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Shopify Masters
How Dagne Dover Turned Word of Mouth Into Its Biggest Marketing Channel
00:35:22
Melissa Mash built Dagne Dover from a business school focus group and $40,000 in pre-sales into a brand now carried in more than 250 retail locations—without ever taking venture capital. By ditching Meta and Google in favor of events, sponsorships, and high-touch retail relationships, nearly half the brand’s growth now comes from word of mouth alone.
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- [00:00]
A
When your metrics are going up, when you're seeing that repeat rates are happening, when you're seeing word of mouth is spreading, those are pretty good proof points that things are working.
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B
Welcome to Shopify Masters, your companion for starting and building a business. I'm your host, Adam Lavinter. For too long, the accessories industry has prioritized how things look over how they actually work. Dagny Dover was built to change that.
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A
Since the very beginning, we've been very focused on what we do for you and how you rely on our products.
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B
Started by three co founders with backgrounds in retail operations and design, the brand grew from a business school focus group and $40,000 in pre sales to more than 250 retail locations without ever taking venture capital.
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A
You always have a choice in terms of who you're taking money from.
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B
Joining me now to talk about spotting a gap in the market, building a customer base from scratch, and finding growth in places no bag brands are thought to look is Melissa Mash, co founder and CEO of Dagne Dover. Melissa, welcome to the show. Hi. So this has been around for a little bit, right? Like it feels sort of startup B in the sense that you've got that vibe of a startup, but this business is what, pushing 11 or 12 years old at this point?
- [01:09]
A
It's actually been 13 years that we've been in market.
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B
Wow. Okay, so walk me back to the early days. What was the origin story here?
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A
I was working for Coach and I was working for their UK distributor in London and the store was at Heathrow Terminal 5. And I was brought in to fix everything for the store, the operations, the visual merchandising, the team, et cetera. And also this was a market that didn't know a lot about Coach and Terminal 5, for anyone who's ever been there, is a British Airways exclusive terminal. It's super posh and there's every long standing background you can imagine in the terminal and people would come in and they still couldn't find what they were looking for despite all of the options. They really needed something that could flex between taking their trip, going to an office, going out for the night and everything else in between. They were also flying between many different places in the world and so they needed a bag that worked for were many different types of climates and situations and sometimes people were carrying two laptops, they were carrying two phones, they were carrying multiple currencies and their bags and wallets didn't have space to accommodate all of that securely. I personally had been riddled with my own bag problems before. That too, where I had a water bottle that the cap was loose and spilled and ruined my tech and blah, blah, blah. Everyone's got some sort of horror story in which this has happened. And so the thought was that why doesn't a bag brand exist? That really speaks to our generation where we're carrying thousands of dollars worth of tech in our bag, we're trying to stay hydrated, we're trying to stay safe, we want our keys like easily accessible, et cetera. And why can't that just all exist in a product that let's call it is 250 bucks?
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B
At some point, what you start with some additional market research, some focus groups to gain customer feedback before you start iterating on the product. Is that right?
- [02:47]
A
Exactly. So the idea was a culturally relevant, youthful, more feminine version of functional bag brands that were out there. I went back to business school. I felt like I really needed that network in order to do the proper test, do the proper studies in order to make sure that we would have product market fit, and also to find my co founding team. I knew I didn't want to be a sole entrepreneur. I knew that, felt that I would need probably a design partner who could really be the person that customers are connecting with and feeling like this came from that person. And then I wanted someone much more analytical than myself on the business side too. So I went back to business school, got to work, starting focus groups and surveys. And through that experience I was able to connect with Deepa, who's our coo, and then Jesse, who's our chief creative officer. And we started running ever since then.
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B
But Deepa and Jesse, these are classmates, correct?
- [03:35]
A
Well, Deepa and I have known each other since just being young in New York when we were 22, 23, but she was a year behind me at Wharton. And then Jesse, I literally found on the Partisans website I was searching for accessories designers and I had started working with several up until that point just to get these designs sent off abroad and trying to make samples and all of that. But then when I started working with Jesse, I was like, okay, no, this is good. This could really work. And so the three of us have been partners for over 14 years at this point.
- [04:02]
B
That's interesting though that you sort of have this hypothesis when you go to business school that you're going to do this thing right and you're going to come out the other side with your co founders, your product, some additional IP and intelligence around how to build a business. I would think that that's not totally typical.
- [04:21]
A
I'M sure it's not. There are many things about us that are built very differently from especially brands of that era. I can't speak about brands today, but at the time it really felt like, how do you cut through the noise? Sure, I had a great career, but no one's going to list. Listen to me. I have no platform to say that we're launching this brand and for anyone to listen, you know, So I think also just being really self aware, we've seen many co founding teams in the past where it was either one or two, very few more than that. And I just felt like in order to be a brand that was going to last a long time, that we were going to cover all of our bases in terms of our strengths within the co founding, our leadership team. It made sense for us to have two people to balance on the business side. One, my background, a little bit more consumer facing, Deepa's background, a little bit more analytical and on the opsend. And then Jesse's background as a designer. And that's what I felt was going to be the right balance between money and magic.
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B
Gotcha. So what does the early customer feedback tell you about how this product should get to market and what it should look and feel like?
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A
Yeah, so we knew like, hey, I needed to have a laptop sleeve. Hey, I needed to have a key leash so you could, you know, always know where your keys are and a water bottle. But like the specifications of exactly what should the drop length be on a tote to, to be able to get it over your shoulder without any friction on the elbow. And that's going to be the bag that you're reaching for every day. Exactly. Does the key leash need to be in order for you to use at your car, on your apartment, like anywhere that you are? So it's actually fully functional to its highest expectations. All those things mattered. And then on top of that willingness to pay and pricing and even just the naming of our brand, I think we went through probably. Well, there was definitely the first name, which was embarrassing, but then we changed it.
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B
No, let's hear it.
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A
Well, it was called Gold Antwine and that was really just like a placeholder name just to be like, we need to call it something but we know that's not it. You know, we needed a name that really meant something. Dagny is a Nordic word for new day and Dover is Jesse's last name. And the idea behind this is that we're not your average bag brand. This is like a new day for what you should expect out of all your products. It's kind of like a smartphone versus a flip phone. Like how can you go back once you've had the laptop sleeve and the water bottle and the key leash and all the things that are anticipating your needs? And really, as your personal assistant, how
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B
do you know that Dagny Dover is the right brand name? Do you test that as well?
- [06:31]
A
I mean, we did some testing, but honestly, it's what you make of it. I personally really dislike brands that have a name that you don't know what the that means, you know, so, and where it came from. So I wanted something that had meaning. And we love the word Dagny. We love the alliteration, we love the five, you know, syllables, the five letters and the five letters. And we love that of course Jesse's name could be attached to it.
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B
That's so cool. Okay, so you start with $40,000 in pre sales. And this is 13 years ago. So I'm trying to think about this. Is this pre Indiegogo and pre Kickstarter?
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A
I think it was kind of of that era, but we were not a brand that we felt was Kickstarter appropriate. I don't even know enough about Indiegogo to speak to that. But this is a brand, you know, this is not a widget, this is not a one hit wonder type. I'm not to say that that's what it is. But like that to us, a brand does not get launched on Kickstarter often. I mean there have been, I'm sure, brands to definitely prove that that idea wrong. But for us, we felt we were much more fashion than something more technical. Even though obviously our bags are extremely technical.
- [07:34]
B
So the $40,000 in pre sales come from where?
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A
So we used actually a fellow classmate's tech called Cricket and basically it was an ability for us to have pre sales on our own site and then through our network where we had focus grouped and surveyed a thousand people prior to actually making the products. We said, hey guys, this is what it looks like, this is what it's priced at. Would you buy it? If so, here's the link. And people sent it to their friends and family and beyond. And soon there were orders that we could not trace in terms of how they found out about us. But it was really through, I'd say the Business School Network. And then all the women at business school were like, we need this product. This speaks to our lives. Nothing like this exists nowadays. There are some more functional bag brands than there were certainly 13 years ago. But at the time this was a Complete anomaly.
- [08:23]
B
Those early days. How did you find the right manufacturer for this?
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A
So we started manufacturing in New York, not because we knew it was a long term solution, but because we wanted to be close to the supply chain and the production and to like understand the entire process of it. For anyone who doesn't know too much about bags, honestly, it's really important that you manufacture close to where the supply chain is. And so we knew that we would have to move production abroad pretty quickly in order to get the scale and the quality that was going to allow us to compete with the other, let's call it affordable luxury brands at the time. So the first production runs were in New York, but we very quickly were able to show that we had proof of concept, show that we had product market fit, and from that $40,000 worth of orders, raise a seed round that allowed us to scale production abroad.
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B
Okay, you've mentioned product market fit a couple of times. What in your definition is product market fit today versus what it meant, say 13 years ago?
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A
It's that what you are putting out there is hitting and that it's not just hopefully one product, but you're able to engage with the customer, cut through all the noise and give them something that they cannot find elsewhere and that they keep coming back to you for. I think that especially what we've seen over the past 13 years, a lot of brands pump their businesses with marketing willing to lose money on the first, second, third order with the customer. And is that product market fit if you're just overpaying to acquire a customer to try your products? In my opinion, no. But product market fit means that you are creating something that is unique to a customer that needs that product. They keep coming back to you and hopefully over time you are building that consistency and reliance on your product as well.
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B
Is there a revenue number that helps a founder define that they have this right? Like you guys have $40,000 in pre sales. Is that enough to validate?
- [10:12]
A
In our opinion it was enough to validate to get to that seed round of funding that was integral for us being able to move production abroad. We were to be able to do anything with $40,000 of revenue in terms of move production abroad, we really need to raise a lot more money. So is there a particular number? No. I think that there is constantly a story that you need to tell in order to get investors to invest in the next level that's going to get you to your next inflection point. So in short, no. But when your metrics are going up, when you're seeing that repeat rates are happening. When you're seeing word of mouth is spreading again beyond your existing network, beyond your existing nodes of contact, those are pretty good proof points that things are working.
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B
So good segue. So word of mouth, you guys have about 40%, I think is the number that I came across of your growth comes from word of mouth. That's a huge number. That's a number that most B2C brands would love to have.
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A
I would even say it's closer to 50%.
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B
Wow.
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A
At this point.
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B
Okay, well, kudos. First of all, how do you generate that kind of word of mouth, that kind of virality organically?
- [11:16]
A
It's really important that we have visibility in a number of places. Part of it is, of course, people seeing it on their coworkers, people seeing it in transit, people seeing it on people at the gym, people seeing it on people on the street. Part of it is that brand recognition. And part of it is also like, hey, tuning into your favorite podcast and hearing about it, whether it's also other forms of pr, whether it's reading about it on your favorite best products list or clicking through from your favorite content creator and so on, but it's kind of just being relevant wherever you're living your life. And one example of this is we recently in March announced our sponsorship of Love, which is League 1 volleyball. And you know, not a lot of people know about League 1 volleyball, but people who know about volleyball know it. And it is up and coming. Volleyball in itself is like the fastest growing sport for girls of that age, which is incredible. They have all these clubs across the US in particular in the south and the Midwest. And for us to be able to get in front of those audiences and say, like, hey, one, we not only support women's sports, but in particular this volleyball community. And this is how we're showing up. We're doing fit checks, we're doing tunnel walks, we're doing all these things goes a long way. And so again, we're doing sort of like, I'd say more unconventional forms of word of mouth that didn't exist, let's call it five, 10 years ago, or certainly weren't leaned into by brands like us. But you have to get in front of the customer where they're living their life. So through all of those experiences, those
- [12:36]
B
add to it, League 1 volleyball isn't the only sports partnership you guys have, right? Didn't you have a partnership with the NFL? Or don't you have one? No.
- [12:43]
A
So League 1 volleyball is the only official sponsorship that we have. But I will say that a lot of NFL teams have. First of all, NFL players have been using our bags, especially our land and carry all in the large size, as their walkout bags for a long time. And so actually, one team, the Steelers, reached out to us and they were like, hey, we love these bags. We'd love to get some for our rookies. And we asked like, hey, could you create some content when you're handing them out? And they're like, better yet, why don't you come and deliver the bags, say a few words, and create your own content? So that's really how it started. And then a bunch of NFL teams have reached out after that, saying, like, hey, like, we would love for you to come and do an entrepreneurship talk and, you know, blah, blah, blah. So we have all different types of relationships, I would say, with NFL teams, it's been very organic, but it's certainly not official yet. We hope to, you know, do more with them in the future.
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B
Nice. So you mentioned podcasting, content creation, you know, influencer marketing. These things, I would say, are relatively sort of new channels or new marketing strategies that weren't around 13 years ago, or certainly not not around in the same way that they are now. Can you talk a little bit more about the evolution of marketing and how you've approached things? Yeah.
- [13:49]
A
You know, at the very beginning, when we launched the brand in 2013, Instagram advertising didn't even exist. And so we were one of the first brands to try it. I think it was 2015. And very quickly, actually, Instagram was like, hey, you're actually a top performing brand for us, you tiny little brand over here. You're beating out Chanel. You're beating out, you know, these Dior. Like, it's crazy. And what do you think the successes. And honestly, it's because the content that we were showing were still images at the time, still images of functional interiors of our products in a beautiful fashion, sort of lifestyle depiction. And you're getting to the core need of why people would choose us. When they see the interiors of our bags and see the functionality, that to them is relief. That to them is, I've got my life together. That to them is like, oh, like, I'm empowered. I'm confident. I have everything exactly where I need it. And that's very different from something that just looks beautiful. So since the very beginning, we've been very focused on what we do for you and how you rely on our products. So I think that that's part of it. But I think cutting through the noise, it's just always really important to get to something that's of substance. Of course we show a ton of our products and our content, but also we stand for a lot of other things. We were oppy founded, two of us are of API descent. So we been the official bag sponsor of Gold Gala this this year and through a smaller event last year, we also do a ton for back to school and teachers and supporting them in their wish list. So there's so many ways to engage with communities that you're showing up digitally, but I think that that goes a long way too.
- [15:26]
B
So Instagram, you guys, at this point, you've got north of 410,000 followers, or somewhere around that number, but TikTok is even bigger. TikTok, you've got well north of 500,000 followers. So when did TikTok come into the fold and how do you approach that channel versus other social channels?
- [15:47]
A
Yeah, I'd say we've really amped it up over the past two years in particular. And, you know, I think that there's still a lot of opportunity with all of our channels in terms of how we're speaking to our various audiences there. And it's really just being very specific in terms of what hits and what type of content they want to consume on those platforms and what type of customer and audience is on those platforms too. So by no means do I think that we are like a poster child, but do I think that we've done a really solid job in terms of speaking to those audiences today? Absolutely. But like, let's just be real, like TikTok, you know, TikTok content's gonna be like a little unhinged. It's very, it's very algorithm driven. It's very, you know, the music, you gotta trend driven. Like, there are certain things that you gotta do. Like Instagram, it's very much more about the millennials. Like, so there's just a different way and life stage that's appealing to all audiences. And then of course there's YouTube and another channels as well.
- [16:37]
B
How do you think about your audiences? So, you know, millennials versus Gen X versus, you know, Gen Z. You guys have an extremely broad customer base, right. You've got buyers, you know, as young as tweens, as old as seniors, and everything in between. How do you think about your ideal client profile and where they live?
- [16:54]
A
That's a really good question. We really focus more on a psychographic profile of the mentality of who we're serving. And that is Someone who wants to feel put together. They tend to have a very multifaceted life. They tend to be on the go and that they're just at various stages of that journey. Right. Some of them are in school, whether it's like literally middle school or in college. And then some people are starting the workforce and so they have certain needs about what they need in their bag in order to feel confident, prepared and professional every day. And then you have like parents, you know, we have. Our indie diaper backpack is actually our number one seller. And the large size and we often get often honestly a lot of celebs and athletes, but everyday parents who are using this as their bag. And it is like, I call it like the Rolls Royce of baby bags. It is dependable. It comes with the key leashes, it comes with the binky leashes, it comes with the neoprene pouch for beverages, it comes with the changing kitchen, comes with the stroller clips, et cetera. So we just want to make sure that we are grabbing them at any stage of their journey in which they're looking for a product like this and continuing to evolve with them. We have pet carriers, we have luggage as well. So we really try to serve them at whatever stage they're at.
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B
If you've got all these concentric circles of shoppers, do you think about who is your largest psychographic customer?
- [18:12]
A
Yeah, I'd say that we, we call them like American royalty. And these tend to be high earning. You know, we have these mosaic profiles and they tend to be high earning, educated people who travel a lot, people who do all the things. And again, like we have such a wide range of customers, sometimes our bag is very much a stretch for people, but for the most part it's an easy purchase. And that might be literally someone who's carrying a Birkin, but they're using our large land and carryall to house it while they're, you know, flying commercial. It might be literally that to again, like someone who is. It's no problem to spend $250 on a baby bag or 200 bucks for a gym bag. But otherwise, you know, it could be a real stretch for other, other demos too. So I'd say definitely it does tend to be that person who is multifaceted on the go where a 200, $300 item is not a stretch at all.
- [19:01]
B
Gotcha. Let's go back to the marketing stuff and the acquisition side of things. So in a world where people are obsessed with paid acquisition, you sort of have this I would describe as sort of like anti paid or anti performance marketing strategy to build this brand. But I would assume paid ads play some sort of role here. How do you think about organic versus paid and measuring the quality of both sides?
- [19:25]
A
Yeah, so over the past year and a half to two years in particular, we've really taken down our paid spend and the reason why is because the ROI was just unjustifiable compared to our other methods that were much more organic and direct. We have been doing events, we have been doing again like different types of partnerships and sponsorships and that have given us different types of visibility and the more efforts and sure they're more high touch, right? It's more high touch than necessarily just throwing more money at something on digital. But does it mean that those relationships are much more deep and much more meaningful to the audience? Absolutely. So that's the reason why we, we have decided to decrease our spend on Google and Meta specifically. And I mean as a result we've seen like double digit roas and ROI on those digital investments too.
- [20:14]
B
Return on ad spend for listeners. And for those that are thinking about measuring those sorts of metrics, how do you think about what is a healthy ROAS versus not? How do you think about, you know, your performance marketing, whether it is events or partnerships or paid ads? What's quality versus not? Are you looking for sort of AOV relative to cac? What sorts of ratios or numbers are you paying attention to?
- [20:40]
A
Yeah, I would say a ratio of like 7x plus is good in our opinion. But as a brand I wouldn't be like, oh, everyone should do events or everyone should do partnerships. It really depends on what the product is and how you're connecting with your customer. For our brand and for what we do, it just makes sense because one, we crush events, we do a really great job, it brings a lot of people and people are excited to come into our spaces and to interact with us as a company. But not all brands have, you know, friendly founder faces and not all brands have those types of assets. So you really have to understand what makes the most sense. Some brands in particular like cpg, Food and beverage, like you obviously want to get more into the distribution points versus doing your own stuff sometimes. So it, it honestly just completely depends on what the product is, what price you're at, where your customers are shopping, where they're living their lives.
- [21:28]
B
One question I didn't ask you about with respect to the early days and your dynamic with Jesse and Deepa. So do you all jump into this full time after business school or did you like Treat this as a side hustle initially and then dive in. What did that look like?
- [21:48]
A
I graduated a year before she did for business school, so I was full time at that point. She was juggling all the things and honestly, still leveraging the business school network for us too. So, you know, it very much felt like we were all in this completely. And then honestly, Jesse had been working for another. Another accessor, not. Not bags. But at the time when I approached her and kind of quickly, she. She quit and she was like, you know what? I'm going to bartend at night and I'm gonna work on this during the day. So we were all in. It certainly never felt like, you know, any one of us was not. We were going for this.
- [22:21]
B
Gotcha. Let's talk about retail. So you're DTC first, right? You expand into brick and mortar. When. What year was that? And who was your first retail partner?
- [22:32]
A
I believe it was 2017. So, you know, my background at coach was actually in wholesale brick and mortar as well as establishing the wholesale e commerce channel. So it was very important to me that we start building our relationship online directly with the customer, but that at the same time, we utilize wholesale pretty quickly after launch, four years after, in order to be able to get the scale. We were not a brand that was going to raise tens of millions of dollars and build out our own freestanding stores when, you know, still we had very little, I'd say, brand awareness and penetration. We were going to utilize our brand partners to be able to scale quickly. So Nordstrom actually was one of the first ones. It was not the first one. I'd say Bedier and Equinox, and then I believe Nordstrom were maybe our first three. And we didn't start with all doors, but that allowed us to get to all 100 doors within, I'd say, maybe two to three years of that relationship. And that really put us on the map being able to be accessible to so much of the country and also to be standing next to brands that, with Nordstrom's customer service reputation meant that, like, hey, this had been a highly vetted brand, and this is a brand that consumers could trust. That went a long way. So, yeah, at this point, we're in about 250 locations across the country between all of our different wholesale partners.
- [23:47]
B
What makes for a good wholesale partner?
- [23:49]
A
Yeah, so, you know, something that's different for us versus maybe how other brands look at wholesale. And again, maybe it's a little bit of my background coming through, but we were never viewing wholesale as A sales channel. In fact, it was a customer acquisition channel. So that means that we need to have wholesale partners who are going to get us in front of many different types of demos. So with Equinox, you're getting in front of a more urban tends, honestly a little bit more male customer than some of the other retailers. With Shop up, you're getting more of the fashion girlies. With Dick's Sporting Goods, House of Sport, for example, we're getting into secondary tertiary markets. But a higher earning, active family with Nordstrom and Bloomingdale's, let's say those are higher earning, sort of family type of, but fashion oriented audience. And then we're in Shields and Von Mar and Dillard's and other brands, other retailers as well. But the idea is that are we getting penetration across the country in different markets? Are we getting different, you know, slightly different income profiles or slightly different customer profiles as well as of course, across gender too. And of course one that stands by really reputable brands as well.
- [24:53]
B
What should founders understand about their foray into retail for the first time?
- [25:00]
A
Wholesale.
- [25:01]
B
Wholesale, specifically.
- [25:03]
A
Okay, for me, it was always really important, in particular at the very beginning that I get leverage. I did not want to be backed in a corner, taking terrible terms and giving away all this unnecessary margin. And that meant instead of going to 50 doors with a particular retailer, we said, let's just start with 20 and see how we, how we do. And of course it was very important that we picked those 20 locations that we felt we were going to crush it in. And then once they saw this had a lot of momentum, I was able to have leverage and say, okay, well then, you know, we can go to maybe like six more for now because I want to make sure we have proper inventory. We can do this. Like, well, we got to make sure we can train the teams. I personally went and trained many of the of the teams who are selling our products across our retailers. And that takes time. But to your point earlier, word of mouth, that's one of the ways people are retelling the story, the founder story, from a firsthand account. And the number of people who have heard that story and have retold it is, I mean, exponential. And in fact, one of our employees, she actually used to work at Nordstrom. She was someone who I had trained and ultimately she was a bestseller of the brand. And ultimately she's like, I want to work for this company. And she applied for a job with us, a CX job. Now she does more beyond cx. But the point is that like she was one of those very important nodes of word of mouth.
- [26:17]
B
It would seem to me that there's a strong correlation between creating that leverage that you want with a wholesale partner and the size of the company. So when you're early days and you've got, say, an online e commerce presence, but you've never been in brick and mortar retail before, and you knock on the door of a, say, a Nordstrom or otherwise, how do you create that leverage? Like, what are those early conversations if you want to be in a strong position with a partner like that?
- [26:45]
A
Yeah, well, part of it is, of course, proving with that people want your stuff. So it could be starting on.com and it could be unsecured sort of dropship orders. You know, they're not placing the orders, you're just taking a bet on the inventory. But once they see the momentum, then they're willing to place the hard orders and they're like, you know what, we can put this into more doors. And I'm not saying, like, we're playing, like, hard to get, but also like, we're pacing this to make sure we are going to be successful. If you expand way too quickly, then how can I train everyone? You know, you lose part of the magic of that scale. So I'd say, of course, showing the press that you're getting, showing the awards you're winning, showing any sort of momentum, the content creators who are talking about it, maybe you're even investing in content creators in those markets near those stores to be able to push it to audiences, to help support them going to those locations too. So there are a lot of creative ways that you can think about this. Instead of just thinking like, oh, I'm going to push it to stores and people are going to buy it, they may not know it. You might have to support with visual merchandising, you might have to support with additional digital assets that need to be on the shop floor. You have to work very closely with these teams in some situations. For one of our retailers, they literally brought TVs to the floor and showed the functionality and the videos of packing up the bags and everything. Our bags fit because they felt like that was so powerful to audiences who didn't know enough about our brand or who are seeing our brand for the first time about why this brand is so different. So everyone wants to make money. Retailers want this to be successful. And often if you are talking to them about this, you can, you can work together, but it is more work than just expecting something to sell.
- [28:16]
B
And these other partnerships we Already talked about League 1, volleyball, but you've had some other unconventional partnerships with college bookstores, registries, pet retailers. You know, the list is like relatively long and random I would say. So what makes for a great partnership and how do you think about these things?
- [28:34]
A
Again, the skills goes back to who the audience is. I think like the pet retailer that you're speaking about is Taton Taylor, which is Taylor Hill's pet, you know, retail e commerce site. And that was cool because she's been a fan of our brand and you know, so we decided to do this and actually have a give back campaign at one point to fund her charity for dogs, et cetera. We try to make everything a little bit more meaningful than just that. Same thing with like Baby List, for example, huge business for us. The registry is a huge moment for anyone who's having a child. This is the moment that you're getting acquainted with the best in class products that are going to equip you hopefully for the next next three plus years. And so it's very important that we have a strong relationship with them. What else seems random?
- [29:14]
B
Nothing really. I mean it just the partnerships are at this point, I think given your customer base, which is pretty broad, the partnerships that you have with Dick's Nordstrom College Bookstores, you know, League 1, volleyball, whatever, I mean, you're trying to just meet your customer where they're at. And given the fact that you are selling to folks as young as teenagers, as old as seniors and everybody in between, it's going back to really your earlier point that you're really focused on the psychographic customer. Like what, who is the end user, what's their lifestyle, what does their daily routine look like and how do we meet them where they're at?
- [29:49]
A
Yeah, like in, in, in the situation of college bookstores, it's that you're getting the parents, you're getting alumni, you're getting the students. And often they need a product right then and there. They're going to the college bookstore because they need something at that moment. They can't wait three days, five days for something to ship to them. And if they find a brand that they love and that they see all the functionality in person, it makes a ton of sense. And especially also students who are looking to start their first internships or jobs. And being able to see that they have a quality problem solving bag at their college bookstore goes a long way too. And often this is an entry point for parents to discover us as they're gifting their kids as well too. So There's a lot there in terms of why that particular retailer is interesting. But all of these retailers have a very unique audience that is absolutely relevant.
- [30:36]
B
We have products for on your website under the Social tab, there's an obvious link to TikTok Instagram, but there's also a link to Spotify where I can download and listen to Dagny Dover playlists. I would assume this is relatively new for you, but how do you think about Spotify in its role within social?
- [30:58]
A
You know, we put out campaigns at least twice a year in terms of the seasonal campaigns, but we really feel like we always create a playlist to go along with the vibe and it just makes the whole thing come to life and it's honestly just kind of unexpected and fun and we all love doing it. We all love experiencing it too. So it's like not a big deal for us, but it feels like it really rounds out that sort of audio version versus just the visual that you're getting on our socials or on our site.
- [31:26]
B
Before we wrap, I do want to do some rapid fire. Having said that, we didn't touch on venture. You did mention that at some point you raised an early seed round. Have you raised subsequent rounds either? You know, series A, B, C, whatever. And how do you think about the role of venture capital vis a vis your business specifically?
- [31:46]
A
Yeah, so we never raised VC money. We raised other forms of money, high net worth individuals, family offices, smaller funds, private investment legs from hedge funds, et cetera. But we always prioritized patient capital, people who were going to let us build because we knew that brand building, successful brand building for a next gen legacy brand was going to be a 10 plus year game. This was not going to be a game of hot potato where we get rid of this in five years and hope that everyone makes money and everyone's happy. This is not tech. So we knew that that would be required. So yeah, we raised several rounds of funding. I'd say, you know, in comparison to a lot of our competitors, not nearly as much. But that was because we kind of came from retail and for us it was always about making sure that the metrics that we were focused on were maybe not just traditional tech metrics, for example, but a little bit more from the retail industry. Of course, profitability being one of them, not just pushing top line revenue, et cetera. So we had a little bit of a different mentality in terms of how we were going to achieve that and how we were going to make sure that we would be able to protect against having to make decisions that we didn't agree with with.
- [32:46]
B
I think this is an area of growth capital that founders frankly don't have a fulsome understanding of. Like when they think about fundraising, they just think they're going to take their idea and pitch it to a vc and that's the only path here. So just say more about these other options that you've chosen to pursue and what founders should think about in this context.
- [33:09]
A
So we raised money in an era where it was very VC heavy and they were funding consumer brands and we just felt like there was a complete disconnect between the likelihood of success funding that way, and the expectations and the timelines and everything, versus if we raised from patient capital, which frankly took longer and was more painful every single time. But it was so worth it. And not only that, but it allowed us to have the freedom and flexibility to do this the right way, knowing that the expectations were not going to be unrealistic for our category. So yeah, I agree that a lot of founders didn't necessarily know that and I'm not sure why, because you can always say no. There are some founders who I've spoken with who've screwed their co founders over because they weren't going to get the money in unless they took it from this investor and that the other guys were out. There's a choice there. You always have a choice in terms of who you're taking money from.
- [34:02]
B
It's great feedback. All right, let's do some quick rapid fire. One thing founders get wrong about branding
- [34:08]
A
today, I think trying to make something that's going to be viral as opposed to something that is a long standing sustainable branding.
- [34:16]
B
What's the most overrated growth channel today?
- [34:20]
A
I mean, definitely meta.
- [34:22]
B
Most underrated, I would say maybe wholesale. Love it. All right, one retail partnership that you'd love to land that you haven't yet net a porte. What is one lesson from Coach that still influences how you operate?
- [34:34]
A
Create a brand at a price point that you can sell to the masses. Classes.
- [34:38]
B
Sweet. All right, Melissa, thanks so much for being here. It's a fun conversation.
- [34:42]
A
Thanks for having me.
- [34:43]
B
That's Melissa Mash, co founder and CEO of Dagny Dover. Shopify Masters is produced by Alicia Clark, Hyacinth Parker and Schwang Esther Shan. Our engineers are Matt Schwartz and Miku Bedlam and Rachel Reich is our senior content lead and I'm your host, Adam Lavinter. Don't forget to come back every Tuesday and Thursday to catch a brand new episode of Shopify Masters. And be sure to check out our YouTube channel for video interviews. Until next time, thanks so much for listening.