#18: Fashion Entrepreneurship with Namastetics Co-founders Micha Saade and Shane Peterson
Josh is joined by Micha Saade and Shane Peterson, the co-founders of Namastetics, to learn about their journey in fashion entrepreneurship and creating a successful direct-to-consumer apparel company.
Josh is joined by Micha Saade and Shane Peterson, the cofounders of Namastetics, to learn about their journey in fashion entrepreneurship and creating a successful direct-to-consumer apparel company.
Namastetics is a direct-to-consumer yoga wear brand that focused on sustainability and boho fashion. learn more at https://www.namastetics.com/
Connect with Shane on Instagram at https://www.instagram.com/shaneapetersen/
Connect with Micha on Instagram at https://www.instagram.com/micha.saade/
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Show Notes & Links
- Shane and Micha tell the story of how they met working at Lifetime Athletic selling gym memberships
- Shane and Micha describe working 80 hour work weeks at Lifetime
- Being in a competitive work environment made everyone working there pretty close and fostered a team-building culture.
- When starting Namastetics, they took their experience from working at Lifetime and decided on aspects of the company culture that they didn't want to bring to their company.
- To get hired at Lifetime Athletic they had to memorize the mission and vision statement of the company and recite it in front of management.
- Lifetime Athletic founder Bahram Akradi
- They learned how to lead by example based on what they didn't want to do when it came to negative management styles from their previous bosses.
- Instead of asking employees what title they want, they ask them what kind of tasks they want to be doing in a year and build a role around that.
- They don't put a big emphasis on sales numbers for their employees so they can just focus on creating their best work
- Shane originally wanted to be a gym teacher, and then get into physio
- A book that influenced Shane to start a business was Rich Dad Poor Dad by Robert Kiyosaki
- One of the biggest pieces of advice Shane got from Rich Dad Poor Dad was: learn how to do sales and sell something that you actually believe in.
- Shane's friend Abraham showed him his ecommerce company TruWood and as soon as he say his sales numbers, he quit his job at Lifetime.
- Shane was introduced to entrepreneurship through Shopify and Facebook Ads in 2016 and was blown away at how easy it was to start any kind of consumer goods business you wanted.
- Facebook now gives you a page score where customers' reviews impact your ads
- Micha studied Kinesiology in University because she wanted to heal people.
- Micha's parents immigrated to Canada from Lebanon and her dad opened his own restaurant and convenience store.
- Micha would steal things from her parents convenience store and resell them herself from her picnic table.
- Micha was always very competitive and would do anything to get ahead and hustle as a child.
- Micha felt intense burn out from working at Lifetime and hit a point where she woke up to the fact that she was killing herself to make someone else more successful.
- Micha applied to a program called Venture for Canada to work with a startup
- At her lowest point in feeling burnt out, Micha decided to look into local yoga classes to try to make herself feel better.
- Micha committed to 30 days of yoga to see how it would change how she feels. After 15 days she said she felt like a completely different person.
- Josh's mom became a yoga instructor and said that the yoga training was less about the physical aspect, and more about the emotional aspect.
- People tend to hold trauma and emotion in their hips. That's why their hips are tight.
- Micha's experience with yoga was so transformative that she wanted to let more people know about it.
- Micha wanted to spread the idea that yoga can be much more than just physical stretching, but it could also be for emotional healing.
- Shane was the one who started a Shopify store with women's apparel for his girlfriend, before bringing Micha in as a partner.
- Shane couldn't find any good men's athletic clothing on Aliexpress, so when he found lots of women's athletic clothing, he decided to run with it to scale the company quicker
- One of the reasons they work so well and compliment each other is because one person (Micha) wears and lives the brand, while the other (Shane) doesn't wear the products and can have creative out-of-the-box thinking and look at the products in a less traditional way.
- Namastetics' first line of clothing was dropshipped from Aliexpress.
- Dropshipping was a way for them to fund the business and get started for little upfront investment.
- Josh was able to design 80+ products thanks to print on demand and dropshipping
- Shane and Micha started with only a couple hundred dollars to get started
- Shane took two small loans from his parents to buy some inventory and capitalize on the momentum they were seeing from previous Black Friday sales.
- Josh explains his design inspiration for Longboi from both Roots and Puma
- Clothing is an interesting space because you can so easily get product feedback from the market and see what people are wearing and how it changes over time just by observing people.
- Namastetics had a huge surge of sales in March, April and May from people who wanted comfy clothing while being stuck at home due to COVID-19 lockdowns.
- They sold out of 6-8 months of inventory within a week and a half because of COVID-19, and then had supply chain issues where they couldn't get new product for a while.
- Namastetics almost went out of business a couple of years ago on Black Friday because they thought it would be a good idea to pre-pay for their inventory ahead of time, and their manufacturer didn't deliver on time because they weren't on their priority list, so they had to start refunding customers.
- Since they ran out of their popular inventory during COVID, their solution was then to start promoting the other styles and products that they always carried, but weren't as popular at the time until they could restock inventory.
- With the money they made from boosted COVID sales they hired an expert fashion designer who was an expert in the industry and was able to help them level-up as a business.
- Their first "expert hire" was a project manager.
- The Buddha and the Badass book by Vishen Lakhiani
- Josh tells the story how reading The Buddha and the Badass inspired Marisa to quit their first company, Contraverse, and start Longboi instead.
- Namastetics had more advantages than weaknesses during COVID.
- Shane says there are tons of opportunities for clothing companies because some of the traditional retailers are starting to get phased out because their understanding of the market and consumers may no longer be relevant.
- They never had a plan to get into brick and mortar, but maybe instead open up a flagship yoga studio with a small retail section.
- Instead of opening their own brick and mortar locations, they had the idea to move into wholesale and partner with small yoga studios that could sell their products in their boutiques.
- Shane thinks there will be a big work from home bubble that will be over glorified.
- Shane: "People are driven by communities, that's why people buy products from brands and why people want to work for great companies".
- To build their community, they have been hosting Instagram Live and Zoom yoga classes with their partner instructors
- Micha works from Make Lemonade, a co-working space for women in Toronto.
- Namastetitcs remote work culture
- They will have weekly calls with team members from around the world (including Philippines) and make sure the first part of the conversation is about their personal life to get to know them as a person and make sure they're doing okay, before talking about business.
- Maker's Schedule, Manager's Schedule article by Paul Graham
- Reducing meetings to get actual work done.
- A way to reduce meetings is to take a note of everyone in the meting, figure out their salaries, then calculate how much the meeting is costing you and figure out if their time is better spent not in the meeting.
- At Facebook Connect, they announced the Infinite Office to bring your office into virtual reality
- Rework and Remote books by Basecamp founders
- Namastetic sustainability efforts
- Shane noticed the pollution from factories in China when he travelled to Beijing to meet his suppliers
- One of the reasons why the fashion industry is so bad for the environment is because of the micro-plastics that get washed away when fabric is washed.
- Let My People Go Surfing book by Patagonia founder Yvon Chouinard
- People are willing to pay more for products that are in line with their sustainability values
- All of their packaging for their products will be 100% compostable
- They find their suppliers just through Google and doing some research.
- They use Alibaba to source some bags and packaging
- One Percent for the Planet - an organization where you can donate 1% of gross revenues to them
- Shane says shipping things will be the hardest part for sustainability efforts
- Micha says bringing production into Canada or USA would mean doubling the price of their products and making it less affordable and inclusive.
- To do better with the shipping, they strategically set up shipping warehouses close to the majority of their customers.
- The majority of their customers are on the west coast.
- Namastetics uses Rakuten Super Logistics: a third party logistics centre with 27 locations to ship their products to their customers.
- 3PL = Third party logistics
- Tesla Semi
- Something like 85% of clothing being manufactured and thrown out is not recycled properly
- Recycling clothing properly eliminates a huge problem in manufacturing
- Girlfriend Collective, one of their competitors does a great reuse / recycle program
- Black Friday prep tips
- Inventory Management for Black Friday: one of the Black Friday mistakes they made was not buying enough inventory. Then the following year they bought way too much.
- It's way better to sell out than it is to buy too much and be stuck with inventory.
- Plan way further ahead than you think you need to and have all of your promos done ahead of time so that if someone in your industry does something interesting, you have the time and energy to pivot and do that thing as well.
- Facebook and Instagram have been a primary source of traffic and revenue for them since the beginning.
- They use Klaviyo for email marketing and Attentive for SMS text message marketing.
- Shane recommends buying your paid traffic early (from Facebook / Instagram / Google Ads, etc.) when the CPMs are lower in September, then capture their email or phone number to then market to them for "free" when the advertising acquisition costs go up closer to Black Friday.
- A great way to plan ahead for Black Friday would be to run paid ads in October.
- They've been seeing good results with TikTok, YouTube and little bit from Pinterest.
- Pinterest ads are much cheaper to run than Facebook and Instagram ads, but may not work as well.
- Facebook is good for "top of the funnel"
- It's important to understand why people are on a certain platform and what the point of it is for them. For example, people use Pinterest for mood boards and planning, and may not be in the mood to buy something right away.
- The biggest thing to ask yourself when a new platform comes out is "what is the purpose of it and how does it fit into the different buying stages that the consumer goes through?"
- Shane thinks most clothing companies start with influencer marketing, but they started with paid social media marketing because that's what he was most interested in at the time.
- Namastetics only just started with influencer marketing
- Shane says that while organic social is good, if you're confident in your brand or company, then you should be confident to spend money on paid social media ads.
- Sam Ovens from Consulting.com
- Thinking of paid advertising like a casino
- Once you can figure out how to acquire a customer profitably with paid advertising, you can translate that to any business.
- Along with Namastetics, Shan was running three 7-figure e-commerce businesses including Nomadic Fabrics and Carte Blanche, along with Foreplay, a marketing agency.
- Because there's no barrier to entry in e-commerce, it's easy to have shiny object syndrome because you can start with any product in any industry you want with little upfront cost.
- Shane advises against splitting your time between multiple businesses, and instead focus on one thing to be truly effective. His advice is to build one first, really quickly, then move on to the next one, rather than try to do them at the same time.
- It's easier to take a step back and start a new project when you have a cofounder or hire managers who can pick up the slack for you after your crucial tasks have been completed and you've laid the foundations.
- Micha has taken on a mentor role for her friends and women in her community to help them start their businesses.
- Josh's dog Tino's Instagram @tino_theteenyweenie
- Yoga is being north americanized and people are lead to believe that leggings are traditional yoga style, but the true yoga style is "genie pants"
- Shane: "Don't major in minor things. Don't spend a lot of time on things that don't have a big impact on your business."
- Shane: "When it comes to clothing, make something unique. Your market is NOT saturated if you're selling something unique. It's only saturated when you're selling the same thing everyone else is selling."
- Shane: "People can buy clothing from thousands of places, so you have to create something that once they see that you have it, they can't go anywhere else to get it."
- Micha: "People have so many other options from established brands. So when they come to your website, you better offer them something that is worth the potential risks of buying from an unknown brand."
- Micha: "Make sure you have your customer service figured out. Give them a clear return and exchange policy to put their mind at ease on the risk they're taking from ordering from you to build trust and loyalty."
- Micha: "When people buy from you and know they can get an easy exchange, they're more likely to be a repeat customer."
- Micha: "If you notice you're having fulfillment delays or stock issues, contact your customers before they contact you, and give them an option to either wait until it's restocked, or offer them a gift card. The very last option should be a full refund. You can also offer a gift card for the refunded amount PLUS an additional $20 on the gift card."
- Shane: Setup automated email sequences in Klaviyo for when orders are unfulfilled after X amount of days saying "Hey we're working on your order."
- Micha: "Be upfront with your customers about where their products are shipping from and how long they should expect it to arrive. This should reduce the number of customer service emails you receive from people asking where their orders are."
- Micha: "If people love it, they'll wait. We've had people wait a couple of months just to get a pair of Wander pants."
- Creating artificial demand and a sense of urgency in e-commerce
- If you restock colors that are not in season, it can make your online store look stale, even if it continues to sell.
- Have products available only for a limited time.
- Shane thinks a lot of clothing companies are creating artificial demand by falsely stating certain products on their stores are sold out even when they're not because nobody knows what's actually available in their warehouses.
- Josh said Longboi will only ever sell red apparel during Christmas or Canada Day sales.
- The Chive t-shirt flash sales that create insane demand for 24 hour sales.
- Bill Fucking Murray t-shirt from The Chive
- Crasqi Swim Shorts number their shorts, and they sell out really fast because when you purchase a pair of shorts, you get # 5 of 22. People don't sit and think about their purchase because it gives them a sense of urgency.
- Limited edition sneakers become less of a purchase and more of an investment.
- Shane believes there is a huge opportunity for new clothing brands right now because some of the big clothing companies focused on fast fashion were hit hard by COVID-19 and will not fullyMi recover.
- Micha is excited about the gaps in the market and opportunities she's seen since starting the business when it comes to warehouse fulfillment and logistics technology.
- With all of the restrictions in malls and stores, more people will be shopping online for Black Friday and Christmas in 2020.
- Shane finds it exciting to see founder-lead companies where the founder is the personality behind the brand. He believes consumers will take to companies that are publicly run by the founder rather than faceless board members.
- Little Black Stretchy Pants book by LuluLemon founder Chip Wilson.
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