#46. Parachute brings a new lifestyle to the home. We talk with founder Ariel Kaye about her quest to forge a brand that owns bedding products and the home more broadly. The Loose Threads Podcast features in-depth discussions with leaders across the rapidly changing consumer economy.

Check out the entire transcript below.

Richie: [00:00:07] Welcome to the 46 episode of the Loose Threads Podcast, a show about the rapidly changing consumer economy. This episode is brought to you by Loose Threads Membership, which gives you access to forward thinking research, events, and our analysts, so you can capitalize on the new consumer economy. Learn more at loosethreads.com/membership. We also have a newsletter called Ripcord, that highlights one important development each week and helps you escape the noise. Learn more at loosethreads.com/ripcord.

[00:00:34] Joining me today is Ariel Kaye, the founder of Parachute Home, a direct-to-consumer brand bringing a new lifestyle into the home. Ariel founded the brand after realizing that no brand owned bedding products, in addition to the home more broadly.

Ariel: [00:00:46] I could absolutely tell you where I went to go buy sheets, but not the brand that I necessarily purchased from. So yeah, I can be like “OK, this is where I go to buy these things, but this is not the brand that I connect with.” I saw an opportunity to build a brand that you could connect with.

Richie: [00:01:00] We had a great talk about the brand’s founding story, its early growth trajectory, and where it’s headed as it expands offline and into new products. Here’s my talk with Ariel Kaye.

[00:01:13] Why don’t we start talking about your background and we can work our way up to Parachute coming into existence.

Ariel: [00:01:18] Well I lived in New York for ten years and went to undergrad there and also did graduate school, I got a Master’s in Media Studies at the New School. I sort of took a roundabout way to get to where I ended up, which was in advertising. I was one of those people that was sort of always curious, never really feeling that fulfilled in my career, so I dabbled in a lot of different industries; I worked in music business, I worked in fashion, I worked in PR, I worked in marketing. And I realized that what gives me the drive to show up to work every day and gets me inspired is really making an impact, you know, building things. I like things that are tactile, I like to get my hands dirty, figuratively and literally.

And I like to use both sides of my brain, so I think what I was constantly searching for as I jumped from job to job, sometimes only lasting a few months, because I just kind of refused to settle. You know, I had the support of my parents who were just like “All right, keep looking,” but I’m not sure that that’s necessarily the advice I’d give someone else, because I think you can learn from being someplace that’s not necessarily the most comfortable, but this constant drive and curiosity and wanting to do something different and bigger definitely led me to where I am today.

So I’m grateful for that, I’m grateful for the experiences and different perspectives I got that really helped me get here. And then working in advertising for almost four years before I left New York to start Parachute was also super helpful, because I was on the strategic side of creative, so I was doing a lot of consumer behavior research and focus groups, and really thinking about how to connect with people, and how to inspire customers, and all of these things that are so relevant to what we do today. You know, a lot of direct-to-consumer brands talk about being “consumer first,” and I think it’s easy to drink that Kool-Aid, but really think about what actually it means to be a consumer first is what we really focus on.

Richie: [00:03:10] So where did the idea come from? Like, what was the beginning inception of Parachute?

Ariel: [00:03:15] So I’ve always been obsessed with home and interior design. I was helping a lot of friends and family decorate their homes for fun. I spent a lot of time decorating my own home and then having it featured on different blogs, and I also, in grad school, had a home interior design-type blog that was just a fun creative outlet for me, so I was very much immersed in the space while working in advertising. And then as some of these other direct-to-consumer brands started entering the market—this is like in 2012, I found myself really inspired by that newness, and the new way of shopping and the way that people were selling products and connecting with customers and I saw this massive appetite among myself my peers for other brands like this. And so, when I was thinking about leaving advertising and wanting to do something else I was really drawn to the startup world, I was really drawn to the scrappy hustle that building a business really requires. And I had this “aha!” moment where all of a sudden I realized that if I was going to leave advertising and work at something smaller, or do something different, you know, “What if I merged my love of home and interior design and my love of building brands and connecting with people?” And that was sort of what initiated the interest into doing something.

[00:04:24] I think initially I also thought I would work for another company and then realized that there wasn’t really a company that was inspiring me. So I started thinking more critically about the space myself, and realized that there was very little brand loyalty in the home space, and pretty much no one I could talk to could tell me the brand of sheets that they were sleeping on, or a positive experience they had buying those sheets, and it just became more clear to me that this is a category that you spend so much of your life using, and your home should be such a special place for you to relax and to find comfort, yet in buying these products that you use every single day—and you spend a third of your life in bed, or so they say—so how could you not have a good experience buying those products? And for me there was this shift to people investing in themselves, and taking care of themselves, and thinking about sleep more importantly and wanting to get eight hours or somewhere near there, or tracking their sleep to make sure they’re getting a good night’s rest. And so I really want to build a brand that wasn’t just going to sell sheets, but also sell a lifestyle and really help people connect the dots between their home and wellness and balance and comfort. So I did.

Richie: [00:05:30] So I want to talk for a minute about the lack of resonance, from a brand perspective. So, there are plenty of brands out there making sheets, all these things. Why was there this lack of connection or no one was really remembering?

Ariel: [00:05:42] Well, I think what I found, and in my own experience I can also say that I could absolutely tell you where I went to go by sheets, but not the brand that I necessarily purchase from. So I could say “I went to a department store, I went to Bed Bath and Beyond, I went to Target,” wherever it was, “I went to this place and I bought these sheets,” but I don’t have a deep connection with the actual brand that they are, once I put them on my bed I almost just completely forget. So, yeah, I can be like, “OK this isn’t where I go to buy these things, but this is not the brand that I connect with,” and so I saw an opportunity to build the brand that you could connect with. And also, you know, a place to go.

But, traditionally and historically about 90% of these purchases were made offline. So, all stores really need was shelf space in order to sell these products. And so, you would go into a store and you really didn’t want to go to a lot of stores to find these sheets because, why? You know, it’s like, this isn’t one of those purchases that’s sort of a commodity purchase—you need it, you use it every day, but you’re not necessarily on-the-hunt for the perfect sheets, because there’s not much option, especially if you’re thinking about price or quality, it sort of buckets you into very few stores to go shop.

[00:06:52] And so, what we’ve been able to do is say “No, you can have super high quality, you can have this accessible price because we’re direct-to-consumer, and that’s sort of how the model works.” And you can also have a modern look and aesthetic and a feel that is relevant to today’s shopper and isn’t stuffy or isn’t super ornate—and if you like that there’s other places to buy that too, but for us, we’re trying to be this brand that really appeals to what we believe customers want today, and we are trying to build a brand you can grow with.

But we’re curating our assortment in a way that it’s very limited in terms of being overwhelming and frustrating. I think the biggest thing that I thought about was trying to rid that experience of walking into one of these stores and seeing the products stacked from floor-to-ceiling, they’re all in the same packaging, it’s just as long as the eye can see and it’s like, “What if you want to try the ones at the top? You’re never going to get to them.” You know, it’s just the one of those things where you’re like “Oh my god I feel like the walls are closing in on me and I’m just going to grab something and go and I might not even be that happy with the product, but I put it on my bed, and I don’t want to return it because it’s such an annoying hassle.

[00:07:54] And so we’re trying to fix all that, streamline the process, make it easier, make it more focused on quality and the way that it actually feels against your skin and educating our customers. I think that’s the other big thing, is that you go into these big stores to buy these products and there’s no one really to help you. And if you say like “Oh I sleep warm, I sleep cold,” or “I’m looking for something that feels this way,” it’s like, you’re sort of left on your own.

Richie: [00:08:15] You had this idea pretty clearly in your mind, and so what were the first steps you took to actually start the company?

Ariel: [00:08:20] Actually, the first thing I did was put together a little business plan, which helped ground me and think about what I actually needed to do, or what my differentiating perspective was going to be, as I talked about it.

[00:08:34] But the first real big thing I did was go to Europe, and I visited about fifteen factories throughout Portugal and Italy over the course of two and a half weeks, and really got a sense of how things are made. Which, to me, was so fascinating, so exciting, like, the most inspiring part of that whole build process was that trip, and I’m not a textile designer by trade, and so actually seeing how things work and are made and what the difference between these different weaves are, and between the different threads, and all the foundation of the products was so cool and so interesting and mind blowing and so inspiring. So, that was my big thing and for me, I always knew that I wanted to go to Europe to manufacture these products because I felt like that’s where the heritage is, if you think about the super high quality products, they’re all made in Italy and Europe—they really are known for their textiles. And I loved the story around being able to tell how these things are made and work in factories that have been in business for almost a hundred years, and the family passing it off from generation to generation. And so that’s what I did. And then I came back and decided on which factory I wanted to work with—we only worked with one at the beginning—and decided to move back to L.A. to really dig in.

Richie: [00:09:44] And so, did you know where to go looking in Europe, or was it somewhat of a blind process?

Ariel: [00:09:48] I set up appointments, so I had meetings scheduled, we didn’t just knock on people’s doors cold. But that was definitely an interesting experience, trying to figure out who these factories were or where they were located. You know, some of them have Web sites, some of them don’t. It was a lot of asking for favors, and friends of friends, and trying to get connected through people to find out where they’re sourcing.

I mean, in retrospect, there’s things like Market Week, which actually happened, coincidentally enough, like a week after I got back from my trip to New York, so I could have gone there and tried to set appointments that way. But it was much better for me to go to where these products are actually made and visit factories and see the whole process. But yeah, I mean it was definitely a challenging experience trying to semi-vet different factories, make sure that they actually manufacture products I was interested in, because of course there’s people that are focused on one niche, or not manufacturing the types of qualities that we were looking for. But I also did a ton of research ahead of time in terms of what the fabrics were that I was looking to create, and so I brought a suitcase full of samples, and it was like “We like this, and this, and a little bit of this,” and it was a very collaborative experience. It made things so much more clear for me, in terms of what I was trying to do.

Richie: [00:11:01] So you came back from Europe, moved to LA, then when happened?

Ariel: [00:11:04] Then I realized that I needed a website. So I started to think about building a website. And I also realized that I was going to need some money. So I started talking to investors, which did not go that well at that stage, because people were like “Oh that’s a nice idea, come back when you have some more progress or something to show, or a sample, even a sample of what a pillowcase looks like.” And so I was forced to kind of push hard and further along without capital, you’re in this catch twenty two where they’re like “Yeah that’s a great idea but I’d like to see more,” and you’re like “Well I need product in order to show you more, and I need money in order to get product.” So I was simultaneously trying to build a website, think about branding, think about content, because I really believe in content and wanted to have a blog already developed when we launched. I set up a pre sale, which was helpful to sort of gauge—I mean at that point it was, who knows? I mean, it was nice to get a few sales, I’m not sure, really, what it told me. I really just tried to talk to everyone and anyone I could, and establish myself in L.A., and meet people that could be potential mentors, and I didn’t make my first hire until about three weeks after we launched, which was in January 2014 and right now we’re in sort of the May-ish 2013, so I was really hustling on my own. So it was hard, and there were good days and bad days as that goes.

Ariel: [00:12:26] But in the fall of that year I joined an accelerator, and that was a big turning point in terms of getting a little capital. I was able to finish the website, I had samples. Sort of hitting the ground running at that point. And this endless to-do list was just the story of my life.

Richie: [00:12:43] How did you decide where to start, product wise?

Ariel: [00:12:46] I wanted to start very simple. I’ve always been a person that wants to focus on quality, telling a great narrative, and a compelling story around the products, and just ensuring product/market fit. There was zero part of me that wanted to launch a million things and be everything for everyone. So, I sort of made these decisions in a vacuum, but I decided to launch with sheets and a duvet cover and pillow cases. I launched in three colors, which I felt like was the right number to give enough variety without being too limiting, and two fabrics. So, percale and sateen, which are super popular fabrics, sort of your basics, but they have a very different aesthetic and a very different hand-feel. And so, I felt like I could reach a sizable audience, or at least please a sizable audience with those two fabrics. And then the three colors were all very neutral; white, which will always be your bestseller, it was a sand, which is kind of a taupe lightish beige/grayish color, and then a powder blue, which I initially thought would be very popular with men, because it was sort of similar to that J. Crew blue button down shirt that everyone wears.

Richie: [00:13:50] The chambray.

Ariel: [00:13:51] Exactly. So sort of that color, and that was it. And so, we launched with those products. We initially launched with sets, and then separates, and then we decided to sort of evolve what those look like early on. And then as we continued to get customer feedback we introduced some additional colors and some additional styles over that first year.

[00:14:11] But really, the first about two and a half years was really all about bedding. So, we expanded within the bedroom, we launched things like quilts and pillows and duvet inserts and linen and additional textures and colors. And then about two and a half years in, we launched towels and introduced the bath category. But again, just starting with towels, and since then we’ve expanded into robes and shower curtains and bath mats and other things. So, just about everything we do has been starting very focused with a very small collection, sort of a core collection that we then can evolve and grow. And then seeing how that goes and really taking customer feedback and making sure that we’re developing things that people really want, and taking it from there.

Richie: [00:14:53] This is the forty-fifth one of these I’ve done and I don’t know if I’ve talked to anyone who’s launched a company alone to start. What was that like?

Ariel: [00:15:01] Oh it was so hard. I’m very grateful for this experience of doing it on my own. I’m not sure that it’s—you know I think the grass is sort of always greener, when you’re doing it alone it’s super isolating and lonely, and especially before you’ve launched it’s hard for your friends or your family to really conceptualize what you’re doing. So almost every time I saw someone, which wasn’t even that often, because I was really working and sort of, you know, crying in a corner if I wasn’t working because I was just overwhelmed. But everyone’s like “Oh, so what do you even do everyday?” and like things like that that are just like “Oh my gosh, what am I not doing?” And so, certainly from a decision-making perspective, I was able to make those without a lot of debate.

Richie: [00:15:41] No committees.

Ariel: [00:15:42] Yeah, there was no committee. But also, there were a lot of times, even after we launched, and as we hired a team, where I really was just longing for the support, or someone to bounce ideas off with, or someone even just to feel the pain and the stress that I was feeling, with me. I’m very lucky to have a lot of friends that are also entrepreneurs and have launched companies and built very successful companies, and so I definitely turn to people that have experienced similar highs and lows, especially of getting a business off the ground. But no one’s in the trenches with you, and so at the end of the day you can commiserate and you can get advice and feedback and you can get a nice pep-talk but still, the weight and the burden of all the things that you’re trying to do is really on you. And so, I think especially that first year and even year after you launch, the highs and lows, it’s like you’re on a roller coaster every single day and so, it’s like within ten minutes you could feel like you’re literally the most successful person on the planet and also feel like you’re going to literally lose your mind.

[00:16:42] So it’s really emotionally draining to be honest. That was the biggest realization. I’ve dealt with stress before, I’ve done hard things, I really like challenges, I think you kind of have to to be in this sort of business. I love solving problems, it’s fun for me, but I also—it’s the exhaustion that you feel moving from elated to depressed, like super stoked to scared, is really—it can be draining. So, you know, I have a great team here, I have a super strong board, and people that have become really involved in the business and I certainly don’t feel that same sort of loneliness that you felt early on. But yeah, that first year is really hard. There definitely were more than ten moments where I was like “Alright, I’m giving up. Alright, well this has been fun, like, I can’t do this, time to get a job.”

But I’m glad that I pushed through and I think being a sole founder requires unlimited amount of patience and perseverance, and some days that will come easier, and other days it will be harder. But I’m definitely not one to sugar coat—as you can tell—this experience, because it’s really hard. But it’s been the most rewarding and transformative experience of my life. And has really shaped who I’ve become. I mean, the past five years have been all about this business, and growing this business, for me, and so, I wouldn’t have wanted it any other way. It’s not for everyone, but if you are the kind of person that wants that, it’s like “Go for it” because there’s nothing that has made me feel more empowered and confident, and just like I’m building something, it’s cool. You know, for me, I’m a very quick person, like something that I’m actually working on is slowing down just a little bit.

Richie: [00:18:18] I also talk incredibly fast.

Ariel: [00:18:18] Yeah, well, I talk fast, my brain moves fast, I’m very reactive to things, I know what I like and I know what I don’t like, which is really good sometimes, but it’s also—I personally am trying to take three deep breaths before making a decision instead of one, because I think it’s important to also pace yourself and sometimes just let things marinate a bit before you jump to a decision. But, not having to depend on anyone to get things done—like, I’ve just had to get it done.

Richie: [00:18:46] So how’d the launch go?

Ariel: [00:18:47] The launch went amazing. So that was probably one of the best weeks ever. To finally see something in-market, and for all of my friends who continually asked me what I was even doing everyday (even though I told them that it was really hurting my feelings that they would say that) finally got to see something in real life, and got to see product, and it was like, instead of sitting there thinking about what it would be like when things were being purchased, I was packing boxes and actually sending product, and then getting feedback on that product and having people say “I love this, I’m buying more!” And see orders come in from people I didn’t know, which was like…

Richie: [00:19:22] The holy grail.

Ariel: [00:19:22] Yeah, the biggest pinch-me moment ever, and, to be honest, never gets old. I mean it’s just like, I look through orders like “I don’t know these people, this is insane.”

[00:19:30] But the one team that I did hire before I launched, when it was still a party of one, was I hired a publicist. And so, I spent time working in PR, I really believe in PR, and I knew for us it would be the best way to get the brand out there, because we weren’t in a place to spend on marketing. You only launch once, people love launched press, that’s like a big deal, and you can’t really recreate it. So we launched in about the second week of January and had this week of unreal press. We were featured in all the places you want to be featured in, Domain and Remodelista and Elle Decor, and all of these really great publications, and the sales just started popping. And so, within a few weeks we had sold through inventory that I thought would last for a few months, which was amazing and scary and all of the feelings, which is, I think, just the name of the beast, it’s always all of the feelings!

Richie: [00:20:20] That should be like a startup blog.

Ariel: [00:20:21] Totally, “All of the Feelings.”

[00:20:22] So we saw this product/market fit and we saw this press that was just like “Finally, we’ve been waiting for this and this is exactly what we want,” and reading comments on those stories, and people being like “Oh my god, I can’t believe this never existed, this is genius.” All of the things that you get really excited about. And so, I realized very quickly that we were going to have to get some capital in order to buy more inventory, so started—well, first, hired a person, which was a big win too, because I was no longer doing everything by myself. And then I started thinking about some fundraising. But launch was amazing. I think that first weekend after we launched we did something like eighty orders in that weekend, which was a huge deal for us. It was really exciting. So that was a good sign. And then it was just about momentum and keeping things going, and so we really leaned on press for that, and word of mouth was really important for us, and we started thinking about blogs and influencers and people that we could gift product to, and writing more content that would inspire people and help tell our story.

Richie: [00:21:18] And so how’d the fundraising process go?

Ariel: [00:21:21] It was easier than it went when I was trying to raise pre-product, that’s for sure. When you’re at that stage, you’re really looking for investors that are excited about you and the opportunity and understand the category and think that there is potential. Because we did have, at that point, about eight weeks of sale data which was really great, and you were getting one or two press articles a week, and our conversion rate, because the people that were coming were very considered, was like 15%, which for e-commerce was…

Richie: [00:21:50] Crazy.

[00:21:50] Insane! And so, you know, I was meeting with people, and I also had been in Launchpad, this accelerator, so I had this great access to a bunch of investors, and the folks at Launchpad were also very bullish on the brand, just saw my hustle, saw what was happening, saw the stacks of boxes getting picked up by U.P.S. every day, and they were like “Let’s make this happen.”

[00:22:09] So I was able to get some meetings with people that probably wouldn’t have met with me otherwise, and really get investors and at that stage you’re really looking for that one investor that can sort of be your hook, and the one that gives everyone else the confidence to invest. And so I was able to get that. I actually went to South by Southwest that year and met with a million people, and closed my round while I was there, which was fun, while handing out sleep masks that said “Dream Big” on them. I don’t think I slept once in that trip.

Richie: [00:22:36] Which is the irony of this whole brand.

Ariel: [00:22:37] I know, I know, oh trust me. Trust me, nothing like having a sleepless night because you’re working so hard, and then talking about the importance of sleep the next day as you’re like, holding your eyes open.

Richie: [00:22:49] With a “Dream Big” mask on.

Ariel: [00:22:49] Yes exactly, exactly.

[00:22:52] But yes, so that was great. And a huge milestone for us. And we raised a seed round, mostly from L.A. based investors, which was something that I was actually really bullish on because I was, at that point, a team of two, and I really wanted to make sure that I had investors that were—I could go to their office and knock on their door and say “Can you help me with this?”—and really have that community and that support in L.A., because, you know, still rather newish, and felt like “Why not utilize the resources that you have at arm’s reach?” So that was cool, and allowed us to buy more inventory.

[00:23:22] So the first year was really all about inventory for us. Trying to figure out how much we needed, how to properly plan what was selling, what we needed to buy more of, what colors to introduce. We were not using any of the normal buying tools. Early on, it was like using linear regression models to buy inventory, which is not what you should be doing. So we were trying to figure that part out. And that was really all that the first year was about, like I said, it was just inventory. And we had some really exciting press moments also that continued to move the brand along. But also then sold through all of our inventory. So we had a lot of periods where we were out of stock, which was a good learning experience and really helped us figure out how to communicate with customers. Which, again, as a customer first business you really want to do that right.

Richie: [00:24:04] Given you didn’t have any previous experience buying inventory for this category, what were some assumptions that were either totally wrong or are right about color sizes?

Ariel: [00:24:12] Sure. Well, we focused a lot on Queen on the onset, and that was what we were buying more in. And then because everything was event-driven and events we called “press stories” or things that just created these spikes that were sort of out of our control, because we weren’t pushing traffic to the site. We got this article in The Wall Street Journal and all of a sudden everyone was buying King and Cal King bed sizes because it’s the older demographic, it’s more affluent, and we were like “Oh gosh, that’s crazy.” And then we saw a spike in full, and we had this New York-centric press, cause a lot of people have small bedrooms and still have full beds there.

Richie: [00:24:43] Just like bunk beds.

Ariel: [00:24:43] Exactly. So that was interesting. Then we launched a dark color in the fall which we had no idea was going to do so well, and, you know, sold through. I mean it’s really hard when you have no sales data. One of the big lessons we learned was just looking how to weight our products and making sure that you realize that a certain percentage of your inventory is going to drive the majority of sales, so trying to always be in stock in those products. And figuring out what the right service rate was, working with our factory to make sure that we were projecting properly with them, so that we weren’t setting ourselves up to be buying into inventory and not be able to get it in time, and just a lot of processes to fall into place. But those are some of the funny ones that we never would have expected. I mean it sort of makes sense if you think about it.

Richie: [00:25:26] So year one was about inventory, what was year two like and about?

Ariel: [00:25:31] Year two was about marketing. So, we didn’t do any paid marketing for the first year and a half that we were around, and then we decided that it was time. And so we wanted to do a lot of testing and sort of see what worked. And we did a lot of the tried and true like Facebook and search and things that were really digital-focused. We also experimented a bit with radio and podcasts and other angles, working more with influencers that were—either you had to pay or doing more campaigns with them. But it was really about marketing and building brand awareness and seeing what that looked like, if we could kind of take the business to the next level and pull the levers down and still maintain control.

Richie: [00:26:13] From, I guess, a mentality perspective, or expectations, what was it like switching from the uncontrolled nature of PR, to the more objective or controlled nature of paid-spend?

Ariel: [00:26:25] To take a step back, I think there’s a lot of different ways to do marketing. You can just throw a ton of money out there and try to get as many eyeballs as possible and hope that they come back. I mean, for us, we’re in a category that’s a little bit more of a considered purchase. We want to educate our customers, and we want to make sure that people are getting a really clean line as they are going through the whole purchase experience and getting all the information they need to make that considered purchase. We have been focused on—and it took us about a year to get there—but really making sure that our acquisition was profitable. So we weren’t losing a ton of money trying to acquire customers, which can be a decision you make if you have a lot of money and want to just spend a lot.

But we really shifted our focus from focusing on testing, like after we did some testing and some of it worked and some of it didn’t, as testing goes, but once we are past that, we really tried to focus on “Who are the right audiences?” like, “What are the right channels, and how can we then pull the levers deeper on those channels that we know are working, so that we can acquire customers profitably?” Like, at least set a break-even or make a little bit of money on a customer. And then also drive retention. So, making sure that we’re still top-of-mind, especially as we introduce new categories and new products, and ensure that people are coming back and really getting excited about the brand they were building, and driving loyalty, because that’s the biggest thing for us is retention, and driving that repeat customer, because we’re really trying to build a brand, like I said at the beginning, that you grow with, that’s really who we are and what we care most about. So we want people to not just be a one-and-done type of thing.

Richie: [00:27:54] I want to talk a bit about price point, in terms of, where did you want to come in, and where did that fit into the broader segmentation of the market?

Ariel: [00:28:01] So I really wanted to be a middle market brand. I felt like that was where the biggest opportunity was, and that there really wasn’t anyone in that space. When I was looking at the landscape, you’ve got these high-end products like a Frette or a SFERRA that are really expensive, and a little bit more traditional. And, definitely more expensive than anything that I could ever afford. And then on the lower end, you’ve got more of the department stores and the big box retailers, and the products that we discussed, that’s sort of all of the same, and are packaged at the same, and not a lot of differentiation there. So, for us, we saw this void in the middle market, where we could take the quality of the high end and the price of the low end and merge them together to create this really powerful value proposition.

So, that’s where we are. We do a lot of price comparison and a lot of price analysis before we launch any product, and we definitely don’t want to be the most expensive ever, but we’re definitely not the cheapest on the market. So, if there’s a customer that’s super price focused, you might go to Amazon and just buy whatever is top-rated. But we’re really focused on super high quality products, we don’t use any toxic chemicals or artificial dyes or synthetic finishes, you’re really getting the finest caliber of threads and cotton and linen when when you purchased from us.

[00:29:16] And so, that’s the balance. So we’re not going to ever sacrifice quality in order to get to a price point that we want, but we don’t want to introduce products that feel like they’ll be alienating a certain customer base. So we’ve been really fortunate to hear from our customers. We’ve got a ton of customers that previously only purchased on the lower-end side and they’re willing to spend fifty or a hundred dollars more to have this super high quality product, because it’s measurably better and it’s really important. And then we also have people on the high-end that have only ever purchased, you know, a thousand dollar set of sheets, that are super excited to find a product that is still working with the Italian or the Portuguese manufacturers, and they could spend $200 instead of…yeah.

Richie: [00:29:56] What was year three about?

Ariel: [00:29:57] So year three was about our supply chain. So we had been working with the manufacturers for a while, we were able to think about how we build deeper relationships with them, how we are able to forecast more efficiently. We wanted to start bringing inventory in by sea instead of by air because it’s so expensive.

Richie: [00:30:16] So you’re freighting it in?

Ariel: [00:30:17] Yeah well we were sending most by airplane, which is incredibly expensive, and really damaging to your margin. And so we wanted to shift that to by vessel, which really required us to be planning in a different way. But with two years of customer data, and understanding the purchase power, and just, what we were doing, we were able to do that. So that was really important, and allowed us to really get back to the foundation of the business and make sure that we were focusing on the right business metrics, that we were building the right relationships, that we were really honing in on what would make this a healthy business. Because that’s always been really important to us, not just “Follow those bright shiny objects and, you know, that whatever top-line revenue is,” it’s like “How can you build a business that’s sustainable and that’s healthy and that’s focused on the right numbers?” So, really making sure that our margin is increasing and that we’re able to do what we want to do and not get ourselves into a tricky situation.

Richie: [00:31:10] Definitely. And so I want to talk about the retail piece a bit, in terms of, when did that start, or when did you start thinking about that? You said that in the beginning, the category is a vast vast majority of an offline purchase.

Ariel: [00:31:20] So I’ve always been a person that likes people and connecting with people. And because our category is so focused offline, there’s always going to people that want to touch and feel the products and see them in person, and we never were trying to shy away from that. It’s always amazing when we would have people come into our office, or do a little pop ups here and there, watching people get so excited to see the products in person and touch them and feel them, you just instantly feel this confidence to purchase. So we started thinking about retail really early on, but we really wanted to make sure that we had this foundation built in the business, because it certainly can be a distraction, and we wanted to make sure that we did it right, and that we weren’t going to sacrifice the core part of the business which will always be online for retail.

[00:32:01] So we ended up opening our first store here in Venice last May, and our thesis around retail is that it can do a few different things, one is, “Be great for awareness.” It is this amazing, beautiful, billboard. So we’re able to get people to discover us just by seeing that we have a store. Of course, revenue, it’s a nice driver of revenue, but your store is never going to do what you can do online simply because of geographic restrictions.

And then, also just connecting with people. So, we really wanted a place where we could host events, where we could really get to know our customers, where we could get very direct feedback from people and talk to them and see how they reacted and use that information to build even better online experience. And we’ve absolutely been able to do that. I mean we see the way that our customers mix and match products and fabrics, and the questions that they ask, and we’re able to answer those questions in a new way online, and it’s been hugely helpful. We’ve seen in L.A., people come in and they see the products and they maybe buy in store, but then they buy online later, and they’re able to get to know us in a way that is super powerful.

I mean you’re excited when people spend two minutes on your website—people come into the store and spend forty-five minutes or an hour, and they ask a million questions, and they touch everything, and they leave as these brand advocates, and then they come back with their friends, and they show their friends everything because they’re so excited, and it’s really nice. Especially here in Venice—and moving forward we’re really trying to be part of these neighborhoods that are real neighborhoods where people live, and we can be part of a community and add value and not just be a store that’s a store, but really give back. So we opened our second retail store a year later, earlier this summer in June, in Portland, Oregon. And that’s been going really well and we’re super excited to be there. And then we’re hopefully opening another store this year. We’ll see how it goes.

Richie: [00:33:46] Awesome.

Ariel: [00:33:46] It’s quickly moving. But retail is a big part of our business and it’s something that we’re really excited about and I don’t think in the next few years you’re going to see a hundred Parachute stores, but you might see seven or ten. So I feel really good about it. It’s so fun.

Richie: [00:34:01] And then what about the hotel piece?

Ariel: [00:34:03] So the hotel started off as really an experiment. So, we had access to this beautiful space that’s 2200 square feet and it’s a one bedroom hotel, so it’s sort of a loose use of the word “hotel” but it’s a really beautiful loft, and this huge open floor plan, and it’s available for private stays. But also, we host a lot of really great events and workshops and we have speaker series and meditations, and we do launch events for new products. So it’s given us a way to really open our doors and create these memorable experiences for our customers and potential new customers, and whoever it is.

And so that’s been really fun, and it’s certainly something we would love to replicate in other places. I mean, I think mostly because we just like to throw events, and there’s so much about the lifestyle of our brand, and getting to know people through these fun events and things where people can hang out and get to know each other, and there’s just this inherent community that forms. So, we’re trying to figure out ways to take that to the next level and do that more. We’ll see how that goes.

We do have a separate part of our business, which is our hospitality business, and so we are also in actual hotels that are using that word in a more literal sense. So that’s been been fun as just a way to have people get to know us on vacation which is ideal because, it’s always fun. That’s a new-ish, growing part of the business and we hope that that continues to grow as well.

Richie: [00:35:28] So you alluded to the ideas of scale and longevity. I’m curious to talk a bit about that and also where it fits into the broader market of these startups growing.

Ariel: [00:35:40] Well for us, we’re building a business, so that’s important, and I think—

Richie: [00:35:45] Rare.

Ariel: [00:35:48] Yeah. But, you know it’s like, we’re selling things and we’re making money and this is a business. So oftentimes there’s a lot of push to grow really fast and to just follow and chase the shiny objects. I think, for us, we’ve seen that go wrong a lot of times and so we’re now really trying to focus on building a real business, one that has longevity and can be around for many years and we want to pace ourselves. It gets really exciting to think about all the things you can do and all the activations and products and all the different newness that could be really powerful for the brand, but we’re trying to pace ourselves and do in a way that remains focused to who we are, and what our point of view is, and really the things that we care most about, which is providing a super amazing quality experience for the customer.

And I think that that can be really hard. But like I mentioned, in terms of focusing on real business metrics, and making sure that we’re growing faster than our expenses, and we’re not scaling the team too fast, and having all these opex lines that are just out of control, I mean, we really want to be in control of our destiny. And so, from a marketing perspective, from a growth perspective, from a product perspective, we’re really trying to hone-in on what that right mix is, and make sure that we’re not doing things that can be potentially damaging for the brand.

[00:36:58] Building a brand takes a long time. I think that in the past there’s been this expedited version of that, and it is just is dangerous. The best brands that are still around, that have been around forever, it did not happen overnight. I mean, they have seen a lot, and they’ve done this build, and they’ve taken their time, and they’ve really connected with people, and they’ve done a lot to stay focused and to not lose track of the goals and who they are, and that’s really what we’re trying to do.

Richie: [00:37:26] Yeah it’s great it’s a multi-decade process.

Ariel: [00:37:28] Oh yeah, we’re three and a half years in it and it’s crazy. And we’ve done a lot in three and a half years, and our whole team, we always have to remind ourselves that, like we’ve made a ton of progress, and it’s hard, especially within the digital world, there’s a lot of competition and there’s people that are moving faster, doing this first, or that first, and, you know, “This company was able to hit this number in this many years, why can’t you?” And there’s a lot of pressures, and a lot of like “Go go go go go.” And so, I think the best thing that I can do as a founder, and the best thing that we can do as a team is to assess all the opportunities we have, and make sure that we’re making decisions that feel right for us, and just stay focused and we try to do, and keep doing it at a very high level that way. You know, we’re not disappointing anyone.

Richie: [00:38:10] What’s been the most surprising best and worst selling product?

Ariel: [00:38:14] So linen is a runaway hit for us, and has been super successful, which is more of a niche fabric, and so I think we thought that it would be great for that niche customer, but we have a lot of customers that see our linen, and hear the great reviews, and are willing to try it for the first time. It’s very different than sleeping on a cotton-based fabric. So that’s been sort of a surprise, we like can’t—linen just flies.

Ariel: [00:38:38] Robes. I’m obsessed with robes, and I live for my robe, and I have lots of them, and when I get home I put on a robe nearly immediately. So we launched robes, which was like the most exciting launch for me. And those have also been doing really, really well. We’ve been very lucky that we haven’t had like a dud in our product line. But also our products are super evergreen, and really simple, so we’re not actually launching like crazy bold patterns, or things that are polarizing people.

Richie: [00:39:10] Or super trendy.

Ariel: [00:39:10] Or super trendy. Like, we have our core collection, and then we sort of adopt principles of fast fashion to introduce more seasonal items, but they still are very simple. So we haven’t had too many misses. Or really any miss.

Richie: [00:39:23] That’s great.

Richie: [00:39:24] Yeah.

Richie: [00:39:24] And then as you look to the future, where are you most excited about, maybe from a business perspective, and also from a product perspective?

Ariel: [00:39:31] I’m really excited about retail, that will be really fun and continue be fun, and I love seeing our product displayed in real life, I think it’s just magical and amazing. So I’m very excited about retail. I’m also very excited about big growth partnerships, and working with other cool brands and people to collaborate and do things that we haven’t even dreamed up yet. And from a product perspective, we’ve got a lot of good things, but really excited about a future dog bed that we might come out with. But, that’s just because I’m obsessed with my dog. But there’s so many good bedding and bath products that are coming out, and really also building out our new baby category, which is really fun, and doing more cute things in that way. But, going to our product meetings every week is my favorite part of the week. There’s so much beautiful stuff that’s coming out and continuing to evolve that, and work with new factories, there’s a ton of stuff.

Richie: [00:40:25] How do you focus within the home, which is immensely expansive?

Ariel: [00:40:29] So we really try to think about the products that provide comfort. So we really are focusing on comfort as a brand, and we are thinking about the ways in which people are engaging with these products throughout their day. So like, the rituals and the routines throughout the home, is sort of how we shape what we want to do or what we’re trying to do. So the waking up, going to sleep, taking a shower, getting cozy on the couch, having your coffee, those are all the things that people do in the home, and we want to be part of all that. There’s new categories that we could get into and we might get into, like rugs or window treatments, that are also soft goods, and furniture is a massive massive category, but we really want to stay focused and just continue to be very much just focused on our point-of-view and making sure that we’re never escaping that for the sake of something that feels cool. But I sit at home and I look around the house and I’m like, “What could be Parachute instead of what’s in here?”

Richie: [00:41:20] Just slowly eliminating non-Parachute objects.

Ariel: [00:41:24] Yeah, exactly. But really, like I said, we’re really focused on comfort, and there’s nothing that makes me happier than having someone say “Your products help me relax”… or sleep better, or be more cozy, or just, any of those things.

Richie: [00:41:37] And then, where’s the name from?

Ariel: [00:41:54] It’s inspired by when you make your bed and the sheet billows, it sort of looks like a parachute.

Richie: [00:41:55] Awesome, thanks for talking.

Ariel: [00:41:55] Yeah, absolutely, it was fun.

Richie: [00:41:55] Thanks for listening to the Loose Threads Podcast. Sign up for Ripcord at loosethreads.com, and feel free to leave a review on iTunes, we always appreciate it. Thanks to George Drake Jr. for editing this episode. I really enjoyed talking with Ariel about Parachute’s founding and the trials and tribulations of being the sole founder. Yet at the same time, it was great seeing all she’s been able to accomplish. We have a great roster of upcoming guests, including Vanessa Stofenmacher of Vrai & Oro, Jonathan Shokrian of MeUndies, and Jody Fox of Shoes of Prey. Thanks for listening and talk to you soon.