The following memory is still very fresh in my mind. When I first started Naadam, I met with an angel investor. Still high on the adrenaline and optimism that comes with launching a new business, I spoke broadly about my brand and who I thought my customer was. These were very early days, and the truth is I was kind of winging it. Maybe he could feel it, because midway during my pitch, he stopped me. He held up his hand, cut me off and said–and I’ll never forget this–“You don’t know what your brand is. It’s not up to you. The customer decides what you are once you get enough of them the product.” Long story short, he never invested. And while I am not sure we ever spoke again, I remember those words vividly. There are times when I want to agree with him, but I think his advice was largely misguided.
It may strike you as obvious, but I think a lot of people reading this piece will agree: Being a founder is damn hard. We often romanticize the glory of entrepreneurship, and ignore the tough, daily grind. For the starry-eyed and the naive, the reality of building a company from scratch can be an overwhelming one to face. Think: long hours, all-nighters, lots of weird travel, tough conversations, steep learning curves, and executing macro and micro strategies all at once–this is what the job really entails. This is all important, because while we frequently touch on the glamorous side of things, we’re reluctant to speak frankly about the psychological effects of being a founder.
Lately, I have found myself in conversations with other entrepreneurs discussing this very topic. It always starts with a “Let’s be real for a second” preface–and generally we have a lot to talk about. Being a founder is extremely hard, and you’re often saddled with the emotional consequences of high, persistent stress, tight timelines, pressure to grow, pressure to finance–the list goes on. The stress can be mitigated over time, but it can still cloud your judgment and deter positive risk taking.
Early on, everyone wants to give you advice and often it’s unsolicited. So it can be very difficult to weed through the advice and make the right decisions. Personally, I struggled with this a lot. My brand, Naadam, was characterized early on by my response to this struggle. I waffled between marketing buzzwords that would, in theory, help to define my company for thousands and thousand of potential customers. And so the question, to recall my conversation with the angel investor, was this: “What the hell was my brand anyway?”
Tectonic shifts.
This existential business dilemma is partly owed to the sweeping changes affecting the luxury industry at the moment. The path to success isn’t so smooth (or so straight) anymore. The rules of engagement for modern luxury entrepreneurs have changed, and rapidly so. Just three years ago, when I first started Naadam, growth patterns and revenue channels seemed to be stable. Macy’s, for example, was not closing hundreds of doors and tossing their strategy between online sales on the one hand, and physical retail on the other. There was still a clear roadmap for success in the luxury market at the time. But recently, surmounting uncertainty has forced myself and others to prepare a business with a back up plan. If wholesale revenues are looking suspect, we need to invest in online sales. If online sales are slowing, we need to look into off-price markets. If the traditional, long-term-lease retail model is unfeasible, then we need to explore pop-up shops.
The landscape has changed, yes, and that’s not necessarily a bad thing. It’s forcing companies like mine to improve distribution and manufacturing models, and it’s left us with a smarter, savvier shopper. But it’s also made it much, much easier for someone to start a company based on a romanticized idea. And ample seed financing has allowed more companies to do things ‘differently.’ Basically, everyone seems to be taking a stab at creating a brand, and the vast majority are seeking the holy grail of startup labels: the ‘Disrupter’ tag. Inevitably, it brings coverage, and customers are certainly drawn to it. We all want to get the press that says we are changing an industry. But with so many brands looking to ‘disrupt’ using the same blueprint, it becomes harder and harder to differentiate the value between those brands.
The disruption chase.
We all need something to jumpstart our businesses in the beggining, but are we sure this translates into strong value over the long term? Do brands need to be a sequence of buzzwords tailor made for Twitter or Facebook, and designed to attract the ‘right kind’ of press? I really hope not. There are a lot of outstanding luxury brands in the market today. (And I am not afraid to admit it–some of them I greatly envy.) But do we all need to follow the same disruption guidelines in order to be effective or meaningful? True innovation requires genuine originality and bold ideas. The transformative ideas will be the ones that don’t just break the mold, but cast entirely new ones altogether. What we have right now are a lot of companies working to break the traditional retail model into bits and pieces, but very few are actually looking to rebuilding it.
For the last five years, the fashion world has felt flat to me. Some companies have introduced new business models, the industry-wide design trends have remained the same. The problem is simple: Large retailers have been playing it safe. They need to protect their cash flow and margins amidst pending change and a slow (but noticeable) decline. The result: They are not buying into new brands that are pushing boundaries. It leads to stagnation, and we see more young companies iterating on the same ideas: cutting out a inefficiencies in the market by specializing in shoes, or sweaters, or shirts, or hats that appear remarkably similar to each other.
I am guilty of doing this myself. For instance, I’m often focused on acquiring customers, not building my brand or doing what I set out to do, which is to fundamentally change the knitwear industry. Truthfully, it’s far easier to stick to buzzy marketing terms–millennials, disruption, innovation–than it is to truly upend an industry. The data for us speaks for itself here: At Naadam, we see a 15 percent higher clickthrough rate on remarketed earned media that uses these words. We also see a 23 percent increase in Facebook ad conversions using these terms. But I am confident that brands are not just a series of conversion rates; I am worried, though, that that is what most are becoming.
And so it is clear to me that as brands, we have a responsibility to decide what we stand for and what our value to the customer is. Sticking to your vision, owning your idea despite the ostensible pressure to conform is paramount. I am saying this out loud so that I can hear it myself, and remember why I originally thought that angel investor was wrong. Still, it’s been way easier to ride the coattails of another brand’s perceived success (I am admitting it). Sure, it might help you acquire new customers faster, but you’d be abandoning the original purpose of your brand. In my case, at least, this is true. The stress and the emotional side of being a founder has made it easier to accept connotations that are not always true to what Naadam was originally about.
A great brand stands for something people believe in. It works best when the customer and the brand share a set of values that go deeper than just ‘lifestyle’ or ‘design’. At times, while building Naadam, I’ve lost sight of this important fundamental, choosing instead to believe that if I sell enough product, the customer will make a tough decision for me. But what’s clear to me is this: The success we have had is directly related to how closely we stick to our value system. For us, it is about doing things differently, and almost never safely. We embrace the risk.
––
Matt Scanlan is the founder and CEO of Naadam Cashmere, a high-end knitwear specialist that works directly with Mongolian herders to supply its own cashmere at a fairer price. The views reflected here are those of the author and do not necessarily reflect the views of Lean Luxe.
Reporting Queue
Related Reporting
-
Ify Azubike
-
LeanLuxe
-
