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Guest: Elyse Daniels, founder of Exodus Wear.
Host: Kevin Mako, founder of Product Startup and the leading expert in hardware startup consulting. A hardware entrepreneur since 1999, Kevin has advised more than 1,500 founders and built and scaled MAKO Invent through its acquisition by TriMech in 2024.
Scaling Customization Without Competing on Price
Elyse Daniels shares how Exodus Wear turned fully customizable jackets into a multi-million dollar business. She explains why students hand-draw their designs, how that process deepens engagement, and why protecting perceived value mattered more than joining a culture of constant discounting.
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Filip Valica: Hey, everyone. Welcome to the Product Startup Podcast, a podcast that helps bring your product idea to life by chatting with successful inventors, product designers, and other industry professionals. This podcast is run by Mako
Filip Valica: Design + Invent and hosted by Filip Valica. Our goal here is to get to the bottom of what makes a product successful, from initial idea to putting your product on the shelf. We're taking you step by step to build a functional product and scale your product business. Now onto the show.
Filip Valica: episode 44 Elyse Daniels with Exodus Wear Elyse took a niche idea for fully customizable jackets inside and out and turned it into a multi-million dollar business hi
Filip Valica: everyone and welcome to the product startup podcast where we talk about turning ideas into successful products step by step I'm Filip Valica and thanks for listening today
Filip Valica: in the last episode we talked to chris mitchell from mfg.com about their survey entitled how will president trump's proposed trade policies affect us
Filip Valica: manufacturing. So make sure to check out episode 43 if you want to hear more about that and soliciting quotes from manufacturers through their system. If you're just getting started with the podcast,
Filip Valica: make sure to check out episode 10. I have an idea, now what? And in that episode, I talk about validating product ideas. So we talk about confirming your audience and testing to see if your
Filip Valica: product will sell, the value of an idea, why aren't ideas worth much, and creating prototypes on any budget using what you have and learning how to make simple conceptual and functional
Filip Valica: prototypes yourself so let's get started with today's interview hi Elyse thanks for joining me on the show today thanks so much philip i'm really happy to be here what was your window into getting
Filip Valica: into the space and why did you see a fit in the market so it was completely by accident i actually didn't ever want to get into fashion i didn't ever want to start a business so i don't know how i ended up here.
Filip Valica: No, I think I was going against my instinct. So my parents started a business when I was 12 years old and I remember just thinking, wow, it's so hard and, you know, I don't want to go start my own business. I'm going to go work in big business where there's lots of money
Filip Valica: and budget and all of that sort of stuff. And so after studying a Bachelor of Business Marketing, I got the dream marketing job, the multinational. And I think lasted probably like six months before I realized that I was in the wrong place. And so it ended up going and working for the small
Filip Valica: family business, which is gem promotional products. They don't specialize in textiles, but they do pretty much any product that you can put a logo onto. But I was instinctively drawn towards uniforms and in particular custom uniforms.
Filip Valica: So if a customer came to me and they wanted a polo shirt, I always instinctively was like, well, why don't we custom make it in the colors of your brand and why don't we design something that hasn't been seen anywhere else? And so I grew this real love for custom textiles.
Filip Valica: And then the opportunity came up where one of their employees had a cousin in year 12. And in Australia, we have this tradition that when you become a year 12 or, you know, senior student, you get a jacket or a jersey with your nickname on it.
Filip Valica: And it's part of the school uniform. So there's some sort of guideline in terms of colors and everything that you have to follow. But pretty much, it's like designing your own fashion line for your school. And everyone gets to wear it and it's really exciting and fun.
Filip Valica: So I thought, wow, like we've done custom uniforms before. Like, surely I can make these custom jackets,
Filip Valica: took on the order, not realizing how complicated it was going to be, and absolutely stuffed up the whole thing, like,
Filip Valica: completely stuffed it up. Like the sleeves were all wrong. And I was just mortified at, you know, this terrible mistake that we had made. But I said, okay, well, I've got to fix it. I've got to find you factory.
Filip Valica: I've got to, you know, deliver this order to the school. and that's all I focused on. But when I got to the end of that process, I kept saying to myself, wow, like, if I had just gotten it right at the beginning, you know, I really, I loved designing the product, I loved to speak to the students,
Filip Valica: and, you know, I love seeing the whole process from start to finish. I should make a business out of this. And so I pretty much went to my parents and pitched to them and asked for a $6,000 investment to start my own business,
Filip Valica: specializing in these custom jackets. And my parents were just like, you're absolutely crazy. you want to go start a business, making that product, which has just caused you six months of brief, which you absolutely stuffed up and, you know, it just was not a fun process.
Filip Valica: But there was something inside of me that I just knew, I think, you know, taking all the
Elyse Daniels: experiences that I had in my different jobs and my passion, I just thought that I could make it work. And so I, truthfully, I just nagged and nagged my parents until they gave in and gave me the $6,000. And I started my own business.
Elyse Daniels: Yeah, we have something similar like that here in the States. We've got senior jackets or letter jackets for high school students. You know, it's interesting that you turn that into a business because most of the schools
Elyse Daniels: here in the states anyway, I think they tend to order from the one or two manufacturers directly. And it's almost like one of these choose your own adventure type ordering systems where you
Filip Valica: pick the color and you pick the letters, but there's not a whole lot of customization other than it leads you to think that it's customizable, but really all you're doing is changing a couple things on, you know, Mr. Potato Head, so to speak, plugging and playing, but it's
Filip Valica: not really that creative. Well, and that's why we never, and to this day, don't have an online designer, which everyone always says to me, why don't you have an online designer and just make it so much easier for the customer, but I fear that it will lead us down that path of, you know, producing
Filip Valica: so many cookie cutter jackets,
Filip Valica: whereas what we actually do is we print out a line drawing of the jacket and give it to the students, and they literally just draw whatever, the imagination can come up with. For better or worse?
Filip Valica: Yeah, well, sometimes the factory's like, please, can we have some restriction? But the biggest product innovation we've ever developed have come from students who have
Elyse Daniels: no understanding of manufacturing capabilities and restrictions who've just drawn what they want, and then we've gone ahead and made it and then found out, hey, other people actually want that too.
Elyse Daniels: And so for me, it's always been the thing that's made us more competitive is by just letting people will come up with anything they want. Yeah, that's really interesting because I think one of
Elyse Daniels: the reasons that we adults, us old people, in my, I'm in my mid-30s. I'm like that young, am I? Yeah. So one of the reason that we are stripped of our creativity is because we spend so much
Elyse Daniels: time working and being adults. And even for me, being an engineer, we were rewarded to reduce risk
Filip Valica: and rewarded to reduce errors. And you have to go through this systemized process. And that just by nature strips out all this creativity and so you start to begin to think on those lines and it's possible
Filip Valica: of course like you said to train yourself to be creative but it's great to work with people that haven't yet had that you know impressed upon them well the thing for us is that we found out it
Filip Valica: made it easier to sell because if you imagine someone has two experiences on you know through our company they hand draw a jacket that is just exactly what they want to buy and then with someone
Filip Valica: else it's not quite right it's not really you know the color or whatever it is that they're trying to do. And then when I present my price and the other company presents their
Elyse Daniels: price, you know, even if I'm more expensive, at least you know you're getting exactly what you want and it's going to be completely unique and no one else is going to have it. And so price for us was never something that we really had to, we don't discount or, you know, offer incentives
Elyse Daniels: to purchase our jackets because we know that the customer is getting exactly what they want and they're happy to pay for it. Yeah, that's very fascinating. I think when startups are just setting out and they're launching their products, there's this huge pressure.
Filip Valica: Some people might feel a huge pressure to, like you said, heavily discount the product because they are new on the scene and they don't have that social proof or that trust in the market. And they feel like they have to do something in order to encourage those sales to roll in.
Filip Valica: And in your case, what you're saying is be different and people will flock to you if you can demonstrate that you're providing something that you can't get anywhere else. Definitely. And don't start a culture of discounting. So that's one thing that I learned from where.
Filip Valica: I think, for my parents' business, they actually sold a product that was identical to everyone else. They didn't actually make anything unique. But my dad's philosophy was like, if you start
Filip Valica: discounting from day one, that's the expectation that the customer will have. And so while we may sell the same product, what you need to do is sell yourself, sell your service, you know, sell your creativity so that people are willing to come back to you and pay that little bit extra
Filip Valica: for the same product, but they're getting you. And so I think I really took that philosophy on from
Elyse Daniels: day one and look we've lost sales because we weren't willing to discount but in my mind I felt it was worthwhile to lose those customers because they probably weren't the type of customer
Elyse Daniels: that I wanted to have anyway and funnily enough those schools have come back around and you know reordered from us down the track because of the issues they had with other companies and so I think
Elyse Daniels: if you do a good job people are definitely willing to pay a premium price for it no that's an excellent point. We have a chain here in the States called J.C. Penny that sells clothing and accessories
Elyse Daniels: and those types of things. And along with Macy's here, they get into this war where they're constantly putting their clothes on sale. They have a sale basically 80% of the time on top of
Filip Valica: the coupons that they send to card holders and things like that. And so like you said, it's trained people to think in that sales mentality and what they try to do recently. They try to just have
Filip Valica: everyday low prices, so to speak, where they just brought the prices down to whatever the sales price would have been normally. And they lost a ton of sales because customers were now, like you said,
Filip Valica: they were trained to go after that coupon deal, that 20, 30% off. And you have to remember that when you're a startup and you're running really lean and you don't have many costs and you can
Elyse Daniels: afford to discount, you can do that. But as you grow and your expenses, you know, increase, you won't be able to. But there'll be someone else coming into the industry who is, you know, at the startup phase who's running lean who can afford to discount and it's sort of like those road
Elyse Daniels: cowboys in the industry are always going to cause i guess issues with pricing and that's why i feel like you just don't even get into that battle just completely distance yourself from it yeah excellent
Elyse Daniels: excellent point so while you were going through and creating some of these jackets obviously you were testing them out on the market and you're actually your market was designing them for you which is really
Filip Valica: brilliant. One of the main issues with bringing a product to market is that audience validation where a lot of people will rush to create the product first and they haven't really spoken
Filip Valica: to their target market well enough to hone down their key features or the key benefits to it. And so there might be that dissonance there where they don't have a proper fit to the audience. And in this case, you've been able to just target the audience directly because they're involved
Filip Valica: in the design process. That's right. And trends and stock and all of those sort of issues that most retail businesses have is something that just doesn't impact at all because, you know,
Filip Valica: our customers, while they will be inspired by trends, ultimately they're designing what they want. And, you know, if it's a dance school owner, you know, if she or he wants to have a rainbow jacket, which by the way, we've produced, you know, a rainbow jacket where once it was blue
Elyse Daniels: and once it was green and once it was, and the hood was red and I thought it was absolutely crazy. But they designed it and they absolutely loved it and they bought in the interest of their students and the students collaborated and so when they created this jacket there was no concern about
Elyse Daniels: oh is this trendy or is this going to be in season in you know six months time to them it's like
Filip Valica: this represents us and we love it and so we're happy to wear it for the next two years and then i only manufacture what they order so i'm never left with stock that i'm not going to be able to sell
Filip Valica: to someone else so as you went through this process and you started to figure out some of the mistakes that you made early on. How did you approach manufacturing from a standpoint of, like you said,
Filip Valica: you know, early on you had some mistakes with the manufacturing not being correct. How did you approach manufacturers to ensure that maybe you were getting what you wanted the next time? It's been a long, long journey, to be honest. And I think in the beginning, I kept trying to
Filip Valica: find, you know, the one stop shop. I just wanted one factory, one contact, who was going to be able to, you know, look after everything that I needed. Right. And it's, gee, I can hear you laughing. It's just so unrealistic, right?
Filip Valica: And I think I struggled with that for so long. And then eventually I was like, no, this is not right. I'm going to have to set up a network of factories. I'm going to need factories who specialize in certain products. I'm going to need factories in different parts of the world.
Filip Valica: So that I'm impacted by things like Chinese knee or I have someone else still manufacturing. And so I think my biggest problem was that I kept, you know, pushing a relationship with one factory because I liked working with them
Filip Valica: and I expected them to be able to do everything that I needed. Whereas in reality, I think that probably harmed the development of certain products where they weren't good, you know, at like jerseys or particular types of, you know,
Filip Valica: materials. And often we would then just put those products on the back burner and not push forward with them. And the ironic thing is I would have my customers asking me for certain products, like in particular jerseys, and I'd just be like, oh, no, it's not something we do.
Filip Valica: And so I would miss out on a whole heap of opportunities because I didn't have the right manufacturer.
Elyse Daniels: And then when I was like, no, I know my customer wants this, I really need to just go out there and find it. And it took a lot of time, a lot of trips to China, you know, a lot of meeting with factories, a lot of trial and error, because my product is extremely complex.
Elyse Daniels: You know, we do small bespoke orders. Every single one is individually personalized with an English name. And so most factories laugh in my face, to be honest, when I tell them that, you know, I want them to manufacture this product.
Elyse Daniels: So it took a long, long time to build a network of factories, but I think I can finally say that I've sort of gotten it right. There's so many people that I talk to that say, I want to go to one factory and create my one product.
Filip Valica: And in some cases, that's true if you just have a single piece product with maybe one or two components. But in many cases, as you mentioned, there's manufacturer special. all the time. And in my professional career anyway, the companies that I worked for, even when they
Filip Valica: didn't manufacture everything themselves, they were probably sourced eight or ten different manufacturers to provide individual parts and components. And then the company I worked for, they were doing the final assembly and the fit and the quality testing and all that stuff. And so they were
Filip Valica: ultimately the final manufacturer, so to speak. But they never were able to outsource everything to one party for all the reasons that you suggested. And you mentioned as well that even if you've got one product, I don't think even if you have one product, you should use one factory.
Filip Valica: That's something that I've learned that I don't just go, okay, well, that factory will make all of my baseball jackets, because you just really can't put your exal in one basket. What if something happens with that factory? What if they take capacity?
Filip Valica: What if they have a bad batch of material that's dyed? And so something that I've learned over the years is that you have to have a backup, and then you have to have a backup for the backup because you just never know what's going to happen. And, you know, this might just be a cultural thing, but in China,
Filip Valica: they definitely want to save face. And so they're very,
Elyse Daniels: it's going to take a lot for them to admit that something is wrong. And so often you'll be saying, you know, like, what's going on? Like, why is there a delay? What's happening? And they'll give you lots and lots of excuses.
Elyse Daniels: And it's only once it reaches absolutely critical phase that they'll actually like, oh, yeah, sorry. Like, we maxed out the production capacity of the factory. And now you have like 2,000 units here. that we can't manufacture in time.
Elyse Daniels: And instead of like two months earlier, just sort of admitting, hey, like, we don't think we're going to be able to make them, they will try and save face until the very last second, which can then put you into like a major, you know,
Elyse Daniels: difficult situation.
Filip Valica: And so that's why I think it's really important to have multiple factories working on the same product. Yeah, absolutely agree with that. Most of the manufacturers that I've worked with in China have been actually really good, even whenever they make a mistake, they will just fix it.
Filip Valica: And I will say the one thing to caution is in the U.S. anyway,
Filip Valica: manufacturing is very much customers always right. If the order is not right, you won't pay for the order, or they'll figure out a way to rework it.
Filip Valica: But I know in China anyway, because the margins are so slim, if the order's not right, you're basically either eating that 30 or 50% that you put up front or they're not going to work with you anymore. Exactly.
Filip Valica: And try fight a legal battle between your homeland country and China. it's just never, ever going to happen. And so you have to put, I guess,
Filip Valica: like a process in place in terms of protecting yourself. And so, you know, like some of the things I do is, like, we get a sample made for every single order. Even if it's only 25 jackets, we will get a sample made.
Filip Valica: We never pay a deposit until we've had that sample approved. And typically, like, I know most people can't negotiate great credit terms with their factories straight up.
Elyse Daniels: Like, we are in a fortunate position now where we don't pay a balance until we receive and check our goods. But I think if you're not in that position,
Elyse Daniels: you should at least have a third-party quality inspection company come in and inspect your goods and check them before you book up the rest of the money for your order because essentially like once the order is delivered to you, it's really like it's going to take a lot.
Elyse Daniels: Yeah, you'd have to be pumping a lot of orders through that factory for them to be like, oh, for the sake of the relationship, we need to fix this. But if you're only doing like one big order of stock for a whole year and the factory doesn't know whether they'll ever hear from you again,
Elyse Daniels: then more than likely just going to be like, oh, don't worry about it. You know, like we'll get business elsewhere. Totally agree with that.
Filip Valica: Every order and even repeat orders that I send through the same factory, I ask a third-party QA guy to go over there and for a day they go check a sample size of my product. And my last order was for 4,400 units and I still asked them to do the same thing.
Filip Valica: Even though I trust my manufacturer, it's one of those checks to make sure, is the laboring, right?
Elyse Daniels: Is the barcode correct? Is everything there that we both expect it to be there? And a couple of times they caught some minor issues, but it was perfect because, like you said, otherwise you're ending up.
Elyse Daniels: And especially for us here in the States, you know, it costs roughly $3,000 to get a 40-foot container of product into L.A.
Elyse Daniels: and that's a lot of profit that you've now wasted and product that you have to rework if it's not right. Yeah, you just can't become complacent because it can be the simplest thing. Like sometimes we've had major, major issues. And it was just because a new worker started in the factory,
Filip Valica: they weren't taught the proper processes. And so they accidentally made all of the product with the wrong pattern. And so, you know, it's a human-made product. And so there's definitely always room for human error.
Filip Valica: One of the things that I thought of once you were talking that we've struggled with here in the States, even using manufacturers from here, is making sure that all the products from different manufacturers are the same.
Filip Valica: So if you had the same component, but it gets sourced at three different places, and it comes back, the black is a true black color, and it matches the pantone or the RAL
Filip Valica: or whatever other color that you use, and it fits the same way, and it was made to the same specification. And even though we document those really well at the companies that I've worked in, sometimes there can be some variances to where a customer can pick up on these two parts are completely
Filip Valica: different. It's so true. And it's one of the things that I guess sometimes prevents you from moving because you're
Elyse Daniels: thinking, oh my goodness, like, you know, if a customer places a repeat order, you know, is the embroidery thread count going to be exactly the same as the last time?
Filip Valica: And I really don't know if there's, you know, a solution or a way to handle it. like we do the same as what you mentioned where we have a really in-depth document about, you know, the PMS colors, you know, the GSM of our fabrics.
Filip Valica: And we have really like in-depth examples of what we expect in terms of quality. And we send that all to the factory upfront and say, before we, you know, work with you,
Elyse Daniels: do you understand this document and understand our requirements? And then I really just think you need to leave enough time for errors because it just always is going to be. And so we've had that before where,
Elyse Daniels: we've started up a new factory and you just can't put urgent orders through them because
Filip Valica: inevitably like the first two or three sample you know will be incorrect it seems like half of the time that you might be spending is just trying to find backup manufacturers and making sure that they are giving you what you've ordered to begin with constantly it's the biggest
Filip Valica: struggle but i think that's why we'll never be replaced completely by a website and you know by computers i think there's always going to be that human element and it's always going to, you know, then help in the sales process, because if you can do that better
Filip Valica: than someone else, it's what's inevitably going to get your customers to come back. Yep. Yeah, absolutely. That's your unique cell that nobody else can replicate. No, that's amazing. As we've talked to this process, you mentioned that you've been able to get some of the
Filip Valica: manufacturers to extend credit for you. What has helped you grow financially to help make some of these larger purchases? Have you just bootstrapped the business from that, you know, $6,000? investment from your parents?
Filip Valica: Yes, we did. And I think one of the unique things about our industry is with custom products,
Filip Valica: generally people expect that you're going to have to pay a deposit. And so from day one, we've always taken a 50% deposit on our orders, which have more than, you know, covered the cost of the whole order to manufacture.
Filip Valica: And we always collect the balance payment before we dispatch to our customers. And, you know, generally when you explain to a customer, look, I'm manufacturing a custom product to you that, If you don't follow through and pay me, I'm not going to be able to sell it to someone else.
Elyse Daniels: You can't return it to me and, you know, I can put it back on the shelf and sell it at a later day. So most customers are happy to follow our payment terms so long as you obviously offer, you
Filip Valica: know, the warranties and things that go along with that. So, you know, we never ever say that if there's any problems with your jackets, we're not going to address it. So, yeah, fortunately through that, we're able to have really good cash loan credit terms with our customers.
Filip Valica: And then I think with China, the only way that you can really achieve it is with long-term relationships. It just has to happen over time where, you know, they can see that you're consistently placing orders through them. And then I think it comes back to, again,
Filip Valica: not having just one factory where you can start sort of playing them off each other and say, look, this other factory, you know, it's making the same product as you, but it's offering me better credit terms. And, you know, I want 14 days from, you know, when it's shipped from China or I want 60 days, whatever it is,
Filip Valica: but you're never, ever going to have that bargaining power if you're putting all of your business in one factory. Yeah, that's interesting to hear you say that, because normally people would think, hey, if I'm giving one factory all my business, they must value me as one of
Filip Valica: their top clients. Yeah, I, trust me, that was a long learning, you know, experience that I had with one factory, or I did feel that way. And then we got into a situation where the U.S. dollar
Filip Valica: dropped and sort of like, okay, cool, like the dollar dropped and, you know, like, let me know what
Elyse Daniels: the new prices and they were just like, no, we won't drop the price. And I just couldn't believe that. I was like, are you kidding? Like, we've worked together for so long. This is not like me just you know, sort of like pushing for better pricing for no reason. You can see the dollar dropping.
Elyse Daniels: You obviously know that it's difficult for me to increase my prices, especially with orders already in the system because I have a long lead time of about, you know, three to four months for most of our products. And I think they just knew that we put 100% of our business through
Elyse Daniels: them. And so,
Elyse Daniels: why bother, you know, dropping the price on the new that the orders were going to
Filip Valica: keep flowing? And they could obviously see a big schedule of, you know, orders that we'd already made samples for that it would take a lot for us to move them. And so that was a really big wake-up
Filip Valica: call for me, where I thought loyalty, you know, I think I was a bit naive, to be honest. And I think it was all like, you know, everyone's nice to each other and no one's here to do anything, you know, wrong against anyone else. But, and I wish that life could be like that. But
Filip Valica: I think you have to be a little bit more realistic and just really protect yourself. A lot of the people that we talk to when we hear their story, it sounds like, well, we went from step one to step two to step three and to step four. And it was a nice walk through the park.
Filip Valica: And yeah, there might have been a couple of bumps along the way, but it was a wild fun adventure. But in reality, I think a lot of people take one step forward and maybe one step back sometimes and you have to iterate a lot with the design.
Filip Valica: And I know some companies have had definite low points where you, question like is this something that i really want to do for the rest of my life and am i going in the right direction have you experienced any of that type of stuff yeah in australia we're allowed
Filip Valica: to swear a lot on radio and so like i'm really tempted to swear right now but i know like americans take it a bit differently but i'm going to say that that's bs like massively um anyone who's saying
Filip Valica: that it's all wonderful is probably trying to sell you a six-week course to become an entrepreneur and that you can like have a passive income like it's just lies and i actually for
Filip Valica: frustrates me because I feel like so many people get sold the dream of this completely fake reality and they think that they're going to, you know, have this amazing lifestyle, choose
Filip Valica: the hours that you work and all of this sort of stuff. And inevitably they like invest all the money they have into a business and it doesn't go well. And I'm a really big believer that entrepreneurship is not a choice. It's something that you inevitably end up in because you can't
Filip Valica: hold a proper job down and you're not interested in making more money it's like you'd rather you know work 100 hours a week for yourself instead of working 40 hours a week for someone else so
Elyse Daniels: yes your whole part of that being one step two step it's a wonderful that's total lies I think
Filip Valica: for me I've made absolutely every mistake in the book like sometimes I just like say to myself am I really going to make like more mistakes like how many more mistakes are there but one thing I
Filip Valica: think I can say for myself is like I've had some major major like stuff up but I've
Elyse Daniels: definitely not remade the same mistake. I've sort of learned from it and really like every time that I've made a major mistake I've looked at the business and thought okay like what do
Filip Valica: I need to change and so you know I've been in business for like nearly eight years now and we've really like really iterated like each time we're like oh we shouldn't have done that we should have done this should have done that um you know and I feel like I've learned a lot from
Filip Valica: it. So if people aren't making mistakes or they've had this wonderful journey, they're really going to be in for a shop when some major mistake happens. And especially if it happens when they're really big, you might not recover from it. Whereas when you're little and you make like
Filip Valica: mistakes along the way, I feel like there's, you know, it's not like the whole world just watching. So you can sort of like fall down and then pick yourself back up again. Right. And as you said, hopefully if your pricing is right, you'll be able to absorb at least some of that in your
Filip Valica: margins. Yeah. And you literally should have like on the, you know, profit and long us like an ep-ups column where it's like this money is just for stuffing up because yeah I feel like
Filip Valica: no matter what no matter how long you're in business just stuff happens you know people make mistakes no absolutely true I totally agree with that we were talking a little bit about marketing can you
Filip Valica: mention some of the effective ways that you reach out to your target audience to get some new business so obviously because we you know we're a bootstrap startup we had zero money so we had to be really, really creative.
Filip Valica: So a lot of the things that we've done were, you know, like social media, like we were on Facebook really early,
Filip Valica: getting celebrity endorsements. So one of the things that I'm, you know, everyone always tells these stories that I got Justin Bieber to wear one of my jackets without paying a cent for it. Did you really? Yeah, I did.
Filip Valica: There was a lot of hustling and just pretty much asking and making it happen. Like, I think when you have no money, you definitely force to be more creative.
Filip Valica: And then funnily enough, like one of the other areas that we've really embraced that a lot of people don't is old school selling.
Elyse Daniels: So my dad is like the old school sales guy. Like, you know, he learned by calling every number in the yellow pages or white pages.
Filip Valica: And so when I worked for him, he used to make me cold call. Like even though they had a website and it generated inquiries, he would make me pick up the phone and cold call call customers or he'd make me go door knock down the street.
Filip Valica: and I'd say to him, Dad, I've got like three emails in my inbox with inquiries, and he'd be like, yep, that's all good, but I want you to understand the value of those individual inquiries. And so for me, when I started the business and had zero inquiries,
Filip Valica: thankfully, I had this skill set where I literally was like, cool, well, let me just build a database of schools, and I'll just spend like two or three hours a day just cold calling them, getting that first appointment. And I'd literally go out with like one sample jacket.
Filip Valica: it. That's all we had in a really very bad catalogue. But I think most people have sort of
Elyse Daniels: become complacent and are sitting back and waiting for the inquiries to come in, whereas we were
Filip Valica: the only company being like, well, we're going to no inquiries, so we'll proactively go out and get them. And to this day, we still call call because I just think, you know, so many people like build it and they will come. Unfortunately, that's not true. You can't just call the website and
Filip Valica: expect that inquiries are going to flood through. Absolutely right. And as you were talking,
Elyse Daniels: I was thinking, you call to school and you have to pitch a jacket. What's the first two-minute pitch sound like?
Filip Valica: Okay, so first rule of call calling is you need to be really vague. Never ever tell the receptionist why you're calling because she will not put you through. So we do it in like a two-step process. Step one is to get the name.
Filip Valica: So I'd be like, okay, call the school and I'd be like, oh, hi, I just want to know who the year 11 coordinator is. And they think that I'm like a parent or something. And they'd be like, oh, okay, that's Philippe. And I'd say, okay, cool.
Filip Valica: So then I would call back maybe the next day and you'd pick up the, like the receptions would pick up the phone and I'd literally just say, how I'd like to speak to Philip?
Elyse Daniels: That's it. And then they put me through and then you pick up and I would say, yeah, hi, this is Philip.
Elyse Daniels: Hi, Philip. How are you? It's Elyse from Exodus Square. I'm doing great. How can I help you? I'm just calling to see if you started to organize anything for your year 12 jackets for next year. No, we haven't really looked at it. We were thinking about going with the last brand that did last year.
Filip Valica: Okay, well, before you go ahead and do that, would you mind if I had one of my sales reps come in and just show you a few samples of our product? We're quite unique in that we make a free, no-obligation sample. We're very competitively priced,
Filip Valica: and all of our designs are 100% custom-made. So are you available sometime this week? Custom-made, that sounds pretty expensive. I'm not sure if our school budget can afford that. Surprisingly not. Can I ask what you're paying at the moment?
Filip Valica: Some number that is market rate? Yes, say $70. Well, what you'd find is, For $70, you're actually getting a lot less than what we offer in a custom-made product. So even though you may be paying like $5 to $10 more,
Filip Valica: you're getting things like custom lining with all of your students' names on the inside.
Elyse Daniels: You're getting their proper name embroider on the front and their nickname embroidered on the back. So generally you find that with our products, you actually get more value for money. But look, one of my reps can actually just go through the whole process with you.
Filip Valica: It would only take five to 10 minutes, and we can leave a catalog and lots more information. So I've got an opening maybe tomorrow at like 2 p.m. Does that work for you? Sounds perfect. Let's set that up. All up on your calendar invite. Wow, awesome. Hey, thanks for playing along. That's great.
Filip Valica: Always an opportunity to cold call.
Filip Valica: No, that's awesome. Well, I had to take you up on it because you said that you had some practice on it. And it's great tactical feedback for everybody listening, how to handle negative responses. Yes, objections.
Elyse Daniels: So this is the thing. Like, you have to have a whole, like, it's painful. Don't get me wrong. Like, I've been through so many hundreds of hours of cold calling that I'm desensitized.
Filip Valica: but at the beginning, it's painful, but you have to take it as like, hey, this is just research. What knows am I getting? And when you learn what knows you get, you then work out your responses to that.
Filip Valica: And so I know the response, you know, when someone asks me about price, I know the response when someone asks me about, you know, well, I've got an existing supplier. And so you need to rehearse that. And I literally would stand in front of the mirror and just rehearse it so that when you're put
Filip Valica: on the spot, you don't like flip out and be like, okay, things bye and just hang up. you need to be like, full calm and collect. You're like, okay, I know how to handle this and I'll respond.
Elyse Daniels: Yeah, because you're not surprised about it. You expect it coming. You're just going through the other side of your flow
Filip Valica: and it doesn't, you know, throw you off your game because you expect them to say no. Or, you know, how many people do you hear no from versus a yes on the first question? Always.
Elyse Daniels: And the funny thing is, like, you get to the point where you've heard every single no and the customer is saying it to you and you almost have to like hold back and just let them finish saying no so that you can then like, respond because he was like so ready i'm like i know exactly what i'm going to say but you have to almost
Elyse Daniels: be like surprised like oh i've never heard this objection before here's what i will say back to you
Filip Valica: whereas really i've said this three thousand times today alone have any customers at least appreciated that say hey you know what you actually are reading my thoughts i appreciate you giving me uh some of this additional information or do they respond negatively like no you're just reading from a script
Filip Valica: no and we never ever make it sound like a script um so many customers would be like oh yeah actually I have been thinking about, you know, what to do and, you know, when we say, oh, look, we'll come in and we'll explain how it all works and, you know, it's only going
Elyse Daniels: to take five to ten minutes. And often at the end of our appointments, customers are so appreciative of the fact that we actually reached out to them. Because in my, I guess, business,
Filip Valica: we're selling a product that the teacher has to organize, but a teacher didn't go to uni to organize year 12 jackets. They go to teach. And so it's just an additional responsibility that they've sort of got lumped onto them. And so if I can make that any way easier for them, they're really,
Filip Valica: appreciative. So again, goes back to selling benefits and not the specifications of your product. Correct. And I very rarely ever try and sell on the fine. The point is to just get a meeting
Filip Valica: and then selling person. Yeah, one other thing that I noticed too is that you're closing the call. You're asking for a date and time. And actually, you're not asking for a one. You're throwing one out there and asking if that is acceptable. You're never ever leaving it open to interpretation
Filip Valica: to say, well, maybe I'll call you next week and see how that goes or is it okay if I do something like that or when is it good for you because that leaves it too open-ended right that's right and so it's
Filip Valica: sort of like you have to answer the you know question that the customer is asking but remember what
Elyse Daniels: your objective of calling was and so if your objective of calling was I want them to meet with me or
Filip Valica: if I want them to sign up for something and whatever it is you always have to bring it back to that so it's sort of like I'll start like you know relax cool casual but when I see that you're resisting a little bit of very quickly like okay I need to just like close this and get a date and time
Elyse Daniels: and get off the phone because I feel like if you're on the phone too long, it sort of gives you too much time to think about it, I guess. Yeah, so get in quickly and get out. Yes, massive. Do you still take sales calls yourself? Occasionally I do. Like sometimes, not very often.
Elyse Daniels: I have had to go to a few appointments sometimes when like someone's caught in sick or whatever. And I laughed. I went to this appointment. I rocked up late. I completely got lost. I was not prepared. I didn't have my jackets in order.
Filip Valica: And it was actually like, like a religious school and it was like Ash Tuesday I think it's called and so they had like all these things on their um like they had I don't know what it is on their forehead like Ash or I guess
Filip Valica: um and like I rushed in and I was like oh I'm so sorry I'm like what's on everyone's foreheads like like it was the worst sales call I've ever done in my life and I still got the sale and I was like
Filip Valica: okay cool but um yeah so I try like to be a little bit more prepared or like on time now or I just leave it to the experts like I apologize profusely to the salesworth I was like I'm so sorry I hope that I didn't like ruin it for you but yeah she ended up getting the sale and she was
Filip Valica: happy that I could fill in anyway so she could always say well I don't know who the company sent in my place some uh some some some temp yeah yeah she's not really we don't really
Elyse Daniels: know who she is yeah so yeah I'm always like I leave it to the professionals to do all of that sort of stuff. No, that's great. I appreciate you sharing that with us. As we're going through
Elyse Daniels: the process of bringing a product to market and launching it, you know, we've covered the design and the prototyping a bit. We talked about manufacturing for a while in funding and now marketing.
Elyse Daniels: You know, towards the end, we get into selling and fulfilling product. It sounds like your sales
Filip Valica: process is people-based because, like you said, you're focused on custom designs. And so there's that human element where you're having that interaction. Do you do anything online? when it comes to sales no not really at all like pretty much our website is a catalog that
Filip Valica: generates inquiries which we then pass on to the sales team who go out and um convert i've dabbled with the idea of like one-off jackets and on our website we actually do have
Filip Valica: um like an online store but i'm also have it there to just filter people in different directions like if you want a one-off jacket here's the information and if you want to buy it
Elyse Daniels: it. And it's sort of more of a way to, like, reduce time wasted with people inquiring about us if they want one-off jackets. But I think we know what we're good at. I just don't know
Elyse Daniels: whether or not it would be too much of a change.
Elyse Daniels: I don't know. Maybe I could make more money, more profit if I just, like, automated or had it online, but I don't know that I think wouldn't be true to the values of our company. I wonder if you could come up with a limited edition type
Filip Valica: jacket series or something that's seasonal that might even be local that speaks to you know a particular demographic and it's only available in spring of this year and so you end up having
Filip Valica: your own line but it's a limited run and everyone knows that you're only going to have 500 units or whatever that is and maybe that just creates more awareness to to say hey we that's we don't
Filip Valica: do just you know youth jackets or whatever it is we do you know something else yeah no i've actually about that a lot and licensing different brands and stuff like that. And I think the thing that
Filip Valica: scares me is that I'm not a fashion designer. And I'm really, I'm not, I guess I wouldn't say like I'm a fashionable person. I'm pretty just much like clothes of clothes, like I'll buy them from anywhere. And so my biggest concern is that I don't have the right person who would actually
Filip Valica: be able to forecast and be like, hey, this is cool. We should make 500 of them and they'll definitely be able to sell. Because my model at the moment is where it's like I rely on the customer to design the product. I have no fear that it's going to sell, whereas I really have this big fear thing
Filip Valica: that it's like, oh, I don't know what's cool. I don't know if I can design a jacket and people
Elyse Daniels: will actually like it. I think you could still keep the same model. What if it was a competition where maybe some of the proceeds were donated to a local charity or something like that? And then you had people submit designs and vote on them based on, you know, Instagram likes or, you know,
Elyse Daniels: Facebook posts or things like that, you know, online poll of some kind. That way you can get the
Filip Valica: community involved in it and you crowdsource it in a way and you know the winner gets something special in addition to the free jacket yeah well funnily enough i've sort of done this
Filip Valica: scenario i did a test one so um i have this i'm part of a networking group i'm gonna even know can i swear or not i can mark the episode explicit yeah well i'll just okay i'll go it's called
Filip Valica: like-minded bees drinking wine um you know what the beast stands well um yeah and so pretty much like We're a group of, like, 30,000, like, female entrepreneurs on Facebook. And I was like, hey, cool, like, we should wear a jacket. And so we all designed, like, this bomber jacket.
Filip Valica: And then on the inside, we put a whole heap of, like, quotes to just, I guess, like, motivate us. A lot of them have swearing and stuff like that. But everyone, I guess, got together and designed this jacket and came off with the, you know, quotes for the inside.
Filip Valica: So there was a lot of buying into the design. And then I pre-sold it. And then I only manufactured it after we had, you know, received all the paint. and everything. And I was like, yeah, cool, that actually worked really well. And I definitely
Filip Valica: want to try and do that more with more groups. I think my biggest problem is that the core part of the business is always just like pumping and so busy that I need to like step out
Filip Valica: of it a bit more to go delve into these new, you know, ideas and initiatives. Yeah, no, that's a great idea. Well, you know, right now you've got a machine that's already creating some good profit for you. Can you talk a little bit about your growth overall as a company and has it looked like a
Filip Valica: straight line from the beginning, you know, year one to year eight? Or are you kind of
Elyse Daniels: ramping up really quickly and you're just growing at a quick pace? So it was really like a straight line, slow and steady for probably like the first three or four years. And I would say
Elyse Daniels: that that's indirect correlation to the fact that I wasn't doing it full time. So I kept my full-time job with my parents and started the business for a good like two years. And I know a lot
Filip Valica: of people think, oh, well, that's so easy because like you're working for your parents and like, could just do whatever you want. But the reality is I was like essentially working in two startups because, you know, my family business is still, um, it's not like a huge organization. So I was really involved in all different aspects.
Filip Valica: And I actually found it really hard to transition out of it. Um, it took like years and years. And like to this day, like my dad called me yesterday and he's like, oh, are you going to be like coming to our office anytime soon because like I've lost my bookmarks on Google Chrome. Um, I was like, oh, okay, dad.
Filip Valica: Yeah, like, cool. I'll help you out. and like that was the problem like I was so ingrained in their business that it took so long to actually step out of it until I got to the point that I had to say to my parents like I love
Filip Valica: you guys but I just don't want to work on your business anymore and the minute I fully stepped out of it and was working full time we grew the business 40% in the space of 12 months so
Filip Valica: wow that's amazing yeah exactly like it's crazy when you're actually working on something full-time. It's almost like, you know, well, I had employees, I had bills, all this
Filip Valica: sort of stuff. I just had to make it work. And so the growth just inevitably happened, whereas when I was still in my, like, my full-time job and I didn't really have that many expenses, it's sort of just like, oh, it's sort of growing a little bit, but there was no major spike.
Filip Valica: Yeah. No, that's fascinating. And, you know, it's good that you brought up that you were working
Elyse Daniels: on this part-time because I think a lot of people have this conception that everything is in boxes you're working as an employee and then all of a sudden you're working as an entrepreneur and there's no overlap but that you're basically going to be working two jobs for a little
Elyse Daniels: bit to make sure that the new one can take hold and it's got enough roots to to carry your through yeah i don't know any person who started a business um full time from day one and could
Elyse Daniels: afford to live on it unless they got investment and i feel like it's not cheating but i feel like
Filip Valica: everyone almost needs to go through those really painful, like, first one or two years so that you really appreciate the good times.
Filip Valica: It's sort of like, it's like the test, right? It's like, how badly do you want it? Like, are you going to spend every night working on this and you're going to work on her on weekends and all of that sort of stuff? Because that's where I come back to, like, I feel like entrepreneurship is not a choice.
Filip Valica: It's just something that is burning inside of you that you have to do and it's not because it's going to make you more money or you're going to work less or whatever. It's just that you've got this idea and you have to see it through to, you know, fruition.
Filip Valica: And so I feel like that's generally you will find people who work their full-time job and then scale back to part-time and, you know, then eventually make the switch are the
Elyse Daniels: ones who I think are going to survive it in the long run, whereas I feel like people who just feel like, oh, I'm going to like $50,000 of savings and I'm going to work full-time
Filip Valica: on it, like sit there at day one. And I don't know what they're doing because like day one in the business, you've got no inquiries. You don't need to be doing that much work unless you've got inquiries through. Like I think a lot of people fluff about doing stuff that doesn't need to be done
Filip Valica: to fill time. Whereas when you're working, you know, part time on your business and part time
Elyse Daniels: on your job, you have limited amount of hours. So you only do what absolutely needs to be done.
Filip Valica: Yeah. And when I was working on the product startup on the side, it was a very similar situation where, you know, we just had a baby and I was working a full-time job. And, you know, at like 11 o'clock,
Filip Valica: you're like writing content and creating a site and so all of a sudden the decisions get made for you right based on the time that you have available and they're both of importance
Filip Valica: do you have any uh tips to to share with people on maybe something that you would have done differently coming up or is there a tip that you'd give to somebody that's kind
Filip Valica: of in the same spot where you were when you were just starting it's so funny i think it's cliche when you say oh like i wouldn't change anything and sometimes i look back
Elyse Daniels: and think no i'd change it all like any of those mistakes um i just think every I don't know, have you read many of Malcolm Gladwell's books, but I, like, he has this theory that you have to, like, clock your 10,000 hours. Right.
Filip Valica: And I'm a really big believer in that. And I almost feel like when you look back and, like, see where I would have hit 10,000 hours, that's when the business really took off.
Elyse Daniels: And so I feel like you just have to start.
Filip Valica: So it's like, if you're thinking about it, don't prolong it at all, like literally start,
Elyse Daniels: like start writing a blog, start writing, you know, do a YouTube, you know, channel, whatever it is, start clocking your 10,000 hours because there's no shortcut. It's literally going to take you that long to get to a point where the business is actually going to, you know, sustain you.
Elyse Daniels: So there's no point to laying it. Very good tip. Lease, thank you again for coming on the show. Where can people go and find out more about your company and how to order some jackets?
Elyse Daniels: So the company is Exodus Wear and our website is E-X-O-D-U-S-W-E-A-R. You can go to dot com or dot-a-u. We're, of course, on every social media platform that exists, which is always, you know, fun.
Elyse Daniels: Yeah, and otherwise, like, if you want to connect with me directly, just find me on LinkedIn. Great. And something that we didn't really get into is you offer track suits as well and some of the other apparel for sports teams and things like that.
Elyse Daniels: Yeah, like against my will, we have started to do some other products. So I really like custom jackets, but my clients were like, at least, we love working with you. We really need crop tops and we need singlets and we need leggings and other bits and people.
Elyse Daniels: pieces and to be honest we actually only sell them to customers who buy jackets off us and it's really just done as like it's a hush-hush deal yeah like don't tell anyone about these leggings um
Elyse Daniels: but truthfully i just do it for my good customers who just don't want the hassle of having to buy from multiple companies but really at the core of what we do is really um heavily customized jackets inside and now perfect great well at least thanks again for coming on the show you're awesome
Filip Valica: and super transparent i hope to have you on in the next year or so so you can give the audience a snapshot on what you've been up to in the next 12 months and some of the new opportunities that you've had. Well, let's hope and let's look back and say that in the next
Filip Valica: interview, I want to be in the States selling.
Filip Valica: Perfect. When you come to the States, make sure you let me know so we can do another update. Definitely. So good to talk to you.
Filip Valica: I hope that you got some great tips from Elyse to help grow your business. Here are my three takeaways for this episode. Number one, use multiple suppliers. Don't wait to find alternate suppliers. until you need them. Working with more than one supplier will give you options during the holiday
Filip Valica: closures and gives you more negotiating power to strike better deals.
Filip Valica: Make sure to solicit samples and confirm that they can work with the same specifications. Number two, learn the objections to your product. Have conversations with your customers to see what the top negative comments are
Filip Valica: to purchasing and using your product. Prepare answers to these objections so you're ready to counter them as they come up in future pitches and number three cold call with objectives in mind if your
Filip Valica: product is suited for cold calling remember that the goal is to not overwhelm the customer or give them too much choice during the call the goal of most cold calls is to set up a meeting and not to close
Filip Valica: the deal if you'd like to get these takeaways in your inbox every week just go to the product startup dot com scroll to the footer and sign up to the weekly wrap up at the end of the week you'll get my three takeaways for each guest, along with interesting articles, free tools, and other
Filip Valica: inspiring innovations that help you with your own product startup. So join me next time as I speak with Johannes Roselius and Rasmus Toftdahl with Botanium. A Kickstarter project aimed to create a hydroponic
Filip Valica: system for growing herbs and chilies from seeds. So tune in next week to hear that episode. Thanks again for joining me today. I hope that you're taking action on your products and I'll see you next week.
Filip Valica: Thanks for tuning into this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success. This podcast series is brought to you by Mako Design + Invent, the first firm in North
Filip Valica: America to provide global caliber end-to-end physical consumer product development to startups, inventors, and small product businesses. If you're looking for product development help on your invention, head over to macawdesign.com.
Filip Valica: That's M-A-K-O-D-D-D-com for a free consultation. from one of Mauco Design Four Design Studios from coast to coast. Thanks for listening and see you next time.
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