#92. Tommy John doesn’t take underwear too seriously, as long as it moves with you. We talk with co-founder Tom Patterson about starting a wholesale-driven men’s basic brand and later maneuvering into direct-to-consumer and physical retail—all without raising much venture capital. 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 92nd 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 actionable analysis, insights and events that drive growth, and Loose Threads Espresso, your energizing and high-pressure filter for consumer news—in context. We also have a newsletter that features the latest analysis of the consumer economy from Loose Threads. Check it all out at LooseThreads.com.

Richie: [00:00:34] Joining me today is Tom Patterson, a co-founder of Tommy John, a functional basics brand he founded with his wife, Erin, after seeking an undershirt that would stay tucked in regardless of the wearer’s movement. A wholesale-driven business blossomed from there, which gave way to an evolution towards direct-to-consumer and now retail—all without raising much venture capital.

Tom: [00:00:52] Underwear is too fun to take too seriously. We have “no-wedgie guarantee.” We have fun with it.

Richie: [00:00:59] Today, with a full basics brand blossoming for both men and women, Tommy John is the rare example of a brand that grew the way it did because it had to—not because it always wanted to. Oftentimes, this leads to the best outcomes. Here’s my talk with Tom Patterson of Tommy John.

Richie: [00:01:19] So why don’t we start by talking a bit about your background and then we can work our way up to Tommy John existing.

Tom: [00:01:23] I’m from a small town of 3,000 people in South Dakota. I grew up in a funeral home. My parents were funeral directors and [had a] door connected to our house. I grew up in a town where I had lawn-mowing and snow-blowing businesses. I played three sports so I’d go to football practice and I would mow lawns at night into the fall, had a lawn-mowing business in the summer. So I had always worked while going to school. I went to college at Arizona State. After college, I started doing transportation sales for a company called Airborne Express, a really hard cold-calling business, which then merged into DHL and did that for two years in Minneapolis and moved to San Diego, California and started selling medical devices for about four years.

Tom: [00:02:03] I was wearing suits and ties and I was buying my dress shirts and tailoring them and, as my suiting was becoming more fitted, I always wore an undershirt. I got out of my car one day to do a presentation at a hospital in San Diego and everything was tucked in in place except my undershirt looked like this billowy muffin top and I was like, “Why the heck doesn’t anyone make an undershirt that doesn’t shrink, it doesn’t yellow, it doesn’t stretch out, it doesn’t get big in the neck and it stays in place when I lift bags on the airplane or I get in and out of my car?”

Tom: [00:02:29] At the time, there was a show called, “The Big Idea with Donny Deutsch,” which was really “Shark Tank” for me in 2007, and a lot of entrepreneurs came on the show and they thought, “Maybe there’s a better way to make something.” Everyday I would wake up and think, “What can I make better?” And that’s really when the light bulb went off. I thought, “Maybe there’s a different way to make undershirts.” And I went to department stores and it was a sea of sameness. Well-known brands, they all had the same design. Boxy fit, form-fitting to fit a UPS box. The shirts were pinned behind the models on the packaging so it looked tailored but when you put it on it was baggy and boxy.

Tom: [00:03:00] So I went up to the Garment District in Downtown Los Angeles with my [now] wife and I bought some fabric that I liked and I took it to a tailor that had a dry cleaners where I was living in San Diego, a few blocks from where we lived, with a sketch that I drew with my second-grade art skills—like a stick man. And I just thought, “You know what? It’s a hundred bucks. I just want to see if this idea of works.” I put the shirt on and it did everything I thought the ultimate undershirt, for me, would do. And then I made ten more and I sent them out to friends of mine, the type of guys that would say, “Tom, this is a great idea,” or, “Dude, no. What are you doing here? Don’t spend your money.” So I knew I’d get honest feedback. I went back up to downtown Los Angeles, found a facility to make the shirts. They ask if you have your markers and grading. I’m like, “I might have a marker in my car.” I knew nothing. I didn’t have a background in fashion so I didn’t know what I didn’t know so I didn’t have any bias. So I was really open to any possibility.

Richie: [00:03:51] What did you actually do to the shirt? What did you change?

Tom: [00:03:53] We actually have a utility pattern on our undershirt because it’s the first one ever invented that stays tucked in through movement. It has a tapered, elongated design from the chest to the bottom hem with multidirectional stretch fabrics.

Richie: [00:04:05] I don’t even know what you’re talking about.

Tom: [00:04:06] So, when you put it on, it actually hugs on your lower body. We don’t recommend you ever wear it outside in public with a pair of shorts because it’s really long. It would look really strange. But the idea is it’s never meant to be seen, but it stays in place. So it serves that functional purpose to make you just more comfortable and have [fewer] adjustments. I built a two-page PayPal checkout website in 2008, before things like Shopify and Wix existed, and used my background in strategic-selling [of] medical devices to start getting into men’s specialty stores. Fast forward about six months later, the fall of 2008—the financial crisis happened. The housing market crashed. The retail recession shortly followed and I was laid off my medical sales job. I just thought, “You know what, I don’t want to be this coulda, woulda, shoulda guy 20 years from now, having regrets about, ‘What if I could have pursued this idea?'” I wasn’t married. I didn’t have kids. I didn’t own a home. I didn’t have a lot of responsibilities. I read this article that there’s no better time to start a company than during a recession. I knew I had a product that every guy needed, but they didn’t know they needed it yet. So I cashed out my 401k, my savings, used my friends at American Express, Visa, MasterCard to really finance and bootstrap the business.

Tom: [00:05:16] Our big break was I was able to get ahold of the buyer at Neiman Marcus and she was a female and I learned, through time, that a lot of women didn’t understand the challenges men had with their undershirts because they don’t really talk about it. They tuck it into their underwear, they attach it to garters, they do a lot of weird things to keep their shirts tucked. And I said, “Look, I’d like to come meet with you. I think I have a product that you need in every one in your stores. But, before I do, let me send them to your husband and some other guys in the office so they can give you feedback.” She said, “Well, when are you going to be in Dallas?” And I said I was going to be there the next Wednesday, which I wasn’t going to be, and I booked a ticket after the phone call and I met with the buyers and the meeting went great and we got launched into 15 Neiman Marcus stores in August of 2009.

Tom: [00:05:57] One of the things that we did is—at the time, a lot of the men’s underwear packaging was black and white and we really needed to stand out and we found, at the time, a lot of women bought men’s underwear. [A]lmost 65% of men’s underwear was bought by women at that time and we did a study and we learned that most women love chocolate and jewelry—Tiffany’s jewelry. So our packaging design had a chocolate and blue color palette and we thought that would attract women to our box at retail because we weren’t a well-known brand. We didn’t have a huge advertising budget and that was really outmaneuvering and really allowed us to stand out at retail. We launched into 15 Neiman Marcus stores. We sold 60% of our inventory during the first 30 days. We went into all Neiman Marcus stores a month and a half later and then we got launched into Nordstrom. We grew from five to 109 stores in the next nine months. That’s really how Tommy John was born.

Richie: [00:06:50] Who was the “we” at this point?

Tom: [00:06:52] Before I started Tommy John, my wife, Erin, who is also my co-founder, had started an organics website selling skincare products. I had observed her building a site, putting copy on the site, buying products, negotiating wholesale pricing. At the time, I was watching “The Big Idea” and I was thinking, “What’s my idea? What am I going to do?” and she really inspired me to pursue something different. Fast forward—we moved the business from California to New York in 2010 and the “we” was my wife, Erin, and her dog, Marley. Literally, [the] world headquarters was in a 500-square-foot apartment right over here on 21st and 6th. We had two desks, mannequins, marketing materials, samples. We were like a $3 million dollar business and we couldn’t afford to have our own office. Every dollar we made went back in to financing inventory. We had to be really creative because we weren’t focused on raising money. We didn’t really know how to raise money.

Tom: [00:07:46] I remember, when I met with the Neiman Marcus buyer, before she placed her order, she said, “Are you factored or on EDI?” I said, “What are those? I don’t know what factoring is. I think we can get both of those going.” And we did. So we were able to factor a lot of our purchase orders to finance a lot of the inventory early on, but it was really a struggle because this business is so inventory intense that we really had to be creative with how we built the business and there [were] a lot of sacrifices—having to work out of your apartment for a long time.

Richie: [00:08:14] So wholesale was the only option, it seemed. To blow it up in a way?

Tom: [00:08:18] To scale faster. The online was such a small part of our business, at the time, and we really didn’t know how to build an online business. We always say we’re an omnichannel-focused business today. We’ve always embraced this omnichannel approach to being, really, everywhere the customer is.

Richie: [00:08:31] So 2008—the same year Bonobos started, right?

Tom: [00:08:35] I think they were around there. Maybe a year earlier? I’m not sure.

Richie: [00:08:37] Okay. You were at the beginning of this canon, so to speak, of some of these new brands. Did it seem like the Wild West or did it seem like you were doing something quite cavalier? Because, today, if you started this it would be, “Oh, you’re doing that for that? Okay, that’s boring.” But ten years ago—

Tom: [00:08:53] We were really a traditional business growing into wholesale and online was such a small part of our business. I think it was a blessing in disguise because, being in stores, talking to customers, talking to the salespeople, a lot of our new product ideation came from those conversations that you had in the store. With my background being strategic selling of medical devices, it doesn’t seem like a natural transition to underwear but, in a lot of ways, it was. Talking to customers is like talking to doctors and nurses, so I’ve always had that curiosity to be like, “How can we improve this? What are you missing in your underwear? How about your socks? How about your loungewear?” I went to 90 Nordstrom stores in the first year, about 40 Neiman Marcus stores. Monday through Thursday, we’d be in Los Angeles and at our factories and then Friday through Sunday I would be in stores. I think, early on, those learnings were so valuable in such a small period of time. In 2011 and 2012, when we started focusing more on our direct-to-consumer business, that’s really when the business started to scale at a much faster pace.

Richie: [00:09:53] What was it like, given you had no background in design—you had your sketch—or in production, figuring that stuff out? It sounds like you started in LA. Having felt that before, it’s not an easy lesson to learn, [how to] make and scale stuff.

Tom: [00:10:06] Fortunately, we didn’t know enough. We didn’t know what we didn’t know. So I was the fit model. Literally, in factories, I would try the underwear on, [say], “All right. This looks great. I think it’s okay.” What I found is, fortunately, I’m close to a medium fit model size. So we had products in major department stores that we had never used a professional fit model [for]. We had never used a professional technical designer until we moved to New York and we started refining a lot of our tech packs and measurements and specs. So that was one way.

Tom: [00:10:32] I was fortunate enough to attend a seminar where I met a mentor to me [who] had a background in working with brands like Nasty Gal and some other brands before Tommy John and he really taught me so much about cash flow, product development, inventory financing, how to sell a product into a department store, talking about sell through, margin negotiations. I was just like a sponge, trying to learn as much as I could at that time from him. Dana Fried is his name and he was really instrumental early on in keeping us focused on building a sustainable business that didn’t require outside capital to grow. I think that’s a really tough part of what you see today. It’s so easy and there’s so much money available to raise in the market where[as] we didn’t look for a market to disrupt that was sleepy and build a product around a business idea. We actually built the product first and we’ve had to build a business around the product that solved a problem. That’s really what Tommy John’s all about is we don’t enter categories unless we feel like we can solve a problem tied to comfort, whether it’s underwear riding up your legs or undershirts coming untucked or socks falling down. Everything has to serve a purpose versus just looking cool on the runway or having colors that are the trends of the season.

Richie: [00:11:42] So what are some of the conscious decisions you make, even that early in the business, to build something sustainable? Because it takes foresight and maybe a little bit of just chance to make that happen or maybe it was the only option. But how did that playbook start to come together of, “Oh, we have to go down this path,” that we would later see a lot of other brands go the other way?

Tom: [00:12:02] I think what we learned is underwear and undershirts is a predictable, forecastable replenishment business that doesn’t have a ton of seasonality to it, like shoes or dresses or pants. And, because of that, we felt we could go really deep and narrow in our SKU assortment. So we didn’t have SKU proliferation whereas basics and undershirts, underwear, different colors, different styles—whether it’s trunks, briefs, boxer briefs—it’s a basic that everybody needs and they need them every eight to 18 months. So, for us, we really stayed focused on not having five different versions of cotton. I always talk about [how] a lot of brands, I think, have turned into this Cheesecake Factory menu where there’s so many options you almost have a headache by the time you decide.

Richie: [00:12:46] I was there yesterday trying to order.

Tom: [00:12:48] But I’m a big fan of In-N-Out burger and I think In-N-Out makes it really simple, really easy. Apple has done a great job of just staying simple and focused. I think it’s really tough to keep things simple and focused as you grow because there’s a lot of things that would be fun to do and you really have to be disciplined on understanding what that means, what’s the inventory liability, what does that do to cash flow? I think, because we were focused, we wanted to be great and go from good to great in the category before we started jumping so we were known for doing something really well first. It came through just a lot of observation of brands that I was a fan of, whether it’s Patagonia or Nike or Apple or In-N-Out. It didn’t necessarily have to be from fashion or clothing.

Richie: [00:13:27] Did you think of raising money early on or it just wasn’t on the table?

Tom: [00:13:31] It wasn’t really on the table. We didn’t think about it too much. We got really creative with factoring, inventory financing, being creative with negotiating our purchase orders with factories. I was the type of person, instead of building a deck to go raise money, I would fly on an airplane to Asia and really focus on building a relationship with our manufacturers.

Richie: [00:13:51] It’s like a reallocation of resources.

Tom: [00:13:52] Yeah. Getting them to really buy into our trust as a vendor to pay on time and talking about our business plan and idea and building trust has allowed us to get creative with a lot of the financials of our business that didn’t require us to raise money. With that said, there [were] a lot of really tough times. We don’t really think we had a lot of breathing room the first six or seven years because you really had to watch every dollar like it’s the last. I think, when you raise a lot of money, you can do what you want because you have the money to do it and, when you don’t, you have to spend it differently and you have to do what you need to do versus what you want to do. That discipline, because we had done it for so long, it’s really hard to get out of that mindset.

Richie: [00:14:30] What are some of the lessons that factoring taught you about cash flow and running a business and having [to] rely on a somewhat unfriendly mechanism sometimes?

Tom: [00:14:39] I think we found ways to make it friendly. As we gained trust and as we were able to forecast our orders more accurately with our retail partners, it allowed you to finance a lot of inventory without raising capital and, obviously, you pay them a percentage of that interest. I think that’s where finding a mentor, like I talked about, was extremely helpful. Without him—having someone like that to really guide us—it would have been really challenging. Not to say we wouldn’t have done it, but the decisions that you make at that time can really almost put you out of business if you guess wrong. So I’d recommend that to anyone. If you can find someone that you trust, that brings value into your business, do it. We wouldn’t be here without him.

Richie: [00:15:15] It’s interesting, looking at a lot of these direct-to-consumer businesses, of all the benefits people talk about—direct connection with the customer and blah, blah, blah—there’s so little predictability in it versus, building something through wholesale, generally speaking, at least maybe a few years ago, you had this predictability. You had your limited SKUs and so forth. It just seems like one of those things people ignore a lot but actually can be very helpful for a business because you actually kind of know where you stand and there’s something to stand on.

Tom: [00:15:40] Well, for sure. When you go from five to 109 stores, just the volume, in general, allows you to meet a lot of the minimums with your factories and you can scale quicker. In 2009, ’10, you didn’t see companies going online from zero to $500,000 a month. Today you see that a lot with the things that you can do through Facebook and social and digital in general. Those things weren’t accessible to us at that time and I think, if we had started two or three years ago, the business would have been built, not entirely, but very different[ly] than it was. So we built it the way that we could and took advantage of the opportunities we had at that time. And, now, I think what you’re seeing is online can become more predictable with a lot of the tools that are available for direct-to-consumer brands after the two-, three-, four-, five-month period. But it can be dangerous because you can grow too fast and then you’re stocked out for six months. I think, for us, because our direct business didn’t grow too quickly and we had a wholesale business at first, we really were able to understand supply chain and delivery timeframes and how do we get quicker response to inventory that we sell out? We also had a lot of retail partners that were really patient with us. They didn’t allow us to grow too fast beyond our means. I think they knew how young we were, but there was something in them that believed that we could be where we were going as a brand.

Richie: [00:16:57] You said in 2012 you started to look more consistently at the direct-to-consumer business. What led to that decision versus continuing on the path that you were? How did those early months and first year go of starting build that new channel up?

Tom: [00:17:13] I talked about my design skills being at about a second-grade level. I think our direct-to-consumer skills were about the same scale when we made that decision. But I met someone, Lawrence Lenihan, met with him. He said, “Hey, you’ve got a nice business, this $3 or $4 million dollar business. If you work as hard as you have been for the next five years, maybe you’ll be a $5 million dollar business.” But he’s like, “If you want to build a direct-to-consumer business, I think I can help you.” And I just thought, “This guy is dressed in a really nice suit. He doesn’t have any investments in fashion. What a jerk to say something like that to me.” I left the meeting and I was cordial. I was going down the elevator and thought about it for a couple days and was like, “Shit. He’s absolutely right. If I don’t figure out how to build a direct-to-consumer business, we’re going to miss out on a huge opportunity.” And that’s really when we started focusing on that experience, in 2012, and the business started to really explode. Not only that, [but also] really just having the data and the insights and having that direct connection with the consumer was so vital in those days. We were fortunate enough to hire a lot of people and surround ourselves with people [who] knew a lot more than we did about that part of growing a brand and a business. Obviously, like most brands, it’s the fastest growing channel and percentage of our business.

Richie: [00:18:24] Were there signs or times in that first year [when] you were like, “This might be a mistake,” or, “We actually shouldn’t go into the direct side as hard as we’re going and should maybe just keep the wholesale thing going?” Not really?

Tom: [00:18:33] Not at all. I think we were open to it. For us, we couldn’t out-Calvin-Klein Calvin Klein, we couldn’t out-Under-Armour Under Armour. We had a lot of limited growth opportunities at retail at that time. After 45 to 60 days and what we saw [in] the acceleration in our business and the customer acquisition cost, it was really a no brainer. I think too, we didn’t want to have all of our business concentrated and dependent on department stores. That’s also to have all your eggs in one basket. It’s something you should never do as a business and that was one thing. We wanted to really diversify our business and make sure we were eliminating a lot of risk in case something did happen or a department store said, “Hey, you know what, we love you guys, but we’re going to move to another brand,” and put us out of business. So a lot of those decisions went into it and, once we saw the acceleration, we didn’t look back.

Richie: [00:19:22] Where are you from a product perspective at this point, in terms of what does the assortment look like?

Tom: [00:19:27] [In] 2012, we were men’s underwear, undershirts, socks and loungewear. It was really simple, really focused.

Richie: [00:19:34] Did you start to see certain products do better online than they did in retail? How do the channels affect the products?

Tom: [00:19:40] They were similar. Obviously, the age demos were different. The income levels were different. A lot of the demographic data varied, but there [weren’t] a lot of consistencies other [than] that underwear became a much bigger part of our business and, obviously, underwear is a much bigger business, in general, than undershirts. Online really opened up our eyes and now underwear has become the biggest part of our business and, at that time, I would say undershirts [were] the biggest part of our business.

Richie: [00:20:05] Were you worried about or were other people worried about trying to just buy underwear online and not trying it on and fit and so forth? How did people approach that and how do you assuage any concerns or hesitations?

Tom: [00:20:17] Yeah, that’s a great, great question. I think what we’ve found is, because there’s no inseams or sleeve lengths or neck sizes, underwear is really hard to buy the wrong size in. Because we have spandex and a high degree of stretch in every one of our fabrics, as long as you know your waist size or your pant size, there’s really no reason you should order the wrong size. And, because of that, I think what you find in the market today is underwear and undershirts and socks have the lowest return rate or exchange rate of any product category you find that I’ve heard of.

Richie: [00:20:45] Okay, so you have a direct business now, two channels basically. Into 2012, ’13, ’14, what are the priorities as you start to grow this? Where are you spending your time and attention and also how is the team evolving as well?

Tom: [00:20:58] The team started growing, obviously, as online business started growing and making a lot of hires, whether it’s in acquisition marketing, ecommerce, tech development, customer service because online returns, exchanges are obviously part of that business, questions about products that they look at online. I think our biggest challenge is, because the online business took off so quickly, we had supply chain challenges like a lot of online businesses and forecasting became a challenge. It just seemed like we could never make enough. I would much rather have that problem. But, at the same time, there’s always a FOMO feeling that you’re missing out on opportunity and demand. I had observed a lot of brands who had rushed product to meet demand and the product quality would be compromised. I think you’re only as good as your last delivery and I think a lot of challenges businesses have as they scale is maintaining the same level of quality and quality control. We were at the point where we’d rather have a month or a month-and-a-half delay and have fallout that could be reworked to make sure the quality was on the same level that those customers had bought and that they were expecting from us. That’s hard. It’s really tough to say “no” to short term sales when you want to build a long-term, sustainable brand. That’s just something my wife, Erin, and I always wanted to do. We want to have a brand that’s here for a really long time. We want to have customers trust that what we deliver, they’re getting value for what they pay for it.

Tom: [00:22:19] In around 2014, someone named Howard Stern received our underwear from an agency that sent it to him. We didn’t even know they sent it to him. He talked about it on his radio show. He had never felt so nestled in his entire life and Tommy John underwear changed his life. We saw a huge uptick in our online sales that led to us becoming a paid advertiser and what we found is we really were able to find a new way to sell underwear through a channel that had never been known before, which is audio. That led to our business reaching different hosts on the radio. But talking about underwear, which was really rare at that time, for men to talk about how great they felt in their underwear. Colin Cowherd or Mike & Mike. We find a lot of these guys who were customers first [and they] talked about it. It was really the litmus test for us because we wanted that authentic passion for the brand versus reading off a script. What we found is that listeners knew how authentic it was and they bought into the brand and also had arguably life-changing experiences.

Tom: [00:23:22] What we’ve found is underwear, in general, has a really high loyalty in the category and, once you find a brand, it’s oftentimes hard to change if you’ve found a brand that does everything for you. We found that the category had been really sleepy for a really long time and there hadn’t been a lot of brands that had re-invented and innovated in this category. Now I think you’re starting to see a lot more. A lot of men just were wearing the same three packs that they’d been buying or getting for Christmas in the stocking for the last ten or 15 years. We caught them on the radio or podcast or through different marketing channels that we use.

Richie: [00:23:55] I was curious: How do you break that habit? Because it seems, as you said, it’s both maybe a sleepy category from the supply side, but it seems also like a very content one from the demand side of, “If the underwear is fine, why would I change anything?” How do you break that?

Tom: [00:24:09] We have always felt men’s underwear especially, [and] women’s too, has been too serious. Whether it’s hiring European soccer players or professional athletes to be the face of the brand on a billboard in Times Square, there’s no emotion, there’s no humor. We’ve always [thought] underwear is too fun to take too seriously. So we have a thing like a “no-wedgie guarantee” and “to bat wings.” We have fun with it. We took a more comedic approach to a lot of our ads. Howard, obviously, has a certain way with his humor.

Richie: [00:24:38] A way with his words.

Tom: [00:24:39] A way with his words that his fans enjoy. I think it stood out in a way that underwear had never done before. We just made it more fun. Not only that, [but also] if the product is able to walk the talk and stand behind the claims that we make, which is also difficult to do. It requires a lot of time and testing and feedback. I think that allows us to stand up and make these consumers open to trying something different and breaking their pattern of what they’ve been doing for ten or 15 years. And then what we found from there is a lot of guys would say, “Man, I’m wearing this underwear today. I gotta tell you about it.” Word of mouth just exploded from these guys. What we found is when guys, whether it’s electronics or a restaurant, when they find something they love, they want to share. To get somebody to share about an intimate topic like underwear, it’s been really exciting to see.

Richie: [00:25:25] Why do you think radio worked so well and why do you think no one else had spent time on it?

Tom: [00:25:30] Our ads are very conversational, talking about underwear that doesn’t ride up. We all suffer from wedgies. [We] talk about, “Hey, we know it’s hot and humid outside. We want to make you’re cool and dry down under.” I am sweating right now. It’s 95 degrees and humid and hot.

Richie: [00:25:44] You don’t have to see it. It’s imagination.

Tom: [00:25:47] But, through the audio, we would put a visual in their mind and I think we could put them back into that spot where [they think], “I have had that problem and I still do and I haven’t found a brand that solves it.”

Richie: [00:25:55] “I might be right now.”

Tom: [00:25:57] Taking that problem-solving approach to product, how do we take a problem-solving approach to the messaging and the marketing in a fun, authentic, but also relatable way? No one had talked about the things that we talk about. Through that, we’ve been able to develop a very unique brand identity, way of speaking, way of photography, way of messaging. Our tagline is, “No adjustment needed,” because, once you put on any Tommy John product, you shouldn’t have to do those uncomfortable adjustments that we’ve all gone through.

Richie: [00:26:26] I think, as you look at a lot of basics brands throughout the last decade or maybe even longer, they’re very sterile. They’re very soulless and boring and they often seem like there’s this trap of how do you have newness and do something interesting when you’re working through consistently core product? You see a company like Gap that has almost stayed the same for decades and the times have moved on and so forth. How do you exist as a self-proclaimed basics brand without falling into the traps that a lot of other ones do?

Tom: [00:26:58] It’s a great question. We turned ten years old in April and it’s something we think about a lot. How do we continue to innovate and give the customer things that they know they want, but also deliver things that they don’t know they need yet? That’s really tough but I think listening to the customer, the voice of the customer, having a direct-to-consumer business where you can survey customers. I think brands today should be able to innovate better than ever before because you have so much data that these brands in the past didn’t have where a lot of the guesses should be more right than wrong. We’re not data paralysis. We also follow our gut to a certain extent. But, to that point, there’s a lot of guys that just don’t want it to change. Me, as a consumer, when I found a product that I loved in the past and then I went back to the store and it was gone or it was made in a different country, I was like, “Why did they do that?”

Richie: [00:27:45] Right.

Tom: [00:27:45] “It was perfect.” So it’s a tough balance because some people don’t want things to change, but some people are very open to change. It’s a constant tug of war. And then keeping it simple. We don’t want to have, for example, ten different cotton spandex variations like a Cheesecake Factory menu. How do we have specific ones for certain purposes? Keeping it simple. It’s not perfect by any means. Because we’re constantly questioning it—that’s how we’ve been able to maintain momentum and also just looking for other categories that we can enter where customers who trust us in underwear have now followed us into t-shirts and socks and buying women’s underwear for their spouses because the women are jealous about how comfortable they hear their men are. Just last week, we launched the first Stay-Tucked dress [shirt], a dress shirt that stays tucked in through movement, which has never existed before.

Richie: [00:28:36] The anti-UNTUCKit.

Tom: [00:28:38] Solving these problems that are rooted in discomfort. We look at categories and think, “How can we make it more comfortable than what they have or what we can find in the market today?” At some point, you can saturate a certain category, but how do you think of delivering value in other categories as you grow into a bigger brand?

Richie: [00:28:58] As the direct-to-consumer business launched, you had underwear, undershirts, socks and loungewear. In the next few years, coming up to 2016, 2017, how does the category proliferation grow and evolve?

Tom: [00:29:11] Everything’s rooted in comfort and function. So we talk about “The Three Fs.” Fabric, fit and function are really the key attributes of our brand. T-shirts that are unshrinkable and wrinkle-free. It would drive me crazy, when I tried a T-shirt on in a store, I wash it incorrectly once and it fits my wife. Why doesn’t anyone do things like that? Also we have seasonality: cooling underwear for summer or people that run warm in humid climates to travel underwear that can wash and dry in the sink and it dries in two hours or less and it’s antimicrobial to hoodies, like I’m wearing right now. You can wear it to the gym. You can also wear it with a blazer. You can also wear it with sweat pants that are really transitional. What you’re seeing in the market today is people want more transitional pieces that can be dressed up and dressed down. Socks, from no-show liner socks that don’t roll under your foot to stay-up dress socks to cushion, performance socks that bring value and comfort and function and make you adjust less.

Tom: [00:30:06] And then when we thought about women’s—visible panty line. How do you eliminate visible panty line? How do you take some of the performance features in men’s and bring that funny, comfort-focused approach to women’s, which is a category that has arguably been over-sexualized and stale and not fun and not authentic? And now I’m starting to see comfort infused into pretty much all categories. But, for us, it’s always been part of our DNA since 2008. We’ve always been about comfort. So there’s an authenticity to that where I think our customers expect it from us but they expect a really extreme, high level of comfort. The stakes are much higher as we become a bigger business and we spend a lot of time thinking about how do we maintain that level of delivery so we exceed or meet their expectations? And that’s a real tough balance for us as we’ve gotten bigger.

Richie: [00:30:55] How did you approach pricing throughout the arc of the business in terms of, from a customer perspective, who did you want to hit? What did you feel like you could achieve from a pricing perspective ? And then has it changed at all throughout the last decade?

Tom: [00:31:08] We don’t play price games. We never want to be the cheapest. We think, dollar for dollar, we provide more value than what you can find in our categories, the categories we’re in. We try to make the best product first and then we try to get creative with some of the components but there’s key things that we have to have: innovative fabrics that don’t shrink, that have certain properties, whether it’s cooling or moisture-wicking, a high degree of stretch, factories that are skilled in putting together products with these characteristics. We also look at the market and, because we solve a lot of these functional problems tied to untucking or riding up, there’s a different formula that we have to use for our product that does make it more expensive.

Tom: [00:31:47] What we’ve found today is customers are willing to pay more to get more for brands that provide value. But also, I think when you reach a certain stage of your life, when you’re in your late 20 versus your late 30s, you look at things differently because you’ve been through that trial and error period of the three packs or the five packs or the ten packs and you just want [fewer] things, but maybe nicer things that last longer. They fit better. They do more. Whether you’re a brand that gets customers when they’re younger or older, you can certainly see the buying behavior changes and we also think a lot about that and how that affects our product. We really try to, at the end of the day, price the product. Of course, we look at our competitors and we’re aware of what they’re doing but it really doesn’t influence a lot of what we do. It really comes down to the value that we think we can bring.

Richie: [00:32:31] So coming into 2017, 2018, working our way up to the present, I’m curious to talk a little bit more about the women’s side and what it was like to basically add the other gender in from a development to sales perspective. And I also want to talk about retail.

Tom: [00:32:44] So we opened up our first retail store last November at King of Prussia Mall in Philadelphia with men’s underwear. We don’t know of a men’s underwear store, direct-brand store that existed before us.

Richie: [00:32:54] That’s all you sold there?

Tom: [00:32:55] Men’s underwear, loungewear, t-shirts, but it was primarily men’s. We thought, “Retail store. How do you make the experience different? How can you make it fun? How can you make it relatable like our customers would expect?” So we have a TV behind the bar that has local sports games. We have local beers on tap, Prosecco for women. We have comfortable furniture. We personalized a lot of the artifacts, whether it’s a Kevin Hart book or the Philadelphia Eagles signed football, to make it relatable to that market where consumers are shopping, but also making it just a comfortable experience. Arguably, to buy underwear is not the most secure, comfortable experience. At least, it wasn’t for me.

Tom: [00:33:29] What we found is customers really embraced it and we found a different way to educate consumers on our product but also make it a memorable experience. It doesn’t necessarily have to result in a transaction. They leave the store knowing more about us than they did beforehand. They’re able to touch and feel the products. No one’s been able to figure out how you can do that through a computer screen yet. We still believe that physical experience is really key. We’re an omnichannel-focused brand. We want to be everywhere the consumer is.

Tom: [00:33:57] At the same time, we also knew women’s was going to be launching five months later. So we would be able to grow women’s into those stores where we would be able to sell products to both men and women that were coming in buying for themselves or their spouse and vice versa. In April, we launched women’s and I think what we learned is women’s was a category that there’s a lot of competitors. It’s a very crowded space. But what we had learned through comfort and the way we speak, no one was really—we didn’t feel—was marketing and talking to consumers in the way that we would naturally or designing and innovating in the products the way we were in men’s. We decided to launch women’s and we underestimated the demand where we sold out of six months of inventory in six weeks. You’d think, after ten years of business, you would have a better understanding of that. What we’ve learned is there was a lot more demand for a brand that was focusing on comfort like us. I think the observations, whether it was their spouses or hearing about it, it had been building for a long time.

Tom: [00:34:55] Now that we’re able to sell to men and women, it’s really opened up a much bigger brand opportunity for the growth. The women’s market is three times the size of men’s. What you find is women own more underwear than men and there [are] different fits. There’s lace, there [are] different silhouettes. It’s more SKU-intensive at the same time. Now that we have men’s and women’s in our stores, we just opened up our second store in Charlotte, North Carolina earlier this month. So now we’re really starting to understand what retail means to us as a brand, to our consumers. We really want to able to have a store that’s displayed in the way that we want to and, obviously, retail has certain guidelines and restrictions that don’t allow brands to merchandise their product in the way they ultimately would want to. I think that’s why a lot of brands have their stores today. There’s a lot of value in our wholesale partners as well and what we’ve found is our wholesale partners’ business lifts in the markets where we have stores at the same time, which is something I didn’t believe when I had heard that initially. But now that we’ve seen that, that’s also encouraging. They also embrace that at the same time.

Richie: [00:35:52] What was the biggest concern you had about going into women’s?

Tom: [00:35:55] For all the product categories we had entered before, a lot of it was designed around my personal problems that I had with underwear. So I would try a lot of these products. I’m the type of guy [who has] one brand of sock on my left foot, another brand is on my right foot to figure out. I would change multiple times throughout the day or change t-shirts throughout the day.

Richie: [00:36:11] The Tim Ferriss approach.

Tom: [00:36:11] Yeah, and just thinking through, “What would I do different about this?” And I always said, “We won’t launch women’s underwear and sell it until I start wearing women’s underwear to figure out what the problems are in women’s underwear.” But, fortunately, my wife, Erin, has become so close to the product in observing through men’s, she really has led the women’s side of our business in really re-comfortizing that category in the way Tommy John thinks we can. She is really the women’s side of the brand as far as product is concerned and surrounding ourselves with a lot of people that have experience in that category from a lot of brands that we respected in that category that wanted to be part of something different. We brought [them] on board, at Tommy John. Their expertise has also been really instrumental in helping us decide certain things for fabrics and silhouettes and categories, how to market them and certain components that you see in them. So it’s a really exciting time for the business and just the growth that we’ve seen in the last six months alone gets us really excited about the future.

Richie: [00:37:05] What’s it like letting go of the control that you’ve had basically for the last nine years as the fit model, as the final frontier so to speak?

Tom: [00:37:13] I let go of fit model responsibilities when we moved to New York. I’m okay with that. I wouldn’t say it’s letting go. I think it’s just empowering people and letting them be part of it. For us, we have five core values at Tommy John. It’s humble. It’s not me, it’s we. You have to be adaptable. Curiosity. Get shit done 2.0. We call it, “GST 2.0.” You have to be able to get stuff done in a more evolved way because the business is at a different point now. Being mindful. Those are key attributes, not only for the product design. But a lot of it comes from my wife and I because we’re so involved in the culture and we still work at the company, we’re still alive. I think you see a lot of companies’ cultures change when the founders leave or are kicked out or they just check out and aren’t involved. We really continue to strive to make that a focus that everyone understands that.

Richie: [00:37:59] What’s been the cheapest and most expensive lesson you’ve learned building the business?

Tom: [00:38:04] I think the cheapest lesson is starting off as a wholesale brand. We didn’t start online only and say, “We’re going to build a direct-to-consumer brand, only go direct-to-consumer and only have online data.” Starting in stores and having that personal experience with consumers and buyers and understanding the wholesale part of the business and what’s important there, we kind of did it backwards first. When we started going online, we had a different understanding of just omnichannel in general. And, now, when we think about going into our stores, it’s not like we don’t know anything about retail because we have thousands of wholesale retail partners that we work with and ship to on a daily basis. So I think we’ve been able to speed up our personal retail success taking those learnings. But we also call it a learning lab. There’s a lot of stuff we don’t know.

Tom: [00:38:48] I think also a cheap lesson is learning from other people’s mistakes through blogs or podcasts, like you have. Also we’re not the first to do a lot of things. I think the first to do things, it’s expensive. A lot of brands that maybe started 2000, 2008 on the digital side, some aren’t around but they really paved those roads for us and cleared a lot of brush aside [so] that we could do things a little more efficiently that didn’t require as much capital.

Tom: [00:39:13] Most expensive. It’s not just one. We’ve made a lot of expensive decisions. Maybe buying too deep in the wrong category or the wrong style or the wrong size, but I look at them differently. I think a lot of these mistakes that can cost you money are actually cheap learnings because you can save a lot of money in the long run. I think, because we haven’t grown really quickly—we’ve taken ten years, we’re a team of 85 people now. You see some businesses hire 50 or 85 people a year and the culture can shift dramatically and things can change and get out of control, where we’ve been able to build our processes and change and evolve our processes a little slower. I think that has allowed us to just build the business more efficiently, arguably slower. Maybe you’re missing out on market size or someone’s going to come up and disrupt your business that raises more money than you do. We haven’t really looked at it that way. Our approach has been invest in the things that you believe in and there’s going to be a return. But we’ve also taken big bets too from the marketing side or the inventory side, but some we’ve bought wrong, for sure, and we’ve had years of inventory on some of them. But we’ve sold through them and we’ve found ways to get past it.

Richie: [00:40:20] Given the humble beginnings of the brand, given the relatively low amount of fundraising you’ve raised, what’s the goal from a scale, longevity perspective? What do you want to do with the company long term? How long you expect you and your wife to stick around? How do you think about all that, especially given this whole other sideshow of fundraising, ideal exits that never really seemed to happen? All that stuff.

Tom: [00:40:44] We love what we do. There’s nothing else we’d rather be doing right now. Our goal is to build one of the next global, iconic brands. I have a lot of respect for the Ralph Laurens, the Patagonias, the Nikes, but we don’t want to be the next one. We want to be the first Tommy John. And I think the brands you’re going to see in the next ten or 15 years are going to be built completely differently. They’re gonna be structured completely different[ly]. They’re going to be global. They’re going to be omnichannel. Now is just such an exciting time to be in this space. The change I’ve seen in the last 12 months is more than I’ve seen in the last eight years and it continues to accelerate where, everyday, we come in and we literally have to click and clear our cookies mentally. We tell the teams that because forget what you learned yesterday, today’s a new day. It’s changing so dramatically.

Tom: [00:41:23] The challenge is there’s not a lot of experts anymore because it’s changed so fast. Who are the experts anymore? Are we becoming experts? Yesterday we were. Today, I don’t think we are. It’s a rollercoaster. But, with that, it’s really exciting. But I think you have to stick to what you stand for as a brand and have a plan. Our plan is to be here much longer than were alive, whether that means we’re still involved with the brand when we’re 85 years old or it changes in the next ten years.

Richie: [00:41:50] It’s a different set of underwear SKUs at that point.

Tom: [00:41:54] Could be. I hope not, but it very well [will] likely be.

Richie: [00:41:57] And what’s on the horizon [for] the next one or two years that you’re most excited about?

Tom: [00:42:02] Continuing to grow retail stores. We just launched the most exciting product since our founding product, the undershirt. Last week we launched the first Stay-Tucked dress shirts. Dress shirts is a huge category. A lot of brands. But we think we’ve innovated in a way that’s never been done before and the response we seen in the first week has just been incredibly exciting. It’s really evolving the brand into a different category, a different opportunity than we initially thought. And then women’s. Women’s, in general, is just a really exciting category with a lot of potential. So we get excited about the runway that we have in some of these new emerging categories, but as well as what retail means to us but keeping it simple. It’s really tough. That’s something that I believe in is the brands have to stay really focused as you enter these new categories.

Richie: [00:42:45] How do you know when to stop or when to edit out or say no, given you have been expanding into new categories and so forth?

Tom: [00:42:53] I think a lot of it is data driven, but a lot of it just comes [down] to your gut. Thinking back, some of the mistakes or decisions we would have done differently in the past, it just never sat right in your gut. The gut bacteria gets stronger and you feel things faster the longer you’re in business. For us, a lot of it’s that gut feel and what we see observing [what’s] going on the market, what we’re hearing from customers, what’s going on globally. Categories: do we exit that category, do we go deeper and faster in a category? A lot of it comes to just the gut instincts of the founders are really important but also the people that we have. We really value their opinions but it’s tough. At the end of the day, someone has to make a decision. If you want to be a popular leader, you should sell ice cream. It makes everyone happy. But the business, as it gets bigger, you have to make tougher decisions that not everyone agrees with a lot of times and we make mistakes. We will make mistakes. But if you’re not making mistakes, you’re not testing enough. So that’s how we look at it.

Richie: [00:43:52] Awesome, man. Thanks for talking.

Tom: [00:43:54] Yeah, thanks for having me.

Richie: [00:43:58] Thanks for listening to the Loose Threads Podcast. You can read full transcripts of the podcast and join the newsletter at LooseThreads.com. Feel free to leave a review on iTunes—we always appreciate it. And thanks to George Drake, Jr. for editing this episode. We have a great roster of upcoming guests including Paul Hedrick of Tecovas, Carmen Tal of Moroccanoil and Zak Normandin den of Dirty Lemon. Thanks for listening and talk to you soon.