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- [00:00]
John Davids
These two guys sell yoga clothes and they make 2.9 million bucks a day doing it. I'm gonna tell you exactly how they made that happen and some super important lessons that you can take away and use in your business right now. That's coming up in just a sec. Welcome to the podcast. My name's John Davids. You can call me jd. I'm the CEO of Influicity, where we help more companies sell more stuff to more people. And on this podcast, I like to share the stories of some of the most amazing companies I know. If that's your thing, make sure to hit that subscribe button. Tell a friend, leave a review, and get my best stuff to your inbox@johndavis.com now let's get to the show. You're listening to Making it with John Davids. So rewind to 2007. Danny and Marco are selling clothes in bulk. Think blank T shirts and sweats. That's their business and it's okay. But growth is a bit slow. And they're noticing something bubbling up and they want to try something new. And that's when they notice this new trend called yoga. And the guys have actually been doing yoga for a long time. It's part of their own lifestyle, their own routine. But now they're noticing that it's everywhere. Studios are packed, wellness is in, and this movement is really growing. But the clothing, clothing is kind of weak. It's all substance and it's no style. These guys want style and they think that they can make this clothing better. So they spin up a new yoga wear brand, and they call that brand Aloe. And now it's time to make some noise. So Danny and Marco need to get this brand noticed, and they've got to do it on the cheap. They don't want to blow a whole bunch of money. So. So they start by just handing out their clothes to people around la. Yoga instructors, fitness bloggers, personal trainers, tastemakers of all sorts, people that are in and around town. And these people are actually influencing the influencers. This trend, this movement they're building catches on quick. Pretty soon, the guys have thousands of believers moving a ton of merchandise. They're selling a whole lot of aloe yoga clothes. This brand is growing, but we are just getting started. If you fast forward a few years to 2016, Alo is pulling in $50 million a year in revenue, selling a whole lot on their website. They're selling in yoga studios, they're selling in trendy boutiques. And then they decide to make another big Move. They open a store of their own. But it's not just any store. This is kind of like a Zen sanctuary, is dripping with Instagram vibes. It's got yoga classes, they've got meditation, they've got overpriced kombucha on tap, all the good stuff. And by the way, you can also buy clothes here too. Customers are loving this space. They love the Alo store. So they decide to open more stores. First in New York, then Miami, then Austin and beyond. This business is really starting to blow up and it's about to hit a whole new level. See, Alo's been building low key hype for a decade now. And then something wild happens. Something. Celebrities start wearing these clothes everywhere and they're getting spotted constantly. Gigi Hadid, Hailey Bieber, Taylor Swift, Kendall Jenner, they're all wearing aloe. Tabloids and social feeds are picking this up. They're putting this brand on blast. Cultural capital really being built from the ground up. And in 2022, sales hit $1 billion. Now, Danny and Marco obviously had an unfair advantage, and I'm going to get more deep into that in a few minutes. But really, it all comes down to combining a few key ingredients. They knew apparel because they were already in that business. They knew yoga because they had lived that every single day they were doing it. And they knew the power of influencers because these guys were living in la, the center of influence. Put it all together and you can build a great business. And by the way, they did it all with no outside investors, no expensive advertising for a long time, no shortcuts, just two guys selling really nice yoga clothes. So let's talk about Alo's growth strategy early on, which was really, really a smart move back in 2007. These guys are the new kids in the yoga wear space. Lululemon was already kind of huge. It was growing quickly and it was already an established brand. But Alo had a unique insight, and that was that yoga wasn't just an activity. It was really a lifestyle, a way of living. And the people leading that lifestyle weren't celebrities. They weren't fitness models. They were yoga teachers, practitioners. Now, remember the golden rule of breakout companies. You must have a contrarian view. And you also must be right. Gotta be contrarian. And you also gotta be right. If you're just contrarian, if you just have a view that no one else has, JD isn't going to talk about you on the Making it podcast, so you have to also be right. But if you're not contrarian, then you just fit in like everybody else. You're just another product that you can get anywhere else. Alo's contrarian view was that people would value functional yoga clothes that were also fashion forward. And spoiler alert, they were also right. But they didn't know that in 2007. It was just a thesis. So how did they put that thesis to work? Well, instead of running traditional ads, Alo just gave their clothes away for free. And they gave it to the tastemakers, the people teaching at the local studios, the people hosting weekend retreats, the folks who were building tight knit communities, class by class, day by day. And they built this community in 2000s. I think at one point they had like 4,000ambassadors. In that environment, when you're doing yoga, your teacher isn't just really a teacher, they're a coach, they're a guide. Sometimes they're even like a life mentor. If you've ever had a personal trainer. I know I have. You wind up talking to them about everything. Your relationship, your job, your kids, your travel plans, whatever's going on. And probably if you're into clothing and your fashion choices, and if that's your thing, you're going to be talking to them about that too. So when they wear a brand, it doesn't look like an ad. It looks like something that maybe you should be wearing also. And it's even more than that because it's not just a passive endorsement. When you see a billboard while you're driving down the highway at 50 miles an hour, you forget about it eight seconds later. But a student in a yoga class is three feet away from the instructor for 90 minutes. They're watching the fabric move. They're seeing how the clothes hold up under sweat. You see the brand in action and you trust it because you trust the person wearing it. That's the power of branding by association. I like that thing, the yoga instructor. So I also sort of like that thing, the clothing. It's similar to what happens when I make videos and podcasts just like this. Maybe you like me and so you might also like my brand, Influicity. And when you think about running marketing for your business, you'll think about my marketing agency. Another word for this is contextual credibility. It's not just about the product itself. It's about who, where, how, why, all the things that go into what they're wearing. A little strategy here to have yoga instructors wearing their clothes checks all those boxes, guys, they check all the boxes. Now here's what's really interesting and how you can take this strategy and make a lot of money using it.
- [07:52]
Unknown
Business owners and marketers, honest question for you. Is the money you spend on social media worth it? Can you point to sales you've made from Instagram or TikTok or LinkedIn? If the answer is no, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. It's a nine step formula designed to turn your social media into a true sales channel. One that produces revenue at scale. Get it now@johndavids.com Playbook if you're spending more than $100,000 a year on marketing, you can't afford to miss this. Grab it now@johndavids.com Playbook back in 2007.
- [08:31]
John Davids
In Los Angeles, Danny and Marco had a totally and completely unfair advantage because they were close in proximity to the tastemakers. There were lots of yoga instructors in LA, but in 2025, this strategy is actually accessible to anyone because of social media. TikTok, Facebook, Instagram, YouTube, LinkedIn, they've totally flattened the playing field. You've got the world of creators and even micro creators, people with less than 5,000 followers who also are making really good content and have a lot of influence and they're defined by their subject matter. These are the people, big and small, that have the most trust. Today, that might be your version of the yoga teacher, whatever your business is. So let's talk about how I would apply this step by step. Number one, start with your niche. Don't go broad, go deep. If you sell running shoes, find the local marathon coach. If you sell skincare, find the estheticians that are talking about all the new products on the market. If you sell productivity software, find the dudes, the mid level managers on LinkedIn that are sharing their productivity tips. There are so many of them. So that's step one. Step two, look for real people who live and breathe your product or products like yours. Now, when I say people, I don't mean content creators. And this is where a lot of businesses mess up. They think that everyone they work with needs to have 200,000 followers on Instagram. They don't. You want people who love the product and happen to make content. Now, I wouldn't rule out the creator class, people who make a living making content, but I would expand my footprint. Here's some secret sauce. Here's an inner secret for all you guys. At Influicity, we run influencer programs for hundreds of brands every year. And we work with thousands of influencers creators, whatever you want to call them, people who make content. And some of those people are full time creators, but many of them are not. They're just really passionate about a subject and they kind of want to talk about it on social media. And they can be super effective at getting the word out because it's authentic. So don't be afraid to work with these people. Don't just look at the people who are making content full time, look at everybody. Because you can get a whole lot done for less money than you think. Again, we pay a lot of these people and sometimes it doesn't cost as much as you might think it does. You just gotta be smart about it. Number three, give these people, whoever the creators, the tastemakers, whoever your yoga instructors are, give them the tools they need to succeed. Tell them your story, but do not tell them what to say about your product. Never. Ugh. That comes off stale, it comes off weak. You gotta have more integrity than that. Give them the product, give them your backstory, give them the origin story. I talk about the origin story in my book, Marketing Superpowers. I literally give you guys the entire playbook. Marketing Superpowers. I give you the entire formula for a world class origin story. Let your creators run with it and then finally just stay in touch with them. Engage, stay close, follow them. Comment, share, build relationships, not transactions. You're going to be around for a long time. They're going to be around for a long time. So make that relationship last. Just like Alo did. Now let's talk about another advantage that Alo has had over the years, and one that really doesn't get talked about enough. But it's so so. And that's the advantage of slow growth. For a lot of people building businesses today, the words slow growth sound like a problem, like something you gotta fix. It's a bug, not a feature. Because growth is supposed to be quick, right? It's gotta be rapid. If we're not growing fast, what are we doing here? Well, that's really not always true. In fact, in most markets, growing slow or growing fast makes no difference in your ability to succeed. It's really just a matter of your own patience, your own timeline, and what your business is doing at any given time. And in a lot of cases, growing slowly is actually one of the biggest advantages you can have. ALO is case study number one for this and to explain why. Let's start with the idea of a winner take all market. What is a winner take all market? Well, it's one where a single company Captures the majority of the value in that market. Think Google in search, think Amazon in E commerce, think Facebook in social media, think Uber in ride sharing, think Microsoft in professional software. In those markets, you have to grow fast. And there are some very specific reasons why. The first one is called the network effect, which means that the product becomes more valuable as more people use it. So the more businesses who use Microsoft Teams, the more that other businesses need to use Microsoft Teams in order to connect with that first business. The more people who use Instagram, the more people want to use Instagram to see and share with the people who are already on Instagram. And then more advertisers join Instagram to reach all those people. And the loop just continues. The more sellers who are selling their sneakers on StockX, the more customers they're attracting. And the more customers who come to StockX to buy sneakers, the more sellers want to be there. With Uber, the more riders who are on the app, the more drivers that are going to sign up to the app, and the more drivers that are on the app means you have shorter wait times, which makes Uber more desirable for riders. And you guys get the idea. It's a feedback loop. And once it starts spinning, this is hard to stop. The first company that gets that flywheel going and builds an infrastructure to support it, and that's an important part, also becomes incredibly hard to unseat. Their lead compounds their scale, gives them a lot of leverage, and their product just keeps getting better. Every new person that joins makes it stronger. So in these cases, and these are very few cases, fast growth is actually a core part of the strategy. And in those types of businesses, yes, you do want to go fast. So that's number one. The number two factor in winner take all markets is high switching costs. So look at how hard it is for someone to switch from one provider to another. Again, if I'm using Microsoft Teams at my company and my whole company runs on it, I'm not going to casually switch to Google Workspace. There's training involved, there's integrations, there's historical files, there's archives. It's really sticky. And that stickiness creates defensibility. It tilts the market in one direction towards one winner. So if switching from one provider to another is very painful, technically, financially, emotionally, that's another sign that it probably is a winner take all. Space and high switching costs. By the way, guys also give the company lots of pricing power. It's the reason you get those emails every year from Google and Microsoft and Intuit where they're just raising prices by 5, 10, 15%. I think my Google workspace price went up by like 20% this year. I get it. The AI is kind of cool. I don't mind, but I'm not going to leave over a pricing switch because I again high switching costs. It makes it tough to leave number three in winner take all markets. Economies of scale. And this is where bigger really, really is better. In a scale driven business, the more you grow, the more efficient you get. Your costs go down, your margins go up. We see this with Netflix. Like they're super profitable now because for years they spent billions of dollars burning cash throwing it in the incinerator so that we could binge watch 8, 10 hours of Netflix. We love it. Today they're super profitable because of economies of scale. It's not really a total winner take all market, but I would argue Netflix is pretty dominant over time. Your costs go down, your margins go up, you can reinvest into better pricing, better services, more aggressive growth, again, taking share away from others, and then you can effectively outrun any competitor who tries to catch up with you. Amazon's marketplace business again is a textbook example here. They've got logistics, they've got infrastructure and inventory models that they've built up over so long, it gets more powerful with every single order. And that makes it nearly impossible for someone else to compete on speed or price. Like could you imagine someone trying to compete with Amazon on those functions? The downside here by the way, is you start to get plenty of attention from regulators and antitrust players who want to break you up. That's a high class problem that our friends at Meta and Google and Amazon are all facing right now. But from a pure commercial standpoint, this is a big advantage and it's a feature of fast growth. So if your cost structure improves significantly with scale, yes, you are in a winner take all market. So those are the three signs, right? And maybe there are more. You can drop them in the comments. I'd love to hear your thoughts, but, and this is a big but, the majority of markets are not winner take all markets. And therefore fast growth might feel nice, but it doesn't actually make you a better company. It doesn't secure some future advantage like it does in the cases that I've mentioned before with Microsoft and Amazon and all those guys. If you don't have a real network effect or real switching costs or real economies of scale, it's not a winner take all market. And be honest with yourself, you might say, oh yeah, it's a Hard switching cost, getting away from me. Customers never leave. Uh, you guys know what I mean. So be honest. So how do you win then? If you're in a multi winner market, which is like what most of us are doing, you don't win because you're the fastest. You win because you're different or you're better in some way. And you also probably don't ever win 90% of the market. The biggest player might only have 17% market share or 12% market share. And in a $50 billion market, that's actually a lot. It's a very good business. Look at the coffee category. You've got Starbucks, Dunkin Blue Bottle, the Coffee Bean, and Tea Leaf, which I love, Pete's Coffee, Gregory's Coffee, Blank Street Coffee. It goes on and on and on, and they all do well. Now, clearly Starbucks and Dunkin are at the top of the food chain. But that doesn't mean other coffee shops can't grow or can't exist. Of course they can. Look at luxury watches. Omega, Patek Philippe, Rolex, Tag Heuer, Breitling, Cartier, Hublot, Tudor, Grand Seiko. I got my Omega on today. You know, I'm in the market for a Rolex. I kind of like the sub. I just. I can't do it. I'm not really a Rolex guy. I love my Omega. I love my Hublot. What do you guys think? Should I go for the Rolex? I don't know. But here's the thing. Lots of players can coexist in watches. It's totally fine. So let's get back to aloe. Now, I would argue that yoga clothes are definitely a multi winner market. We know this because we already have Lululemon and Vuori and Fabletics and Athleta. So there's lots of room here. And because there's no pressure to really grow fast, slow growth, especially early on, is very smart. You get more time to understand your customer so you can strengthen your marketing and your channel strategy. You can define your product without burning cash on overhead and useless things like ping pong tables.
- [20:00]
Unknown
Ugh.
- [20:00]
John Davids
Get rid of these ping pong tables, you can build healthy operations instead of just duct taping systems together because you're desperate to keep up with this frantic growth for no reason. And you can stay under the radar longer, which keeps competitors off your back. And listen, I know it's fun to be in the headlines and grabbing market share, but it also makes you a target. You're the guy with a thousand arrows in your back because everyone is always trying to take down the giant. And by the way, I'm not trying to say that you should grow slow on purpose. If there's plenty of demand on the table and you are able to hit the gas, that's great, go for it. But don't fool yourself into thinking that rapid growth early on is an advantage in itself, because it is almost always not. So let's now get back to the story of Allo. They launch in 2007. They don't raise any funding, they don't rush to dominate the market. They don't launch 45 SKUs out of the gate. They just focus on a narrow product, a narrow market, and they spend years building a strong brand, a loyal customer base, solid operations. By the time they open that first retail store and start getting some headlines, the foundation was already there. They're not scrambling to keep up with their growth. Right? That's the advantage slow growth gives you. It gives you space to figure things out, refine your offer, test your product, learn from your customers, all that good stuff. And one more thing, guys, if you're growing really fast because you've got great marketing and sales but a weak product, then yes, you will have fast growth. But your fast growth is probably going to take you down faster. Because if you grow super fast because you've got great marketing and sales, but your product sucks, guess what? You're growing in the wrong direction. So you got to do it right. Now. I mentioned at the very beginning of this story that in 2007, Danny and Marco launched Allo. But they had actually been in the wholesale clothing business for a long time before that. And that's obviously a really important part of this story. So let's get into it. Back in 1992, they launched a women's wholesale clothing company called Bella. So you can buy T shirts and hoodies and sweatpants, put your brand logo on them, or you can pay Danny and Marco to screen print them on for you. And there was also another company called Canvas, which was the exact same thing, but for menswear. And then eventually at some point, they merged these two companies together and it's called Bella and Canvas. I think it's still called that today. So I'm just going to call it Bella and Canvas, even though it wasn't always called that. So this wasn't a sexy business. There were no iconic brands, it wasn't aspirational, but it was a real business making real cash flow. And Bella and Canvas grew into a high volume player in that space. And that means Danny and Marco, who were hands on. Operators were learning every inch of the apparel business. They were masters at it, Designing clothes, building supply chains, logistics, delivery, all that stuff. And that experience gave them the foundation to do what they did next. So fast forward to the early 2000s. Yoga's exploding. These guys are living that life themselves. They see Lululemon start to take off. They see a gap in the market. They launch alo. And y'all know what happens next. Think about the wild advantage that they had here. Most people when they dream up of launching an apparel brand, they start with a Google search. How do I find a manufacturer? What are the minimum order quantities? How do I ship to America? Our boys didn't need to do this. They could pretty much spend all their time on the product design and the marketing. And this brings me to the most foundational truth about success in scaling your business. You need to stack growth. You need to look at what you're already doing successfully and ask yourself, what's the next logical thing that I could do where I could short circuit 90% of the work because I've already done that work and I can focus 100% of my attention on 10% of the activity. In other words, I can afford to spend 10 times the brain power than someone else would on solving this one problem. Danny and Marco just needed to figure out product design and marketing. That's it. They already had everything else figured out. This was stacking growth. Compare this to the real estate agent who spent 12 years selling houses and now they want to launch a wine brand. Or the dentist who wants to start a D2C skincare line. Or the personal trainer who decides they're going to build an app for tracking crypto. And by the way, I hear these stories all the time. You guys should see my DMs. These entrepreneurs message me with the craziest out there ideas where their backgrounds have no connections to the high risk thing they want to do next. And I say to myself, why doesn't that real estate agent just launch a high end home staging company? Or maybe a CRM tool designed specifically for boutique retailers just like them. Or a local content platform that showcases listings with cinematic tours. Whatever. Something having to do with real estate. The dentist, instead of cliff jumping into a D2C skincare line, should probably just launch an oral care brand. Maybe they can sell teeth whitening kits or floss or mouthwash, all backed by their clinical knowledge. The personal trainer, instead of getting into crypto, which is fun, maybe get into a supplement company or start a consulting service where you teach other personal trainers, how to scale their businesses, you know, stuff you actually know about. And look, guys, I'm sort of teasing when I say all this, and you do, you. You got to figure out what's best for yourself. But I want to see people maximize their odds of success. I want to see you win. And you do that when you stack growth, not when you try to hit the reset button every 39 months and get into a whole new game competing against others who have been playing that game for two decades. Let's look back at the Alo story. Because of Bella and Canvas, these guys were able to control quality at every single level. They didn't have to pay manufacturers to make their clothing at high markups. They could move faster from concept to production, and they could scale more profitably without relying on any outside partners or investors. That's how to do it. That's how you stack growth. That's how you scale in business and in life. So if you're wondering how these two guys ended up running one of the most influential lifestyle brands today, that's the answer. That's the story of Danny and Marco. That's the story of ALO. Get my best stuff to your inbox@johndavids.com.