#49. Shoes of Prey sends women their custom designed shoes in two weeks. We talk with co-founder Jodie Fox about how she built a supply chain that customizes shoes at scale—in a world where people don’t always know what they want. The Loose Threads Podcast features in-depth discussions with leaders across the rapidly changing consumer economy.

Check out the full transcript below. 

Richie: [00:00:07] Welcome to the 49th 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. Joining me today is Jodie Fox, a co-founder of Shoes of Prey, a company that allows women to custom design their own shoes and get them delivered in two weeks.

Jodie: [00:00:41] When you say to someone, “Hey, come customize,” they don’t delineate between, “Tell me, is this where I design, or is it where I get my size?” You tell me customization. I get to pick it all.

Richie: [00:00:53] Jody founded the company after coming across a custom shoemaker on a trip abroad. She quickly realized that other people were looking for the same flexibility, and no one had been able to figure out how to customize shoes at scale until now. Here’s my talk with Jodie Fox.

[00:01:11] So why don’t we start to talk a bit about your background and then we can work our way up to Shoes of Prey existing.

Jodie: [00:01:17] I grew up in a really small country town in Australia. Like, very very small, to the point where if you chose to take an airplane in there, it would be a very very small plane that would land in a paddock.

Richie: [00:01:28] What’s a paddock?

Jodie: [00:01:29] A paddock, like a big green, grassy…

Richie: [00:01:31] Okay, a field. A non-sanctioned runway.

Jodie: [00:01:34] I am speaking Australian. So I grew up in this very small country town. I am half Italian, half Australian, I’m a citizen of both countries, and grew up around a family who believed a lot in education, but also were extremely nurturing. So I actually became very artistic and I was going to be a dancer, a ballet dancer actually, and I’d done that audition, but I also got into law school to do law and international business, and so I was faced with this big decision. They were using completely opposite sides of my brain. And the way I made the decision was, my mum and dad both got through high school, my mum didn’t quite get to finish, had to go into the workforce. Her mother didn’t get to finish primary school, so I was the first person to have the chance to go to University. And my dad would always talk to me about, “You’re so lucky, you speak two languages, imagine what you can do. Imagine traveling the world with business, imagine the access that you could have.” And it was kind of an extraordinary mindset to grow up with and to be encouraged to think into. So the reason I decided to take law and international business was because I felt like in my creative brain, that I didn’t understand well enough how the world worked. So I went in to do law and international business. I hated it.

Richie: [00:02:48] Why?

Jodie: [00:02:49] It was really, really challenging for me to move over to that side of my brain. I mean it was extremely dense study as well, and it just simply wasn’t natural to me. So after becoming a lawyer I discovered myself really not enjoying it, and starting to play around with business ideas, and figured that I needed to get out. So I made a list of things that made me happy, and not just in my career but in life, every single thing, not shy about putting everything down. And while I was doing that I started to just interview and interrogate every single person who’d crossed my path about the work that they did, “So tell me about your job, what’s the day-to-day like, what’s your industry like, what do you hope to do? What does a good day look like, what does a bad day look like?” And I was, in my head, ticking it off against my list. And I ended up going into advertising off the back of that, and learned how to build brands. But during all of this, even when I was a lawyer, I liked shoes, and obviously got great exposure to them through the Italian women in my family. But there was always something where, and I think we still experience it today, where you pick up a item on the floor of a department store or a store and you take it up to the shop assistant and you say, “I was just wondering, do you have this in my size?” And do you have it in whatever color it is that you want, and you kind of hold your breath waiting to see if they’re going to bring it out or not. Or you look at it and you think, “Ah well if that’s all that’s available, I’ll just get that.” But I always had my own ideas about what I actually wanted to buy.

[00:04:11] So I heard about this guy in Hong Kong who I could commission shoe designs with. And I happened to have saved up enough money to go and visit a girlfriend in London. And I stopped over in Hong Kong for five hours, dashed out of the airport, went into the store, and as I walked in it was kind of just like a regular shoe store, and not necessarily the kind of shoes that I would enjoy wearing. I said to the assistant, “I heard I could design shoes.” And he said, “Absolutely!” And brought out all of these swatches and pencils and paper and I had the time of my life, so much so that in one and a half hours, I designed fourteen pairs of shoes.

I went on my merry way, they arrived back in Australia at my office probably ten or twelve weeks later. And my girlfriends were asking, they were not necessarily common shoe designs, and I don’t know if it’s a compliment or not, but they were asking where the shoes came from. And when I explained one was like, “Oh, can you please—I’m a size ten and I have a wide foot and I can never get what I want, could you get him to make me a pair?” Another one was like, “Oh I’ve had this pair of that I wore pieces and they don’t make it anymore, do you think you could make it?” So I started making shoes for them. Side by side with that my two co-founders, Mike and Michael, we’d met in law school, and they had both ended up at Google and were looking at e-com going, “This kind of looks like a place that we’d like to be, we just need an idea.” And in the background I’m making shoes for my girlfriends. So it became designer and shoes online, and Shoes of Prey was born.

Richie: [00:05:33] And so when did this start and when was it, “Oh this is interesting,” and, “Oh let’s all leave our jobs and start”?

Jodie: [00:05:39] So we had the idea in December 2008 and then we launched in October 2009. And during that time it was a lot of meeting with suppliers, would they want to work with us? Sitting together and drawing how the actual first configurator would work, and what that meant, and getting our girlfriends to use it to see and what they thought of it, and was our messaging making sense, and all that kind of stuff. It was extremely functional things. But the leaving work thing is really tough and gray and blurry. So, Mike, Michael and I all left at different times. And as one person left, the other two sort of split the salary between the three so that we could see each other through what we needed to. So Mike left first, and that made sense because we needed to get a site that was functional running, and then Michael left second and he was running the operation part of it, and then I left third. So I’ll speak to my personal experience, because I think it is a really personal thing to make that decision.

[00:06:36] For me, I remember we went for this five hour lunch, no alcohol, just green tea and sushi, to talk about whether I should go full time or not. And from a personal side, I had a deposit saved for a house, at that time I was married as well. So there’s this very clear path unfolding in that way. And I was doing very well in my career in terms of what next steps might look like in advertising, and things like that. On the other side there was this giant question mark, and it would absorb all of those things if I chose to go down the path. The couple of things that helped was, I know we’ve all read it in startup books, but it’s really true; the fail fast. And I kind of took comfort in that because this could either hang around as a potential thing that sat in the background for years and then failed because we didn’t put enough time in it, or if it was going to fail and not be a good idea anyway, then we may as well quit, do it for a couple of months, not have taken too much time out from the career path, and just know. And also not have the regret of, “Oh if I just put a bit more effort in, it might have worked.” So the fail fast thing was very relevant in that discussion.

[00:07:38] The second thing was, and this is going to sound so basic, but having a tiny bit of faith to say to myself, “You know how to adapt, you know how to subtract, you know where the bottom line is, you know when it’s dangerous and when to stop.

Richie: [00:07:54] The math isn’t that complicated.

Jodie: [00:07:56] Yeah! Exactly. And it was just that that simple moment of, “Okay, that’s all right.” And I do have two great co-founders that I trust as well, that we will push each other but also sense-check and hold each other accountable, so that’s okay. The third thing was obviously passion for the idea, really believing that, in my mind at that point in time, it’s crazy that we can’t get—particularly for women—shoes that are comfortable and the style we want, and express us. It’s actually a very limited selection. And I was really keen to see why wasn’t there another model for that out there.

[00:08:29] The last thing was actually my support networks, and they were doing all the right things, so some of them getting completely excited about it, and other ones saying, “Right, so you’re leaving your job to start a website,” and kind of sense-checking it through with me. But regardless of all those conversations that were going on, I knew that there was a group of people around me who would be there when I made a shitty decision, and would be there to say, “Actually yeah, that was a crappy decision, but usually you’re smart and that’s okay.” And still today like I really value and need this to keep doing what I do every day. You know, there are days in the business that are really crappy, and I’ll go home and these are the people who say to me, “Yeah that actually wasn’t great for that person today. And it is because of you. But you know, you’re a good business woman today.”

Richie: [00:09:19] So it sounds like you started with this site and the experience, and so where did that come from, what did you think it had to look like, and what did version one of that look like? Which I’m sure is embarrassing in retrospect.

Jodie: [00:09:31] Yes! No no no that’s Okay. So Mike Knapp, he was the technical co-founder, he really drove that thinking, which is amazing, and it’s not my area of expertise. But I still have sketches from when he and I were sitting down together because that natural tension existed where I was pushing for this branded thing, and he was pushing for the technical experience to be right. And that’s absolutely what we should be forging or striving for. So a lot of that was in his court. We would connect and kind of play with, and we would also watch our friends use the website, and get our friends to use it and send us notes and things like that, and that informed what that would be.

[00:10:11] I think for the actual configurator itself, there were a couple of things that we definitely wanted it to be. The configuration, or the designer within it, we tend to call it “the designer” so I’m going to start saying that because I’m more comfortable with it. We knew that it had to be dynamic, so it had to be constantly shifting and show you what you were picking and how those components would go together. So if you wanted to choose a stiletto heel and a pointed toe and closed back with leopard print on it, it had to show you that instantly, as soon as you clicked on the leopard print. And everything had to go together like puzzle pieces to issue, which if you are listening and you know about making shoes, you’ll know that’s definitely not how the process works and it’s very complicated. So we had those ideas, and then obviously we became more sophisticated over time. But that initial thought about dynamically visualizing what it is that you’re choosing in the highest quality realism is still something that we have an ongoing project for. Even now in the business, nearly eight years later.

Richie: [00:11:08] So how did you land on the tension between design and fit? Because there are other companies out there that have decided, “We’re going to keep our aesthetic and you’re going to be able to seize it to yourself.” There are others that have said, “You can literally do whatever you want.” I assume this is something, taking a bit of those extremes together. And how did that come to fruition? I’m sure it informs back to that Hong Kong trip. And how easy or challenging was it to build that?

Jodie: [00:11:34] Really bloody hard. It’s kind of funny. So I remember when we were first approaching suppliers. I’ve taken you through a little bit of our skill sets, the three cofounders, but you may have noticed that not one of us knew how to make a pair of shoes. And I remember this one particular supplier we had gotten on well with, and she emailed two weeks after our trip and said, “I’m really happy with everything we’ve agreed, looking forward to it. I feel like we became friends and just, as your friend I want you to know you’ll be out of business in three months.” And that was super confronting. I think there were of a couple of things that got us past that moment. In hindsight I can articulate it as, the decision we were making, “Is her expertise what we should follow, or is her expertise getting in the way of a good idea?” And to be honest, not knowing how shoes were made at that point in time, that naivety, the touch of arrogance of, “It can be done better!” The determination and belief in the idea where the combination of things that we needed to be able to build Shoes of Prey in the face of things like that. Let me go back to the question though that was to…?

Richie: [00:12:34] Just in terms of the spectrum of, “We want to allow custom fit,” or “We want to allow of custom design,” or kind of both, or somewhere in between?

Jodie: [00:12:40] Yeah. So we really went down the path of custom design. It’s kind of curious, so I do see our company, and have in our road map, us going down a path of truly custom fit as well. But it’s curious because the industry in itself, and we’re just talking about women’s shoes in U.S. sizes right now, will go from say, offered in stores size five to ten, no half-sizes, only a couple in the five and the tens and everything else bunched around the middle. The reason for that is in the manufacturing. So there’s a thing called a last and this will be interesting to only audio describe.

Richie: [00:13:15] We’ve done it before, so it’s possible.

Jodie: [00:13:17] Alright, let’s do this. So basically it looks like a plastic or wooden foot, like without the detail, the toes and things like that. And then what you do is you draw the patterns and things like that according to how they would sit on that last. So you need a different last for every single shoe size, of course, then you need a different last for all the heel heights you’re going to use, so you times that out. Then you need to do it for the toe shapes as well, and then some of the different styles will require, because that last has to mimic what the volume of your foot is doing inside of that kind of shoe. So in a flatter shoe it will spread out, on a high shoe, like a high heel, your foot actually becomes slightly shorter and where the ball of your toes are needs more space. So you need a lot of different lasts. So most shoe companies will do sizes five to ten, no half sizes, and only in maybe two or three heel heights, and that’s it. At Shoes of Prey we do sizes two and a half to fifteen, including half sizes. We do five different widths, and we offer it in maybe ten different heel heights across eight different toe shapes, and all of those are interchangeable.

Richie: [00:14:25] SKUs on SKUs.

Jodie: [00:14:26] Right, exactly. So already by going from the usual of sizes five to ten, and expanding that to two and a half to fifteen, plus five with width adjustments, we were already offering an entire new world of fit options for shoes.

Richie: [00:14:41] Yeah. It’s interesting though cause some could argue that the custom fit is actually easier than doing custom design.

Jodie: [00:14:45] Really?

Richie: [00:14:47] Well just in terms of, when it’s custom design, there’s so many options right?

[00:14:52] I mean, this is purely from my perspective, so I’d be super curious.

Richie: [00:14:56] I guess what I’m saying is I think you did the harder thing.

Jodie: [00:14:58] Really. Let me argue against myself. Thank you for the compliment. But. So, I think fit is super tricky because the way that fit exists right now, until we can get to that stage of stereo camera 3D printing future that I’m super excited about, we don’t actually fit anything to the foot exactly. And if you’ve been to the beach and looked at everyone’s feet hanging around, and I don’t mean to be a creep, but I look at the shape of people’s feet; they’re so different. And it’s not surprising that people find shoes tricky to buy or experience discomfort, because it’s not an item that is yet disrupted enough to really have the right solution. So I think at Shoes of Prey, I know it’s this a buzzword, “disrupt,” but I think we’ve come to a place where we’ve started to make headway on that, which I’m really excited about. But I do see a bigger future in the way that exists. The important ways that we’ve done it so far is, I really think, in the manufacturing of things. So every single pair of shoes is made one at a time.

Richie: [00:16:00] I guess for me what’s interesting is, okay, so customization has been just this dream within this space for a very long time. By and large it has massively failed for I think a number of reasons, especially in apparel, especially in a lot of things. To me, the two categories where it’s starting to happen is maybe in footwear and in beauty and cosmetics, for a number of supply chain reasons, either people are open to overcoming them, or it’s easier to mix potions than it is physical things. Generally, then, there’s almost this bifurcation, right? Which is within, customization is a very broad word, so there is the design-driven customization, is where some people go, which would be with a very standardized fit, or they would go down the fit route with a very standardized design. It seems that Shoes of Prey sits right in the middle of that.

Jodie: [00:16:43] Yeah. And when I think about customization, I think you need both. I don’t think you have one without the other. And it’s curious because, like you said, look, the idea of mass customization has been around for a really long time, since MIT was writing about it, late 60s, early 70s, saying, “This is the future of retail.” So here we are in 2017, as I understand that we’re the largest company tackling this in a pure form. And I do think it’s because when you say to someone, “Hey, come customize,” they don’t delineate between, “Oh, tell me, is this where I design or is that where I, you know, get my size?” You told me customization. I get to pick it all. So I don’t think that, if we’re thinking like our customers, truly, then we don’t make that delineation. We need to do both.

Richie: [00:17:27] So generally another question that comes up is, “Do people really know what they want?” Right?

Jodie: [00:17:32] Great question.

Richie: [00:17:33] Oftentimes the way this industry works is people are delighted by things that they didn’t know they wanted. How do you tackle that? What is Shoes of Prey’s role in that, curation verses letting the person do their thing?

Jodie: [00:17:48] Yeah, yeah. Wow I wish that you had been here to ask questions like this of us, say, about seven years ago. So, look, it’s really interesting because that is definitely the crux of what we need to solve if we really believe that this paradigm shift can exist. So when I look at Shoes of Prey, I think our initial build of Shoes of Prey really built something that customers probably won’t understand for another ten years. And that’s not because customers are stupid, they’re not, customers are smart. It’s just because paradigm shifts like this take that long. And also, as an entire society, you’re bang-on, people, we love being told what to wear. We love watching the runway shows, we love following influencers, we love all of these things that inspire us. And frequently people will say, “Oh I really want to design my own.” But actually they just want to stumble across something they love, make a tweak, and buy it.

Richie: [00:18:45] So it’s almost, the problem is that the thing they want does not exist, but the solution is often not, “They know what they want.”

Jodie: [00:18:51] One of the best ways that this came out, I did a discussion with Nordstrom one day, and I was like, “That just crystallized all of this problem to me.” Which is, if a woman walks onto a shoe floor, and as an assistant you walk up to her and say, “Hi, would you like to design your own shoes?” She’s going to go, “Yeah but Ah!” But if you walk onto a shoe floor and say, “Hi, do you see anything you like?” And she picks up a shoe and says, “Do you have this in my size, in red, and is the heel any different?” And you say, “Actually I’ve got five different kinds of reds and a few heel heights to choose from, do you wanna come have a look?”

Richie: [00:19:24] It’s like post-intent in a way.

Jodie: [00:19:26] Yeah. So that, for me, really characterizes the mindset of where we are as consumers today. So in terms of the evolution of manufacturing sitting in the background, and particularly with shoes, you’d first go to a cobbler and you’d spend weeks waiting for your shoes and doing multiple fittings. We all get tired of waiting for that period of time, consumers want to be able to buy things, wear them more quickly, we ended up making things on mass. But there is a new need emerging, and that new need is a real thing that we probably currently class somewhere in the vicinity of whinging, which is not true. So, even think for yourself or anyone around you, I’m sure you’ve heard them say in the past couple of weeks, “I just couldn’t find what I wanted, they didn’t have my size, they ran out of stock, I searched sites all over the world, couldn’t find it.” And that is not an indication of whinging or anything like that.

Richie: [00:20:15] What does that mean?

Jodie: [00:20:15] Oh, is that an Australian word? Okay, complaining.

Richie: [00:20:21] Okay.

Jodie: [00:20:21] Complaining but not with necessarily a valid base, like complaining about something frivolous. So there you go, you’ve got a new Australian word.

[00:20:30] It’s an indication that something is not delivering on the customer, because the customers have an idea of what they want, but it’s simply not available anywhere. And to me that is absolutely driven by the way that we manufacture things. So we ended up building our own factory to make everything one at a time at scale, and that is what serves giving the customer what they want, “I will buy that, here is my money.” “Okay we will make up for you.”

Richie: [00:20:55] All right so when we get back to the history a bit. How did you actually start to convince the manufacturing side that this would work? How did the economics start to come into play, because traditionally this will be sampling, right? You’re sampling shoes if you’re making them one-off, that’s very uneconomical traditionally.

Jodie: [00:21:08] I agree. And every shoe person on the planet would agree with you as well. It was interesting, so something had happened, and actually we just had the ten year anniversary of this, the global financial crisis.

Richie: [00:21:19] Yay.

Jodie: [00:21:19] I know, it was a very, very, very challenging, traumatic time for a lot of industries and people. In the shoe manufacturing industry I suspect it was something that actually allowed them to entertain this idea, because we were coming to them in early 2008, a lot of their mass production orders had reduced. So there was capacity available. We approached them with the idea, we had thought through how it would work, we had the skills amongst the people, to be honest I think it was partly our passion, our planning, and their being capacity that allowed the suppliers to entertain it. And then proving it out quickly with some sales in the beginning. That being said, we did hit a point where we needed those manufacturers to scale with us, and they all said no. And so we even built the systems and processes and wanted to give them to them, because we didn’t think we’d have to become manufacturers, but it became really clear that that wasn’t going to be the case, and so then we had to start setting up a little test kitchen, and seeing what parts of the process we could master and understand and systemize. And then getting a floor somewhere, and being able to work there, and then building, eventually, our first entire factory, which opened on the 24th of December, 2014. Actually that factory is nearly maxed out now too.

Richie: [00:22:41] So it sounds like you were working with smaller manufacturers early on who had more of an intuition toward sampling and the capacity for it. When was the realization of, “We need to do this ourselves,” what was that process like? Cause it’s one thing to be vertical to begin with, it’s another one to do it as a moving target.

Jodie: [00:22:58] Yeah, totally. It was really tricky because, as I’m sure you know as well, you’ve got so many things to focus on in your business, and particularly in ours, we had that bias from starting that we didn’t think we were going to be a manufacturer, so we were very focused on our marketing and technology. So to make the decision to carve out an entire part of the business in that was terrifying. Look, there are a couple of things, like we could see when we started to extrapolate out from the position that we were in, that we, our business, simply wouldn’t exist if we couldn’t solve the manufacturing problem.

Richie: [00:23:29] That it was a fundamental differentiator to the company.

Jodie: [00:23:32] But honestly, not even in those words, just saying, “We’re not going to make shoes for the orders.” Yeah, so, when you say it like that it makes it sound like I exactly…

Richie: [00:23:42] It was mission-critical.

Jodie: [00:23:42] Yeah it was, it was. And as it turns out, that is the fundamental differentiator. And so when I layer what we’re doing onto the environment that fashion is in today, we see so many talented designers coming up who have to finance their first collections, and who ever gets anything right the first time around, you know? They really need finance to do a few collections, to get that under their belt. When we look at department stores or any other retailer, they’re limited by the number of SKUs that they can afford to stock in the back room. But at Shoes of Prey we’ve done this thing with Nordstrom where their buyers design the shoes that they wish they could stock. We build photo-realistic renders, you can’t even tell that they’re not real shoes, and when the customer clicks Buy on that, we make it on-demand and send it to them. So there’s lots of problems that we can solve, and actually in fact on the emerging designer side and businesses that are thinking of getting into shoes, we’re starting to do small runs with them, so that they can have access to having shoes as a part of their collection to complete the entire look. And in fact that’s only one thing I would say if anyone’s interested in that, I would love to hear from you because it’s something we’re really excited about, and providing that platform.

Richie: [00:24:50] So really opening up the core piece of this as a platform.

Jodie: [00:24:54] Absolutely. And that’s another thing I don’t think we fully understood when we started the business, that we were really building a platform for the fashion industry, and that for me is so so so exciting. We often get asked if we’ll move outside of shoes—there’s so much to do in shoes! So I do love the idea of pressing into other product, but I think there are a lot of great businesses that do that already. And so I’m really curious to see how we can bring shoes into those mixes and see how we can build with them.

Richie: [00:25:23] Do you see a point where the company would be making more money from the platform than it would from the brand, in the future?

Jodie: [00:25:28] I think that’s entirely possible. We are yet to really get to the bottom of the full extent of that, and the scope of that, but I think there’s a huge world out there for it. And when I think of the numbers of brands out there that maybe have gotten into apparel but could just finish off the look with a shoe that they designed to go with it, there’s so much potential. And also, from what I see in terms that we talked about earlier in the interview with just the way that we make being such an issue environmentally and financially, I do believe that this can really turn a corner for the entire industry with that. So I feel excited about that.

Richie: [00:26:04] Work us up to the launch and then how did the launch go?

Jodie: [00:26:07] So early 2009, we were going on trips to try and find suppliers. For us, finding a supplier was a huge time investment. So I think if you’re doing just a product that exists and you want to make some design elements to it but produce en-mass, then you can almost do that on line and just get samples sent to you. If you want to research the industry a bit more, you go to the trade fairs. For us, we wanted to do something that had never been done before, so we had to go and find suppliers who may be able to do it, romance the hell out of them, and then try and get it off the ground.

[00:26:39] So it was I think the 9th of October and we switch the site on. And it wasn’t something that we did a big launch around. We switched it on and sort of wanted to see if it worked. I remember our first customer, who was someone that we didn’t know, was a result of a twenty five email chain back and forward to talk about what we were doing, and the shoe she designed, and all that kind of thing.

Between October and December we had started to tell people about it, and it was cool, we were up for Best Bootstrap Start Up for The Crunchies, which was fun. But the really big launch happened in the following March of 2010. And working with influencers is not a new thing now, but back then there weren’t a lot of people who were teaming up with YouTubers and things like that, and we teamed up with Blair Fowler, or juicystar07. We wrote to her, seeing that she had such an engaged audience, so kind of wrote her an email like, “Hi Blair, loved your last—oh my god, cat eyes, amazing, I have this cool shoe company, you should totally check it out, maybe we should do something.” And then her Hollywood agent wrote back. And we got a bit more of a serious tone, and talked about terms, and had Blair make a pair of shoes to see if she liked it. She did, and she made a ten minute video on design-your-own-shoes.

And we had a competition at the end, so, “Go to Shoes of Prey, design a pair of shoes, put it in the comments, say where you’d wear them, we’ll pick out two favorite designs and make them for you.” So, for me, I’m actually pretty lazy when it comes to entering competitions and I’m like, “Look just take my details, I know that’s what you want, you don’t care about my twenty five words.” So I was a bit dubious about people going to another website and coming back and that kind of thing. Anyway, we sent the video live. Up until that point we’d had 200,000 unique visitors to the site over a five month period. That day we had half a million people hit the website. Yeah.

Richie: [00:28:21] Did it stay? It stood up?

Jodie: [00:28:21] Yes it did. That’s because of Mike Knapp, because being a software engineer from Google he had a good training ground and knew what we might need to look out for. And so we were watching this traffic and just going, “Oh my god, this is insane.” And then an hour later, “What should we do with traffic? Okay, let’s put some share buttons in place so that we can help this to get more traction.” A few hours after that, “You know, it’s really weird guys, I think the sales graph might be broken, because the traffic’s up, and I thought traffic meant sales.”

But you can totally guess what happened, right? So here we were having a sixteen year old YouTuber (we didn’t know she was sixteen at the time, P.S.) who puts makeup on on YouTube—who do you think watches her videos? Thirteen, fourteen year old girls. And the average price of our shoes is $220. She doesn’t have that money to spend on shoes. So what were we going to do? We hadn’t thought about—we’d gone for the big funnel, but we hadn’t thought about our actual customer. So we had this massive debate that night about what to do. And after a very heated discussion, decided to write a case study about what we had achieved and we posted it, sent it out to journalists, and woke up the next morning to an email from a journalist at The Wall Street Journal. He wrote an article about it, and that’s where our customer was.

Richie: [00:29:44] Interesting. A very roundabout way.

Jodie: [00:29:45] Yeah. I think that the younger girls who were watching the video, they have an important role to play too, but it wasn’t sales. And they ended up telling their families and ultimately it ended up permanently tripling our sales. We had 90,000 people enter the competition, it was the most commented video worldwide YouTube that day. It still ranks extremely highly in the how-to-install videos, which is great. So that was kind of our first major turning point into launch, and we’d had some press and things like that, but, then shortly after that we won some awards for the marketing campaign that we’d run. And that’s when we started to build the momentum around it.

Richie: [00:30:17] So we’re in 2010 now. What was the theme happening 2010 to 2012 or 2013?

Jodie: [00:30:23] Sure. It was interesting. So 2010 was all about, “Does this work, do people want it, it does it make sense?” 2011, “does the business model work?” 2012, “Raise money so that we can do this fast, because frankly, what if a big guy decides to do this, and we lose the entire opportunity? We’re the only people doing it right now.” So that’s why we raised money. Rest of 2012, figure out our marketing, which is an ongoing question for any company, I think. 2013, we decided to go offline.

Richie: [00:30:52] Talk about that.

[00:30:55] Well we’re not offline any more so this is a great story.

[00:30:56] So in January of 2013 we opened a store in Sydney, Australia. The store itself did two things that were great, the first thing it did was double its forecasted revenue for the first twelve months, which was unbelievable. It was ranking like the highest per square meter in terms of airway on the floor, and it was a floor full of all the most extraordinary shoe brands, including Louis Vuitton all the way through to Steve Madden, so it was really special.

Richie: [00:31:23] Was it a stop and shop?

Jodie: [00:31:23] Yeah, concession. So it did very well financially. And the other thing was that the store itself was an experience. We’re not a place where you pull shoes off shelves. So we built sculptures out of shoes and try to evoke your imagination. We pumped a fragrance into the space, we had a soundtrack that we actually did ourselves, you know instead of using like snare drums, we captured recordings of clicking of heels on concrete, and odd things like my cat purring, and things like that. Everything in the store, the tables, the chairs, everything were made from things that we make shoes out of. So different kinds of leathers padded with the same padding in the shoes, you can see what it felt like. There were iPad’s, boxes of all the swatches, sizing shoes to try on, so you could build your shoe there. And that store went on to become a finalist for the World Retail Awards, World’s Best Store Design for that year. And it was in Paris and we were against Karl Lagerfeld, his concept store in Paris, and Pumafor their store in Osaka, so none of us went of course, but we’re all in bed, separate beds, obviously, and phones started flashing and luckily someone from the Australian Retail Association was there to pick up the award for the World’s Best Store design. So we had this really surprising, exciting start to a foray into offline.

[00:32:31] Then we took that idea and we brought it over to Nordstrom, and we talked to them about the success that we’ve seen with it, what we were doing. Nordstrom, shoes flow in their veins, I’m certain, and their reputation for innovation obviously proceeds them. So we spoke with them over a few months, maybe eight or nine, ten. And all of this Skyping and emailing was really getting us nowhere, so we called and said, “Hey listen we’re going to be in Seattle, why don’t we drop by?” Total lie. I don’t need to be in Seattle. They met us and after forty-five minutes were like, “Oh my god, we have to do this.” And within four months of that meeting we had our first store live with Nordstrom. They subsequently invested in us, and we have the online component and we had the stores with them. And the investment they made in Shoes of Prey, I believe, is about the future of retail potentially being this on-demand manufacturing and mass customization, which is very exciting. And also we can offer so much that isn’t available through the brands they have at the moment. So it’s been great. The thing that was really tough about the stores was that, so we had six stores in the U.S. in total.

Richie: [00:33:36] And were these all still concessions?

Jodie: [00:33:38] Yes, that’s right yeah, all within Nordstrom. And they were always in our minds, “Okay let’s try and see how this works.” They took about 20 to 25% of our cost base across the entire business. And when you’re running a website that is shipping to more than 100 countries every single month, has had more than six million pairs of designed on it, that’s tough, to make that decision. So ultimately that’s why we decided to ramp down that part of the operation. Perhaps the most challenging things about it were that there were obviously people working in those stores, and the people, decisions like that are always, frankly, the absolute worst. But actually I must say they all handled it with incredible grace. So the other thing was, this was an extremely public test where a lot of the industry was talking about clicks to bricks and vice versa. And while that room was zigging into creating these stores from having been online to offline, we were zagging and saying, “Actually we’re going to shut them.” That was really tough to handle as well, to share with people our thinking around that. But I knew as a business person, this was a really great decision.

Richie: [00:34:40] And is the business back 100% online now?

Jodie: [00:34:43] Yes, absolutely. So that happened in November last year. And the other thing too, just to be super clear, I do think there is a place for offline retail, I don’t think it’s for this moment in the business. And one of the fundamental shifts that we saw from 2013 to 2016 was our customer, what drove the opening of the stores was her constantly saying to us, “But what will my shoes look like in real life?” And I want to touch the leather, I want to try to the shoes on, da da da.” Which is all very true. But over that three year period, she got very comfortable with shopping online, and started saying, “Oh yeah I can order and send back, there’s a great return policy.” So I think there was definitely a paradigm shift happening with our consumer in that period of time too.

Richie: [00:35:18] So that gets us up to, what, 2014, was where we left off?

Jodie: [00:35:21] So we opened our first store with Nordstrom November, 2014. We opened our own factory at the end of 2014 as well. Beginning in 2015 we opened five more stores with Nordstrom. End of 2016 we closed all of the stores. In that period of time we’d also done a couple of raises, so we’ve gotten now $24.6 million. So investment has come in from Blue Sky, which is an Australian fund, Khosla, Greycroft, yeah, so a number of other funds sort of came on board to be a part of the journey with us.

Richie: [00:35:49] Where did you want to land on price point, and why?

Jodie: [00:35:53] Such a good question, which we’re exploring right now. We are currently running—don’t tell my customers, we’re running a price elasticity test. We’re running that in a very confined environment, in a very confined way, to understand where we should sit, because I’ll be really frank with you, and anyone who’s in the shoe industry will say, “Duh,” but our price really sits in no man’s land. It doesn’t mean anything for the branding, it’s really difficult to position. So we kind of either need to be around that $150 price point, or we need to be up in the $400 price point to make sense. And if we went up into the $400 price point, it’s not just, “Hey we’re just going to jack our prices and there’s nothing sitting behind it,” there’s a lot of changes that we would do to push behind that. If we dropped it down then we’re not going to drop our quality, it’s then we’ll have to think about margin in a different way. So we’re looking at that at the moment, and I don’t have the answer to that yet, because typically these kind of tests, as I’m sure you know, take months before you really get the right data to be able to make a decision on.

Richie: [00:36:53] What’s been the cheapest most expensive lesson since you started the company?

Jodie: [00:36:57] So we actually talked about this a little bit, but the very first person, who was the guy that I was commissioning shoes with personally, and he was one of the very first people that we talked to this idea about, said, “Yeah put all the cool designs in the window, but she wants to stumble across the black shoe inside the store and buy that.” And he was right. So he was the one who sort of made that delineation, within literally weeks of us having the idea of saying, help her to customize something she can see, as opposed to having her design.

Richie: [00:37:26] From a blank canvas. Interesting.

Jodie: [00:37:28] Yeah. Exactly. So that was like a cheap lesson that we didn’t really land, to understand. So I guess all the time that we spent on doing the full design thing was the expensive lesson. I don’t know, expensive lessons, there’s been a few, I can think of many, but I can’t think of what the most expensive one was. We’ve done things like, we have great PR agencies now, we hired someone who was slightly dodgy very early on, which proved to be an expensive lesson at a time that we didn’t really have the money to spend on things that didn’t work. But it’s not that I can’t think of them because there are none, it’s that there are too many.

Richie: [00:37:59] What was it like building a brand that other people would change? Generally most brands in this space are immensely specific and edited and all these other words that connote the final approximation of what was in the designers head.

Jodie: [00:38:14] Totally.

Richie: [00:38:15] Shoes of Prey was obviously a very different position, how did you balance that?

Jodie: [00:38:19] Badly. So the thing about building this brand that was so tough was we were so afraid to have an opinion when we started because, “Oh no no, this is your blank canvas.” So we had to learn, “How do we show people who we are in our lifestyle and give them that grounding to come and be a part of, without saying what they might want,” and I would say we’re only really truly coming into ourselves on that now, because, again, if I break down a lifetime in the business so far, and frankly we’re still toddlers if I imagine this over what I hope the business will be, what I believe it can be. You know, the first part was, “Hey this seems like a fine idea, does it stick? Do people want it?” Holy crap, how do we build all of the key pillars to making this something that actually works? How do we build the manufacturing, how do we build the technology, how do we build the marketing? And through all of that we were being a blank canvas, and it was only really last year that we started to turn the corner into realizing we can and should have an opinion, and share that with people.

And I think on that point too, it’s worth saying that customization comes in lots of different forms. So you can have collaborative, which is you and I sit down together and we sketch together and pick the materials together and sew and all that kind of stuff. We don’t do that. There’s the transparent one which is the kind of, “You don’t know that I’m customizing, but I’m doing it in the background.” Then you’ve got cosmetic, which is, “I’m just going to whack your name on this and make you feel a little bit like it’s for you.” And then we have ours, which is the version where we create this huge array of things and allow you to pick and choose and put it all together. So customization can work in different ways for many businesses. It doesn’t just have to be the way that we’re doing it that makes it work.

Richie: [00:39:58] Given the brand landscape right now where there are some big buyers out there, there are also a lot of people that want to remain independent, how are you looking to scale and independence for the business into the next three to five years?

Jodie: [00:40:08] That’s really tough. And I’ve received very black and white advice going both ways, which is, “You should know if you want to sell or I.P.O., and other ones saying, “Just concentrate on building the company.” I have to say I’m in the camp of, “Concentrate on building the damn company,” because honestly if I start thinking about that then I’ve really taken my eye off the ball, and there’s so much that we need to get done. It’s not that I’m not open to considering those things. If the right buyer came along, and I don’t just mean from a dollar perspective, but I also mean from a business perspective.

Richie: [00:40:39] As well as strategic.

Jodie: [00:40:40] Yeah absolutely, I think then that can make sense. But at the moment we are all about building this into what it can be.

Richie: [00:40:47] And then over the next one to three years, what are you most excited about the business?

Jodie: [00:40:51] There’s so many things. So we’ve got this great project that I won’t give too much detail on, since we’re not really supposed to talk about it, which is a new configurator, and I’m super excited about it because it hits so much of the journey of where we think our customer’s head space is right now with design versus having a blank canvas. I am very excited, as I mentioned earlier, about stereo cameras and 3D printing and where we can head with that. We do make vegan shoes at the moment, I’m very excited about how that area will develop. I’m really excited about platforming and being available to people who want to make one or one hundred wholesale kind of shoes, so that we can support those new amazing designers and retailers who otherwise wouldn’t have access to getting their designs of what they believe is great in shoes out into the world. What else am I excited about? There’s a lot of things.

Richie: [00:41:45] And then where is the name from?

Jodie: [00:41:48] So, my brain. Actually, my good friend Lisa’s brain. I came up with this idea which was an observation of myself, whenever I’m flicking through Instagram, reading a magazine, walking down the street, I mentally take snapshots of the things that I see that I want to buy, and then I go hunting for them. So Shoes of Prey is, it’s where your shoes are that are your prey, that you can go hunting and you’ll always be successful.

Richie: [00:42:08] Awesome. Thanks so much for talking.

Jodie: [00:42:10] You’ve got it.

Richie: [00:42:18] Thanks for listening to the Loose Threads Podcast. Sign up for Ripcord at loosethreads.com, and feel free to leave review on iTunes, we always appreciate it. Thanks to George Drake Jr. for editing this episode. I really enjoyed talking with Jodie about all the challenges and opportunities of building a custom supply chain in a world where people don’t always know what they want. We have a great roster of upcoming guests including Charlie Giannetti of Giannetti Factory, Charlie Ambler of Strike Gently Co., and Jeff Hansen of Peter Manning. Thanks for listening to talk to you soon.