It has been a whirlwind couple of months for Ricky Choi and Phil Moldavski, the Living Social alumni behind the Washington, DC-based menswear staples startup Nice Laundry.
Since launching their company on Kickstarter in August 2013, the two have nearly sold out of their initial production run — a lot sooner than they thought — following a strong crowd-funding drive that raised more than three times its target goal.
Modern Fellows sat down with Phil and Ricky at Filter coffee in Dupont to discuss their successful Kickstarter campaign, the emergence of direct-to-consumer retail and building brand loyalty for a low-value product.
The two arrived with a package of socks – their Dreamer pack — which they provided at no cost.
It is nice to see entrepreneurship alive and well in Washington, and even nicer when the product is so strong.
Having reviewed a dozen brands of socks over the past several months, Nice Laundry’s offerings are among the strongest combination of looks, comfort and fit around. The colors are bright but well-balanced, the cotton is medium weight and comfortable, and the socks stay up around mid-calf all day. All of the pairs they provided are in heavy rotation.
What led you to start Nice Laundry?
Ricky: The idea was born out of a personal pain point. When I first met Phil at Living Social, I thought, here’s a guy who pays attention to how he dresses. Nice shoes, good pair of jeans and button down shirt. But everyday, he would wear these same white gym socks with his dark shoes and dark jeans. It just didn’t help him achieve the look that he was going for.
I’ve always been a big sock guy. When I felt I knew him well enough, I convinced him to buy one pair of colorful, cool socks. He paid twenty-something-dollars for them. He threw them on and got some compliments, and then the next morning, he woke up to that same bleak, white-colored sock drawer.
Phil: Then I spent hundreds of dollars and months trying to refresh my whole sock drawer. At some point we looked at each other and said, there has to be a better way of doing this.
The margins for socks have been artificially inflated for a long time. We’re seeing a lot of innovation when it comes to eyeglasses with Warby Parker and disposable razors with the Dollar Shave Club. We thought we could do socks better.
Nice Laundry emerged with a very successful debut on Kickstarter. Looking back, how would you assess the launch?
Ricky: There really is a paradigm shift in how an inventory-based business can launch. Kickstarter essentially acted as a pre-order mechanism and helped us assess demand. It’s awesome for a company like ours. Our target was $30K and we wound up raising about $120,000, so some of that excess helped us stand up our operations. Kickstarter is increasingly an intelligent way to raise funds to get your company off the ground.
Phil: What we learned from Kickstarter was the focus on storytelling. I think we connected with people because a lot of people had this bad relationship with their sock drawer. We have been very fortunate from great word of mouth.
There has been an explosion of socks online in recent years. How does Nice Laundry stand out from the crowd?
Ricky: Convenience is a big value proposition for us. There are plenty of other brands where you can pay $20-plus per pair for sock. Our goal is to sell you an entire drawerful of socks. We define a drawer as 18 pairs. We are also going to be rolling out a subscription option soon – a very democratic one. You come online and say you want so-many pairs of socks, you set it and you don’t have to worry about it again.
The second is affordability. As companies like Warby Parker and Dollar Shave Club have seen success with this transparent, direct-to-consumer model, we’d like to bring that to socks. When you look at socks, it’s a $15 billion a year industry, but there is very low brand loyalty and no dedicated shopping experience. I think it’s a combination of speed and price, and building brand loyalty.
How do you go about building brand loyalty for socks?
Ricky: Socks are typically a low-emotion item that people see as a utility. Our hypothesis is that you build brand loyalty through touch with the consumer.
The first thing that we did was to initiate a recycling program. There’s no excuse not to build some social or eco-good into your company. With every order comes a pre-paid shipping label. We’re working with the nation’s largest and oldest textile recycler based in New Jersey. It’s a true fresh start. We send you a box of socks and you put your old ones in the envelope. The socks that are in the best condition will be cleaned up and sent to areas of need. The balance will be converted into fibers and turned into other things like home insulation. That’s an additional touch point.
As an online brand, how else can you get in front of the consumer?
Ricky: My background is steeped in online user acquisition, so I look at it as, how do you get in front of users in a scalable way? We’re testing Google Adwords and Facebook promoted units.
It’s also thinking about non-traditional distribution. Partnering with brands that can give us a nice halo effect and using their distribution channels.
Phil: We only launched on August 12, 2013 to the public. Events and meeting people and doing popups and brick and mortar collaborations are great, but right now we want to get some baselines on things that are scalable and sustainable.
I think that’s an atypical approach. Most people like the pop-up events and launching a moving tailor shop, going to fashion week and hanging out in New York with fashion editors. It’s a big hypothesis right now, but we’re focusing on scalable channels.
How did you choose where to locate your supply chain?
Ricky: Our supply chain is all in South Korea.
One of the reasons we manufacture there is that I had a previous apparel company that I incubated while I was in school and worked with the same vendor before. Also, my parents are from Korea. I speak the language and have some family over there, which helps when I visit.
But the big reason is that South Korea has a free trade agreement with the United States. We can bring our products in duty and tarrif free, which represents a big discount and almost brings us to price-parity with China with more attention to detail and better quality control.
Do you have any new products in the pipeline?
Ricky: We are currently heads down on design and production of the new Spring 2014 collection. I was in Korea for about a week playing around on the machines with different yarns and various settings, really trying to get exactly what we want out of our future products.
Do you have any plans to expand the company?
Ricky: It’s just the two of us right now. On any given day, we have two sides. The supply side and then everything that is consumer-facing. We manage the web development, do all the marketing and handle all of the design, do all of the PR. You need your swiss army knife of different skills to accomplish all of your goals.
We’re lean by nature and meticulous about how we spend our money. We’re going to do things ourselves for as long as we can until we’re busting at the seams and need to bring on someone else.
The other thing is hands-on learning. We’re obsessed with talking to as many customers as we can, really understanding where they’re coming from and how they’re experiencing our product. I love answering a customer care call. It makes it all worth it at the end of the day.