#110. Outlier is a men’s techwear brand. We talk with co-founder Abe Burmeister about how the company is using Reddit, Instagram Stories and Depop to drive conversation and sales. The Megaphone Podcast features marketers, analysts and advertising professionals navigating the roller coaster ride of building a 21st-century brand.

Check out the full transcript below.

Abe: [00:00:02] Nobody walks past a website. In the early days, people were hungry for stuff, and so you essentially got effects similar to foot traffic. But there’s no foot traffic on the internet; you can’t replicate that formula.

Richie: [00:00:16] That’s Abe Burmeister, co-founder of Outlier a menswear brand driven by fabric innovation. We talked with Abe about the brand’s story back on episode seven, but today, Abe and I spoke specifically about Outlier’s marketing journey as a bootstrapped and product-driven company that is focused on content and communication from day one.

Richie: [00:00:34] I’m Richie Siegel, the founder of Loose Threads, which analyzes and advises next-generation consumer companies, and FaceLift by Loose Threads a retail incubator and accelerator for leading brands and retailers. For our latest analysis and insights check out our free weekly newsletter at LooseThreads.com.

Richie: [00:00:48] I started The Megaphone Podcast to talk with the marketers, analysts, and advertising professionals navigating the roller-coaster ride of building a consumer brand in the 21st century. That’s why I was excited to talk with Abe about Outlier’s marketing evolution over the last 11 years, which includes how it found a home on Reddit, Instagram Live, and Depop and how it has reacted to the dramatically changing marketing landscape. Here’s how they did it.

Abe: [00:01:17] If you know the skate world there’s Danny Way, right? He was huge skater, and his brother was this guy named Damon Way. And Damon was at DC Shoes for a long time and then he had moved over to Incase and he was running marketing it Incase, I think, but a really good friend of mine, Roy Dank, went and had a meeting with him. And they happened to be building a line of bags at that time working with the main fabric provider, Schoeller Textiles in Switzerland, which is one of our biggest partners, and our original partner, and they make some of the most advanced textiles in the world.

Abe: [00:01:47] So, Roy was in this conversation with Damon, and he was just like, “Yeah. My friend. I think that’s the company my friend is using to make these pants.” And we were basically in pre-launch but we had a blog going, and we had this hypothesis that we could make a website that was a blog, so that it was always fresh, right? This is when people still went to websites.

Richie: [00:02:05] What were you writing on there?

Abe: [00:02:06] Ah, it was just little things, like pictures of us biking around, little process updates and stuff. But the audience was like, I don’t know, five or something, right? So it was like us warming up and getting ready to get product. But Roy was like, “Yo Damon, check out my friend’s site.” And he was like, “This is cool.” And he put it on his blog, which was attached to a network called “arc tip,” I think. It was like, a small network but he was connected, people from the skate world and the marketing world were like, “Yeah, let’s check this out.”.

Abe: [00:02:35] It was one sentence with a typo in it, but it linked to us, and we didn’t even have a mailing list at that time. When we learned that we got linked to, I was scrambling to code myself. I hand-coded a mailing list sign-up form to stick on our website, because it’s like, what are we going to do with this draft pick? We weren’t ready for it.

Richie: [00:02:53] Is this like, before MailChimp?

Abe: [00:02:54] Yes, this is before they were a well-known product, that’s for sure. Yeah, I scrambled to put this together, and since Damon’s blog wasn’t that popular—but he had the right audience, right? So it ended up on Highsnobiety and PSFK. I think those are the main ones that had like, kind of really thrived since then, but they were both pretty decent-sized sites at that time, with this little link to some of the photos we had posted that were basically, me with my little digital camera. Or Tyler, [who] is my partner, with his digital camera. So it’s a lot of scrappiness like that right.

Abe: [00:03:24] We were shooting at the “golden hour” which is [a] super-simple photographer’s trick. And if you have more time than money, it’s a great trick. You have to rely on the light being right, the weather being right, like all these factors.

Richie: [00:03:35] You have 40 minutes or something. Yeah.

Abe: [00:03:36] Exactly. This tight little window. But we’re shooting photos ourselves, it was all really scrappy. It was [a] PayPal button to buy this stuff. So, what happened is, we had this little, small—not even viral, but like, “micro-viral” hit—but you know, we hit the blog world and we built a mailing list off that. We just started collecting names and that was kind of like, the launch.

Abe: [00:03:57] The next phase, beyond that? I had this hypothesis, I had designed a website for a furniture store. I built some prototypes of the blog as a store. So it’s something I had thought about that, and that was a couple years before, and they ended up not going with it. You know, this is early in social media, and so people used to just go to blogs and be like, “What’s new on this website?” Or follow RSS feeds, right? So there still was this whole blog network that was different than like, a magazine, essentially, which is what they are now, right?

Richie: [00:04:27] Yeah.

Abe: [00:04:27] We realized that they needed content. And that if we just went and shot digital photos, and put them up, and release product, there was a good chance they would cover it. So we didn’t really think about marketing very much at all, for too long, really. We did think about some of the infrastructure of the internet and what was going on. And so, we realized that, you know, we would make product and product that’s innovative and new. And so, the product would lead and then we’d be like, “Alright, let’s go and photograph this as best we can, as scrappily as we can, but make juicy images and have a little bit of a story to go with it, and just put it out there.” And we would hit up blogs and have little forms where you could submit content. And then you start getting emails and doing, essentially like, scrappy PR-level stuff.

Abe: [00:05:13] But we really built off that. The very early stuff was very cycling-specific. The first year-and-a-half we were focused on cycling.

Richie: [00:05:20] Like, urban cycling.

Abe: [00:05:22] Yeah like bike commuting, bike-to-work, very niche but very intentional. We realized that these products had a lot more possibilities than just the cycling, but it’s good to give yourself design parameters, right? If you try and design for everything then you design for nothing, right? So, we were very focused on that, and we got frustrated with it pretty early on, but it treated us really well for the first year. Cycling was blowing up; it was the era of fixed-gear and bike commuting. And so, the first year we kind of rode that wave.

Abe: [00:05:56] You know, we figured out a few little pieces [of] the internet. We were extremely early and direct-to-consumer. We weren’t the first—I found out about Bonobos because they were in the same factory as us, like, making pants in New York City. They were still making pants in New York City, at this extremely starter factory. The owner of the factory was like, “You need to make pants like these. They’re making so many pants, they’re selling so many.” And we were like, “It’s not our aesthetic, it’s not our thing.” But I was like, what is this?

Abe: [00:06:24] It was interesting. The model that we had used at that time was a company called Finisterre. They’re a cold-water surfing company out of Cornwall in England. They [were] one of the first to really figure out, like, let’s put this stuff online, and go direct to the consumer, and see how it affects the margins, which is less and less true. But at the time it was real, right? Basically, when you could get free marketing, you could price things much better on the internet than you can now.

Richie: [00:06:52] It sounds like the energy is very much going into the product, and the marketing was a byproduct of that, in a sense. At what point did you start to feel that was working less, or, for the first X amount of years, it worked and just, you kept—?

Abe: [00:07:03] Hey, it worked for—we essentially invested in product and photography for the first eight years or so. Photography is definitely marketing, and we would go out and do things and push further than other brands, especially for our size. So there’s a lot of realness there. And we’d meet people. Especially really early on. It was crazy, like, people would come and pitch us and stuff. We’d be like, “Why is this PR firm pitching us?” And they’d be like, “We thought you were like, a real company.” And we’re like…

Abe: [00:07:27] You know, the first two years, year-and-a-half, me and Tyler were working full time jobs, right? So it was a side project. So that was the first eight years, product and photography, and we rode that for too long. Somewhere around year six or seven, we saw the warning signs and, in retrospect, it’s very obvious. But our web traffic started leveling out, and we were investing a lot in merchandising and product development, and so, we were selling more and more stuff to the same consumers. And so our sales numbers were still really good. Like, it was an incredible sales year, actually. But we ignored this very clear warning sign, in retrospect, which was that, “Wow, our web traffic is getting flat. So where are the new people coming from?”

Abe: [00:08:06] Like, there’s constant churn in business. You need to be out there, even to stay the same size, right? If you want to stay flat you still need to invest in marketing. Because people move on, or they have too much. And we make very durable stuff. So people like our set. They’re like, “Yeah. I got enough stuff.”

Abe: [00:08:22] So we ignore that warning sign. We were like, “Yeah, we see that.” But numbers are still going up, which is great. And so it’s kind of like Wiley Coyote out up in the air, off the cliff, and you’re still up, right? But you’re off the cliff. So we woke up about a year later, and we’re like “Wait, what’s going on? We’re not seeing the same sales growth anymore.” And so we had to dig really deep and think, and be like, “Alright. Let’s look structurally at what are we doing wrong.” And it was really [about] ignoring the press, ignoring the marketing side that [made us realize] what was up. And so that’s when we were like, “Okay, let’s figure out this marketing stuff.”

Richie: [00:09:03] How do you think you got there? Or what were some of the implicit decisions that were made in those prior years that got you to that point, in retrospect?

Abe: [00:09:12] I mean, I think a lot of it was structural. Like just being early into the market into direct-to-consumer was super-helpful. And I think that initial realization that like, “Oh. A website as a blog.” I don’t think it’s relevant now—like, we’re in the process of really reformulating that. But it was a time when people used to type in URLs to find new content, or follow an RSS feed. Now it’s all in social, right? It was like, “Oh, if we put up something new every week, or every couple of weeks or so, people come back to our site.” It’s not just, oh, they’ll come, but they’ll come back. They’ll be like, “What’s new, what’s fresh?”

Abe: [00:09:40] And then, email was huge. Email is the core of direct-to-consumer in a lot of ways. We ignored a lot of the metrics in email, and we really focused on the open rate and the click rate, when we looked at the metrics at all. And we really just focused on building a really, really strong email product that people wanted to open, right? Making sure there’s actually fresh content, real things, in the email. Because a lot of people get into the email and it works, especially back then. It was like, it’s so powerful. Like, we got scared at one point. Email was such a revenue-driver in terms of all the spikes, that we were like, “We need to find other methods of distribution.”

Richie: [00:10:15] Right. Without just sending more emails.

Abe: [00:10:16] Yeah exactly.

Richie: [00:10:17] ‘Cause then it would stop.

Abe: [00:10:18] And it takes more and more to get people to open, and you’re—so, for the longest time our click rates used to be higher than the industry average open rates. And our open rates would be through the roof, and they still are, compared to what everybody else is getting, because we invest in it. And we try and make sure that like, when you get an email from us there’s something new in there, there’s something to learn, there’s something that we’re telling you that’s worth opening. Not just like, “Oh yeah, we took another 5% off the thing that we told you about last week.” And you know, it’s dicey, because email is a super useful tool, so it takes a lot of discipline.

Richie: [00:10:47] Right. To not over-invest and over-communicate.

Abe: [00:10:51] And then, also, email was crazy. Like when Gmail split the tabs, right?

Richie: [00:10:55] Right. To the promotions, and updates, and…

Abe: [00:10:56] You know, that was just like 5 or 10% off everybody’s open rate. It was like, boom, all of a sudden you’re not just in the regular inbox, you’re in this secondary like, ghetto inbox, right?

Abe: [00:11:08] But email was huge. The blog-side—a big thing there is that that infrastructure was very nascent. So you have something like a Hypebeast, right? I don’t know what their goals were exactly but, you know, say it was like 20 posts a day or 25 posts a day or something. But it’s way more now. Whatever it was, they might only be getting 10, 15 pitches a day or something.

Richie: [00:11:31] Right. So they need you.

Abe: [00:11:31] Yeah. They were out looking for content. And now it’s just completely the opposite. They might have way more inventory. They might be putting up 100 posts a day or whatever it is.

Richie: [00:11:40] But maybe off of a thousand pitches or something.

Abe: [00:11:42] Yeah exactly. They’re getting—they’re just flooded. So that was like, structural and just being early helped. We were in there, in the system, and we could just present content, take good photographs and people would run us. But one of the really interesting things that we did that paid off really well, and we got kind of lucky, was build out our Reddit. You know, we were just getting a lot of traffic from Reddit, and we were like, “What is this?”

Richie: [00:12:05] Did you know of it, or use it before? Or no?

Abe: [00:12:08] I had heard of it. But I wasn’t a user at all. And so we had this one really early instance, and it actually turned out to be a friend of a friend just fucking around. They were in the space doing marketing, and they were like, “Yeah, I think I can get these people on the front of Reddit.” They got us on the front of Reddit, and we were like, “What the hell is it?” But it was garbage traffic. You know, the front of Reddit, they’re looking for a joke. You know, people would come for seven seconds and be gone. The bounce rate was through the roof. And so we were like, “That’s wild.” [It] opened our eyes, but it didn’t make us want to dive into Reddit. We’re just like, that’s a lot of traffic but it’s not the traffic we need.

Abe: [00:12:41] But then this particular subreddit called Male Fashion Advice—we started getting all this traffic, and we’d be like, “Where is this traffic coming from?” And we’d go follow the link and we’d be like, “This is a random post about T-shirts or shorts or something. Like, where’s the link to us?” And you’d dig 200 comments down and there’d be a link, and it’d be driving real traffic. And we’d be like, wow this is powerful.

Richie: [00:13:04] Right. Cause that’s like a fraction of a fraction of a fraction.

Abe: [00:13:06] Yeah, exactly. And so we were like, “This is powerful. What do we do with it?” And it took us a while, playing around. One of the things we noticed, and it’s also the same in other internet forums—you know Reddit kind of started dominating in the forum space, but there are other forums, too, of discussion—that if you would show up, the tone of the conversation would change completely.

Richie: [00:13:30] “You” being the brand.

Abe: [00:13:30] Yeah. Well, a person associated with the brand, right? Like, not just, here’s a brand account, anonymous.

Richie: [00:13:38] Because that, people hate and will expel it.

Abe: [00:13:40] Yeah. No, just as a human being, you being like, boom, here I am. Like, let me address your concerns, let me talk to you, listen, talk. And the conversation, the tone would just shift. I mean, it’s the same thing as like if somebody is talking behind your back versus you in the room, it’s really the same thing. And the internet’s got this notoriety for getting really, really toxic, and it certainly happens. There’s like, toxic spirals that happen in internet conversations in different comments sections or whatever. But I think it’s a little exaggerated, right? There’s still healthy dialogue happening all over the internet. And so, when you get out there and put yourself out there and put the energy in, you have a certain control over that dialogue, and you have a voice in there, and people aren’t gonna just spew garbage and make stuff up, which people are prone to do. And sometimes they just have genuine misunderstandings or whatever it is that makes things spiral in weird ways. But once you get out there and try and be really honest and upfront, and when you’re wrong, admit that you’re wrong. And when you think somebody else is wrong, like, not just yell at them and tell them they’re wrong but try and get them to a point where they understand that they made a mistake or an error. Or it’s actually just their opinion, not an absolute fact. So there’s a lot of stuff like we learned just diving into these spaces and playing around and working with the conversation.

Abe: [00:14:54] And then we were like, “What happens if we have our own subreddit?” And I think it’s literally still called, “An Experimental Space for Outlier” or something, but we were just like, “Alright. Let’s make r/Outlier, the Outlier subreddit.” And people started coming and talking. And it became like, this really powerful tool and there’s a community there, and there’s people that care about our products. And sometimes they get mad that we’re going in a direction they don’t want us to, or whatever, but they have their opinions and it’s—they’re all like, humans and it’s great. And it’s actually quite civil, and it’s become this really useful tool.

Abe: [00:15:28] And so, at one point we realized that we were too heavily dependent on email as a direct-to-consumer brand, and one of the things we realized is that we can use Reddit as a tool. We almost had to because Reddit has this interesting thing among the social media spaces in that, like, you don’t have that much control over the dialogue. Like if we’re on Instagram and we launch a product at one o’clock and we don’t put an Instagram post up till 3, that doesn’t really matter, right? Because somebody might post about or whatever, but it’s our Instagram feed, and people, they just don’t know the product’s out but it doesn’t change the discussion.

Abe: [00:16:04] But on our Reddit, if we don’t post it within a minute of putting it up, somebody else is gonna post it, and then we lose control of the discussion to a certain extent. And we still want like, an active discussion going on but we were like, “Oh, we’re gonna post something on our website, we might as well post it on the Reddit at the same time.” And then we make the post, we can pin the post or whatever, and we essentially started launching products on Reddit.

Abe: [00:16:26] You know, they’re technically launched on the website but, a lot of times, especially for the smaller stuff, it just goes up to the Reddit. It gives us a range of scale, a really interesting range of scale for a brand, because the Reddit is a small subset of our consumers, but they’re very active and they’re very passionate. And it’s not just on Reddit; you know, it goes out onto social media channels and [other] things as well, but the Reddit’s sort of the point of discussion where there’s the most energy. So if we launch something on Reddit we can launch stuff really small, and do experiments, and like, test and play around in public but not in like, the mass public. It lets us prototype.

Abe: [00:16:59] Like, you know, Instagram will prototype changes, and they’ll release it to, you know, for them like 100,000 is a tiny fraction of their users.

Richie: [00:17:09] Right. 0.1% or whatever, yeah.

Abe: [00:17:10] Yeah. “We just tested it with a hundred thousand users. See like, w3hat happened with this interaction change. And if it does well then we’ll roll it out to everybody, right?” So it’s the same sort of thing, where we can test in public to a small set of people without advertising, without blasting it out.

Richie: [00:17:25] Is there stuff that goes on Reddit that is never in the emails?

Abe: [00:17:27] Yeah. Oh definitely. There’s stuff that goes onto Reddit that’s gone within minutes. And then, you know, when it’s successful, we obviously want to bring it back. But that means a lot of different things when you’re talking about physical product. And so, everything has to line up. Sometimes we can’t bring it back; physical stuff takes way longer than people realize. That’s one of the really interesting challenges, is like, a very product-driven brand. You know, we’re working on six, nine, twelve-month cycles for a lot of stuff. And the Internet moves in like, two-hour cycles or something, right? So that discord between the speed that different things operate [under is] really a challenge.

Richie: [00:18:04] So, some other brands—and I’m thinking of Glossier, specifically—have talked a lot about the over-reliance on social media. And they’ve said they’re building this platform that will live on their site to have the beauty conversation take place under their purview, so to speak. It sounds like you’ve found [that] Reddit serves that role for you, effectively. Do you have thoughts, or do you care that it’s not on your website? It’s not a forum on your website, you don’t own it, so to speak? Or would it not work like it does if it was under your umbrella?

Abe: [00:18:35] I wouldn’t say it wouldn’t work, but I think people don’t always realize that we control it, which I guess is kind of devious, in a way. I mean, we’re not denying it or anything but like, people think it’s just a random Reddit that somebody started, and like, we actually have the ability to delete comments and things like that. So it’s a nice balance; it’s open and public, and we try and be really respectful. You know, obviously, you get like, weird racists popping up and stuff like that, that we’re just like, “Out. That doesn’t play.” But we try and be really respectful of people criticizing our products, right? They have a voice, and we’re there, so we can dialogue with them. But we try and keep it open and as free as possible.

Abe: [00:19:11] You know there’s this bag company called Tom Bihn that runs a bag forum for their customers on their site, and it’s quite active, so it’s possible to do it. That’s the only example I can think of, though. It’s nice to put yourself out in public and give people a space they feel comfortable, and tools that they’re comfortable with, but it’s a balance. And you know, who knows what happens with Reddit. Like, one day it could just vaporize, or—I get why brands don’t want to rely on this stuff.

Richie: [00:19:38] Algorithm changes, etc.

Abe: [00:19:39] Oh, I mean Instagram, especially since the management has changed there. And so the original founders are gone, and who knows, but my gut is that they were like, part of what kept Instagram really good. You know, like having that overarching human vision to counteract some of the mass corporate decisions that often get made—or, really with these companies, algorithmic decisions, right? Where there are human’s saying like, “Oh, this number looks better than that number, so we’re gonna go this way,” without really, necessarily following through on what it really means in the long term for the product. So I’m a little worried about what’s gonna happen when they scram.

Richie: [00:20:17] 2015. This is when this starts to happen. You look at what’s happening with website traffic and so forth. What do you start to do? ‘Cause it sounds like Reddit was going in the background, and it was growing, so there was probably some diversification there. But what do the last three years look like?

Abe: [00:20:32] You know we were focused on product, and we’re focused on our core and we had a banner year. It was great, growth was great. And then in 2016, it was a crazy year with the election and everything, and so like, there’s a lot of distraction and things weren’t as good, and we started thinking about other stuff. And it wasn’t really until 2017 that we were like, “Oh wow. We gotta like, learn how to market. We gotta figure this stuff out. We’re not seeing the growth.” We were basically flat-lining; we weren’t shrinking, we were flat-lining. Not like, flat-lining dead, like a heart attack, like just plateauing, right?

Abe: [00:21:03] So we’re like, what’s going on? And then we’re like, “Alright. Well, our web traffic hasn’t been growing,” and we identified that at one point and decided to ignore it. And then we’re like, “Alright, let’s get in it. And let’s start using all the tools that everyone else is using.” The low-hanging fruit with marketing right now—and I don’t know how much it still applies in 2019, but I think it still is—is Facebook. I’m pretty sure it’s Facebook just because their algorithm for finding lookalike users is so much better than anybody else’s out there. Especially on Facebook itself, it’s not actually as good on Instagram.

Abe: [00:21:34] That’s just kinda like, a magic tool for anybody, because it finds these customers that are basically the same as your existing customers. I mean, you can put in different inputs, you can put in your customer list or your mailing list or whatever, and then it finds these people that essentially are your customers but they don’t know about you, which is just like magic, right? So that was great. We’re like, okay, wow. And I’m not a big Facebook user, that’s why we had sort of ignored it for so long. And we’re not using that product now, it has diminishing returns, essentially. But that’s how a lot of the early direct-to-consumer brands grew, up to a certain point, and then it caps out. Then it becomes kind of difficult and you gotta pay a lot of money to reach who you want.

Richie: [00:22:15] Does that mean to you that you’ve hit the cap of who your customers can be, or only within the microcosm of Facebook? Have they provided diminishing returns,. and you’re like, “Okay, this tool itself is exhausted.”

Abe: [00:22:26] We stopped using it partly ’cause we weren’t getting exactly the same numbers, but also partly ’cause we’re not big fans of Facebook and like, we were working on building other structures. But you know, ultimately it was like, Facebook felt off-brand for us, ’cause neither me nor my partner or very many people in our company were like huge Facebook users. And it’s a maturing product, right? So the average age is growing in its different spaces.

Richie: [00:22:48] So it’s like, a year that you spent using it a little bit?

Abe: [00:22:49] Yeah, pretty much. Now we use it pretty extensively and it’s great. You know, they have an amazing tool. They built the best ad product for a certain scale and then it was like, alright let’s play around with the other tools. So PR, Instagram, Twitter—just dive out there and see what works and keep playing around. And I don’t know if we have the answers at all, but we’ve been playing around in the space a lot, and so it’s been fun and we’re seeing a lot. This is a rapidly changing marketing environment. What works today might not work at all tomorrow, so the first thing it has to be is quick on your feet. Be aware. You know, I’m trying to figure out TikTok right now, what we can do there, and I don’t have the answers at all.

Richie: [00:23:30] What’s intriguing to you about it?

Abe: [00:23:32] It feels really pure in this funny way. I mean, it’s a huge gigantic corporate beast out of Shanghai, right? But it’s got that new hit energy. It’s different, it’s fresh, and the content that people put up there is exciting and there’s kind of this innocence still to it. It’s just more fun.

Richie: [00:23:52] It’s kind of like an inverted Vine, in a way.

Abe: [00:23:55] Yeah. It definitely has the level of Vine, but it has this amazing internationalist [quality], which is incredible. It has almost a better implementation of the algorithm. A lot of these other products, the algorithm came in after the timeline. They were like, build a timeline, and they put the algorithm in to reorganize the timeline, but it’s still a timeline. And it’s really frustrating to people who grew up with the timeline still, you’re like, it’s an imperfect match, whereas like in TikTok you’re in the algorithm. And there is sort of a timeline of your followers that you can get to, but the interface de-emphasizes the fact that it’s a timeline, right? It’s like, the full-screen and you’re in it, and the default mode is just to be in the algorithm, and the algorithm is seemingly pretty damn good. Like it gives you content, that you’re like, “Wow this is enjoyable.” So I think it’s the next level, like that’s where you have to be, it’s sort of like, embrace the algorithm, to a certain extent. It makes them more enjoyable.

Abe: [00:24:47] But from a marketing standpoint, I don’t really know. We haven’t figured out what it is. I mean, what makes it stand out is that people put more effort into it than they put into Instagram. Instagram is kind of like a documentary app. You know, it’s an embellished documentary, but it’s still documenting what you do with your day, and trying to make it look as cool as possible.

Richie: [00:25:06] Especially with stories as well.

Abe: [00:25:06] Yeah. TikTok is like, a performance medium. People are trying to perform for TikTok. That’s a lot harder. So, from a viewer standpoint it’s great. You’re like, “Wow people worked really hard to make this content for me.” But from a brand standpoint, you have to invest a lot more from the get-go to exist on that platform. Or that’s my hypothesis. Right now I’m just kind of in “enjoy it mode” and like, you know, “mess around mode” and see.

Richie: [00:25:34] Talk a bit about how the brand’s use of Instagram has evolved, maybe specifically around Instagram Live, which has now become this recurring thing.

Abe: [00:25:42] Yeah. We went through a lot of phases with Instagram. At one point we were just sort of using it almost like Tumblr. I guess, it actually came out of Tumblr. We had a Tumblr that we were just curating and like, inspiration. This stuff [is] since super-dated, but it made sense at the time. We were just like, yeah we’re going to put up our—you know, we had somebody working part time on it, finding cool interesting inspiration stuff that, you know, mood boards and stuff.

Richie: [00:26:07] Like The Row does that.

Abe: [00:26:09] Yeah, exactly, yeah.

Richie: [00:26:11] They don’t post any product stuff. It’s like, only inspirational stuff.

Abe: [00:26:12] Yeah. That was a thing. So we started with that, and then it became a lot more product-focused, and so we do a lot of product stuff on there. And then Live came about. We release products every week, you know, it’s a drop model that’s obviously growing and growing in the apparel industry. And so, we’re releasing stuff every week, and we do it every Tuesday at 1 o’clock, so it’s a regular schedule, and we’re just like, “What happens if we go live while we release this product and just talk about it?” And it’s been an amazing level of dialogue that we can do. And at first we actually did at one, and the product came out at one, and eventually we realized that we should do it before the product comes out so people can like, listen to us talk about it, then decide if they want to buy it or not.

Abe: [00:26:53] It’s interesting ’cause the Instagram audience is very different than the Reddit audience. Obviously, some of the Reddit people go over there deliberately and whatnot, but the organic audience in there is very, very different. So we’re hitting different sets of customers with this kind of communication. But it’s really natural and like, it’s straightforward and you can talk to people. And we talk about our product and then we talk about what’s going on, and it’s a dialogue. And people can—you know, the comments work and so you can literally be on there, listen to people ask questions, and [they’ll] be like, “Can you show us this?” And we’ll be like, “Yeah we can show you that.”

Abe: [00:27:26] It’s really nice and natural, it’s my favorite part of Instagram right now. But, again, at the same time, you can’t just be “live” all the time, right? It’s limited. So we’re trying to keep it in a healthy place, not blow it out. But it lets you connect directly to people, which is key in this day and age.

Richie: [00:27:42] What hasn’t worked in the last few years, or what have been some of the bigger misses from a marketing perspective? Where either you had high hopes and they just didn’t [hit], or just kind of like an “eh” response?

Abe: [00:27:54] We’re very hypothesis-driven so we don’t—it’s rare that we have really high hopes, I guess. The way I approach things particularly, but it comes through in the whole company, is like let’s just go out and test it, and see, and then build off of that. But definitely like, Instagram, from an advertising perspective, it’s been really frustrating. I don’t like their ad product. It makes sense for certain brands. I’ve heard that for big consumer product groups, they think it’s the best thing on the internet. The closest thing to TV for them. But these are like, giant corporations spending insane amounts of money, and so it kind of makes sense.

Abe: [00:28:27] I like the ad product itself, especially the story ones. I think they look good. It’s the first ad product that really takes over your whole screen, so you’re using the real estate and, you know, we’re in a phone-centric world now. And so, instead of having like a little piece of the phone you get the whole phone for a second, right? So that part I love. But I find [that] for more like, tactical-driven, sales-driven ads it’s not that great, and that’s partly because Instagram is very greedy with linking out, you know? They make it hard for people to organically get out of their ecosystem. And so, now they’re trying to build the sales product in there.

Richie: [00:29:04] Instagram checkout and product tags and, yeah.

Abe: [00:29:06] Yeah I’m pretty hesitant to deal with that.

Richie: [00:29:08] Because?

Abe: [00:29:10] I don’t trust Facebook. I don’t need that data in the Facebook ecosystem, and I don’t need them taking a chunk in that way. I feel like Instagram is probably peaking. It’s got that Yogi Berra problem, right? Like, nobody goes there anymore it’s too crowded. And it’s compounding on itself right now, because I see maybe 5% of the stories people post a day or something, right? And the algorithm is kind of determining which ones I see by popping it. And it gets some of it right, there are certain people that, yeah, definitely I want that there and that’s what I’m clicking on, but sometimes I’m like, why is this other thing buried there, you know? But from a brand perspective, like, if you want people to watch your stories in a, similar in the feed, not quite to the same extent, you have to post a lot. Now you’re posting more, there’s more content, and so like—

Richie: [00:29:59] Right. You’re feeding the problem.

Abe: [00:29:59] Yeah exactly. It’s even harder for people to see all of it. So, you know, it’s been a long time since you could see all of Instagram, right? But most people were comfortable with it because I think they’ve felt like they were getting what they needed out of it. Now I really feel like I’m missing. I’m like, wow, like, my friend posted that, and I missed that? And so I don’t know how sustainable it is, and how they break out of that challenge. And they have really talented designers working on the products, so maybe they will figure it out, but we’ve never found the Instagram model. We played around a lot with it, both in the feed and the stories, and from a tactical-driven ad, there are a few products that blew up off of it, but they’re very particular. You have to basically optimize your product for what is really accessible on Instagram.

Abe: [00:30:46] It’s tricky ’cause it can’t be too low, because you’re dealing with shipping, you’re dealing with direct-to-consumer. So shipping can’t be too big of a percentage of the cost but, at the same time, it can’t be too high, you have to be able to make an impulse purchase. It’s hard to even get your credit card in there because it’s not in the regular web interface, right? You’re in their sub-interface. And so, if you have your saved credit card in your browser, you can’t actually do it in Instagram, which is crazy.

Abe: [00:31:14] So it’s really tricky to do that kind of tactical-driven stuff. That’s not really our main focus, anyhow. We like to do sort of like, secondary-tactical. Like, we’re trying to not push a product instantly, like ad-to-sale but, ad-over-time-to-a-sale, and we found it’s just not that well optimized to it, for that exact reason. Like, versus Facebook, especially when it’s on the web, it just links straight to your website then you’re into another ecosystem, and like, a tighter connection to the actual transaction.

Abe: [00:31:43] And so, again, Instagram has their product they’re rolling out right now that they’re trying to solve that [with], but it’s kind of the same thing with publishers. You really want to give up a big chunk of your core competency to this third party that’s giant and it’s kind of proven that they’re not very trustworthy? The flip side, and I think where Instagram does work well, is branding ads. But the problem is that branding ads require very large investments, so customer acquisition, awareness, brand awareness…like, it works, but you got to go in there with a pretty big buy, right? So you need a lot of budget.

Richie: [00:32:17] Right. And you’re also kind of bidding against all the direct response ads, too.

Abe: [00:32:20] Yeah.

Richie: [00:32:20] So it’s even more expensive.

Abe: [00:32:23] Oh, I mean the prices have gone through the roof. And it’s sort of the only game in town. Like, obviously you can still do search ads, but that’s such a different thing that it doesn’t even feel comparable. It’s really the only really well-fleshed-out brand-type ad out there. The product itself is good, but it’s a narrow channel that it’s going through.

Richie: [00:32:44] Like, monopolistically good.

Abe: [00:32:44] Even with a billion users it’s still a narrow channel. And so, people are sick, there’s so many ads on there. The other problem is that you can’t control who you’re— what ad is next to yours, right? That’s actually a huge problem on a fashion perspective, right? If you look at like how traditional fashion advertising is going, it’s all about placement. It’s all about like, yeah, I’m paying more to be in the front of the book, or like, if I’m an artier brand I want to be somewhere a little bit back, where it’s a little bit cheaper. But I want to know exactly where I’m placed because that context is super-important.

Richie: [00:33:20] Places like YouTube and so forth have run into this problem from a political standpoint, and a bunch of other ways, too.

Abe: [00:33:25] When you’re in Instagram, you have some control over the feeds you’re into. Not great, but you can at least have some control over that. But like, if your ad is next to an ad for, you know like, I don’t know, dental floss or whatever, that’s not on-brand. And it could be awful, it could be an ad for a knockoff of you, right? And so that’s what gets associated in a consumer’s mind, they’re like, “Oh yeah, I saw this brand ad, it was really cool.” And they can associate it with their own feed which is good, but then they’re also associating it with ads [that] you have no control over. So that’s tricky.

Abe: [00:33:57] But at the end of the day as a bootstrapped company, we’re still pretty small. We’ve grown quite a bit but like, we’re still pretty small. It just didn’t seem like we had the budget to play that game the right way. It’s tempting, and it’s kind of fun, and it’s still actually like the product itself, right? And that’s kind of like, they’re the victim of the fact that they built a really good product and nobody else did.

Richie: [00:34:18] Has the increased focus on marketing in the last few years changed at all how you’re buying inventory or thinking about supply, as the demand piece has changed? Or has that stayed constant?

Abe: [00:34:28] No, that’s pretty much constant. Our structure is very much like, we do very small experiments and then we try and—it’s a hit-based model, essentially. We’re doing lots of small experiments and then we’re trying to build hit products. So once we have a hit—and there’s different stages to that—and when we have a hit product, we grow it, and try and push it, and try and grow it, and then the really small stuff is kind of sub-marketing-level. It’s for the people that already know about the brand, and while it can have marketing corollary sometimes, but for the most part we’re doing that for the community itself, right? For our existing customers. And when it comes to marketing it’s about taking something that we’ve proven as a hit, that has real value in the market, and [finding] new people, new customers, new people that are actually going to appreciate what we’re producing.

Richie: [00:35:18] What led you to start launching stuff on Depop?

Abe: [00:35:20] We invested in a direct-to-garment printer. It’s not even super new, but it’s a relatively new piece of technology, and it’s really interesting in a fashion context because it’s not sold into the general apparel market. They’re not trying to sell it to Gap or small brands, even; it’s sold to a totally different market, which is the silk-screeners and embroiderers, and like, these sort of mom-and-pop businesses that will make the uniforms for the high school football team and stuff. And it’s a large infrastructure, like, every town needs somebody who can make uniforms and can embroider, the local motorcycle gang needs somebody who can embroider their vests, right? So there’s this whole infrastructure there, but it’s sort of this parallel, smaller apparel world, right? So silk screening is a huge part of it. And so, there’s this new technology that’s essentially launched into that world that’s quite interesting. And so we were like, “Let’s play with it. Let’s get it.”.

Abe: [00:36:15] And the beautiful thing about Depop…the easiest way to explain it actually is, so, we have this concrete table that we like to photograph items on for small-run things. It’s where we do our Instagram Live, so it’s kind of this defining piece of architecture for the Outlier. Kind of like, a mobile-type experience. And so, we have these metal stairs that you can climb up on, and you can get right on top of the product and just photograph straight down onto the product. And when we put things on Depop, you just go up, you photograph, take four photos of this product, and then I would literally post the entire thing to Depop before I get off the stairs. So basically, standing on a ladder, taking photos, their interface is so fast and easy that I can post the product before I got off the ladder, and I don’t know any other product like that.

Richie: [00:37:05] Any ecomm product. Yeah.

Abe: [00:37:06] Yeah. Basically, as easy as doing Instagram posts. If you’re trying to sell a lot of stuff, all kinds of weaknesses emerge. It’s a very limited but specific product, but when you’re doing one-offs, it’s incredible. And so, it let us put one-offs up there, and it’s fun, and the printing stuff is very new and it’s, we aren’t successful with it yet. I still love it. It’s super fun, but it’s not like a runaway hit. It’s very different than…you know, we sell unbranded items, right? Like, our core customer is like looking for unbranded stuff, not printed stuff. So it’s a whole new space but, you know, we’re built around exploring constantly so we’re playing with it, and Depop was a great tool for it. And we’re still using it. We’re gonna do another big Depop run in a few weeks, actually. It’s expensive. You know, they take 10%, which is a nice healthy chunk, and it’s super limiting with things like returns and stuff like that. But for small-run stuff it’s a great tool and I love it.

Richie: [00:38:01] It’s interesting talking about Reddit, Instagram Live, Depop, in the sense that it sounds like you’ve made the conscious decision to prioritize audience and use case over control. Because like, you could do all those things on your own site. You could drive people to a forum on your own site, live, etc., but it seems conscious.

Abe: [00:38:18] It’s good to be tied into these socials—you have to in this world, right? Like if you do it on your website you’re essentially only marketing to your own customers, and we want to be out in public and in the world. You know, I think one of the key things that’s like, transformative in how direct-to-consumer has evolved over the last ten years is that nobody walks past a website, right? Like, in the early days, people were hungry for stuff, and so you essentially got effects similar to foot traffic. So like, you know, Zara spends almost nothing on traditional marketing because they’re spending insane amounts of money on prime real estate, and also shopping bags, and things like that. So that essentially is their marketing. Like, buying the old Nat Sherman store on 42nd and 5th Avenue, that’s a marketing expense at the end of the day, right? It also happens to be a place where people buy lots and lots of product and is very profitable, so they have a good formula.

Abe: [00:39:10] But there’s no foot traffic on the internet. You can’t replicate that formula. So you have to get out into social media and find some good real estate on social media.

Richie: [00:39:20] What’s it like trying to build and market a brand that, as you said, is unbranded, by nature? Like, does that make your job harder, or does it actually help you find the people that are going to talk about it, which becomes a way that new people learn about it?

Abe: [00:39:32] I mean, yes and no. It’s certainly a lot of levels where it makes it harder. Like, a prominent logo is a piece of advertising, and it’s essentially subsidizing the cost of clothing. We work a lot in the outdoor market and we also work a lot in the fashion side, and we see these two worlds and how different they are. [In] the outdoor world, every single thing has a prominent and not very attractive logo, but the margins are much lower in the outdoor world, and so one of my prime hypotheses is that, essentially, that’s literally functioning as an ad, right? In the fashion world, yeah, there’s a level where a logo might function as an ad, but it actually is designed to add value, in a way. They’re functioning very differently. And so, when you go buy an outdoor brand, you’re essentially saying, “I’m gonna spend less money for this because I’m putting an advertisement on it, and then other people are gonna be like, ‘Oh, that brand.” And so, you’re functioning in that way. We don’t do that. So, essentially, it means we don’t get the free advertising.

Abe: [00:40:29] But on the flip side it’s really nice, because there’s a lot of people that are looking for that, so it was kind of a nice market opportunity. But it eliminates certain pieces of low-hanging fruit that other brands have access to that we don’t. So it’s challenging sometimes.

Richie: [00:40:44] Yeah. In terms of the evolution from the PR-side—so, we talked before about the nascent infrastructure in the blogging world. It sounds like you kind of slowed that down, put that on hold in the middle and then, more recently, have turned back to PR. And I think you’ve seen more articles and features about the brand, and so forth. How has the thought process evolved there, and also how has the role that PR plays for the brand changed, if at all?

Abe: [00:41:07] We did a bunch of PR, and I like it. It feels like a lot of diminishing returns. And I think part of the problem is that people are just moving more and more away from traditional media. And even when they do consume traditional media, how they get there is different, so it’s almost like it doesn’t matter. These traditional media brands have audiences, they have real audiences, so that’s worth quite a bit, actually but, at the end of the day, what really matters is how viral it can go. And it has very little relevance, like where the site is. Having a good media brand gives you a jumpstart because there’s a subset of audiences, but if it’s really exciting and it is gonna go viral, as long as you get a dozen people onto the thing, it’ll pick up, right? ‘Cause they’re gonna repost it, and that’s how it works. The viralness itself is like what’s going, and it doesn’t really matter where that outlet is.

Abe: [00:42:01] So, we’re not doing a lot of PR right now. We did a bunch and it was cool, but there’s sort of a diminishing returns on that, pretty quickly. Like, you get some stories, and you hit the editors that you want, and they’re like,”Yeah we ran that story.” So like…what’s next, right?

Abe: [00:42:17] One interesting space that we are really interested in is the video reviewers and that type of blogger. There’s a whole interesting world of people, and they have passionate followings. I mean, I guess it’s influencer, but deeper, you know? It’s like, instead of just a surface-level influencer, it’s like, “Yeah, I actually review these products and I dig into them.” That’s definitely an interesting space for us, and so we’ve been trying to work with those types of people and get our product out there. And then we’ve been doing our own YouTube stuff, which is new and fun, and we’ve avoided video for a long time because it’s heavy production, in some ways, but it’s a whole new channel. And like, I don’t know, it’s interesting.

Abe: [00:43:00] ItX feels like it’s the end game for Google. You don’t use Google to get to websites as much as you used to, but you use it to get to videos, or you go straight to YouTube, which is Google, right? Like the video world is still very much like, search and then find. Whereas for a website, you’re less and less inclined to start at Google to end up on a website; you’re gonna just go onto your social channels and find websites that way. So it’s an interesting change.

Richie: [00:43:28] Yeah. It seems like most of the advertising is focused around the products, the models, so forth. Have you thought about using—given the, call it, “deep interest” from existing customers—more user-generated content, testimonials etc.? Or do you want to exert more control over how it’s presented?

Abe: [00:43:46] No, I think that goes back to what we were talking about, like us not having a logo and a lot of our stuff is core items, right? Everyday items. So it’s not natural for that type of marketing, because it’s like, “Oh you have a black T-shirt on.” Like, you don’t know if it’s an Outlier black T-shirt or another black T-shirt. And there’s brands that have copied our pattern and whatever, so they look the same in a photograph. So it doesn’t play super-well in there, whereas if you’re a brand that’s all about graphics or about how prominent the logo is then you can do a lot more of that stuff. But like, when we get user-generated content, it can be good and bad, and we do use some of it, but it’s not distinct. We’re making clothes that function like more in the real world than they do on the social media space.

Richie: [00:44:32] You posted something on Twitter about customers and price.

Abe: [00:44:36] Oh yeah. It’s just, the Henry Ford—it’s not really a Henry Ford quote but, you know, it’s a fake Henry Ford quote that I like. “If I asked my customers what they wanted, they would want a faster horse.” This is something I’ve noticed over the years: in the end of the day, the one consistent thing is that people have a really inherent sense of what the value of these products are, in some strange way. But at the same time, what they really want is, you know, it might be like, “Oh I want this feature or that feature.” But what they’re essentially asking for is something that would blow the price out. In the end of the day, even though they don’t realize it. Like, when you ask your customers what they want, they really want you to sell your products at a loss. They kind of know what it’s worth but they want a better deal.

Abe: [00:45:18] I don’t know. It’s really interesting, like, I haven’t looked at it in a while, but when Ron Johnson took over JCPenney, right? You know, it was a disaster. But when he launched the takeover, he went to their shareholders meeting—a huge public company, lots of shareholders—and did this really in-depth presentation where he laid out his hypothesis. And he failed miserably, but I think there’s some really interesting stuff in there. And he had this graph where it was like, yeah, we’ve been discounting like crazy. And so like, you look at a J.C. Penney customer X amount of years ago and we would discount a little bit. And at the end of the day like, the number was 1.8. That was the markup that they, like J.C. Penney—so that’s what, like, a 40% margin-ish? Somewhere in that zone. That was at the end of the day, after all the discounts were done, people were buying products from J.C. Penney at 1.8 times the price that J.C. Penney was paying for them. And then they started ramping up the discounting, which meant they were just raising the base price and then adding discounts, and playing this huge discounting game. And at the end of the day, people buying the stuff at 1.8, like, they’d wait until it was 40% off. They wouldn’t buy anything until it was 40% off, but at the end of the day they were paying 1.8 times what J.C. Penney was doing.

Abe: [00:46:27] And actually there’s a kind of interesting hypothesis I came to, recently. I think where he really went wrong is that he didn’t realize that all the discounting games that J.C. Penney were doing—you know, he thought that was free money. Like, he’d stop discounting, and people would pay 1.8 and they were good. But he didn’t realize that like, all the work they were doing into discounting was actually giving customers value, because they enjoyed it. Like, they liked getting the deal. And so all that money that they were spending on marketing and thinking up promotions and stuff is actually adding to the value. People weren’t paying 1.8; they were paying like 1.8, but then they were discounting all the free game-like enjoyment that J.C. Penney was adding in on top of it.

Richie: [00:47:12] And that’s what people wanted.

Abe: [00:47:13] Yeah exactly. And so, he looked at it and was like, “Oh yeah, we take away the discount game and people still pay 1.8.” But no, they wanna pay 1.6, because that’s what the value is without the gaming.

Richie: [00:47:24] Right. And no one’s doing this math, as a customer, anyway.

Abe: [00:47:27] Yeah. But what was really interesting in all that is like, customers do have this innate sense of what something is actually worth and what the value is. Which is fascinating. As a business person, you’re like, “Wow, how do they figure it out?” But it’s like this read of the market, and it’s imperfect, and people gamify it in all kinds of different ways. But at the end of the day, people have a pretty good sense. And so when you’re talking to your customers, and they’re like, “Yeah, I want this, I want this, I want this.” Like, what’s frustrating is [that] you know how much it costs, and what they’re asking for. And sometimes you think it’s a good idea, sometimes you think it’s a bad idea, but often they’re basically asking for you to make your product unprofitable, because that’s what they really want.

Abe: [00:48:08] Like, you know, everybody wants the best, but they don’t wanna necessarily spend insane amounts of money for it. So they’re like, “I want it at this price and I want all these features or all this quality,” or whatever it is, right? And so, you know, we just try and focus on delivering the best value that we can at the end of the day.

Richie: [00:48:24] What’s the cheapest and most expensive lesson you’ve learned in the last three years, from a marketing perspective?

Abe: [00:48:29] Instagram was an expensive lesson, that’s for sure. Instagram advertising. You know, like, we’ve gone in and out of that quite a few times, and it’s been expensive. And it’s not like we didn’t get anything out of it, but we had a hard time getting to a point where we were happy with it. But then, on the flip, I think Instagram Live was super-cheap. We turned it on and it worked, and we’re like—that’s the beauty of them, is that they keep making products and they see what works and what doesn’t. So there’s things they roll out that I’m like, no way, like I’m not doing that, I don’t need that, I don’t want that. But then they stumble on things that work really, really well, and they iterate and they execute well when they have that. So that’s been great.

Richie: [00:49:07] Do you think the product matters less today than it did back then, in terms of driving the business forward?

Abe: [00:49:16] No, not at all. I’m still a product person at the end of the day. There’s people that aren’t product people and they can buy commodities, and there is an incredible world of commodities out there, but like, if anything it matters more, ’cause we’re in this very information-rich world. I think that’s one of the fundamental things. If you think about 15, 20 years ago if you went into a store you have very little information. You have the price, you had what was on the tag, and you had whatever kind of knowledge you carried in there about like cotton vs. polyester or whatever, and then you had the brand, right? You had some kind of inbuilt knowledge associated with the brand. And then, you know, if there was a good salesperson, or you cut out something from a magazine, you might have a little more information. But for the most part you were making decisions in a very low-information environment, and ultimately it was about price, the product and the brand. But you didn’t know what went behind the product, you could only see the surface. You know, touch it and whatever. Now you can go and read for days, or watch videos for days, like digging into every little piece of where does the cotton come from, why is this better than this? Like, somebody—I tested 100 T-shirts, right?

Richie: [00:50:24] You want to be the last one standing in that world.

Abe: [00:50:26] Yeah. Like, your product has to stand, there’s a lot. And there’s a commodity space out there and it exists and that’s a super valid place, but you’re competing with Amazon, and you gotta have your edge in that world, which means having incredible logistics and infrastructure and everything. And then there’s like, the sort of elevated product, where you’re trying to make really, really a product and people want it. And they’ll look for it. And so I think it’s still super, super important.

Richie: [00:50:53] Awesome man. Thanks so much for talking.

Abe: [00:50:55] Awesome. Yeah, a pleasure.

Richie: [00:51:00] Thanks for listening to The Megaphone Podcast, a show from Loose Threads. 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 and we hope you tune in next week.