The Exchanges

Q Which is a grind. I mean, especially when you're starting out, it's like, 60, 70 hour Hours a week, right? Just a grind. But if you can stick it out, you can make a lot of money.

A Well, we, we did make a lot of money, um, and it was a grind. You know, there was, DLJ became kind of legendary. There's a book written about how, how difficult the life was as an analyst. You basically didn't get days off, and that, that took its toll, but, you know, I, I have to say, I, that experience was phenomenal. I have tremendous amount of appreciation for that job because it It taught me how to work hard. It taught me how to be accurate and taught me how to get things done and then over the line. But at the same time, I was surrounded by a bunch of folks who had gone to Harvard and Wharton and Michigan and Stanford who were econ majors and were way smarter than me, um, were outperforming me. And I think that began to kind of creep its way into my head that I just was not in the right place. And I think about it a lot, and that's a gift. If you can early on figure out, even if it's what I don't want to do or what I shouldn't do, it's a real gift, and that certainly was that. I, after my, my tenure in that program, I decided to get out of banking, which was a big decision for me, because I'd worked so hard to get the job.

AI assessment note: “Well, we, we did make a lot of money, um, and it was a grind.”

Q So what did you do after? I mean, I would think that maybe there were other tech companies you were looking at or other opportunities in that space. Did you, Do that?

A Uh, no. In fact, um, so when we got acquired. And, um, I, I was so ready to get back to a tangible thing. Web chat had seemed like, though it was a good financial moment for me, it was a return to banking in that I was dealing with a product that didn't truly understand, wasn't passionate about. And so, um, I didn't even consider tech. I, I had met another guy that had gone through the Stanford product design program, and his name was Steen Strand, and, and I had met him, um, when I was at Atlas. And Steen and I became close. And, you know, fast forward a few years later, I had sold web chat. I was sitting out on Clement Street in San Francisco and had just come out of a bar with some friends. And I saw a guy go flying by on a skateboard. And then he turned around and he said, Byron, it's, it's Steen. And we reconnected. And he told me about the business he was trying to launch. And little by little kind of began to suggest to me that maybe I could join him. And, um, so that, that's what I did.

AI assessment note: “Uh, no. In fact, um, so when we got acquired... I didn't even consider tech.”

Q So you, you found the company, and by the way, the name American Giant, how did you come up with that name?

A Yeah, I'll tell you a quick, really quick funny story about that. When you are starting a company and naming a company, you have to go through this agonizing personal process of what am I going to name it? And then you have to, once you come up with a name you might like, you have to make sure that your URL is available and that there's no trademark infringement or any other thing. And I started to keep notes and lists and pads of paper in my car next to my bed and everywhere that I might, Jot things down. And I had gotten it down to, I don't know, three or four that I thought were okay. I didn't love them. Um, but I was sitting at a coffee shop. I was on a phone call with part of the supply chain. I was starting to build and I was kind of daydreaming on the call. And I had my mother's mother, uh, grew up in Northern Maine. And if you looked out of her window of her house, you could see these two hills that were called the sleeping giant. And I was like, Thinking about that, kind of reminiscing about that, and the name American Giant popped into my head, and I was like, gosh, that's, that's great. And I love this idea of a giant being a quiet but strong thing, and sort of felt there were correlations to American manufacturing, kind of, has been left alone, but would be strong if it got reawakened. So I got on my computer and, and did a USPTO search, And saw on there that it was…

AI assessment note: “two hills that were called the sleeping giant... the name American Giant popped into my head”

Q So you, you, I guess through like a series of friends of our friends, you ended up meeting this guy who was one of the owners of a company called Atlas Snowshoe, which I looked up. They are literally, literally snowshoes. Were you like, I don't know, was it like a skier, a snowshoer? Like, what was your interest in that?

A Neither a skier nor a snowshoer. I don't think I'd, I'd been on a pair of skis more than once or twice when I moved to California and had never been on a pair of snowshoes. But that, that company, Atlas Snowshoe, was a, a remarkable little company. And when I found out about it, it was a couple of guys. One guy out of Stanford's product design program and a, and another guy who had actually conceived of the idea of, Of building a modern snowshoe. There had been no innovation really at all in 30 or 40 years, and they had designed an interesting, uh, harness for your foot that gave you a mechanical advantage when you use the snowshoe itself, and they launched a company around that, and I was their, I think their first or their second employee, um, but it was all I could have dreamed of. A couple of really smart guys making a product, trying to get a company stood up in a warehouse in a Bad part of town in San Francisco, and it was just , I felt like I'd fallen into a tub of butter. I mean, it was just the, it was the absolute, you know, realization of what I'd hoped for, and it's really from the ethos that those two instilled in that business, and you know, I had a front row seat to that, really seeing those guys be sticklers for, for design and, and manufacturing, that, that was something that never left me.

AI assessment note: “Neither a skier nor a snowshoer.”

Q because there's those double stitches, and it's heavy, and it's just a thick, solid sweatshirt, um, so I know them well. When you got this first run in, What did you do? Like, how did you just like put them on the website? Did you reach out to media to get some attention? Like, how did you get people to become aware of this thing you were trying to do?

A Well, the basic business idea was if you built a really great sweatshirt and did it in a way that both the brand and your consumers would be proud of that, that customers would care. So that basic idea was what we wanted to launch the business around. And so we poured everything into the product basically. And I sent out, you know, a thousand emails to everybody I've ever met in my life saying, hey, I'm watching this company, please buy a sweatshirt. And so we did that, and so we launched, we shipped our first sweatshirts, men's only at the time, in, in February of 2012. We got a little bit of press, and we had friends buy stuff, but it was still tiny guy. I mean, I think we sold, I don't know, maybe 10,000 dollars worth of sweatshirts a month.

AI assessment note: “I sent out, you know, a thousand emails to everybody I've ever met”

Q And you thought he was the right guy? I mean.

A I thought he was very smart. I thought he was passionate. And what I liked was he had no apparel experience. As counterintuitive as that sounds, I really wanted somebody to come in that had completely unencumbered eyes, where he, he and I could ask very open-ended questions about what, what made a great sweatshirt. So I got with him somebody that started with no preconceived notions about anything, not what was possible, not the way things do things, not the way that designers are trained or merchants are trained. I wanted somebody to come at this totally fresh, and he did, and he challenged basically every single assumption, and we piece by piece by piece began to assemble what we thought was going to be a pretty great product.

AI assessment note: “I thought he was very smart. I thought he was passionate.”

Q I was working at NPR at the time, and I interviewed you when that came out. We talked about the sweatshirt. Um, what did that article do? Cause I imagine it just, things blew up. Like, For a time.

A It, I mean, changed everything. I, I, um, I had met Farhad. We had approached him and said, listen, we think we're doing something kind of interesting. Why don't you look at this and compare it to a bunch of other sweatshirts and see what you think? And he was a tech reporter for Slate at that time. And I think this kind of grabbed his fancy a little bit. It was a, some part of tech story because of the e-commerce angle, I guess, but it just felt something different for him. And I think he intended to give it a couple of hours and move on. And he came up to the city one day and met with me and he ended up spending a I don't know, four or five days with us and really immersing himself in the whole thing and wrote this really detailed article that was not only an exploration of the business model, but the sweatshirt itself. And I think he was moved by what he saw in the product and wrote this article that when it went out, and to your point, it was early December of, uh, I'll never forget it. The article hit. I didn't know it. I got a phone call from the people that were hosting our e-commerce platform and said, are you Are you aware of what's happening here? I said, no. He said, something's happening.

AI assessment note: “It, I mean, changed everything.”

Q Um, who, what were the reasons people were interested in buying the product? Was it, was it a sense of patriotism? Was it like, I want to support Made in the USA? Was it, or was it something different, or was it A bunch of different things.

A I think it was a bunch of different things. I think at its core probably was probably what you experienced was this article that came out that seemed totally unique and different, went totally viral. You couldn't get it. But I think in addition to that, I got a handful of brands in my life that I like giving them my money, because I admire what they're doing, and it aligns with my own values, and I think that is probably behind it is, and this gets back to the earlier comment about this sort of non-partisan patriotism that I think lots and lots of Americans feel, that there's this intuitive sense that the Amazonification of our lives is not great, and that we're getting this disconnected reality from the people and the places that make the things that we need and love, and we got to turn back on that a little bit, and I think that's probably part of it too.

AI assessment note: “I think it was a bunch of different things.”

Q Bayard, why is it so hard? And maybe it's not, but why are so few clothing brands manufactured in the US? Is it that hard to make clothing in the US? Is it, is it the cost? What's, what, why?

A It's more expensive. So you've got labor rates in America, and that really boils down to the cost of labor, I think, more than anything else. Um, there are other factors, but that's the big one. And so I think it's more expensive for many, many years. The dominant paradigm in apparel particularly was to drive cheap and to drive the means of the cost of production down. And so during that time, there has been, I think, a progressive decaying of the manufacturing base domestically, but there are real strengths and bright spots as well. So at first it was motivated by, by cheaper means of production. That drove, I think, diminishing investment in domestic manufacturing. So it's quite striking now that when you go into, into facilities overseas, you oftentimes will see more modern, more updated manufacturing capabilities than you see here domestically. On the other hand, um, part of this journey for us too has been, as we have stood up a supply chain now across t-shirts and sweatshirts and jeans and pants and jackets, you do find these incredible pockets of capability, um, that have driven our business forward. It's a mixed answer. I think that the, the, the, Maybe the overly simplistic thing has been that brands have been incented by shareholders to chase cheap production and better margins as much as possible. And, um, and so, and they've been in some ways incented by our trade, …

AI assessment note: “It's more expensive. So you've got labor rates in America”

Q How did the past year change and sharpen and presumably improve your management style?

A I've been thinking about this a lot. And, and, and, and I think that I have given lip service to, for most of my career, to empowering people to lead in my organization. And I think a lot of people do that, but don't actually do it. They talk about it, but don't actually do it. And that was, that was the case in my case. I, I, I continued to manage my team, um, as opposed to leading them and empowering them. And I think that the, and I've been maybe talking about that for many years in my career, I think what the pandemic did is Is by the force of distance and working from home, uh, it required that we give the control of all aspects of the business down to our senior people, to our brand new hires. And I don't want to overstate this, but almost without exception, everybody rose and stood up and did just incredible jobs about taking ownership and pride over what we do. And that was just a Uh, it almost makes me emotional talking about it. It was just an incredible thing to be a part of, to see people throughout the organization step in and, and work hard and get things done that needed to get done in ways that were beyond what I think I'd ever believed was possible. So that has transformed the business, um, in a really basic way. My management style now, I think it's totally changed. Um, I think if you, if you ask my leadership team, they would say he is Way less involved in th…

AI assessment note: “My management style now, I think it's totally changed... Way less involved in the day-to-day.”

Q in San Francisco, um, and I'm sure people say to you, wait, you, you make sweatshirts and t-shirts and apparel in San Francisco, right? You're not, but you were, you do have a background in tech. You were in the tech world for some time. How did you get the idea to leave that behind and start an apparel company in San Francisco? How did that, how did that happen?

A I started off my career in finance, actually, and left that quite quickly, realizing that I wasn't any good at it, and I had no interest in it, really, and And then sort of luckily found myself in a company that was making a physical product, a snowshoe of all things. And once you get your, at least in my case, once you get your arms around a physical product and the making of something, that bug kind of never leaves you. And I, I did for a brief period run a tech company, an internet company, an early internet company, but that if more than anything else, that reinforced my total desire to be in the making of physical products. Uh, and so that, that part of the transition was quite easy. The contrast of being in San Francisco was sort of this tech capital with a real manufacturing business. That's an interesting one. We are kind of one half a tech business because we, we've got a big e-commerce business. Um, a lot of our business has to do with taking advantage of the, uh, innovations and manufacturing innovations, but also technology and technological and e-commerce innovations. And then the other half of it is manufacturing. And a lot of that is in places like North and South Carolina, where the bulk of our production is done. And we actually own some factories down there. It's one part tech, one part, part old world manufacturing, so it's been a pretty interesting, uh, 10 y…

AI assessment note: “that if more than anything else, that reinforced my total desire to be in”

Q to produce their clothing in the United States? Obviously, labor costs are always going to be high, and they should be high. I guess ideally union as well, so, so employees are treated fairly, but what do you think are ways that could attract other manufacturers to, to either return their manufacturing to the US or keep their manufacturing in the US? Are there simple things that can be done?

A I don't know if they're simple, but that's a, that's a very important question. I may frame it up this way. I think in my judgment, labor rates should be high. You should be rewarded for working and working well and unskilled and skilled jobs in this country. Um, that's my opinion. And, um, but I also think it is an inconsistent, uh, policy from DC to say, we're going to burden our domestic capability with high labor costs, let's say, or higher environmental standards. And then at the same time, be incenting our big corporations to advantage themselves by chasing, Um, the cheapest labor or the poorest environmental standards. So I think those two things are inconsistent and the answer lives in there somewhat. I think, um, to the extent that we can begin to, um, even at the playing field between what we are allowing to happen from manufacturing standpoint internationally and what we are holding our domestic producers to, that's a big step to begin to lift, to level that up a bit more. I've got a great partner of ours who produces our yarns and, uh, and the CEO of that company always says to me, Define free trade first, and then I'll tell you if I'm for it or not. And what he means by that is, if I'm competing on a level playing field with my international competitors, I'm all in. I'll, I'll go toe to toe. But if it's an uneven playing field, then that's, you're unfairly burdenin…

AI assessment note: “to the extent that we can begin to, um, even at the playing field”

Q A sweatshirt with a zipper, like a hoodie?

A Yeah, at that point, I just, it was one of those four things, and I sort of looked at all of them, and flannel shirt felt impossible to me. Blue jean felt, you know, a little less impossible, but so incredibly difficult for our early nascent business, and the t-shirt didn't feel particularly substantial, so I kind of defaulted into a sweatshirt, and so that became the thing I wanted to make as our, as our flagship product, and And so I, that was sort of the product piece of it that I was really focusing on and looking a lot at the underlying supply chain underneath it. And then separately, as I thought about financing it, I began to reach out to my network of people, and one of the most important father figures in my life was growing up in, back in Greenwich, was a man named Don Kendall, who had really built PepsiCo.

AI assessment note: “so I kind of defaulted into a sweatshirt, and so that became the thing”

Q How long did it take to make one sweatshirt?

A Yeah, so, so I'll just give you the whole step-by-step process. So, um, the big regions of cotton production are California, Texas, and the Southeast, um, North and South Carolina. So that cotton gets grown, um, it gets harvested typically in late October, early November, and goes to a gin, if you remember your, um, your old history lessons about Eli Whitney. The ginning process removes seeds and Leaf litter. It used to be done by slave labor in the United States. It was a big part of the Southern economy. Now it's done through automated ginning machines, which are, are kind of dotted all over the United States, cotton growing regions. So it goes and gets ginned. So in this example that I'm giving you would get ginned at the Enfield gin, which is an Enfield, North Carolina, and that gets cleaned and then bailed. And so that gin takes in raw cotton and out the other door goes a bale of cotton. And that cotton gets Labeled, so you get varietal, you get moisture content, color, but a whole bunch of quality controls, much like a grape and a wine.

AI assessment note: “I'll just give you the whole step-by-step process.”