How to Pivot Your Business in the Age of Pandemic - NxTSTOP | EP. #42

July 20, 2022 | Author: Andrew Maff
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On this 42nd episode of The E-Comm Show, our host and BlueTuskr CEO Andrew Maff is with Brendan, the founder, and CEO of a sustainable travel wear company that helps people Pack Less. Do More.™️ while exploring the world, commuting locally, and everywhere in between. Listen to Brendan as he shares NxTSTOP’s journey on how he has pivoted his travel wear brand amid the pandemic through successful product innovation, effective SEM/SEO, and proper customer profile segmentation.

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How to Pivot Your Business in the Age of Pandemic

SPEAKERS

Andrew Maff and Brendan Kennedy

 

 

 

CONNECT WITH OUR HOST: AndrewMaff.com  |  Twitter: @AndrewMaff | LinkedIn: @AndrewMaff

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brendan Kennedy

 

 

Brendan Kennedy is the Founder and CEO of NxTSTOP, a sustainable travel wear company that helps people Pack Less. Do More.™️ while exploring the world, commuting locally, and everywhere in between. Prior to NxTSTOP, Brendan spent his career in technology, first working for Accenture before founding Fathomd Inc. (an NSF SBIR-funded company) in 2015 to revolutionize gaming in business education. He is a graduate of Stanford University and holds an MBA from MIT Sloan.

Transcript:

00:03

As a traveler going to some of the most beautiful places in the world grew up as a surfer and a sailor on the water. It was really important to me that ran would resonate with people who care about the environment and want to do something more proactive change.

 

00:15

Hey everyone, this is Nezar Akeel of Max Pro. Hi, I'm Linda, and I'm Paul, and we're Love and Pebble. 

 

00:22

Hi this is Lopa Van Der Mersch from RASA. you're listening to, and you're listening, and you are listening to The E-Comm Show.

 

00:34

Welcome to The E-Comm Show, presented by BlueTuskr, the number one place to hear the inside scoop from other e-commerce experts. They share their secrets about how they scaled their business and are now living the dream. Now, here's your host, Andrew Maff.

 

00:54

Hello, everyone, and welcome to another episode of The E-Comm Show. I'm your host, Andrew Maff. And today I'm joined by the amazing Brendan Kennedy of NxtSTOP a Travel Leisure brand that was created during the pandemic, which is going to be incredibly fun to learn about. Brendan, thank you so much for being on the show. Are you ready for a good show you ready to do this?

 

01:12

Yeah, totally pumped. Can't wait. Awesome.

 

01:14

I would love for you to kind of kick stuff off. Let everyone know a little bit more about next up, and we'll go from there.

 

01:20

Yeah. So next time was an idea that I had really started in about 2015 or so I've been traveling my entire life being consulted. So I was doing the out and back kind of you know, Road Warrior life flying out Monday coming back Thursday, I did this most notably for two years straight doing JFK lax every single week for two years. And I started to, you know, have this idea about, I would wear the same thing, every time I go to the airport, I'm only packed and carry on. And I needed it to be this versatile type of apparel that I could wear, and get away with multiple situations when I couldn't bring that many things with me. At the same time, I didn't want to just be apparel, I wanted to be something you know, a little bit deeper. And I started to think about sustainability. I've been, you know, as a traveler who goes into some of the most beautiful places in the world, I grew up as a surfer and a sailor on the water. And it's really important to me that the brand would resonate with people who care about the environment and want to do something for proactive change. So the original idea was that this travel lifestyle brand was kind of the highest level. And then it took me quite a while to be almost until 2019 before I was able to understand the sustainability piece for the supply chain, and make that a central piece of the product offering and I mean, find the right suppliers actually met. If you know surfing, Kelly Slater has a brand called outer known, where they're super focused on sustainability, I happen to randomly sit next to the CEO at a conference, who ended up really being nice to offer me you know, come into the office and meet the sustainability team. And let's help you kind of do this. So 2019 rolled around, and I had this concept. Okay, let's combine sustainability with travel and functionality. Let's call this Travel Leisure almost like Nike Dri Fit, so I trademarked this as the function of the product. The next stop is the company name, of course. But we were literally getting ready to launch the brand. In 2020, I'd actually left my full-time job and only worked in you know, as I mentioned before, technology consulting before. So 2020 in January, I left my job thinking alright, travel is really hot right now, this is going to be a perfect time, we were sampling these collections as Travel Leisure apparel, and basically set up to do a photo shoot on March 7, 2020, which we did. And then the next week, the entire world shut down. So it was not the path that I figured. But that's the path that we took.

 

03:55

So you very well could be one of the most educated people we've had on the show. I know you're a Stanford grad, you have an MBA at MIT. So obviously, I'm gonna guess you were pretty well educated on how to pivot once something like that happens, or at least adjust as much as possible. So what like how did you? You're literally spent, I think, I believe you started the company in 2015 2016. Right? It was, yeah, it was

 

04:23

2016 when I filed the paperwork, but nothing really happened for quite a while because I was just working part-time. Yeah, trying to figure it out.

 

04:31

So you even part-time for the better half of what, four years, and then all of a sudden you're getting ready to launch you're all pumped, and then it just doesn't. The world just doesn't let it happen. So what uh, how'd you kind of approach that?

 

04:47

Yeah, well, they talk to you a lot in business school and, you know, Stanford in particular, would like to claim itself, the entrepreneurial capital, you know, the MBA schools, I think all of them really do a great job of bringing that to the forefront, and you take these classes about entrepreneurship, and you talk about this word pivot. And much like cash flow and other things in accounting class, which you don't really get until you have to do it in the real world, I feel that that was the similar idea of this concept pivot. It's a different thing when you know, maybe your product doesn't work. And you need to change ideas, but you have money, you have things you can do resources to make it happen for me, I'd left my job, I had, you know, the COVID pandemic was setting in. And it was basically something has to happen or, you know, I'm going to be really in trouble myself and not really sure what to do. So the idea of it was something that one of the suppliers I worked with that helped us launch a couple of the additional accessories called me up based in China. And he says, Listens, you know, are you thinking about these facemasks yet? I said, Well, you know, I don't know, we're over here. And still, you know, we're still kind of evaluating. He's like, I'm telling you over here, this is what's happening. And you got to be thinking clearly about at the same time, talk to a friend of mine in New York, who's had the fire safety for all Metro-North Railroad and Long Island Railroad. And he's telling me how bad it was, and all the people that were dying and how this was not going away. And I was out for a run kind of thinking about this idea that masks when suddenly just kind of hit me like a lightning bolt, right is if this is that bad. If everything is going in a direction that people around me are reporting it is, then this is 100% going to be important to what people are doing for not just travel on planes, but getting on the subway, going to hotels, going into conferences, even just being outside with people. And I came back from this run. And I was a little hesitant about doing this, my girlfriend really pushed me she was very confident that this was the type of thing that I should do, and took all the money that I had. And I laid it into a purchase order to do a Travel Leisure bamboo mask to basically be the best reusable mask that you could have, that would be antimicrobial, super soft and breathable. So we took the idea of travel Asia, and we pivoted it into this one specific product that we knew that the world was going to need it. And we launched on April 1. So this is one of the very first brands I think in the world, it came out and that inventory to do this. And from there. It sort of exploded. And I can talk about that, too.

 

07:27

Yeah. And you didn't have any kind of limitations on your time by April 1, 2020. Correct. Warnings warning. So he really did that in a matter of weeks, which is super scary,

 

07:39

super scary, right? Because we were trying to sample because we need to sample that thing before I was gonna say okay, and I was talking on WeChat trying to figure out, you know, fabric options, I wanted to do the bamboo. But getting things into the country was really tough. And you got to understand, they shut down all plane traffic. So that meant that most commercial airlines that are taking cargo stopped. So the only people who are transporting anything in the world were DHL, FedEx, and maybe ups, but really DHL was outside of us. DHL is who everybody uses. But getting those samples into the country was taking longer. And then they were looking everything at face masks, like, is it medical? What does that mean? So it was a little challenging just to even get the samples. And then when we launched on April 1, we were selling everything in pre-order. So we went live on the site, we had 10,000 units that I put all my money into to get. And they were still in production. So they were not yet here in the US. And then we got covered by Vogue, New York mag, I think GQ, and a few others right away, and we started to sell like crazy. So then it was a factor of we have, you know, 10s of 1000s of people who were coming onto the site going, you know, we want these things. But still, the freight and getting it into the country was a challenge, I was driving to LAX myself, grabbing my girlfriend too, and we were doing trips to intercept the cargo and bring it out to a warehouse and pay the guys off in the warehouse to like, expedite it and get it going. So that we could ship these 1000s of orders. And in that meantime, I realized this was gonna go bigger. And I put in an order for 100,000 to sort of scale up.

 

09:24

Wow, it's such an interesting story. Because we, you know, obviously here we work a lot with E-commerce sellers. And there was a lot on the apparel side that was like we gotta get into mass, we got to get in the mask. And by the time they actually were able to make it happen. There were some limitations over what you can advertise and where you can put it and what you can say about it and all that stuff. And you were just in time to basically get grandfathered in. So that you know everyone who had their rules in place didn't really matter. So that's incredibly impressive that you're able to get it done that best.

 

09:53

Yeah, it was what occurred as interesting as Amazon actually came to us. So we got this cover reach for our site, they reached out to us and said, we see that you're doing this, you got this coverage, do you have inventory, we want to bring you into the Prime program for FBA, at a time when they'd stopped letting anybody else in it for any product, right, because they were so overwhelmed. And they managed to sort of walking us through the door. And then that immediately scaled things up enormously, some May 5, or May 3, 2020. Within the span of about a month, we were able to get in there. But it was challenging. I mean, they, they didn't really have listings for face masks for what was the words and you know, it was a little irritating to kind of set it up. But once we did, then we immediately also moved across Amazon, Mexico, UK and Canada, as fast as we could to get that reach.

 

10:52

So you're essentially two and a half years in since you launched, and you're already well into seven figures, pushing eight, I'm imagining. And, you know, doing that, in that short period of time for any eCommerce seller is incredibly unknown. Like, that's just not very common. Do you feel that had the pandemic not happened, obviously, next up is what it is now for a reason? Do you think that had the pandemic not happened that you would still be at where you're at now, based on the current approach that you're now back to?

 

11:31

Not at all I think that's the most curious part of that when you think about how the universe works. And the way that things are going to take the path that is meant to be taken. Apparel is a terrible segment to raise money in to start as a, you know, new business, it doesn't have infinite scalability like technology, and to raise money as an early lifestyle brand, is extremely difficult. I mean, I think took also such a long time to think about the product and do things because it was difficult to even get money to initiate the first few pieces. And the way that I funded the brand, in 2020 was I took all the money I had which was really miserable at a time in the stock market, and like half sold it all and put it into the brand than to scale up I went to friends and family actually several friends who did a convertible note with me for a little bit. And then another friend introduced me to an investment bank that funded the working capital for us to do this. But as you can see, most of this money was they saw the demand, we were in the right place, and they gave us the money because of that. And then when we came out of the pandemic, we did an SBA loan to basically further scale up now we're just closing a round really, it's occurred between seed and a to get to our next piece. And the reason we were able to do that is that people could see you know, now because of the mass business, we've worked with delta we worked with Virgin we've worked at Avis Budget Group or an Amazon, but it was because of this wedge with the mask and this unique time period that we were able to move and get the scale that we did I don't think without that we wouldn't have been able to get such explosive awareness and growth I mean even though we're still small on our awareness needs to build but to prove for travel that there was a brand that could be doing this the pandemic was key which is the opposite of what you would think based on what happened.

 

13:36

So let's jump ahead now to today ish. So obviously Next up, Travel Leisure travel Travel Leisure my saying that right?

 

13:45

Yeah, we so what we do is next up the brand, but Travel Leisure is this design concept so if you think of you buy Nike Nike has Nike Dri Fit think you know Vory and some of those guys have these special fabric mixes is effectively what is so we call travel is your our mix of sustainable fabrics either organic, biodegradable, biodegradable, fully recycled with some sort of versatility you know, function either wear for multiple days without stinking super anti-wrinkle, you know, versatile for situations where you can dress it up and dress it down ultra-lightweight, breathable. So it's those concepts that's what we call Travel Leisure.

 

14:28

So, travel can be a relatively broad statement. Are you strictly sticking to, you know, as you mentioned, it kind of stemmed from like you being in an airport all the time, things like that? Are you strictly sticking to that direction or do you have you gone into different verticals of travel?

 

14:48

It's interesting like we've tried to use a lot of the customer data to understand better what the segments are now we really three customer segments the airline for sure is one and that is I think the core beginning And, but then we have two others, which is this, you know, intercity interest city commuter, like I'm living in New York. And living in Chicago, I'm hopping on a subway, I'm commuting across town and going to coffee meetings, maybe all day long. And then there's this road trip, road warrior type one, two, or the weekend warrior, where, hey, you know, I'm in LA, I'm gonna hop in the car, drive to Joshua Tree or go to Big Sur, and there's some sort of, like a physical activity that you're doing. So, I mean, they're in the car, I want to be comfortable, but I need to look good, look good enough. And be, you know, ready for whatever the situation is. So those are the three customer segments that we started to build out, as we've now been introducing apparel for men and women. And see, you know, the response to that.

 

15:47

It's a very interesting customer profile because you know, that person could be incredibly interested in one thing, or they might just be, you know, hiking out at Joshua Tree for a little while, like, once a year kind of thing. So it's very interesting how you've been able to build this brand based on people that are either traveling a lot or are just occasionally traveling, what is your marketing approach been to kind of be able to reach all those different customer profiles?

 

16:17

Yeah, it's shifting now. I mean, I think at the beginning of the pandemic, affiliating was a huge challenge for us. And I think, ideally, we would do more of that. But it's really, it's focused back in on social, but the social landscape has been shifting, I mean, we increasingly are using a lot more tick-tock to do short-form video, UGC, and testimonials. And really, you know, finding letting people talk about why they love the brand, why they love the apparel in particular is the strongest thing. And we want more of that like like to have been inundated with those types of videos all the time and really just use them to showcase it. But at the end of the day, there's still a lot of this brand awareness that we're still seeking to do, especially with influencers at the social level to prove that brand authority and to make sure that when people think of travel they think of next time. And you know, for us, SEM is by nature, something that we do, we try to show up in an SEO to show up organically for search results. But we've just noticed with the apparel in general people aren't until you get to be big, like a Nike or somebody people are coming and Googling you. Right? There's, there's yeah, there's very, that is a limited value, although a very, very valuable and efficient return. So it's this top of a funnel really driving the social awareness and then shifting the channels you know more towards Tik Tok YouTube is one we really want to break into and think of being huge for the experiences. The Facebook, of course, we continue to do although that shifted a bit as well. And then, you know, have that drive opportunity in PR in the affiliate channels, where we can have more people coming to the site, and you know, really continuously, you know, improving the awareness. And finally, of course, at the bottom, that is people know us more either seeing us on social seeing as a PR affiliate, that that organic piece starts to come in now, just very separately, as Amazon is kind of its own beast, right. So yeah, we still, ironically sell a lot of masks on Amazon. And that's where a lot of people find us I run into people in the airport, and I see them with our masks with the little plane logo. By the way, if you fly Delta or Virgin, actually virgin doesn't have them at Delta does. Do you see the mass of the plane logo, if they're still wearing them at all? Those are ours. So people find us, they see us there, and it almost acts as an additional reach. But Amazon is Amazon. So a little different. Yeah.

 

18:56

You said a lot of interesting stuff there. So there's so much to unravel in that. So for it the SEM SEO side, that's a very common thing I've found with apparel brands, we have the same problem. Every time we talk with apparel brands like Google ads, you're going up against the guys Hanes that selling a t-shirt for 15 bucks like what are you gonna do? You can't beat that out the SEO side though, what's interesting that my thought like what is your approach been on that side? Because one of the things that we've always discussed especially specific specifically sorry for apparel brands, is you know, too many of them we find trying to target you know, the best like in your case would be the best t-shirt for traveling or the best pants for traveling or something like that. And to me that's very, that's gonna be tough to rank for because like you mentioned that you've been Nikes of the world and stuff like that you have to go against but have you done anything along the lines has a little bit broader from a brand awareness perspective and then just retargeting them so let's say top restaurants at O'Hare to go to because chances czar they're sitting in an airport trying to find what to go eat at or something along those lines, is that kind of more of a broader approach that you guys have taken there?

 

20:07

Well, it's interesting. We've used blogs for experiences and other things that will draw them in. So similar, I think what you're saying is you create other content that's relevant to bring them into the site, and then sort of through that link out to products and things. Yeah, that yeah, so that we've done that, increasingly, I think, to not even just with the, I think our domain authority needs to be higher before people are coming to us for search for that, but we are getting, we're having a lot of success with an email where we create those types of things, and we push it out to our email list, instead of just buy the product, buy the product, rather buy the product, you know, so that to me, I think is great. I would love to you know, if you've seen any other ideas about the, you know, articles and how to drive is purely for, you know, SEO sem for inbound. Like I've seen, you know, some of the travelers who have the best sites or best things to do, but that might be a very long tail thing for us. We have to see unless you put picked a really, really unique topic.

 

21:20

Yeah, it's true. And you would also mention Tik Tok, which is obviously a hot topic right now because it's taking over everyone was so relying on Facebook and Instagram. And now I believe even CPMs on tick tock are higher than they are on Facebook and Instagram. So a lot of questions around whether that platform is going to get a little bit more ad-heavy than it is right now. And kind of what their approach will be. From a tick-tock perspective, you know, most sellers, relatively simple to get some ads up and running, you create one or two videos and start testing them right away, which tends to be the approach they want to take. But what's been your approach for organically posting on the platform? Do you have someone internally that's creating that type of content are you solely focused on etc,

 

22:03

it's been, we were going through a transition now, or we've been trying to like, for us put together the organic stuff and post it. But the, you know, we're in process of making that more core to what we do every day and working with a group to help us create more of the organic content, not even, like, as you said, the ads and testing. But what we're hearing around is that the organic Tiktok pieces really are the magic, if you can get that to work, you can drive a lot of sales just through how great it is. But as a small team, and we were you know, nine people right now, you need to really be every day ideating and creating specific things which we have a person coming in who's going to help us do that. But I wish we could be doing it. You're absolutely right. I think that that we've seen it be more expensive. We had a lot of success at the beginning of the holiday season. Last year, we had a couple of those UGC, you know, review type ads that were done that we white labeled, or whitelisted. And it was very successful, but then the pricing kind of went upside down. And it just became crazy. So then we had to pull really pull back. And it's we're still trying to figure out the kind of method to do that.

 

23:24

Yeah. So from a resource standpoint for everything, which you've you've kind of mentioned a handful of people internally, like what does your overall org chart look like? It's very interesting to me of E-commerce sellers when we talk to them about someone who's got one or two people even though they're willing to eight figures, and then you have other people that like keeping everything in-house, what's your approach been?

 

23:46

Well, we try because we built everything on these native e-commerce platforms, we tried to automate everything possible. So my plan here is to have a team that's just the best possible team we can have. Ideally, as we get a little bigger, also the best paid in the industry to keep those people around, but where we can use agencies very selectively we will, but for core functions of that, you know, that the creative director role, you know, the paid media, the brand director, even to some degree, like the customer service and things we're going to keep that in the house along with our, our you no head merchant. So these core functions, I believe, we might have a pretty flat structure and people who lead each one of these initiatives, and then a few, you know, maybe an assistant or two that helps them execute. And what we can't do with that will farm out to do additional pieces, you know, I don't foresee us as a brand, even getting to 50 100 million dollars and needing more than, you know, 1520 people total to do this. I think It's it's more of a, okay, we need to do more content. Well, who can we engage with outside? And how are we controlling that process from the inside? You know, sales teams, we do a lot of wholesale things now working with new companies through distributors, or through promotional products groups. So we don't need a big sales team to go do it. So how can we be as lean as possible? But really control I think, is the core element of what it is that we're trying to do if that makes sense?

 

25:28

Yeah. Beautiful. Brian, I really appreciate your time. I don't want to take up too much more of it. I know you're busy. Alright, I would love to give the opportunity to everyone. Um, let everyone know where they can find out more about you more about next up, and we'll wrap stuff up.

 

25:41

Yeah, absolutely. So to find us, first of all, we had to start a new social account, which is kind of curious Facebook and Facebook, you can find one at NxtSTOP apparel, NxtSTOP apparel. On TikTok, it's different. It's the next step. So you can check us out there. Obviously, the website, the website, thenxtstop.com. And then on Amazon, if you're an Amazon person, you should be able to search NxtSTOP, we have a brand store there with not all the products that we have on the website, but a lot of the core ones. And we also offer the same Amazon shipping on our site as on Amazon itself. So either way, you're good to go. Beautiful.

 

26:22

Appreciate your time. Thank you so much. Obviously, everyone who tuned in. Thank you so much again, please make sure you do the whole usual rate review, subscribe on whichever podcast platform you want on YouTube, or just head over to ecommshow.com. But for every time I say this, thanks for joining. I'll see you all next time. Have a good one.

 

26:41

Thank you for tuning in to The E-Comm Show head over to ecommshow.com to subscribe on your favorite podcast platform or on the BlueTuskr YouTube channel. The E-Comm Show is brought to you by blue tusker, a full-service digital marketing company specifically for E-commerce sellers looking to accelerate their growth. Go to BlueTuskr.com Now for more information. Make sure to tune in next week for another amazing episode of The E-Comm Show.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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