How I Built This with Guy Raz - Beyond Yoga: Michelle Wahler
Michelle Whaler co-founded Beyond Yoga with Jodi Guber-Brufsky, focusing on creating inclusive activewear for women of all sizes. They started with a modest investment and chose a wholesale strategy, selling through boutiques and yoga studios. This approach allowed them to grow steadily and gain a loyal customer base. A significant turning point was discovering a unique fabric called space dye, which became a core product due to its comfort and quality. Despite challenges like the 2008 financial crisis and the COVID-19 pandemic, Beyond Yoga adapted by focusing on e-commerce and maintaining strong relationships with suppliers and customers. In 2021, Levi's acquired Beyond Yoga for $400 million, allowing the brand to expand further, including opening brick-and-mortar stores. Michelle's journey highlights the importance of resilience, strategic partnerships, and staying true to brand values.
Key Points:
- Beyond Yoga focused on inclusivity, offering activewear for women of all sizes, which differentiated it from competitors.
- The brand's wholesale strategy helped it grow steadily by selling through boutiques and yoga studios, rather than direct-to-consumer initially.
- Discovering the space dye fabric was a pivotal moment, offering a unique product that enhanced brand appeal.
- Despite financial challenges, Beyond Yoga thrived by adapting to market changes, such as shifting to e-commerce during the pandemic.
- Levi's acquisition of Beyond Yoga for $400 million in 2021 marked a significant milestone, enabling further expansion.
Details:
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3. 💳 Financial Empowerment for Entrepreneurs
3.1. Schwab Investing Themes
3.2. American Express Business Platinum Card
4. 👗 The Quest for Premium Fabrics
- The team prioritized selecting high-quality fabrics, showcasing a strategic commitment to premium product offerings, even in the face of potential cost increases.
- During the vendor visit, the interaction with the sales representative highlighted a deliberate choice to differentiate the brand through superior material quality, aiming for a competitive advantage.
- The decision reflects a strong belief that consumers will appreciate and choose quality fabric, indicating a strategic focus on customer satisfaction and targeting the premium market segment.
- Specific fabric choices, such as organic cotton and silk blends, were made to align with the brand's vision of luxury and sustainability.
5. 🚀 From T-Shirts to Beyond Yoga
- Michelle Whaler transitioned from creating custom t-shirts to founding a successful activewear brand, Beyond Yoga.
- The brand has grown significantly from its humble beginnings to become a major player in the activewear industry.
- Beyond Yoga was able to capture a niche market by focusing on comfort and inclusivity in its designs, leading to increased customer loyalty and retention.
- The brand's strategic marketing efforts and collaborations with influencers have played a crucial role in its expansion and recognition in the competitive activewear sector.
6. 💼 Strategic Launch Paths
- To successfully launch a consumer brand in sectors like food, skincare, or apparel, consider two primary strategies.
- First, raising substantial capital from investors to enable aggressive marketing and advertising campaigns can ensure rapid market penetration and competitive advantage.
- This strategy is particularly beneficial for well-funded brands capable of outspending competitors, leveraging financial resources for broad visibility and brand awareness.
- Alternatively, a more gradual approach may involve organic growth tactics, focusing on building a loyal customer base through strategic partnerships, social media engagement, and community-driven initiatives.
- While the capital-intensive approach promises quick results, it requires a strong financial backing and risk management. The organic method, though slower, fosters long-term brand loyalty and sustainability.
7. 🧘 Crafting Beyond Yoga's Unique Identity
- Beyond Yoga chose a strategic growth path focused on bootstrapping or raising minimal funds to quickly achieve profitability, even if it meant slower revenue growth.
- For its first decade, Beyond Yoga operated under the radar, in contrast to more prominent brands like Lululemon and Athleta.
- Despite limited initial visibility, Beyond Yoga employed unconventional strategies that eventually proved successful.
- The brand's decision to prioritize profitability over aggressive expansion allowed it to establish a sustainable business model.
- Beyond Yoga differentiated itself through unique marketing strategies and product offerings, which helped it carve a niche in the activewear market.
- By focusing on niche markets, Beyond Yoga was able to build a loyal customer base and improve brand recognition over time.
8. 👭 Founders' Vision and Growth
- Founded in 2005 by Michelle Whaler and Jodi Guber-Brufsky with a modest investment, demonstrating entrepreneurial risk-taking and vision.
- Initially adopted a wholesale distribution model, effectively leveraging existing retail channels like boutiques, yoga studios, and department stores to build brand presence.
- Focused on inclusivity by offering yoga apparel for women of all sizes, successfully differentiating from competitors such as Lululemon and expanding their market reach.
- The vision was rooted in creating a community-oriented brand, emphasizing body positivity and accessibility in yoga apparel, aligning with growing consumer trends.
9. 📈 Achieving Growth and Acquisition
- By 2016, Beyond Yoga was recognized as the fastest-growing indie yoga brand in America, reflecting a robust and effective growth strategy that capitalized on market trends and consumer demands.
- The company was acquired by Levi's in 2021 for $400 million, a testament to its significant market value and strategic positioning in the industry.
- The acquisition process was initiated through a LinkedIn message sent to co-founder Michelle Whaler, emphasizing the importance of digital networking and professional connections in modern business transactions.
- Three years after the acquisition, co-founder Michelle Whaler stepped down as CEO, indicating a planned leadership transition that may align with the company's strategic goals post-acquisition.
10. 👩👧 Family Influence and Self-Esteem
- The speaker's mother was actively involved in everything, which the speaker appreciated.
- The mother's struggle with self-esteem was a significant influence on the speaker, affecting her own self-image and confidence.
- Despite being beautiful, smart, and caring, the mother felt inadequate, heavily influenced by diet culture and a narrow vision of beauty.
- The mother often commented on the appearances of the speaker's friends, emphasizing thinness and other physical traits, which impacted the speaker's views on beauty and self-worth.
- The speaker observed the mother's struggle with weight and self-image issues, leading to a personal understanding of these challenges and their effects on self-esteem.
- The speaker's self-esteem was shaped by observing the mother's frequent dissatisfaction with her own appearance, which instilled similar insecurities.
11. 🎨 Transition from Graphic Design to Fashion Entrepreneurship
- The entrepreneur successfully scaled Kemp Mill Records from a single store to over 30 locations, demonstrating effective retail expansion strategies and regional market penetration in the D.C., Maryland, and Virginia areas.
- The rise of digital music formats, such as MP3s and platforms like Napster, caused a significant disruption in the music retail industry, highlighting the critical impact of technological innovation on traditional business models.
- Despite strong management skills, the entrepreneur faced the total loss of the business due to rapid industry shifts, emphasizing the importance of adaptability and foresight in business sustainability.
- The emotional challenges of managing a declining business included denial and difficulty in accepting the end of the business, illustrating the psychological impact of business failure on entrepreneurs.
- The entrepreneur's eventual sale of the business to family without financial gain underlines the difficulties of exiting a declining industry profitably.
- Insights gained include the necessity for continuous innovation and adaptability to prevent obsolescence, as well as understanding the emotional resilience required during industry disruptions.
12. 🌆 Navigating New York's Early Career Challenges
- In 2001, the individual moved to New York to pursue a career in graphic design, showcasing ambition and a strategic move to a hub of creative opportunities.
- Initially, they secured two graphic design jobs, demonstrating initial success and skill in a competitive market.
- However, both jobs were lost shortly after due to the economic impact of the 9/11 attacks, highlighting the volatility and unpredictability in job security during crises.
- This experience underscores the importance of resilience and adaptability in career planning, especially in industries susceptible to economic downturns.
- The individual had to reassess their career strategy and explore alternative pathways to sustain their career in the aftermath of the crisis.
13. 👚 Launching 'Unsweetened' T-Shirt Line
- The 'Unsweetened' t-shirt line was launched by the founder while employed at People Magazine, inspired by dissatisfaction with unrealistic body images in media due to Photoshop.
- Initially, the line was not intended as a business but started as a personal endeavor—a custom illustrated t-shirt gifted to a friend, which subsequently attracted interest from others.
- The designs featured women in various activities, embracing diverse body shapes and sizes, and promoting authenticity over idealized beauty standards.
- These illustrations were displayed at the founder's workplace, generating interest and serving as an effective informal marketing strategy through workplace exposure.
- The transition from a personal project to a business venture was driven by demand, showcasing the importance of market testing through initial interest and feedback.
14. 🌴 California Move and Strategic Partnerships
- The speaker started selling t-shirts while working at People, expanding sales through holiday bazaars and boutiques like Pookie and Sebastian.
- In 2005, the speaker decided to move from New York to California, specifically San Diego, despite having a successful graphic design job.
- The speaker felt homesick and considered returning to New York but decided to stay in California after investing effort in the move.
- A pivotal moment occurred when the speaker attended the LA gift show, leading to a significant business connection with Jody, who became a business partner.
- The partnership with Jody facilitated access to new markets and channels, significantly boosting sales and expanding the business's reach.
- This strategic move to California and forming a partnership marked a turning point, catalyzing growth and long-term success.
15. 👗 Building a Brand with Beyond Yoga
15.1. Initial Encounter and Brand Inception
15.2. Development and Long-term Involvement
16. 🧵 Activewear Development and Sales
- The collaboration between the speaker and Jodi started informally, with advice and sketch sharing, leading to Jodi offering a full-time partnership within weeks due to the promising synergy.
- The mission to create inclusive clothing for women of diverse body types was a significant motivation for committing to the partnership with Beyond Yoga.
- Initial funding was secured from Jodi's father, Peter Guber, a distinguished Hollywood producer, who provided essential financial support for early-stage development.
- Despite having a background in graphic design, the transition to activewear design was facilitated by working with a local LA factory for fabric sourcing and pattern assistance, showcasing adaptability and resourcefulness.
- The design process was hands-on and intensive, involving late-night sessions to create sketches and refine the clothing line, indicating a strong commitment to quality and innovation.
17. 🏪 Embracing Wholesale for Growth
17.1. Strategy Focused on Wholesale
17.2. Wholesale as Marketing
17.3. Product Differentiation and Pitch
17.4. Learning Business Operations
18. 📊 Addressing Financial Hurdles
- In 2006, the first year of shipping, the company achieved $1.1 million in revenue, demonstrating a successful market entry.
- Revenue doubled to $2.2 million the following year, showcasing rapid growth and effective market strategies.
- By the third year, revenue reached around $4.5 million, indicating sustained growth and successful scaling.
- However, the global financial crisis in 2009 led to a significant drop in revenue by almost $1 million, highlighting the impact of external economic factors.
- In response to financial challenges, the founder took accounting classes at UCLA Extension, emphasizing the importance of enhancing financial literacy to manage business growth and setbacks effectively.
19. 🎓 Entrepreneurial Learning at Babson College
- Babson College offers specialized graduate programs that equip aspiring entrepreneurs with essential skills and practical experience, enabling them to transform innovative ideas into successful businesses.
- Notable alumni like Jamie Siminoff, founder of Ring, David Heath, co-founder of Bombas, and Mike Salguero, founder of ButcherBox, exemplify the entrepreneurial success fostered at Babson.
- The college emphasizes the importance of building a robust professional network, a critical factor in entrepreneurial success.
- Programs at Babson focus on hands-on learning experiences, mentorship opportunities, and provide resources tailored to support new venture creation.
- Babson's curriculum is designed to integrate practical business acumen with entrepreneurial thinking, preparing graduates to navigate and succeed in diverse business environments.
20. 🔧 Mastering Business Management as CEO
20.1. Financial Challenges and Strategic Solutions
20.2. Impact and Results of Financial Reorganization
21. 🤝 Assembling the Dream Team
- Hiring a COO/CFO, who was the founder's husband, was crucial for business growth. His influence led to increased investment in team and marketing.
- The founder initially did much of the work, including sketching designs, before hiring designers, highlighting the importance of delegation.
- The COO/CFO identified underinvestment issues, advising to spend more on talent and marketing, which was pivotal in business development.
- The founder's cautious spending approach was influenced by personal history, but trusting the COO/CFO's financial insights marked a turning point.
22. 💰 Financing Sustainable Growth
- The company strategically chose not to take on additional outside investment, despite receiving multiple offers for investment and acquisition, allowing for independent growth.
- Partnerships with banking institutions, particularly Wells Fargo and CIT, played a crucial role in the company's financing strategy. Wells Fargo provided general support, enhancing financial stability, while CIT offered a line of credit specifically for factoring wholesale accounts, which was instrumental in managing cash flow.
- This approach enabled the company to self-finance its inventory, maintaining control over its growth trajectory and ensuring that expansion was aligned with long-term sustainability goals. As a result, the company was able to grow without diluting ownership or taking on additional financial risks associated with external investments.
- The impact of these strategies was evident in the company's ability to scale operations efficiently, demonstrating the effectiveness of leveraging strategic financial partnerships over seeking external investors.
23. 🌟 Competing with Industry Giants
- Lululemon was a billion-dollar brand by 2011-2012, showcasing significant market growth and setting a high benchmark for competitors.
- The speaker didn't focus on competing with larger brands like Lululemon but rather took inspiration from them, seeing them as paving the way for premium product pricing.
- Lululemon's 'sheer pant debacle' was a pivotal moment that allowed smaller brands to capitalize; Beyond, for example, was able to quickly fill inventory gaps at Equinox, demonstrating the importance of agility in product supply.
- Being prepared to respond to competitors' missteps can provide substantial opportunities for growth, as illustrated by the swift response to Equinox's request for black leggings, leading to successful sales.
24. 🧶 Discovering the Signature Fabric - Space Dye
24.1. Discovery of Space Dye Fabric
24.2. Decision and Impact
25. 👥 Attracting and Retaining Top Talent
25.1. Revenue Growth Strategy
25.2. Talent Acquisition and Retention Strategy
26. 🏠 Going Digital with E-commerce
26.1. Attentive's Personalized Marketing
26.2. Lenovo and Intel AI Partnership
26.3. Beyond Yoga's E-commerce Shift
27. 🏭 Commitment to U.S. Manufacturing
- The decision to manufacture apparel in Los Angeles prioritizes brand integrity over rapid growth, emphasizing the importance of maintaining a high-end, profitable business despite the potential to scale faster by outsourcing manufacturing to lower-cost regions like Asia.
- Manufacturing in Los Angeles allows for greater quality control and flexibility in production, enabling rapid response to market demands and reducing the risk of over-investment in unsuccessful products.
- The choice to produce locally is also driven by the desire to support the local community and build strong, personal relationships with manufacturing partners, which can lead to mutual growth and success, as exemplified by a contractor who expanded from a sample house to operating three manufacturing factories.
- The narrative underscores the benefits of local manufacturing, such as immediate oversight, adaptability, and community impact, despite the higher costs compared to overseas production.
28. 💼 Navigating Investment and Growth Decisions
- The decision to seek investment was driven by a desire to accelerate growth as competitors advanced more quickly.
- Hiring a banker was a strategic move to present to potential investors, but this process revealed differing views on business models, specifically D2C versus wholesale strategies.
- Despite operating at break-even, investors raised concerns about profitability, indicating a preference for profit over mere growth.
- Fundraising activities distracted key operators, affecting daily operations and underscoring the need for a balance between raising capital and maintaining business focus.
- The cycle of raising and deploying funds was undesirable, highlighting the need for a sustainable financial strategy.
- Potential investors sought majority ownership, risking loss of control and alignment with core values like local manufacturing.
- The challenge was to balance growth ambitions with maintaining control and preserving business values.
29. 📉 Overcoming Pandemic Challenges
- In March 2020, Beyond Yoga faced over $6 million in order cancellations within one week due to yoga studio closures.
- The company halted all shipments unless written consent for the orders was received to avoid burdening closed studios with unwanted inventory.
- This strategic decision prevented financial strain on both Beyond Yoga and its clients, aligning with ethical business practices.
- As people began working out from home, Beyond Yoga's products saw increased demand, with their website experiencing high traffic.
- The reduction in industry advertising led to decreased customer acquisition costs, allowing Beyond Yoga to gain new customers efficiently.
- Unsold inventory was redirected to the website, which helped convert it into cash, supporting the company's financial stability during the crisis.
30. 📩 Levi's Acquisition Proposal
30.1. Initial Contact and Brand Synergies
30.2. Shift Towards Acquisition
31. ❤️ Legacy and Family Fulfillment
- The acquisition provided a sense of closure and fulfillment by achieving the exit the speaker's father always desired.
- The speaker's father had a strong desire to provide for the family, ensuring the speaker's mother would be taken care of.
- The father's passing left the speaker with the comfort of knowing that the family would be financially secure.
- The emotional impact of fulfilling the father's wishes brought a sense of peace and accomplishment to the speaker.
- The father's legacy was not just financial but also about instilling values of responsibility and care for the family.
- Reflecting on personal anecdotes, the speaker recalled how the father's dreams were often shared during family gatherings, emphasizing their importance.
32. 🌅 Embracing New Beginnings
- The speaker and her husband stepped down from their company positions in February 2024, concluding nearly two decades of daily involvement, which marked a significant life transition.
- Post-departure, they vacationed in Cabo, Mexico, as a way to adapt to their new phase of life, highlighting the importance of taking time for adjustment after major life changes.
- One of the challenges faced was the abrupt end to daily team communications, which required a redefinition of personal and professional boundaries.
- Initially, there was an internal struggle regarding maintaining contact with the team, which underscores the difficulty of letting go of established routines.
- The speaker is redirecting her focus towards personal life, prioritizing time with her children and volunteering in educational settings, illustrating a shift towards family-oriented engagements.
- Engaging with the female founding community in Los Angeles is a new venture, facilitated by her newfound availability, and signifies a strategic networking shift post-career.
- Through her transition, the speaker aims to leverage her experiences to support other female founders, demonstrating a commitment to community involvement and mentorship.
33. 🧘 Expanding Beyond Yoga's Horizons
- Beyond Yoga has expanded beyond women's activewear to include clothes for men and toddlers, significantly broadening its customer base.
- The brand has introduced a variety of new products, such as pickleball paddles, to attract customers beyond yoga enthusiasts.
- Beyond Yoga's expansion strategy is designed to tap into new markets, potentially increasing revenue and brand visibility.
- The inclusion of men's and toddlers' clothing lines suggests a strategic move to capture family-oriented consumers, enhancing customer retention and brand loyalty.
- Specific examples, such as the introduction of pickleball paddles, highlight Beyond Yoga's aim to cater to active lifestyles beyond traditional yoga, thereby increasing market relevance.