last six months.
Megan: Like they’re coming back. So typically what we’ll see is we’ll see somebody come and they buy . . . they’ll try a couple different styles and see what works. They might come back two weeks later with their next purchase. And then in the next three months, they want a new style, a new color, a new product that we’ve just launched. And so they become really incredible cheerleaders for the brand. And I think in terms of that sometimes it’s hard to define, but we feel like if that’s like such an incredibly strong number for that to have maintained as we’ve grown and as the years have gone by is really phenomenal. And the reason that, one of the reasons is that we really look at growing up with this girl, and we’re giving her products as she goes into sports bra as she goes into seamless into everyday, and like basically giving her those super easy basics that she loves and is going to reach for every day.
We also know that we’re not going to be the only bras in her drawer. We’re not going to be the only product in her wardrobe. And we can be those sort of like buildable basics, go-to things that are not necessarily seasonal, but not necessarily trendy or fashionable. Like they’re fashionable and like trendy, but not in a sense that they’re going to go out of style. Like girls are going to wear leggings and tank tops every day. And they should love those from Yellowberry. And so I think that’s how we look at the products and how we can grow with this customer and not be cutesy. We talk about a lot of being cute, but not cutesy in terms of our branding and product and copy and photography and things like that. And it’s been a great thing to see girls that . . . We just did a photo shoot last week and we had girls that were 11 and the girls that were 15. And it’s really cool to see them in the product in their different way. It’s kind of special.
Andrew: All right, let me talk about my first sponsor and then come back into the story. Let me come back. I want to ask you about the PR thing that I interrupted. I want to find out how you got the first sales beyond this Kickstarter thing and along the evolution of the business how you continue to grow and sell. I want to hear about will customers outgrow you? And I’ve got lots of notes here. My first sponsor is a company called HostGator. Look how excited you are, Megan. You started this . . .
Megan: I’m going to grab my charger. Sorry.
Andrew: Yeah, go ahead. Oh, yeah, we’re doing this on . . . we tried so many devices to make this interview work. All right. Look how excited Megan is. She’s got this idea. She launched it. And yes, it took about a year of just blah until it took off. But she launched it. And the reason she launched it is because she was able to go online and create a web page and just start publishing. If you’re out there and you haven’t yet created something, you owe it to yourself to go to hostgator.com/mixergy and just fire up a quick website. It doesn’t take long. One click and you install WordPress and you could do anything. A blog, a website for your company, idea, your agency website if that’s what you want to do, or even an online store using WooCommerce.
So many different things that you could do. But here’s the thing, once you get it you just can’t help but create. And even if it’s an idea that’s a side project, a little doodle, do it. A lot of the people who I’ve interviewed here started off with doodles and then built their businesses into fantastic companies that they can’t believe have overtaken their lives.
If you’re looking to start a business right now and need a website, go to hostgator.com/mixergy. You’ll get a super low price so we won’t feel pressure, “Oh, man, I spent all this money. Why didn’t I create my idea yet?” It’s going to cost you a few bucks every month. You’ll be able to fire off as many websites as soon as you want if you pick that middle option on hostgator.com/mixergy and you’ll be able to create, create, create and once you start, man, your creative juices will start flying but all so your ability to produce is a muscle. And you’re just going to be able to strengthen that muscle.
Hostgator.com. I’m just going to do like a case study. I just went, fired off of your energy, Megan. Hostgator.com/mixergy. The lowest price they have available. Unmetered just space, unmetered bandwidth, unlimited email address, there’s 24/7, 365 tech support, even 45-day money back guarantee if you think I’m a jerk and I misled you, you can get your money back and go off in a different direction. Hostgator.com/mixergy. Welcome back. You were telling me about PR and I interrupted you. Let’s go into it. Tell me about PR and what happened after that initial Kick?
Megan: So we had and I look at this now because at the time it seemed normal, but we had one of the most abnormal PR launches I’ve ever experienced and I’ve seen. I launched this Kickstarter I told you. It took off, it was wildly successful. And when I got back, you know, I was still trying to finish up my senior in high school and all of a sudden I was I had all these orders to fill. And remember I only had 400 bars. And so I would be in school in calculus class trying to like answer . . . I had 8:00 a.m. calculus, which I don’t know why I said the one I think off. I’m trying to like answer customer emails in the back of the class like not really paying attention and I was always very studious. And so it was a weird switch.
And then I remember getting like the first Facebook message from a woman who was a producer at the “Today Show.” And she was like, “Hi, you know, we’d like to have you on the show.” And I thought it was a spam. And I was like, “Wait, what? What? This is crazy.” And so the same thing happened with “Good Morning America” and with “The New York Times.” And it just it really kept growing. And every segment and every piece was really surrounding bras for girls don’t have to be sexy. But also the fact that I was at this point 18 and still in high school, I started this company for my sister that had resonated so deeply. And it was really it was an incredible wave. And so we had all this press, we had all these people coming to the website and I was completely sold out of product.
I had one manufacturer who was struggling to get me like 100 bras, you know, a week and I was like I have thousands of back orders. And we had . . . we’d print them all out. When they came, we just call it the scary pile. It was in my living room. We didn’t even have an office. And so the pile just kept getting bigger and bigger and bigger. And I was like, “I don’t know what to do.”
Andrew: The pile of what? Of orders?
Megan: Of orders. And so I used my printer that was in my house because I didn’t even have . . . I shared it with my sister. And so everything is just taking over my house, my poor parents, my poor family. And at this point, I actually was when my mom became my partner because I was like, “I have a Spanish AP final. And, you know, all of these orders, can you just help me pack some boxes and take them to the post office tomorrow?” And she’s to this day is my partner and it’s been phenomenal. But it was a really fun time and a really exciting moment. And I think that first like year was really surrounded by all this organic press. We never paid for any of it, it just happened.
And then we ended up actually launching a partnership with American Eagle Aerie for their brand, which was phenomenal. And Jen Foyle who is the President or the CEO of that company is one of my most favorite people in the world. And I learned so much working with them. And that was actually what brought me to New York and to finally say, “No, I’m not going to college right now. I’m going to pursue this,” and kind of the rest is history, as they say. That’s not quite but . . .
Andrew: And all the press came because they understood the hook that you didn’t understand to pitch to them. They saw bras don’t have to be sexy as counter to this standard message as a feel good story. They saw a 17-year-old becomes an entrepreneur as a hook. They noticed it themselves because it was there and it was obvious apparently, yes.
Megan: And I think it’s funny. When I look at it back now, like I think so much about hook was because of my age. Like I think it would have been different had someone like a mom started the company just because it’s a little bit more intriguing to have a teenager. But that was no part of my thoughts. I mean, I just happened to be that young. And I was, you know, going to make it happen no matter what. So I did.
Andrew: You mentioned that your mom was part of the business, which made me wonder why wasn’t your mom the one who took your sister to get the bra? Why was it you?
Megan: We were together.
Andrew: Got it. Okay.
Megan: We were all there. I was older sister.
Andrew: I was trying to get a sense of family dynamics.
Megan: So I can’t say I took her. We both took her. Yeah. No, it’s fun. I think working with family is . . . not without its challenges but I also was so young at 17. I don’t think I knew anybody well enough or trusted anybody enough to work with this closely as a partner in something that I was ready to put my whole heart and sort of life and life savings into. And it’s been awesome. So she’s COO really runs all the operational side of the company. She has a great eye for product and color and sort of the quality factor of all that, which is a huge part of the company.
Andrew: We’ve talked about success after success after success, let’s talk about a painful moment just to show that it wasn’t all very easy. You guys at one point were redesigning the site. You took a look at the new website. You took a look at the new logo and it was wasn’t good. How did you feel?
Megan: It’s not that it wasn’t good, instead it was so not my brand. I think this was two or three years ago. We had brought on . . . I was told by experts that we needed to make some updates, do some changes, whatever. And so we had the opportunity to kind of put this team together, redesign the website, kind of update the brand. And initially it was going to be a refresh. And then it became this whole new look of a brand that was sort of focused on the color blue and a logo that just didn’t have this sort of natural feel of my brand. And I think it was one of the most important as my time as the CEO of this company and also just as a human being, I mean, it sounds so cliché, but like listening to your gut.
I mean, I was going through this process, which was months and months and months, and I couldn’t sleep, I lost a bunch of weight. I wasn’t really eating. I was like had so much anxiety and I couldn’t figure out what was wrong. And we got to the point where we’re getting ready to launch this new look, this new site, this refresh brand. And we’ve gone down this path with this whole team of people that are super talented and good at their jobs and they’re experts in their field. And so my fault, to be very frank, was like . . . I was like, “Look, I’m 20, maybe 21. Like I don’t really know. You’ve done this for 20 years, you’ve done this for 10 years. You obviously know more than I do. Of course, I had to listen to you. That’s why I hired you. That’s what you’re here for us. That’s what you’re really, really good at.”
And those women are very talented. But it got to the point where I was like, “There’s no way in hell that I can launch this. That this is not the company that I started.” And it was really difficult. I was the youngest person in the room by 10 plus years. I was on my own. This is in New York City. My mom was in still in Jackson because we had kind of split offices at a time.
And it was literally going through like almost what felt like bouts of depression and all this really difficult times to get to the point where it’s maybe sounds frivolous, but to really look into what could have been what I believe used to be really detrimental decision to my company and to have let it go on but also to be able to stand up and stop it and say, “You know what? I respect you and I think you are super talented but this is not what I’m going to do with my company.” And I think it was a huge learning curve. It was an expensive learning curve. But ultimately, I think it was I’m going to be glass half full always. I learned a ton and I think it gave me all the . . .
Andrew: Help me understand your view. What was different from your vision to give me an understanding of what your vision is? I think it’s helpful to see what it’s not.
Megan: I’m trying to think of how to phrase it. I haven’t thought about it this way before. When I think about Yellowberry, it really does go back to the name and the berry and like simple things like that logo and that whole natural, organic, supportive, kind, warm, gentle vibe that we’ve cultivated as a brand. And to look at something that was much more kind of commercial and not as authentic. I know it’s not such a buzzword right now but not as real was really difficult. And I think at the time and even as I look at it now it’s a beautiful thing that we did that they did build, but it just at the end of the day, it wasn’t my company and it wasn’t the Yellowberry that was going to be supportive and kind and gentle to these girls while also creating exceptional products. You know, it was a different look. It was a different feel. And I should be more articulate than I am being but at the end it was a really a gut thing.
Andrew: I get it. And then when I looked at the note here, I saw that you had to fire people who are 10, 20 years older than you and decide, you know, “This is me saying I trust my instinct more than I trust the fact that they’re older.” I said, “Fire that many people. Let’s see how many people at the company.” I went to LinkedIn, I did a search for Yellowberry. This is crazy. And maybe I’m miss-searching or something. It seems like there are eight people who work at Yellowberry and one of them is Zara Tahir here who works at Yellowberry in Pakistan, which is clearly not your Yellowberry. It’s like a whole other thing.
Megan: No. Yeah, no. And I don’t . . .
Andrew: Is it 10 people who work at your company?
Megan: There’s about 10 of us. We definitely work super lean. We run it still like a startup. I think of us in startup every day. I think we expect a lot from our team and we kind of like the idea of like stealth mode, which actually somebody told me they’re like, “What’s going on with Yellowberry. You guys are so stealth.” And I’m like, “I sort of love that.” But yeah. It’s challenging being in Wyoming in trying to build a team here. So we have a lot of people that work remotely. But yeah, small lean team.
Andrew: So what you’re trying to do is it’s under 10, it’s outsource factories, obviously, who are doing this still, right?
Megan: Mm-hmm. Yeah.
Andrew: Producing how much product? Can you give us a sense of how much . . . ?
Megan: I mean, we’re making like tens and hundreds of thousands of units. So it’s a lot of products.
Andrew: Over the course of a year?
Megan: Over the course of a certain amount of time.
Andrew: Okay. All right. So then who is manufacturing this? One of the things that we’ve kind of brushed over and I wrote it and then I underlined it, look, you can see in my notes. Manufacturing. You just found someone who said, “Yes, I’ll do your stuff.” Created your first . . .
Megan: Oh, yeah, we’re sorry about that.
Andrew: Was it good the first product?
Megan: Yes. And thank God it was, because I don’t know what . . .
Andrew: It was? You just looked out at the first person who took your order and who was willing to say, “Yes, I’ll take the small order,” actually ended up doing a good job?
Megan: Oh, he was not the first order. He was not the first person I called because I had all these people hang up the phone because my order was so small.
Andrew: Right. But he was the first person who said, “Fine. I’ll do the small order.”
Megan: Right. Right.
Andrew: And still did a good job.
Megan: And it was great. And I will tell you, we still work with him today. We’re one of their biggest, you know, customers and they pump out some of our best line products in the United States. So we do a fair amount of our stuff in the U.S. And, you know, we’ve gone through and we work both director factory and the supplemental work with like an agency for some really like some of the Asia factories. But basically we’re producing where the fabrics are sourced. So we do things in L.A. We do quite a bit in El Salvador, we do some things in like Vietnam, some things in Israel and Peru. So it’s a whole little global operation.
Andrew: Wow. No issues? Do you have any advice for someone who’s trying to manufacturer clothing based on your expense?
Megan: There’s so many issues. It is a building physical product. It’s really, really challenging. And I think the question arises . . .
Andrew: What are some of the issues?
Megan: You know, the question arises, they’re like, “What are the things that keep you up at night?” Absolutely, manufacturing is one of those things because I remember the first big shipment we got from like a real . . . it was an offshore factory. And we had things that were in the absolute wrong fabrics, wrong colors, that was not to spec, the sizes were way off. It’s kind of like, close your eyes and point at something and it was wrong. And I remember, I mean, we had like our first big chunk that was, you know, tens of thousands of dollars. And I was like, “Oh, my God, how. How am I going to pay for this? Like what do I do?”
And I think that was really challenging and we kind of went back and we’re like, “We definitely prefer factory direct or working with a really trusted partner who knows the factory well, has worked with them for years to be able to build those relationships.” It’s also really expensive like running your business. We’ve not raised any venture capital, we do have great private angel investors that have been with us pretty much since day one or day one of Kickstarter. And they’ve been incredibly supportive. But it’s sort of a daily challenge. Is just like the inventory analysis in and of itself is a big one because you’re not dealing with someone that you can just pop out of thin air. Product that has sometimes lead times of like six months and so if you’re sold out of it, it’s a problem.
Andrew: So what’s the advantage that of getting into physical products in a world where people are going for apps and digital goods? There are advantages. What are some of them?
Megan: We have to have clothing. So I think you can’t whip clothing out of thin air right now.
Andrew: But you don’t have to make it. Here are the advantages. I feel like one of the advantages is that it actually takes time and money to produce it so you’re not getting somebody out of nowhere who decides that they’re just going to price it at zero or half your price, right?
Megan: Oh, absolutely. Absolutely.
Andrew: There’s cost. The fact that it’s difficult when you do get it to a client and it does work, now you trust you enough for the next time, right? That there are big advantages using the products. All right. Let me talk about my second sponsor, speaking of advantages. It’s an email marketing company. And one of the things that I noticed when I went into incognito mode on your website right now is as soon as I went in, I got this offer, “Receive 20% off your first order. We’re glad you’re here. Join us right now and get that 20% off.” All I have to do is enter my name and email address and then hit the get 20% off button.
This is one of the reasons why you have repeat customers that you actually know who’s coming in, you get time to nurture them, get time to teach them, get time to even over time, show parents how to help their daughters find their first bras. I’m looking at your site here and I’m looking at a lot of the content that you’re doing here is teaching and nurturing and letting people know who you are. And eventually, when they’re ready, they can come and buy. Anyone out there who’s not doing email marketing, well, frankly, they’re probably not in my list, right? They’re not in my audience and on my subscriber base.
We’re all smart enough at this point to know that email is important. The question then is what do you use to do your email marketing? Now, I like software that will let anyone who’s listening to me recognize for example if you had ActiveCampaign recognize things like maybe there’s someone who just keeps going for the sporty or active wear over and over and over. Why should we try to sell them something that they’re not into? Why should we try to sell them, I don’t know, a bra if what their keep looking at his clothes for running, clothes for working out?
If they’re constantly looking at the same thing, let’s just show it to them. Let’s even try anyone who keeps looking at the hoodie and hasn’t actually clicked and bought the hoodie, what if we try emailing them and saying, “Twenty percent off the hoodie right now.” See if that closes the sale. If we can just push them over the edge.
That kind of thing used to be really hard to do. ActiveCampaign makes it super easy. And the reason they do it is they let you put a simple piece of code on your site. And then that tracks what people are doing on your site. When they click links in your email, that tracks what they’re interested in your email. And finally, all those little indicators allow you to start targeting. Target people based on what they clicked on and your site. Target people based on what they clicked on in your in your email.
Oh, here’s another cool thing, you probably already know about stuff like this. If they click on the same thing, yes, you can reach them via email. But you can also say, “I want all the people who clicked on this same thing to be one of my Facebook targeted audience,” and then start running ads to them on Facebook. So they see you on email, they see you on Facebook. Boom, you can close the sale.
ActiveCampaign makes it super easy. And if you go to activecampaign.com/mixergy, they will let you try it for free. They’ll give you your second month free if you decide to buy and then they’ll give you two free one-on-one sessions to strategize with their consultants. I’m doing a lot of talking here, Megan. This is way fast.
Megan: Yeah. I love it. I talk fast too.
Andrew: Finally, if you’re already with an email provider and you want to switch over, they will even migrate you for free. That is the special offer that they’re making Mixergy listeners. Go to activecampaign.com/mixergy.
What like about you, when you go on for a while talking and you do and I’ve intentionally not interrupted you, what makes you good is you’re telling stories, you’re showing me your experience. What I was doing here at ActiveCampaign was I was throwing features at the audience. What we need is better stories, right? And you’re really good that way.
Megan: Thank you. I like to tell stories.
Andrew: Tell me the story of how you got . . . what was it? American Eagle as a partner, am I right?
Megan: Yes, yes.
Andrew: How did you get them?
Megan: I had an email from Jen Foyle in my inbox that said, “Hi, I am the president Aerie and I would love to work with you.” And like her phone number and that was it. And I called her. I . . .
Andrew: Yeah, go ahead. Yeah, I’ll let you tell your story. I should not interrupt you.
Megan: Yeah. Tell my story. No, that’s okay. So I Aerie had launched their first ever Aerie real campaign which as a person, on a personal note, I was such a huge fan of because I was an Aerie customer forever, loved their products, was probably wearing their stuff when I got Jen’s email. And it was the whole idea of no longer retouching their models or Photoshopping any of the people in their products.
And once we connect on the phone and they ended up bringing my mom out to New York, which was my second time in New York City ever. The first time was for the “Today Show.” Second time was to see American Eagle. I was like, “Wow, this city is so nice. This is so great.” We just sort of sat down and talked about . . . she was like, “I feel like there’s so much synergy between what you’ve created, an Aerie with this new campaign.”
And so we built was essentially an Aerie for Yellowberry line and we had nine products. We had these beautiful bras that were . . . the idea was bridging the gap between the younger Yellowberry customer and the older Aerie customer. And so I learned a ton about creating a partnership, working with a publicly-traded company. It felt like I was just trying to be a sponge and like absorb as much as possible during that time. And it was like a six-month partnership. So there was a start and end date. And we’ve maintained great a relationship. I have huge respect for . . . I love them as a brand and as a company. And it was a really incredible thing that was sort of like . . . that was about a year after that first initial wave of PR. So it was kind of like the next big thing that put Yellowberry on the map. And really refocused us, which was exciting.
Andrew: And so I’m looking at Aerie now and their Instagram account. I didn’t realize that American Eagle had this brand. It says, “Aerie Real, the mission is to empower all women to love their real selves retouching free since 2014.” They have bras, they have dresses . . . well, not dresses but they have clothes. Why do they . . .
Megan: Yeah, the line is big. Yeah.
Andrew: It is. Why do they need you? Why couldn’t they just create it?
Megan: [inaudible 00:44:45] about the brand.
Andrew: They wanted the brand. But aren’t they a brand? Aren’t they trying to grow their brand instead of growing yours?
Megan: Oh, my God, Aerie is massive. Aerie is massive. But I think what they have done so well that we’ve talked about a lot is like they have these really great Aerie role models and I think the product is obviously exceptional. But what was really cool was I was kind of the age of their customer, but they didn’t necessarily reach a Yellowberry customer. So it was kind of like testing a way to work together. But also to see how they could essentially feature a girl who was an Aerie girl and something cool that she was doing. And starting this company that sort of had this great synergy with Aerie.
Andrew: Okay. And wasn’t competitive because they’re going after women. You’re going after tweens.
Andrew: Got it.
Megan: I mean, sometimes we’re like we’re like the older sister of the Yellowberry girl. But yeah. No, I love that company and I love Jen. I love their whole team.
Andrew: You also found a way to work with Nordstrom and Bloomingdale’s. How did you do that?
Megan: A lot of cold calling I think.
Megan: Those initial Yeah. I think initially it might have been, again, thanks to the PR, they were just very aware. And that’s where it goes back to like this is such a weird space of like, now there’s definitely a lot more bras in the tween market but the quality is kind of the biggest issue that we run into now. And so we’ll have girls and moms come to the website and they’re like, you know, we’ve tried six bras, you know, this mass retailer, and they fell apart after you wash it one time or they are really scratchy or they just didn’t give enough coverage. So we’re going to invest in this product, which Yellowberry products are typically more expensive than what’s available for mass market. But they will look the same after you wash them 100 times and they’re going to last and girls will sometimes pass them down to their sisters or you can also wear them for longer than a month, which is obviously the goal. So sorry, I actually kind of felt like I gone on a tangent there.
Andrew: Well, the thing that stood out for me is you cold calling in gotten Nordstrom, got Bloomingdale’s, got that size company to work with you?
Megan: I mean, we’re like, “Hey, we’re just featured on the ‘Today Show.’ We’d love to talk to you.” And so I think it was a little bit of . . . and if you’re talking to the [brother 00:46:52], they’re kind of like, “We’ve read about you. We’d love to talk.” And so it wasn’t like coming out of nowhere.
Andrew: I was looking to see where you got your traffic. I’m looking at SimilarWeb. And a lot of it is just direct traffic. And then a significant . . . so number one, though, is organic search. They’re looking for Yellowberry. They’re looking for teen girls lingerie shop. Are you guys doing much in SEO or is this just because . . . ?
Megan: We have more recently, but so much of that we just had really great . . . we come up really high in all those rankings because our site, when I wrote all that initial copy and things like it just ranks really well. And I don’t fully understand it all but that’s what I’ve been told from our SEO guy. Awesome.
Andrew: So you do have an SEO person helping you do this?
Megan: We do now but not before a year or two ago. So it’s pretty new. And I think we’ve come up with . . . like if you search girls first bras, Yellowberry is like the top three hit above like some pretty major retailers. And I think that’s typically how people will find the company. And you’re also . . . what’s beautiful about our customer and this sort of first time purchase is like, first of all, it’s not seasonal. So it’s not like you’re only going to buy them January 1st or in August or after school, it’s really year round, which is awesome. The product itself doesn’t go . . . it’s not like it’s only available in winter or summer. Again, it’s not seasonal.
And so you have somebody who’s searching for a daughter’s first bra because she needs it now or she is going to need it within the next couple of weeks. So she’s going to do a lot of research, she’s going to look at the size chart, read the reviews. We’re really proud of. We have hundreds of reviews that are really been awesome. And then they buy. And then they stay with the company for years. But that first purchase is so it’s not like they’re maybe looking to potentially have a new pair of shoes. It’s like they need a bra and they want the best bra for their daughter. And that’s where they come to Yellowberry.
Andrew: I’m constantly researching everything you’re talking about. I’m looking at . . . so I went into Ahrefs . . .
Megan: You’re fact-checking me?
Andrew: No, to get more detail. I went to Ahrefs. I said, “Okay, that’s a tool for people who are looking to improve their SEO. That’s going to tell me where she’s getting her backlinks. I’m looking at backlinks, a lot of them are articles about you. There’s a Forbes article how liberal arts colleges reinvent themselves and startup factories. I’ve no idea why you’re connected to that one. But I did keep going down this list and I saw . . . where was it? Where was it?
Megan: Because I was supposed to go to Middlebury.
Andrew: Because you what?
Megan: Because I was supposed to Middlebury College.
Andrew: Okay. Interesting.
Megan: [inaudible 00:49:17].
Andrew: Seventeen.com did post of teens doing amazing things. Teenagers, teen age inspiring stories. You’re in that. “The Guardian” had an article “Tired of pink and keen on football.” Boom, here’s some preteen feminist. You’re in that. A lot of it is articles about you. “Why Gen Z may mean trouble for retailers,” that’s CNBC writing an article. I feel like that’s where you’re getting a lot of your links, which then gives you a lot more credibility for searches, which means that all those 75% plus of people who end up on your site are finding you because all these articles. Am I right?
Megan: You’re absolutely right. You are 100% right.
Andrew: I’m ready. Yeah. I came to the bottom of it. I understand now.
Megan: You found me out.
Andrew: All right. Is it feeling better now to run a company? I know you told our producer, “Look, I’m really young. I’m running a company with all these older people all around me.” Is it now easier because you’re 23 years old?
Megan: I think it’s easier in the sense that I feel like I really had to grow into myself as a leader and as a CEO and finding the confidence to run my company. But I think that there are certain things that are definitely easier today. But I think the challenge is how do you continue to innovate and push forward and grow? Those are challenges that change every day because technology changes or the customer . . . or something happens. And so I think those are the things now that like makes me really anxious or keep my mind up. But I think that’s also what makes it really exciting. And going back to what we talked about earlier, if it’s like really competitiveness, it’s fun. Like running a company is you’re kind of like on the edge a lot of the time.
Once we have profitability, that was the time where I was like, “I can sleep better. This is really exciting. This is great.” But it still is like things can change so fast. And I remember being really anxious about this product launch that we just launched on Monday, which is the first ever Yellowberry GO collection. It’s true active wear for girls. We did jackets for the first time and we used this incredible fabric for new leggings and tops to match the bras and things and I was like, “What if we don’t sell one?” And I think those are . . . you look back and it’s a silly thing to think but it’s also like it’s such a new category. It’s like, “What happens if it doesn’t sell? What do we do?” And so I think . . . yeah, again, I don’t know about the story with finishing but I’m getting on a tangent . . .
Andrew: I’ll tell you where I would end it. I would end it in the same way I’ve highlighted and bold it. It’s from a Forbes article that I read about you in preparation for this. The sentence that I highlighted was, “I sent about 200 cold emails to people I thought would care about my story of my company and one person responded to me. And once they posted, my campaign was fully funded in less than 24 hours. It was almost dream,” that is the thing. That it’s like this cold calling, this persistence, this thing. And then, boom, one opens the doors. It didn’t change everything but, boy, did it open the doors. All right, for anyone who wants to go check you out, it’s yellowberrycompany.com. Am I right?
Megan: Just yellowberry.com. We have that domain name now.
Andrew: You do? You know what? I thought so.
Megan: We do.
Andrew: I want you guys to go to yellowberry.com. Got it. So now you’re starting to have your SEO people properly redirect everything to yellowberry.com.
Megan: Yeah, that’s a big project we’re working on currently.
Andrew: Yeah, you don’t want to screw that up. I interviewed this kid, this 17-year-old kid. He just switched the domain name and all the traffic that he had went . . . I’m not going to talk about it. I see you’re actually getting anxious as I bring that up.
Megan: No. Yeah.
Andrew: You got people working on it. So it’s yellowberry.com for everyone who wants to check it out. And I want to thank the two sponsors who made this interview happen. The first will host your website right. If you haven’t started a company, go with HostGator and get started. If you have, bring your hosting to HostGator the way that I did. They will level up with you.
Number two, if you need email marketing done right go to activecampaign.com/mixergy. And finally, I’m going to tell you, Megan, and everyone else, when you’re starting a company and you’re looking for guidance on how to do it right, we’ve got 200 entrepreneurs who I’ve interviewed here who came back to teach courses on Mixergy. If you want to go check them out, go to mixergy.com/courses. I highly recommend it. And all those people who are signing up for it and building companies are going to come back here and be interviewees the way that Megan is. Megan, thanks so much for being here.