Got t-shirts in your closet that you no longer wear and don’t really want to get rid of either. We all have old t-shirts that we want to hold onto since they have so many … Read more
Got t-shirts in your closet that you no longer wear and don’t really want to get rid of either. We all have old t-shirts that we want to hold onto since they have so many fond memories attached. Project Repat offers you an excellent way to declutter your closet and at the same time preserve your t-shirt memories forever. All you need to do is send them your old t-shirts and they would flip it into a hip new blanket that you could use to stay warm or just keep around your house.
Project Repat launched their custom t-shirt blanket through a Groupon campaign last year and it was an instant hit, within a week they sold over 2000 blankets with over 1500 people shipping hordes of their old t-shirts to their office to be memorialized forever. Since then the demand for their service has only been skyrocketing, hitting over $1 million dollars in sales in just over a year.
Their popularity is not surprising considering that in America people get t-shirts for almost every reason and occasion. For example there is usually a t-shirt for every race you’ve run, for every event you’ve participated in, for every project you’ve completed at work. As per Project Repat in the US alone 2 billion t-shirts are sold every year and billions of t-shirts are sitting in people’s cupboards. Project Repat’s t-shirt blankets are allowing people to hold on to the t-shirts they loved in a way that occupies less space and continue to be useful as blankets.
Also Project Repat by up-cycling t-shirts is helping reduce the environmental impact of discarded t-shirts as they mostly land up in landfill or travel thousands of miles to be resold in the developing countries. Even the ones you donate to charity usually go through the same cycle with only a small percent actually being donated to someone in need. Also by manufacturing their blankets locally, this startup is creating fairly paid jobs in the US.
So how did Project Repat land up with such a clever idea that has so much pent up demand, there is an interesting story behind that. Ross and Nathan the two founders always wanted to do something around recycling excess clothing and were thinking of different ways to go about this. They had known each other from business school but they only began working together after Ross came back from development work in Africa with a business idea to repatriate American t-shirts. From there on their idea took a number of interesting turns, they initially met with lots of failures and rejection but they didn’t give up, they kept iterating on their idea until they found the right product market fit.
I recently interviewed Nathan Rothstein, one of the Founders of Project Repat. I was intrigued by their growth trajectory and wanted to find out more about how they evolved the idea, the choices they made and how they went to market.
Deepa Chaudhary (DC): Tell us about your idea and how you arrived on this product that you are currently selling?
Nathan Rothstein (NR): The original format of Project Repat was to bring back secondhand American t-shirts that wind up in Africa to resell in the US and to make money for nonprofits. After few months of doing this we moved onto employing Kenyan artisans at fair wages to recycle those t-shirts into new products like tote bags and scarves to be sold in the US. However this didn’t last for long – once when we ordered 100 bags from Nairobi we ended up not receiving any since we had no one on the ground in Africa. This incident made us reconsider our initial plan and we wondered if we could just find a way to manufacture locally in the US. We decided to take the same concept of turning t-shirts into unique products but to manufacture them in the US, creating jobs and providing fair wages to American workers. We partnered with a nonprofit NuPath in Boston, MA that worked with people with disabilities to upcycle these t-shirts.
In the early days I remember going to the local markets in Boston to sell our totes and scarves. We would spend a good many minutes telling the story and once we were done, if people were still listening we would finally talk about the product itself – this was clearly not working for us. While our totes and circle scarves weren’t selling we were constantly asked by people about what we could do with their tshirts. What we realized was that people had strong memories attached to their t-shirts even those they didn’t want to continue wear any longer and were asking us for a way to preserve these memories. This is how we discovered our calling – converting people’s old t-shirts into blankets as a way to preserve memories. While we failed to create a circle scarf that the market wanted, the way it was constructed gave us the idea to create quilts in a similar manner, which substituted the labor intensive quilting process, and provided the market with a much more affordable t-shirt quilt. A few weeks later, we launched on Groupon Grassroots to a national audience and sold 2,000 blankets in a week. Obviously, there was pent up demand for an affordable custom t-shirt blanket!
Around that time we also partnered with Threadless, the Chicago based t-shirt company to upcycle their unsold t-shirts into bags . That was an interesting moment since while we were sure that this partnership that would launch our business it instead turned out to be the end of our tote bags idea. The fact that we only sold 11 bags in 2 weeks, told us that there was clearly no market demand for our bags, and we refocused all our energy on the blankets.
After our initial Groupon Campaign in Aug 2012, things slowed down in Sept and Oct, we weren’t getting so many people on our site. By end of Oct we got featured in The Boston Globe and a local news station that helped revive our business again. Also Christmas season was approaching, we started to get a lot more orders. We introduced the Blanket Gift Box with prepaid envelopes which was a big hit. Customers paid money upfront that really carried us over to the next year.
DC: How did you get the word out? What were some of the things you did to get customers?
NR: The way we went to market was through Groupon campaigns. What we were doing resonated with the Groupon Grassroots team and they offered to help us. We did our first campaign in August 2012. For our business we needed money up front and Groupon allowed us to do that and the customers were happy to see such low prices. Within a week we sold close to 2000 blankets with over 1500 people participating. We ran two more Groupon campaigns earlier this year. In our last campaign we made close to $400k in sales, that was really a big boost for us as were able to reinvest that money in our business. Seeing the success with Groupon we continued to follow the pathway of using flash sales sites like Gilt, Fab, Daily Grommet to acquire new customers. We also use Google Adwords for marketing.
DC: You were a Hub Ventures Startup, what was that experience like?
NR: Hub Ventures wasn’t necessarily the right fit for us. While I think they have done a great job of bringing together strong social impact customers, we probably should have been spending our time developing our production partners, rather than preparing for a pitch day. Then, when we finally pitched, we didn’t receive any investments, and when you spend the whole time preparing for one day and nothing happens, it is incredibly disappointing. Also as soon as you tell the investors that you are focused on doing good, it puts you in a bad spot because “doing good” is associated with not making money. What we also realized is that the social impact investors are not really interested in you if you do not have a few years of traction, but to get to a few years of doing business, you often need someone to invest. It’s a strange paradox. For companies between $100K -1 million revenue there is not much growth capital available in the ‘impact investing space’. Looking back, we were probably not the right fit for tech-focused incubator, what we were really seeking was to learn how a consumer goods company should go to market. While people have successfully used the model of tech accelerators like Y Combinator and Techstars to prep ventures that model does not always apply to businesses like ours.
DC: What are some of the tech tools you use in your everyday work?
NR: We use the Shopify platform to power our online store. Without Shopify we couldn’t have thought of starting a business like this. We use Stripe to accept credit card payments. With these two cloud services we are able to provide a shopping experience as good as any billion dollar e-commerce site. Shopify has a lot of apps built on top that allows us to do everything we need. We use their ReferralCandy App to reward our customers who refer new people. We use LiveChat to connect with people who are viewing our website, it also allows us to see where the viewers are coming from and engage with them. We use all the Google tools including Google Analytics and Adwords. We look at the data from Google Analytics to see what we could do better. We’ve used the technology of a Boston based company Klaviyo to automate emails for all our processes.
DC: Which are some of the brands you look up to and would like to emulate?
NR: There is no one who is doing exactly what we are doing but there are number of brands we look up to. Chobani Yogurt is a social good business that has made a huge impact in our economy by hiring American workers and also created a great product. American Apparel, their garments are created here in the US and they pay fair wages. There is a local company here is Boston called Quinn Popcorn that makes organic, non GMO microwave popcorns. They have one of the best small business blog where they share their knowledge about how they do things. Prosperity Candle who have created a very successful business around selling candles made by women from conflict zones. SustainU that makes clothing from recycled materials in the US. There are bits and pieces from what all these companies are doing that we would like to follow.
What advice do you have for entrepreneurs who are just starting off?
NR: Learn quickly what customers want and are able to pay. Don’t spend months building something based on assumptions about what people will buy . Get your product out fast and start adapting to what customers need and are able to pay for. Don’t hold on to your initial idea, be flexible and make changes. We listened, learnt and took what worked ahead.
Use tools that are already out there to acquire customers like the flash sale sites Gilt, Fab, Groupon etc and don’t be afraid to give discounts as you can always get people back to buy from your website. Also make use of tools that makes it easy for you to launch your website fast.
Don’t hire people to do things you can do yourself until you can’t do it anymore. At Project Repat we are just two of us, me and my co-founder. We focus all our attention on marketing and acquiring new customers. To make blankets, we work with production partners and pay them only once the production ships. This arrangement has allowed us to keep our overhead costs low.
To give you an idea of how common this problem is, check out this old tweet by Randi Zuckerberg