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- [00:13]
A
Hello and welcome to the Consumer VC Podcast, where we discuss the intersection of venture capital and consumer innovation. I'm your host, Mike Gelb, and if you're enjoying the show, you can subscribe to my newsletter where you'll receive every new episode a week early. Head to the consumerbc.com and click subscribe. All content episodes are for informational entertainment purposes only and is not investment advice. Hello and Happy Holidays. Just like we've done in years past, during this special time of year we're going to be sharing recaps of our most popular episodes from this past year. 2022, an annual roundup, so to speak. It's going to be during Hanukkah and Christmas, so every day from December 18th through December 26th. This is a highlight episode of my conversation with Tai Haney, founder of Outdoor Voices. Jaggy and Try youy Best Outdoor Voices makes activewear for doing things daily. Ty talks about her journey from starting Outdoor Voices, why she ended up leaving Outdoor Voices and was very forthcoming regarding how she was leaving, which I really appreciated and was really appreciate how open she was and how vulnerable she was. She also talked about how she ended up starting a CBD line and how she got into crypto, why she thinks that crypto could be an interesting platform for consumer brands or rather leveraging crypto and web3 for consumer brands. This is a live one that again in Austin wanted to really thank also Mark Nathan for helping to arrange this. It also, I'll be honest, the actual quality of the recording is not great. We had some last minute recording issues, so apologies for that, but I thought it was a very, very useful and helpful conversation. Really, really enjoyed it. Without further ado, here's Ty.
- [01:51]
B
What was the insight that led you to founding Outdoor Oasis?
- [01:56]
C
It was pretty simple. It was all about inspiring people to move. And so I grew up in a town called Boulder, Colorado. Super outdoorsy, mountains to climb, hiking every day. Every day we biked to school. That was just the kind of way or ritual of daily life. And for me, not only was that something physically that I needed to get energy out, et cetera, and feel my best, but from a mental perspective it was super important to find a way to move. And so that really was the inspiration for Outdoor Voices. And after graduating from high school in Boulder, I went to New York City to art school and found myself not moving whatsoever. And so it dawned on me, I think I actually played on the intramural basketball team for like two days because all the security guards who were like six foot three were also Playing and so I'd land right in their armpits and I was like, sweaty mess. Oh, this is horrible. But I had kind of in my junior and senior year realized from a mental perspective that I wasn't moving as much. And that really made me a different person. And so I kind of tapped back into as a kid growing up, being active, et cetera, and was like, how cool would it be to build a brand not necessarily around being the fastest or crossing the finish line first, but all around inspiring people to be active. And that kind of simple mission we then called it doing things really took off. And I think not only is that a mission that's good for you and has the potential to maximize happiness for people, we also were very inclusive in who could see themselves as an active person. So it wasn't about a certain body type or big muscles, again, how fast you cross the finish line, but all about connecting the dots on a daily basis to move your body, also changing the chemistry. And so from a business perspective, all of the activewear companies, Nike, Under Armour, etc. I had loved growing up being an athlete. They were all founded by men. And so changing the chemistry, not only through moving our bodies, but also being a female founded activewear brand that looked and felt different was super important to me.
- [04:00]
B
Now, I know, I mean, you're still very young, but you started Outdoor Voices when you were very young. I think you were like 23. Right. And you also had a very like experienced board. You surrounded yourself with very kind of experienced people. And we retail. What was kind of awful and also awesome about that and kind of what was maybe obvious, maybe not so obvious to you when it came to like.
- [04:18]
C
Where retail was going well, what was awesome was we, this being kind of my first go and then the team's first go, we had this true belief that we could build the next Nike. And so not having had prior experiences, it was like, this is our vision, our mission. We're going after it, we're going to be as big as Nike. And so the energy, the enthusiasm, the passion was palpable. And I think that was super core to us, really creating a community around the brand that became our moat. I now understand from personal experience why a lot of people say, I don't invest in an entrepreneur until their second time around. Because starting at 23, I certainly had blind spots. And that was the most awful part.
- [05:02]
B
Got it. That's helpful. Looking back, like, how do you also think, because you start off as a digital brand, how do you think about the relationship between D2C and also brick and mortar retail.
- [05:14]
C
So we grew up in this direct to consumer kind of wave. And I very much believe direct to consumer was a lie. It was not all direct whatsoever. 30, 40, 30 to 40% of the dollars that we had raised would go to Facebook or Instagram, et cetera. So we can talk about that later. But from day one, what had really worked for us from a growth perspective was something I called activate offline amplify through digital and social. And so our first store here in Clarksville is a great example of that. It's a tiny little footprint in a residential neighborhood, not your traditional kind of retail location. That's where we opened up and would start to program on a local level, different events, dog jogs, hikers, clubs, biking, et cetera, on a frequent basis. And so what we really valued was the in real life connection, the in real life movement and participation in the mission of the brand. And then that energy would essentially unlock the digital channels. So that became a really interesting, repeatable playbook. Kind of the third piece to that was we always looked at markets that had a university. And so UT this really became like a perfect pilot for us that then the plan was to repeat kind of over and over a small shop in a residential neighborhood, field marketing, where there's consistent kind of events going on, and then a university. And so as we started rolling out kind of this what I called 360 community model, we would be able to unlock total markets, let's say Nashville for instance. You'd then see other spots or cities outside of Nashville turn on from an awareness perspective. So what I saw and the team saw really working was exactly opposite to what was being pitched to us. Go spend all of your dollars on paid performance channels. It's working for everybody else. It's gotta work for you. That was not an efficient way to grow by any means. And so really core to our early success was leaning into this offline amplify through digital and social.
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B
And that led you as well to rethink and reimagine what it makes sense to actually grow it online and as well as kind of me having these kind of community led brands.
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C
Right.
- [07:25]
B
Talk to me a little bit about how and why you left Outdoor Voices and as well as starting your next couple ventures.
- [07:32]
C
I think you asked something about the board earlier on, and I think I certainly was a pretty trusting founder and was open to kind of suggestions, particularly from our VCs, which was I trusted them as partners. They were on my board, a guy named Mickey Drexler. On. And he had this crazy impressive kind of retail legacy. And I was totally into it and open, open to it. However, when he came in, it became very apparent that there were. There was a bifurcated kind of view on the strategy for the company. So I pretty much felt this kind of go local community effort was the way to grow. He felt very strongly about kind of big box, more traditional retail being kind of on fifth Avenue and in malls, et cetera. I was, I think, 25 or 26 and wasn't politically savvy enough to essentially convince the board that my way was correct, or at least correct for OV and me being kind of at the helm of the company. So Dynamics became very challenging and I ended up leaving. I can't remember the year. What was it? 2020, maybe? No, 2019. I don't know. It doesn't matter. Some crazy press story that had been referencing kind of Mickey came out and I was pissed because I had been warning the board that there was, you know, there were challenges between he and I. And so ultimately I read this press story that hadn't been fact checked, and I went to Google and said, how do you resign? I'd never resigned in my life. And so this is very embarrassing. But the next day, that morning, I write, dear whoever the board, I hereby tender my resignation. Doing things like the most formal resignation ever. But I saved it because it's kind of cute and I was pissed. But ultimately. Well, I'll pause there. You can ask me whatever.
- [09:21]
B
No, no, no, no. I appreciate it. So in terms of, like, what your vision was versus Mickey, just so I understand it, it seemed like you wanted to maybe own your distribution channels, you wanted to sell your own products, where Mickey wanted to like, to actually create like an incredible wholesale business. Is that roughly kind of correct?
- [09:36]
C
I think we just had different views on the appropriate strategy for an apparel brand at the time. And I think another problem kind of around this whole thing was that it was really easy to raise money. And so we had raised so much money, and then with that came the pressure to grow at breakneck speed. And not only did that then mean, like, we're pushing go on like three strategies at once, which is not an efficient way to grow. I've deluded myself, so I'm continuing to lose control. I found that companies that were expected to grow that quickly made themselves trends. And so people would see them kind of all through their Instagram feeds, plastered on billboards everywhere. And that's a dangerous place also to play where it's Like, I see this brand for five years blitzing me everywhere, like, I'm sick of it. So there's a few things related to raising so much money that ultimately became challenging, which seems odd.
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B
Yeah, no, I appreciate that. So, I mean, with all this being said, how did you get into Blockchain and how did you and, like, tell me a little bit of the story of Tyb and how, like, that kind of came about and kind of like, the aha moment there.
- [10:47]
C
Yeah, I like to go after things that are really hard. I'm now in crypto cbd. There's a lot of baggage around these spaces. I left doctor Voices, and our head of finance, who's a close friend and partner of mine, had been investing in Avalanche. And so he was trying to get kind of the OP situation under control, but also, like, over here, just experimenting and learning as much as he could about Blockchain. He was really kind of my shepherd into the space. And what I became really fascinated, like, by was these NFT projects. I think it was cryptokitties or something, where people who had stake in the project and the project success would then come together and explode the success of this project. And I was like, holy shit. That applied to consumer is a beautiful future. If I were to simplify why I'm attracted to Web3, it's this. I love the idea that users of a product or loyalists of a brand have stake or aligned incentive in the success of that brand and something to show for their continued loyalty, contribution, and participation.
- [11:54]
B
So how did you get started with this idea? And what did you also think about what type of brand would make sense in terms of the actual stage of the brand first?
- [12:03]
C
So I didn't know I was leaving nobody to start Tyb. I was going to work with Zach to essentially create an umbrella of brands that, you know, my personal kind of passion and through line continues to be movement. And so while I was still at ob, I was experimenting with taking different amounts of CBD and THC before runs and found that at the right kind of dosage, you could conjure up the feeling of a runner's high. Did any of you guys run track or cross country? That kind of elusive, euphoric feeling that generally takes many miles of aerobic exercise to feel like, I'm the Energizer Bunny, I could go forever. I found that with the right kind of CBD dosage and formulation, you could unlock that. And so it felt really interesting to me in that if we could get this to more people, we could help them move Again on a more frequent basis and feel good and joyful about it. So Joggy was the first brand and we're off to the races with that. As we started thinking about going to market, Tyb kind of came into frame and so realized that we could leverage crypto or the blockchain to create a better business model. You know, we had been a brand that in my past was structurally reliant on ad platforms like I had briefly described. This was a really unique opportunity to use tech to directly connect Joggy and our first customers with no middleman. And that's really what the interesting opportunity is here is the future of brand building, I would say is two things. It's about co creation. So empowering your most trusted fans and customers to truly influence, shape and have a voice in how your brand evolves and comes to life over time and then incentivization. And so rather than I'm part of the community, I like this brand on Instagram or like comment. No, you're coming into this community and now rewarded for every action that you take. And that's we essentially use the blockchain as a coordinating mechanism for value creating initiatives between brands and fans.
- [14:11]
B
What about NFTs? I imagine that's probably maybe part or a big part of your strategy. NFTs were very, very popular. A lot of hype in 2021 and then now it seems like a lot of brands are launching their NFTs and are consumers. You think a little bit fatigued of NFTs. What do you think overall?
- [14:27]
C
I think the crypto space looks and feels one way. It's very bro culture and that's what excites me. The opportunity to leverage this tech in interesting ways for people that aren't interested in it. Today is very exciting. We're particularly on getting more young Gen Z and millennial women into the space via the brands that they love. But I like to compare. I also don't call it an nft. We politely rebranded it to collectible and other people have as well. But I think it has less baggage. I would say if you think of tie and backed out your voices our blue doing things hat I'm sure you continue. I would hope you continue to see them here. I don't live here anymore. But the blue doing things hat in the early days was something that you could only get by participating participating in one of our activities and then you'd be on the trail, see it, you'd hide. 5 We're part of the same community and it really represented kind of this Belonging, right. And so that as a physical item now goes digital lives in a wallet and not only represents your belonging to a community, but has perks, utility, access, et cetera.
- [15:31]
B
When do you think for even for try your best and you actually helping a brand launch this kind of rewards platform or just do it on their own, what kind of stage do you think a brand needs to be? Because I can imagine you can't just kind of start from scratch and then you know, you don't really have a community or don't really have much to do. Like what do you kind of think makes sense towards the actual starting side?
- [15:53]
C
So with Joggy, we started from scratch and this was a grand experiment. It went well. We sold the way that we launched Joggy was we sold 500 joggy doggies, these brown animated collectibles for $250 each. It came with a suite of like a list of perks. And so that was our first 500 community members. And from there we've grown it. What we're focused on, at least from our perspective now, is more the enterprise because if we can get a large volume of audience, customers, participants into the network, this is going to be a very valuable place for mid size and small brands as they discover new communities they want to be a part of. So that's the sequencing that we're focused on is like bring a lot of people into this space and then it becomes a really attractive place to start from scratch. And I do think 10 years from now the next great Nikes are going to be fully community founded, led and owned. And that means full decentralization and that's really into this world where everyone has a piece of the pie and that becomes very cool. But we're progressively going to get there. We don't have the tools to manage that from a treasury or fiduciary standpoint. Right now.
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B
How do you also think about the kind of customer consumer education around crypto blockchain?
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C
It's huge. Yeah.
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B
And like what are, what have you seen brands maybe Joggy or another brand that you maybe admire that has done a really good job in terms of actually kind of showing people that it's actually really easy to kind of be part of this community and there really isn't that much friction.
- [17:24]
C
There's not. There aren't great examples out there. That's really what we're focused on. So with Tyb we're focused on bringing the 99% of people who don't have crypto experience a rainbow wallet, metamask et cetera into the world of web3 without having to know it. Like you're coming in through a cute collectible that gives me these perks. Hell yeah. And then you'll start to benefit from it. Understanding that I might potentially for being like the first thousand of the glossier community, I might be able to sell that for X amount of dollars later on. Right. And so I think where we are uniquely differentiated and able to win and I don't know that there's going to be a necessary winner, there's going to be many winners in terms of what we do in this space is we can communicate in simple terms to the community member why they want to be here. And so I think from an adoption standpoint that's the name of the game. And you'll start to see if you follow Tyb. You all should now after this you'll start to see us turn on kind of our comms strategy which is just around education or maybe I call it infotainment because it's more than it's not boring. And through case studies. So as June Chang goes live, we're working with Loops and Camila Mendez, we're working with this really cool Nike instructor called Joe Holder and a number of bigger brands kind of in Q1 of 2023 but. But I'm a big believer in showing versailling. And so these case studies will start to bring to light like how you can participate and what it means.
- [18:53]
B
I know like Tyb kind of came out of you kind of rethinking how maybe go to market jogging should go right. Are you thinking about in terms of long term vision for Tyb? Are you going to try to like incubate other brands too that can then leverage Tyb or you or is it going to be kind of just working with brands as you're doing other brands as well?
- [19:11]
C
Yeah, that's a great question. Like the ultimate vision is yes, this becomes a network of skilled brand builders for lack of a better term, where they get inspired, find one another and can truly found brands out of this network. There's three simple phases and this might be too much for this, but New loyalty is the phase that we're in right now. Introducing coins, collectibles and kind of the unlock of those. The next phase will be value share which is introducing new smart contracts that further incentivize community members like I described, revenue based rewards, loyalties, et cetera. And the third phase is what I call true community ownership. And that's essentially where it's a community of community led Companies working in this interoperable way where there's the toolkit right in front of you to essentially start a brand from scratch. And what's exciting is going back to where Zach and I started with this kind of Tyb umbrella of brands, we have three other brands kind of in a box ready to go. But I was like, shit, I don't want to go like manage another brand with inventory. We're going to wait until kind of this matures and then essentially for those that would be interested in these types of brands, hand over this brand in a box and they can take it and run with it.
- [20:24]
A
Cool.
- [20:25]
B
That's awesome. Obviously you're a second time founder. What were some of your learnings from the Outdoor Voices experience? Whether it's managing teams, maybe leadership, or just overall go to market, releasing your product. What were some of the learnings that you're taking from Outdoor Voices and applying to these two ventures?
- [20:43]
C
This one makes me laugh, but it's also sad. Have an exit plan. And I take that very seriously because as a first time founder, especially in my case where it's all about the mission and really I was very connected to it. The team was very connected to it. You lose sight of, oh, we should have a plan or potential to exit, let's say three to five years from now. And so I've become very focused on that. And not that in every case that's the goal, but setting yourself up and having kind of alignment with, you know, your investor set, etc. That we're really optimizing to be able to have an exit three to five years from now. That was something that certainly wasn't on my mind and I wish someone had told me that. I think secondly, this was interesting because it's maybe I have like a little bit of a wishy washy perspective on it, but a lot of what I was told was like, you have to get the right people in here. Hiring is so critical. And so that meant like these crazy expensive searches and like, you know, way too many people that were just like almost right, but not totally right. And I really think of hiring as dating and ultimately like your partner that you pick, they're not going to be everything for you. You need like a very sharp point. And so what I found was I had not spent enough time. Actually, I had spent enough time, but I hadn't been quick enough to get my leadership team around me to essentially complement what I was not great at. And Gary Keller, who is Austin based, is an investor and I remember him saying to me. Like, Ty, the only thing you need to focus on is your five to seven people around you. And so I just want to call out like, I spent way too much time trying to find the perfect person in each case, thinking like it's all about the team, which it is. But there's really, really capable, fantastic people that just need to have a spike in one area and then find five to seven of them.
- [22:33]
A
Awesome.
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B
Ty, thanks so much for doing this.
- [22:36]
C
Of course.
- [22:36]
B
We really appreciate it.
- [22:37]
C
Thanks so much. Thanks for having me.
- [22:40]
A
And there you have it. I hope you enjoyed this highlight episode. If you enjoyed this episode, I'd love it if you'd write a review on the Apple Podcast. You're also welcome to follow me, your host, Mike, on Twitter ikegelb and also follow for episode announcements onsumervc. Thanks for listening.
- [22:57]
C
Sam.