Bonobos

“When we were nine years into building Bonobos, the cliff notes on my story were we had over a hundred million of revenue. We had 600 plus employees and I ended up in the psych ward of Bellevue because I had untreated and unmedicated bipolar type one.”

“The most strategic part of the plan was to change the narrative. I knew that we didn't have the talent inside of Walmart at the time to do what we needed to do. We had to attract the best people in the world, and at that point, you know, honestly, that wasn't …”

“And then in 2017, the brand was acquired by Walmart for around three hundred million dollars.”

“And if I could go back and do bonobos again, I wish I understood how much better it is to dilute your brand by giving the equity to someone like that than running Instagram ads.”

“I spent 13 years building something that I think in retrospect is an impossible business model, which is DTC apparel. Like, I don't actually think it works. Like, the math doesn't work on it, because it's too expensive to acquire, acquire customers, right?”

“Like Ipponobos, we didn't do a layoff until our 12th year.”

“We ended up with a handful of investors that invested, like I mentioned, Kirsten Green from Foreigner Ventures and a handful of other amazing people that stepped up and some of my friends from business school, like the Warby Parker founders the founders of Har…”

“Warby Parker, Bonobos. Yes, they're making a product, but they're playing customer acquisition arbitrage. They are just trying to acquire a customer for a little bit less than they're making and scale that profitability. And they're playing in categories where…”

“Andy, and I had also hit it off. He became an early investor, founder of Bonobos, sold it to Walmart for three hundred million plus.”

“No, I w I wouldn't have done it. If I could go back, I think there's so many Problems with raising money.”

“And we started Bonobos, right? And right before the great recession. And so, oh, eight, oh, nine, 20, 10. We had to raise our first eight million from a hundred plus investors.”

“We sold the company for three hundred million dollars”

“The acquisition conversation with Walmart wouldn't come till about half a year later, so we were more in the warm-up phase.”

“What I did, Guy, was I told a small cohort of people who just had to know I told our general counsel. I told our head of HR. I told our CFO. I told my assistant.”

“And that was this genius insight that actually the way to do this is to make pants with a curved waistband, which would bring in the pant around to your waist in a way where the overall shape looks, looks great. And that hadn't really been done in a meaningful…”

“One day, we had a pants party at our house, and I think we sold 16,000 dollars worth of pants that day, and that was when I kind of looked at him.”

“I have this offer from a venture capital firm, which was a firm up in Seattle called Maveron, and I said, but I don't think I'm going to take it, because I'm going to sell pants on the internet.”

“He said, at three, we'll take a 100,000, but if you dropped it down to two, we'll take the whole round.”

“Well then I went to see the other professor from school who is an amazing business person named Andy Ratcliffe, one of the co-founders of Benchmark, and he also offered to invest, and he was willing to do it at the three million dollar price”

“Seven guys bought three pairs of pants, six guys bought two pairs of pants, only one guy didn't buy anything, and it was at that moment that I decided, we need to build this company in New York.”

“So we properly launched BonobosPants.com in October of oh seven, and we did 10 grand that month, then in November we did 20, December we did 30, came back from the holiday break in January, and we did no sales for the first five days, and I thought, oh my god,…”

“What I realized is once you get into a business partnership with a friend, the friendship gets totally sublimated to the business partnership.”

“Because we were fifty-fifty partners. You know, I had the title of CEO, but Brian had a ton of business acumen, and so it really was a partnership of equals, and it becomes difficult to figure out who makes the call.”

“I got depressed. So it turns out I have a propensity clinically for depression. And so I got to the place where I kind of had to fake it at work that I was doing okay, drag myself out of bed and come to the office and kind of put on a show.”

“We had enough cash in the bank, I thought, to make payroll, but then we had, I guess, promised a supplier through a letter of credit, and we were about Eight days away from not making payroll, which is not an inspiring moment for your employees.”

“And then I had another 90 conversations like that over the course of the next couple months, and pieced together another round, and, you know, we ended up raising our first eight million from, you know, over, over a 120 investors.”

“We did two million in that first year, and of, kind of, full operations in a way, and then four in a nine, and then we were heading towards seven or so”

“The second angel round that we raised. We raised it too high of a price, and actually, Joel was pretty upset about this. I, actually, I think I wrote the email to Joel that Was a condescending email in some regard around supporting the company, and it was the …”

“You know, we opened an office in Palo Alto, and it turned out to be a catastrophic error.”

“And our second most profitable were our retail stores, and those two businesses' profits were funding losses from the e-commerce business, which is a wonderful paradox to the way that we conceived of the company.”

“And if you look at our chinos business, we've got 36 waist and inseam combinations, four different fit silhouettes, and we might be running 15 to 20 colors. So if you do the math, that's four to 5000 variants.”

“And so the incredible insight was, you don't. You don't stock it. You create a clothing store that has no clothing.”

“When I graduated business school, I had 3000 dollars in the bank and 160,000 dollars of debt. And I started a company with that balance sheet.”

“I can't go back in time and do this company on 20 to thirty million. Which is what I think it would take, knowing what I now know”

“For 72 hours, there's a really big reaction and an availability bias of the most vocal people. And then business returns to normal. The vast majority of people don't think about this stuff that much every day.”

“And that was this genius insight that actually the way to do this is to make pants with a curved waistband, which would bring in the pant around to your waist in a way where the overall shape looks Looks great. And that hadn't really been done in a meaningful …”

“One day, we had a pants party at our house, and I think we sold 16,000 dollars worth of pants that day.”

“Retail isn't just physical products. It's a bundle of physical products and customer service, and those two things together create the experience that drives customer enthusiasm.”

“I went to see the other professor from school who is an amazing business person named Andy Ratcliffe, one of the co-founders of Benchmark. And he also offered to invest, and he was willing to do it at the three million dollar price”

“Seven guys bought three pairs of pants, six guys bought two pairs of pants, only one guy didn't buy anything, and it was at that moment that I decided, we need to build this company in New York.”

“So we properly launched BonobosPants.com in October of oh seven, and we did 10 grand that month, then in November we did 20, December we did 30, came back from the holiday break in January, and we did no sales for the first five days, and I thought, oh my god,…”

“Once you get into a business partnership with a friend, the friendship gets totally sublimated to the business partnership. So a lot of the stuff that you used to talk about or do, you don't have time to do because you've got to work on this little growing bab…”

“It turns out I have a propensity clinically for depression, and so I got to the place where I kind of had to fake it at work that I was doing ok, but drag myself out of bed and come to the office and kind of put on a show.”

“We had, I guess, promised a supplier through a letter of credit, and we were about Eight days away from not making payroll”

“We ended up raising our first eight million from, you know, over, over a 120 investors.”

“We did two million in that first year, and of, kind of, full operations in a way, and then four in a nine, and then we were heading towards seven or so”

“You know, we opened an office in Palo Alto, and it turned out to be a catastrophic error.”

“Our most profitable business became Nordstrom. And our second most profitable were our retail stores, and those two businesses' profits were funding losses from the e-commerce business, which is a wonderful paradox to the way that we conceived of the company.”

“You create a clothing store that has no clothing. And that was the insight, which is the customer doesn't need it right away, and that flew in the face of everything everyone in retail told me from the traditional industry. Instant gratification. And it turns …”

“They said no at first. And, you know, said, hey, like, you need to work for the shares that you've got. And then, you know, ultimately I just wore them down, and I got some alternative perspectives from people in the venture capital backed company space, and s…”

“When I graduated business school, I had 3000 dollars in the bank and 160,000 dollars of debt, and I started a company with that balance sheet.”

“I can't go back in time and do this company on 20 to thirty million. Which is what I think it would take, knowing what I now know”

“Once you've got venture investors who've been in For seven years and angel investors who've been in for 10, it just would be wrong to not make other people money.”

“The future of e-commerce was going to look a little bit like the history of Netflix. That a platform that was streaming other people's content and distributing other people's content would vertically integrate and start to develop their own proprietary content…”

“For 72 hours, there's a really big reaction and an availability bias of the most vocal people. And then business returns to normal. The vast majority of people don't think about this stuff that much every day.”

“The examples you gave of Dollar Shave and Bonobos have wildly different outcomes. One of them was a huge win for their investors and their team and kind of showed that you can get the return on it that they wanted going in, which is Dollar Shave, and the other…”

“I look at Chewy's as what Wright looks like, not Bonobo's, right?”

“They offered me 300,000 dollars plus to stay, so I turned that down to make zero, and I think 2013, I made It was our first, like, real full year. I made a little more 30,000 dollars that year”

“And now we're the largest U.S. Retail company that was founded online.”

“And being that we don't have to worry about distributing our inventory across hundreds or thousands of stores we have a real opportunity to do that better than the traditional retailer, if we can get smarter about it.”