In a digital world, offline touchpoints are still invaluable for growing a business—even when you're building an email list.
Look no further than Nate Checketts—the founder of Rhone, a premium activewear brand designed and built specifically for men.
In this episode of Shopify Masters, you’ll hear how he built a pre-launch email list manually through one-on-one conversations, and how it helped him launch his store to $80,000 in sales.
We'll discuss:
How to identify if an idea can actually be a profitable business.
Why you don’t need to create a completely innovative idea, but just make an existing one marginally better.
How to get into an industry that you know nothing about.
Listen to Shopify Masters below…
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Show notes:
Store: Rhone
Social Profiles: Facebook | Twitter | Instagram
Recommended: Klaviyo, Upwork
Transcript
Felix: Today I’m joined by Nate Checketts from rhone.com, that’s R-H-O-N-E.com. Rhone makes premium active-wear designed and built specially for men and was started in 2013 and based out of New Canaan, Connecticut. Welcome, Nate.
Nate: Hey Felix, how you doing?
Felix: Good, good. Tell us a little bit more about your story. What are some of the most popular products that you sell?
Nate: The company was started back, the idea came in 2013 and really, it was like most things, it was a result of an issue. My brother in law and I, we were both very active, he and I both live in Connecticut but commuted to New York City on the train every day, and so we just got to talking about the state of men’s workout clothing and how most of the stuff was really cheap and would fall apart easily and we were generally working out right before we got on the train, so it was a natural part of the conversation.
His wife, which is my older sister, had once said to me at a family get together that my shirt, which was freshly laundered, smelled bad. Nobody likes to be told that they smell bad, that’s just a terrible thing to hear. We were talking about it and started doing some research, and what we found is that most active and performance clothing is treated with chemicals that wash out over time. In fact, there’s an industry accepted standard, which is 15 to 20 washes. You can imagine, if you spent real money on this workout clothing, it’s kind of shocking to know that the company that makes that clothing plans for it to fall apart after 15 to 20 washes, that it’s actually going to absorb your sweat and the bacteria, and 90 percent of odor is caused by bacteria.
We started asking ourselves, is there anything better out on the market? What we found is that the US military and NASA used this encapsulated silver thread, the way it works, this silver was actually melted down and extruded into a polyester based yarn, and blended with certain fabrics to permanently fight odor and bacteria. What we started doing is we started reaching out to all the different groups that manufactured this on a commercial level, and asked the question, “Why is no one doing this for workout clothing targeted specifically at men?” That’s really how the company was born, it was just by asking those questions.
We started, very simply, just selling to friends and family, built a Shopify store with a basic theme, and now the company’s grown quite a bit since that point. Our most successful products, to answer your other question, are really our shorts and our short sleeved T-shirts. We’ve got a lot of different styles now and we’re very, very proud of the product and company that we’ve built.
Felix: Very cool. Like you were saying, this is a result of a personal issue you had that you guys worked out, but the clothing still smelled even after it was freshly laundered, like you said, and you started asking these questions. Did you guys have the intention of starting a business, or were you just looking for a solution for yourself? Tell us about how this problem that you had personally, how did it evolve into actually thinking that “Maybe we can turn this into a business.”
Nate: I’ve always kind of been an entrepreneur, and that sounds cliché to say nowadays, because I feel like it’s become popular to just be an entrepreneur, but that’s how my mind works. When I was younger, I was always the kid doing the lemonade stand and quickly evolved into going and finding the nearest golf course and jumping in the lakes and picking out golf balls and selling golf balls back to the golfers and we did car washes. When I was 15, my parents said, “You need to save up some money so you can pay for the summer camps and activities that you have going on.” I actually built my own summer camp for little kids, ages three to six.
Felix: Nice.
Nate: That’s how I made my summer living. I actually earned enough money that that’s how I bought my first car and had saved enough money that eventually, when I proposed to my wife, that’s how I bought the engagement ring. I really believed in this idea of if you want something to exist in the world, you’ve got to go build it. It was a very natural progression for me while we were having these conversations of something like this truly didn’t exist, that we felt was targeted and really meant for men.
It was a natural evolution to say, “Can we make it?” The next, more important question to ask is, can we sell it? Can we get people to buy it? Nowadays, it’s pretty easy to find manufacturers and build something, the real question is, can you sell it, can you convince people that it’s worth spending their hard earned money on? That’s a question we have to ask ourselves every day. We want this to be valuable, and provide real value to our end consumers. It’s not just, can we get them to buy it once, it’s can we get them to come back and buy over and over again?
Felix: Let’s talk about this a little bit more, because I’ve heard you say this a couple times already now, about how you just started asking questions and it seems like it’s a natural maybe curiosity for you to figure out what kind of questions to be asking, and then what kind of answers to look for. How do you begin this approach, then, of having an idea for a business, having an idea for a product, and what kind of questions do you ask yourself to determine if it can be a profitable business or not?
Nate: I think there’s a lot of different types of businesses out there. I was actually speaking recently at a university, and a girl raised her hand and she said, “What do you do if you feel like all the good ideas are taken?” This class was an entrepreneurship class, so I didn’t really know quite what to say, but my first reaction was, “Well you’re probably in the wrong class, right?” I then reminded her that the US patent and trademark office actually closed at one point, because at least as it was explained to me, when the toaster came out, the patent office kind of said, “Well, that’s everything. We’ve invented everything there is to invent so not sure that we should keep on going.” Obviously, we know that so many things have come since the invention of the toaster and the reality is is that innovation breeds innovation and new ideas create more ideas.
You think about how many businesses were invented just off of social media alone. Not just the platforms, but all the tools and the apps, and Shopify’s a good example of this, the whole app community and ecosystem that exists off of Shopify. I think it really is about asking questions and not just always about inventing new things, sometimes it’s just about making things marginally better. A great example of this is Trunk Club which built an automated personal shopping platform, basically. Really, they weren’t doing anything new or had really good IP around it, but what they did do is they found a way to remove friction from the shopping process. I think for me, when I evaluate and assess businesses, it’s always just a question of, “Can I make it incrementally better? Can I create value?” Oftentimes, it’s self motivated, is this something I would want or something that I would be interested in?
Felix: This idea of marginally better, rather than trying to become completely innovative, is something that I’ve heard a lot from, especially seasoned entrepreneurs that have seen new products, that have taken existing products and just made small improvements over them and created million dollar businesses off of it. How do you figure out what that thing is, what that particular feature that you can improve, that particular feature that you can add? Not necessarily how can you figure out what it is, but how can you figure out that by doing this, it could actually create a business for you that will actually win customers from the alternative that does not have these marginally beneficial value adds?
Nate: I think there’s a couple of practical questions that you have to ask yourself, and the first is, and people have ideas all the time, so really, you have to ask yourself some hard questions. Even if you have a really great idea on how to improve something, you have to ask yourself, am I ready to put the time, effort, energy, commitment, heart ache, ups and downs, into building and selling a product? Some people just aren’t built for that.
The other thing is that now there are so many tools to help you take something from concept to selling that just didn’t exist before. Once you get past that point in your mind, then you need to start asking yourself some really practical questions. What is the total addressable market size for whatever idea I’ve come up with? Take any widget out there, let’s say that you create a new tool for farmer’s to improve their growing season. Now you’ve got to ask yourself, how many farmers can I practically reach with this new widget or tool?
There’s research tools, we’ve got the biggest accessible research library available to all of us in the form of Google, you can just go start asking yourself questions and researching and then you can find, “All right, well, I’ve identified that there’s 500,000 farmers that fit the need of this widget, what percentage of that population do I think I can meaningfully reach and convert?” If you start getting into the neighborhood of, well, in order for this business to be successful, I have to convert five, or even 10, or 15 or 20 percent of my total addressable market, that’s a hard business. That kind of market share takes a long time to earn.
What I liked about this business in particular is, there are going to be many billion dollar winners in this category. It is a massive, massive market size. The US sportswear market is an 83 billion dollar market, from the research that we did. We felt, “Okay, if we could go and we could carve a niche for ourselves in premium men’s active, we could still build a billion dollar company.” For us, that was a pursuit that we looked at. Even if we failed reaching that, we could still build a very meaningful sized business, because the market size was so big.
Oftentimes you hear the idea of you go small, go niche, and I think that’s important, but you also need to pick your head up and say, “Am I creating something for a market size of a hundred people, and if so, can I realistically reach 50 percent of those people, and if I reach 50 percent of those people, how much money am I making per person?” You can figure out whether or not you really have a product or a company or something in between, or neither. You really need to do that work up front. I’m amazed how many people just say, “Oh, I’ve got this great idea and I’ve started spending time, and I’ve engaged this factory.” It’s like, you haven’t done any work in thinking about whether or not this is a good idea and if there’s a big enough market out there to reach it.
Felix: I think that there’s this honeymoon phase, it almost seems, with entrepreneurship where it’s so exciting to think about all these ideas, think about pursuing these ideas, but then I’m not sure if it’s fear or just ignorance and ignoring these, the hard data, the actual numbers, the math behind, is it going to be an actual business, can it become a company, or is it just a product? These questions that you were talking about. After you think through all this, and do the math, and do the homework, and realize, “Okay, there is a potential here to build a very profitable, maybe million, maybe billion dollar business.” I’m assuming next you have to actually validate this in the real world. Did you go through a process like this with Rhone?
Nate: We did. We did the research and we came back and said, “There is absolutely a void in the marketplace for anything like this.” Nobody was doing what we felt needed to be done in the space. We started asking ourselves the question, we say we can build it, can we actually build it? We started very simple, and we looked at sites like oDesk and Elance which are now joined together as this great outsourcing community. We started trying to find apparel manufacturers. Neither me nor my brother in law came from fashion or from apparel or from manufacturing. He was an investor in retail companies, and I was working at the NFL at the time in a sponsorship strategy group. Neither of us had any real, relevant experience, and so we had to just ask a lot of questions.
It was funny, sometimes the questions we asked, it was like, they were very, very obvious. The people, it almost discredit us to ask these questions to the people we were talking to, but we quickly learned by asking these questions, and not being afraid to ask those questions. We found a couple of providers and we started interviewing them. One provider, in particular, was led by the former head of the first head of innovation at Nike. We said to him, “Hey, we’ve got this great idea, and this company that we want to build, and we want you to help us manufacture the clothing.” I’ll never forget, he said, “Well, I don’t really work with start ups.” We said, “Well, we’re different. Listen to us, we have this great pitch and we’ve got a marketing deck.” He’s like, “Okay, well you can come and pitch me on what you’re doing.”
We walked him through our thinking, we walked him through our market validation, and we finished the presentation and it was kind of quiet. He said, “You know, I have been waiting for somebody to go after this segment.” I think they had 30 companies that they were helping, and big companies too, they did work for Lululemon and Nike and NorthFace and Bodybuilding.com and [inaudible 00:16:54] so big companies in the active-wear space, and he said, “You’re right, nobody is going after this space the right way. I personally want to help design your first line.” That was a game changing moment for us, because to have somebody with that kind of credibility and pedigree get involved so early on was really, really helpful.
Even still, after we were working with a credible group, we were getting prototypes back and we just kept asking questions. “Why does it feel this way? Why is this fabric more expensive than this fabric over here? Why does it take so long to manufacture, are there ways of shortening that time? Are there ways of increasing or decreasing the number of quantities we need to make, how does that impact pricing?” Again, so many questions. That slowly built a knowledge set. We started to surround ourselves with really smart, great advisors that we trusted and could help us call BS with our partners if we felt like that needed to be done. It really came in incremental steps, but asking a lot of questions.
Felix: Clearly, you and your brother, was it brother in law?
Nate: Brother in law, yeah.
Felix: You and your brother in law clearly had, like you’re saying, no relevant experience, knew nothing about it, and taught yourself. Hindsight, looking back at all that you’ve went through, whenever you start a business, start a company, you always want to stack the odds in your favor, you want to make sure you have all the advantages on your side. One big disadvantage right off the bat, was what you’re saying is that you did not have any relevant experience. Looking back, would you be hesitant next time, to go to an industry that you didn’t know anything about? Would you lean towards looking at what you might already, looking back at your experience and trying to find something that overlaps with your previous experience, or do you think it doesn’t matter that much?
Nate: I feel like saying, “I don’t know that.” Or, “I don’t come from that industry.” Is really more of a giant excuse than anything else. The pathway to knowledge, maybe not mastery, but the pathway to knowledge is so short now, and it’s shorter than it’s ever been, because you can really, in an hour, I can find the 30 experts in the world on astrophysics and how it applies to marine biology. Whatever it is, you can find experts in any given field just by doing some quick searching. I really believe that ignorance is often times an entrepreneurs best friend, because if you came from an industry, and you knew how difficult it was to accomplish a certain task, you’d likely be so paralyzed with that fear that you wouldn’t even take the first step.
If I truly came from retail and manufacturing, I’m not sure I would have ever started this company to begin with, because I would have been afraid about all the complexities and all the things that can go wrong and getting fabric to the cut and sew manufacturing and getting the seams right and the fit dialed in and the color to come through the right way, and the margins to be right. There’s just so many complex things in any given industry that I think, often times, when you see innovation, it comes from somebody who didn’t come from that world, because one, they think about it differently, and two, they’re not afraid. They don’t have these preconceived notions of what’s right and what’s wrong and what to do. It does help to have that relevant industry experience, but I certainly don’t think it’s a prerequisite to be successful in a given field.
Felix: Like you were saying, you guys really put yourself out there, made yourself very vulnerable by exposing your ignorance so that you could get answers, so that you could get help, so that you could ask these questions. I think sometimes the concern for a lot of entrepreneurs is that, I think one of the concerns, at least, is that they don’t know how to figure out who’s actually an expert, and who’s just BS’ing, I guess, essentially, because you don’t have that context, and you are looking to other people for their expertise, but then because you know so little. Was it hard for you to figure out who’s an expert, who’s not, did you ever run into those kind of issues?
Nate: Totally, that is a very real issue and I think one that entrepreneurs really face, because it’s hard when you don’t come from the field for you to be able to call somebody out, and to really hold them accountable on their opinion. When we first got started, if somebody told us they were an apparel expert, we had no way of validating or verifying that. Part of it was just asking people within our network and trying to validate people that way and if somebody was going to be an advisor or was going to be compensated for it, then we really tried to do extra homework and ask for references and call people and say, “Have you worked with this person? How knowledgeable of the industry would you say they are?”
The great news is that we were able to find a lot of advisers who weren’t looking to make money off of us, but were just trying to be helpful. I was amazed at how many people were so willing to give up both their time and their expertise without any expectation whatsoever in return, they were just trying to be good and helpful. Generally when you came into situations like that, I found that people were pretty genuine. If they didn’t know the answer to something, they would tell you, because they didn’t have any perverse incentives. It’s the situations where you have an adviser or somebody’s trying to get something in return for helping you, those you need to just have both eyes wide open.
Felix: You do your homework, do your own research, look to your trusted network, and then look at people’s incentives, right? See well what could they be motivated by? Like you were saying, if they were just trying to make a buck off of you, then you should be more suspicious than someone that’s just trying to help and not expecting anything in return.
The second, I think, concern, that some entrepreneurs might have about talking to, especially talking to these providers early on that have a lot of resources, is the fear of getting their ideas stolen. Was this ever a fear that entered your mind, you know approaching someone that has a resource like you were saying, this provider you worked with worked with 30 other companies, Nike being one of them. Was it ever a concern in your head that maybe they would just take this idea and run with it without us?
Nate: I started a company right out of college, and it was a very unique idea. It was basically building a mobile point of sales system on your cell phone that allowed you to order food and merchandise from your seat at sporting events. At the time, the iPhone wasn’t even out yet when we first put the business plan into existence. I remember being terrified of sharing that idea. If I ever spoke to anyone, it was like, “Oh, I need an NDA.” That was really such a mistake. There are very few ideas that are just so unique that people will steal them. Most of the time, anybody who’s worth their salt, they’re usually busy doing something else. They wouldn’t have the time, the resources, or the bandwidth to even take your idea and really do something with it.
There are situations that come up and things that happen that way, but I think far more often there are ideas that die because people over-complicate the business starting out. They require, “I’m not going to tell you my idea, because I need NDA’s.” This happens to me all the time, I have entrepreneurs reach out, “Can I get a couple minutes of your time, I’d like your help with something.” I get on the phone with them and they say, “Well I can’t really talk to you until you sign an NDA.”
I just say to them, “I totally appreciate that, but it’s not that I’m unwilling to sign an NDA, but it’s hard to know and look at all these forms, and if I need to mark it up, I’d rather just not talk about it. Rather not learn your super secret, million dollar awesome idea that nobody’s ever had before.” You need to be careful, you need to be smart, but I would err on the side of being more open and transparent, and even vulnerable, because that’s generally what leads to help and people willing to, especially good people, people being willing to dive in and help you out.
Felix: This is one of the key things that I’ve learned, too, is that in order for people to trust you, you have to put your trust in them first and one of the biggest steps towards that direction is to be vulnerable, to say, “I’m willing to open this up to you because I trust you.” Then in return, they’re much more likely to give you their trust as well.
One important thing that I also want to get you to elaborate more on, is this idea of over complication. I totally agree with this, too, where a lot of businesses tend to stall out. It’s not like they can’t eventually be successful, but they add so many road blocks, so many hurtles, into their own path, that they stumble over their own obstacles that they put out there. Are there other examples that you can think of that you see other entrepreneurs adding friction or over complicating, that makes you want to rip your hair out just seeing how much work they’re putting on themselves, that they don’t need to be putting on themselves?
Nate: By the way, in all of this, the only reason I have any perspective on these things is because I probably made every mistake that was possible. You talk about over complicating, it’s a natural tendency for all of us to do and one of the things that always makes me laugh is when people spend a lot of time on their logo and their business card and the name, and it’s like, that’s what everybody wants to spend time on up front. It’s not that those things aren’t important, a good or a bad business name can certainly have an impact, a good or a bad logo can have an impact, but those things don’t matter if you don’t do the fundamental things of creating value in the first place.
When we started Rhone, we didn’t have a name, we just called the company Newco. Every time we talked about it, we just said, “What should the Newco’s product be, or how many styles should Newco have?” Eventually, once we felt like we had a business that was worth building and building and developing the marks for, we said, “Okay, now let’s take the time to do that.” Rather than start off and say, “We need to have company email addresses, and we need to have the logo.” That stuff’s fun, but my friend, Noah Kagan, he calls these people wantrapreneurs instead of entrepreneurs. It’s people who spend time on the idea of being an entrepreneur rather than on the things that actually create value.
A good example of this is, I spoke to these guys who were really clevre and they had this concept of basically, a very creative concept of turning cemeteries into a social network, if you will. Obviously, these people are dead, so they can’t create their own profiles. The idea is that friends and family members could create profiles for people that were buried and then if you were visiting a deceased friend or loved one, you could, in theory, go around and learn about the lives of people in the cemetery and this very clever idea and they had this idea about using QR codes. At the time, nothing like this existed. I think Ancestry and others have built out something like this, but they were so focused on getting people to pay for it up front. I said, “Rather than getting people to pay for it, and then going and building it, are there ways that you could create value in the short term that cost you and them nothing?”
A good example of this is getting letters of intent. They started going around, I think, or at least this is what I encouraged them to do, I don’t know if they ever did it, but going around to all the cemeteries and just asking, “If a product like this existed, would you be willing to install it or offer it up as an option to your patrons?” I guess they’re not offering it up to their patrons, but you know what I mean, the people who were making those decisions. That’s what you need to focus on as an entrepreneur, is what can I do to create value, create real value so that eventually, either I can sell this or I can get somebody to give me some money to put some money into the business. We often focus on the things that really don’t matter in building value.
Felix: This is, I think, an important way that you’re phrasing it, too, because you’re not talking about finding ways to sell, finding ways to pitch your product, you’re talking specifically about creating value. Creating value for, obviously, your end customers. I think a potential fear of entrepreneurs is that they might spend so much time on what they think is valuable, creating that thing, and then it not paying off for them in the long run. Is there ever a chance that that could happen? I guess there’s a chance for anything to happen, but is it a real fear that people should have, that they might spend a lot of time creating value but then not have it set up, I guess, in the right way for them to benefit from it, or at least to be able to fund a company to build a company off of it?
Nate: I guess they should have a healthy amount of skepticism but welcome to the world, right? So many jobs are like this. You talk about real estate brokers, they could show somebody 50 houses and those people might not ever buy a house. That’s real time and money that this real estate broker has spent driving around and there’s opportunity cost there. Most businesses have a component of that and the reality is is there’s no problem or challenge so big that sitting there being afraid of it is actually going to fix the problem in and of itself.
I think people should have a healthy amount of skepticism and make sure that they’re spending time on high priority, high value tasks, but not overly concern themselves with, “Well this might not pay off.” The reality is you’ve got to hustle, you’ve got to drive so hard. I can’t even tell you, we’ve raised some great money but there were plenty of conversations that were dead ends. “So and so’s got a wealthy uncle who knows a friend.” I just spoke to everybody, just spoke to everybody. Eventually, I’ve gotten better at discerning, but I only built that expertise by failing a lot of times and trying a lot of different things.
Felix: Very good point. I want to go back to your experience with Upwork or I guess oDesk and Elance at that time, which is now called Upwork. When I hear about Upwork, it’s usually for hiring things like assistants, designers, or basically very computer technical kind of work. You went to Upwork to find somebody that was a manufacturer, or provider? Tell us a little bit more about that experience. Was there a category for this type of provider that you were looking for?
Nate: Once I discovered Upwork, which, at the time, I was using oDesk but now Upwork, I couldn’t believe it. I was obsessed with this idea. I had a full time job, but I was doing research and so I actually hired some part time research assistants and I was paying them like less than five dollars an hour and they were sending me PowerPoint charts and Excel spreadsheets and I was like, “Oh my gosh, what else can I find and see and really outsource?”
I had read some great articles about it, so it was kind of challenging myself and the ultimate pinnacle of what I did is I was coming up on the five year anniversary of when I had proposed to my wife. I had this idea of “What if I could get a beautiful oil on canvas painting recreating this moment?” I had a photograph of it, so I went to Odesk and started looking for oil based painters. Lo and behold, apparently Vietnam is like a specialized country for painting and I found someone and they sent me some samples and I sent them the photo and I said, “This is how I would tweak it.” I have the most gorgeous painting of one of the most important parts of my life, and I think I paid like 200 dollars for it, and it’s huge. It’s gigantic. I was so blown away about the amount of things that I could outsource.
My wife and I, we built an iPad application using outsourced designers and developers and so for me, it was a natural instinct to go there. We did, found some people but as you pointed out, on the manufacturing side, I think the talent pool is less deep than it is on obviously website design and programming and some of these other things, but you can find resources there. It’s a good way to start, it’s also a good way to learn how to manage people and give very clear directions about what you want.
It’s so easy to fall into the trap of, “Oh, that looks good, yeah, no, I think you did a good job here.” We’re so worried about offending people rather than again just saying, “I like that, but why did you put the button there?” Or “Why did you use a snap button versus a regular button.” Or "How come the seam doesn’t stretch in the back. No, I really want it to look exactly like this, and here’s these three pictures, and let me point arrows and just be very, very clear about what you want, because most of the time when you’re dealing with Upwork providers, English is a second language to them, so you have to be very clear about how you speak to them and I think it’s not that they’re not brilliant, because many of them are, it’s just that English is their second language.
I think the rule of thumb that somebody had said to me is, “Write clear instructions as if you were giving instructions to a first or second grader.” If that’s the kind of instructions that a first or second grader could understand, then it’s going to come through really clearly. That’s kind of the case, also, with speaking to people where English is their first language, you need to be very clear about what you want. If you give vague directions or vague instructions, you’re going to get the amount of difference that you can get in return is, it’s input, output. What you put in comes out. That was a great lesson. It’s a long winded answer to your question.
Felix: I think that’s great advice and even like you’re saying, explaining it simply is a great exercise. Not just for non English speakers and not just for even English speakers, but it also forces you to think through it completely.
Nate: That’s exactly right.
Felix: I think Einstein had that quote about something about, “If you can’t explain something simply, then you don’t understand it well enough.” I think that’s an important thing for you to understand before you try getting everyone else to understand it. This experience at Upwork, then, I think one of the issues people run into when they hire remote workers or from other countries is finding high quality workers. Not necessarily because like you were saying that they’re not intelligent or anything, but there’s just so many workers on, there’s so many potential candidates, and a lot of times it is advantageous for them to carpet bomb, I guess, all of the listings out there. You might get generic applicants that might not fit exactly what you’re looking for. Tell us about your hiring process, how do you filter for great candidates, how do you conduct your interviews to make sure that you’re hiring the right people?
Nate: I don’t know if this was right or wrong, but what I did, and I felt like I had really great results on there, so many I did do something right. What I did is I would look for as close a match from a category perspective of what I was looking for. Once I got the pool of candidates and let’s say that you get it to eight or ten thousand candidates, then I would start going and being very specific. “I want a candidate who had put in a hundred hours on Upwork.” I wasn’t willing to spend my time and resources towards helping somebody learn the Upwork platform. I wanted somebody who already knew it, was already comfortable using the Upwork platform, and had ratings. I wanted somebody who had a hundred hours in and was at least four and a half stars.
There are certain tests that you can do. For programming, for example, if you’re looking for an IOS developer, you can say, “I want them to be in the top ten percent of the IOS testing.” Or, “I want them to be in the top ten percent of C+ and I want them to be in the top ten percent of English speaking.” You can filter all of these things, and generally, I would try and get the pool down to like two to five hundred applications. Then I would start clicking through and going into their profiles, and then I would personally invite them to apply to the job. I would generally invite 20 to 50 candidates and I would ask them, I would be very clear, “This is what the job is, or here’s a brief description of what I’m trying t odo. Tell me why you think you’re the right candidate for this, and include any relevant portfolio samples.” I would further narrow it down, and then I tended to have a gut feeling based on previous experience, and I would just try and make a quick decision.
In some cases, I would do tests. I remember we were for our iPad application, we needed a song. I went to sound engineers and I said, “This is the type of song that I want.” It was almost like a 99 designs process, right? I said, “I want you to submit a 15 second clip.” For some people, they were like, “I’m not going to do that, I’m busy enough on Upwork, and I don’t need this guy.” I would get five to ten samples and I was like, “Man, I really like this one. I already know I’m going to like it.” I’ll continue to build this out and then I would go and I would hire them. That was generally the process, no magic pill to it, but just taking the time to interview and do the work up front, because that saves you a lot of time on the back end.
Felix: Makes sense. I wanted to talk a little bit about the growth of the business, the marketing behind this. I think earlier you were talking about first starting off by selling to friends and family and what happened after that? How did you start selling to strangers? What kind of marketing channels worked best for you early on, and is it still what’s working today?
Nate: I think what we focused on in the early days was, it was all about email. Before we even launched our Shopify store, we had built a splash page and I can’t remember the tool we used off the top of my head, but it was really easy. We basically uploaded a photo that we had designed and then we were capturing emails. Everybody we talked to, we were like, “Go sign up for our email list.” One of my friend’s who’s the CEO of a company called Love Sack, he said to me, he gave me some great advice in the early days, he said, “Whatever you do, you’ve got to be proud to wear your own T-shirts, so to speak.” In my case, it actually was a shirt, but in whatever business you’re doing, you’ve got to be so proud about it that you’re telling everybody about it. That’s what we did.
In fact, me and my brother in law, we used to challenge ourselves, if we ever got in an airplane, how many people could you tell about the company? By the time we launched, we had, I don’t know, 5,000 emails that we had collected over the course of a month or two. A lot of those people were one degree connections, people that we had met or knew personally or were a friend of a friend. When we launched, we actually did quite well. We probably did, neither of us were doing this full time, we probably did about 80 thousand dollars in the first two months of the business. Again, with zero, we didn’t spend anything on Facebook or Instagram or Google or any of those channels that we use and leverage today. It was really just about email.
Still, to this day, email is without a doubt the highest return on investment from the marketing perspective, because it doesn’t cost very much time, or doesn’t cost very much money. You build a template, you use a service. We use [inaudible 00:44:04] as our email service provider and we send these emails out and inevitably, every email we send out comes back in the form of revenue. Now, we use a lot more channels, everything on the digital side to also doing things on the physical side like pop up retail events and on the digital side, we use all your basics, Facebook, Instagram, Twitter, Google. We’re always trying to tweak and get the most effective spend, the most effective return on our spend in those channels.
Felix: It’s interesting that you essentially manually built your email list. There’s a lot of talk when people are building their mailing list about how to get this done automatically or [inaudible 00:44:53] trying to push as many people through the funnel as possible, [inaudible 00:44:58] collect their email addresses but it sounds like you guys just talked to people and then got them onto the mailing list that way. Obviously, a very effective strategy, to get 5,000 subscribers within you say it just took a month to do this?
Nate: I think it was one or two months from the time we had the splash page to the time we put the site up. The thing is that just think about your own experience. Even though people are transacting digitally more than they ever have before, they’re still making those decisions based on their experience in the real world. If you meet somebody online, and that’s a cliché phrase, but if you have a Facebook friend and you see that they posted something versus a friend in person tells you, “I’m building this really cool thing.” That in person experience is still so strong, such a strong motivating factor and it’s very real. Think about the relationship to build in person versus building online. We try and have physical touch points with our customers, or our prospective customers by doing events and getting out and talking to them and meeting them in retail stores. It makes the brand tangible for them. Obviously, you still need those digital channels to help people remember and continue their conversion funnel.
Felix: I don’t want to boil this down to just numbers, but you are essentially saying that the people that you do meet in person, even though it might be a more manual process, even though it might not be as scalable, it’s still, per person, still much higher converting than finding someone online, so it’s worth investing the time into running these events, these pop up shops and actually meeting, [inaudible 00:46:53] physical touch points like you’re calling it, because they are high converting, even though they’re not as scalable as running ads online.
Nate: [inaudible 00:47:02] question, and that’s the other thing that we love about Shopify. I know we’re not supposed to, that’s not the point of this, but I really believe in the platform. We have this point of sales system that ties directly into our database. We go and do these events, and even if the event only does a couple grand in sales, it’s like well think about the customers that we just made, and that we created a touch point with them. Our head of events is so awesome, she always says to me, "I got these business cards, and I’m going to email them and tell them how grateful I am that they came and stopped by and learned about the brand.
That interaction builds brand loyalty and as many people have pointed out, you don’t need to think about the millions of dollars that you’re going to make. You need to think about how you’re going to create one thousand loyal fans of your product or your store. That’s what we just kept hitting our team over the heads with, how can we get a thousand loyal people, that we know are going to come back over and over again? We got a thousand, how are we going to get ten thousand? How are we going to get a hundred thousand? For me, that means wearing that T-shirt proudly and saying, “We’re proud of the product that we make and we can’t wait to tell you about it, and we can’t wait for you to try it and realize that you love it, too.”
Felix: Amazing. For anyone out there that wanted to take this similar approach that doesn’t have a mailing list, maybe doesn’t even have a store yet and wants to build their mailing list and is ready to do it manually like you did it, how were you approaching this, were you just going up to friends and family and telling them about the product doesn’t exist yet, and [inaudible 00:48:43] check out the splash page [inaudible 00:48:46] what was the, I don’t want to call it pitch, but what was the process of getting people that you met offline onto an online mailing list?
Nate: We built what we called pass along cards. It was very simple, had the website on there, so it was at least memorable, because our first website was longer than just rhone.com, it took us a while to acquire that domain. We’d interact, we’d tell people about it, people would ask questions, and then we’d leave them behind with this card that they could go and put it in to their phone or their computer when they had a second. Sometimes we would be there with people and be like, “Oh, go on right now, sign in, put your email in.” I’m trying not to make it a high pressure sales pitch, but we were just very passionate and enthusiastic.
I give my brother in law a lot of credit, I learned from his example this way. He will tell everybody about what we’re doing and what we’re building and that enthusiasm rubs off. It’s so funny, you spend so much time building a product or a store, but it’s easier to become an introvert, whether you’re an introvert or an extrovert, it’s easier to become an introvert about your own product, you don’t want to seem boastful, you don’t want to feel like you’re pitching friends, but really, you’ve got to be proud of what you’re doing and say, even if you have to do it in a shy way, be so sincere, “It would mean so much if you would go to the store and sign up and I’d really appreciate your support.” Don’t be afraid to ask people and say, “Oh, you should check it out, I’d love for you to learn more. You’re the perfect customer.”
Felix: I think that’s a good point about how you have to be proud to wear the shirt or wear the logo, wear the brand out there, because you also have to think about, am I building a company or building businesses, or building products that will actually give value back to people? If you had some cure to some disease out there, you wouldn’t be meek about it if you know you’re giving value to people out there by giving them this cure. Obviously this is an extreme example, my example that is, but if you do have a product that is going to generate value in people’s lives, you should be excited to talk about it.
I think it’s important to think about businesses, and think about your product in that way, that you don’t even want to think about you being intrusive by talking about your product or your company, but think about you want to share what’s valuable, what could add values to their lives, and once you start thinking that way, hopefully you can build a company and business that way to begin with and when you do that, I think it becomes a lot easier to talk about it, because you’re not just being boastful, you’re actually trying to bring value to people’s lives.
Nate: That’s exactly right, we talk about all the time, you know the friend who is just kind of asks, asks, asks, asks, all they do is ask for things. “Can you help me?” They only talk to you when they need something. Nobody likes that person, right? Rather than the friend who’s always giving, giving, giving, and then when that person finally asks you for something, you can’t wait to help them. Where we think about ourselves as a brand personified, we want to be like that second friend. We want to be always giving value, are we giving the best product that really meets expectations, are we providing content that’s relevant for our customers, are we building a great customer service team that gives back?
If we’re giving, then when customers think about buying active wear, they’re only going to want to come to us, versus saying, “Oh, here’s this promotion, here’s this thing, did you know about this thing about our product, oh it’s so great, we’re so awesome, just buy from us.” It’s so easy to fall into that trap. When you look at people’s social media feeds, it’s me, me, me, me, me, versus how can I give back to you? I think your point is really well taken.
Felix: Awesome. I want to talk about one last thing before we close this out, which was brought up in the pre interview question about some marketing strategies. It has here that you guys have launched some pretty unique and funny campaigns, April Fool’s as well as lime day instead of prime day, so tell us a little bit more about this, how does coming up with unique and funny campaigns actually help, I guess, help with your marketing, help you actually drive traffic and sales to your store?
Nate: I think people, again this comes back to exactly what we were just talking about, people like to laugh, they want to have fun. If we can provide value in the form of humor, then I think again, it builds customer loyalty. Recently, on April Fool’s Day, it’s not uncommon for stores to come up with a product that they’re not actually selling, but we came up with this idea of what we called the never nude short. It’s a reference to Tobias Funke from Arrested Development, when he decides he’s going to be a never nude and wears these jean shorts all the time.
We took some pictures of this like we were actually launching this product. It was amazing, because I think people got it, they got the email, and for at least some people, they were like, “Are they really making this? Are they actually building this product?” It got them to click through. When they got to the splash page, there were some funny pictures there and some gifs and it made them laugh and then we said, “Obviously, we’re not actually making this short, but since you clicked through, here’s a code to get free shipping.” Or something like that, and it ended up being one our all time best sales days.
We took that same thing, Amazon has built this new Black Friday in July, or is it June? I don’t remember the exact day, but it’s essentially black Friday in the middle of the summer. It’s an incredible strategy, but we asked ourselves, “How can we capitalize on that?” We had read that online shopping as a whole increased on prime day, not just on Amazon. Clearly, people were out with their wallets open, how could we capitalize on it?
One of our main competitors is Lululemon and we’re not afraid to talk about the fact that we don’t think men should be wearing a brand called Lululemon and that guys don’t want to be shopping at the same store as their mom or their sister, so we created what we call lime day, so that you didn’t have to be stuck in a lemon costume and had some clever copy and some good imagery and it was great and it went so well and we received some positive press on it. Some thought and energy and I give the team, our team, all the credit, because I had nothing to do with either of these ideas, and they were brilliant.
Felix: Very cool, it sounds like a key to this, too, is tying it to an existing current event so that you can ride that wave as well, so I think that’s a very unique way to do that. What’s planned for the future for Rhone, what do you guys have lined up for the next year or so?
Nate: We’ve got a lot of things coming, we are launching our first retail store ever next year. We are also currently doing something that I’m very proud of, called the 12 weeks of Rhone. What this is is you hear all the time, black Friday just becomes this unbelievable day of shopping and focus, but really, we wanted the holiday season to start earlier and offer things up, again, offer value up to our community before just black Friday. Not just in the form of discounts, but in the forms of other things like we’ve got some really cool new products that we’re launching, some e-touch gloves that are made from this luxurious polar tech fabric and are built for running. We’ve got this water flask that will keep your drinks cold for 24 hours or hot for 12.
Really cool, new products that we’re talking about and people who participate get access to these deals but in addition, we’re also issuing our community a weekly challenge. The challenges are as basic as go and have coffee with a friend you haven’t seen in a long time, to as hard as go and meet a homeless person and have a meal with them. Don’t just bring them a meal, have a meal with them and talk to them and learn about their life. Part of our messaging and brand is really about becoming better in our daily pursuits and so we wanted to again, to give value and inspirational stories and things like that led up to the holiday season so that we kind of all collectively got in that spirit. That’s something that I’m really proud of and we’re working hard on right now.
Felix: Very cool, so thanks so much Nate. Rhone.com again is the site, R-H-O-N-E.com. Anywhere else you recommend the listeners go and check out or is there a way for them to find out or sign up for this upcoming events that you guys have?
Nate: If they go to the website, that’s the best place to sign up. Our products are also sold at [inaudible 00:58:32], Nordstrom, Bloomingdale’s, and [inaudible 00:58:36] Equinox. We’ve got some great retail partners that we also sell to.
Felix: Awesome, thanks so much again for your time, Nate.
Nate: Thanks, Felix.
Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit shopify.com/masters to claim your extended, 30 day free trial.
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