How I Built This with Guy Raz - Advice Line with Michael Preysman of Everlane

Episode Date: October 24, 2024

Everlane co-founder and former CEO Michael Preysman joins Guy on the Advice Line where they answer questions from three early-stage founders.  First we meet Todd in the Bay Area, who’s looking to spread the word about his pickleball apparel brand with a younger demographic. Then Anna in Sydney, who wonders if she should expand her eco-friendly kids clothing line to include adults. Then Pall in British Columbia, who wants to change how people think about reusable plastic containers.Thank you to the founders of KTCHN, Earthlings United and Mr. Lid for being part of our show. If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [e-mail] or call 1-800-433-1298.And be sure to listen to Everlane’s founding story as told by Michael on the show in 2023. This episode was produced by Kerry Thompson with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineers were Robert Rodriquez and Gilly Moon. You can follow HIBT on X & Instagram and sign up for Guy’s free newsletter at guyraz.com.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with.

You can also send us a voice memo at hibt at ID.wondry.com and make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gairoze.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Michael Phrasman.

He's the founder of the clothing retailer Everlane. Michael, welcome back to the show. Great to have you on. Super excited to be here. Thank you for having me. All right, so Michael, today we are going to talk to founders of a few direct-to-consumer businesses that are looking to kind of build buzz and take their businesses to the next level. And I wanted to invite you back specifically for this episode.

episode, because when you launched Everlane, the thing that was kind of at the core of your idea was getting attention by like building buzz, like wait lists and focusing on going viral and creating scarcity, which is now the norm with so many products and shoe drops and all this stuff. So many drops. And it's a totally different world than it was 15 years ago. And I just launched a new brand again. So I'm right back in the thick of it. Right in it. Yeah. No, some of the new tricks. And I'm also baffled. that, you know, learning, learning on the go as well, because you always got to stay young and learn. For sure. But before we get to the callers, Michael, first of all, tell me a little bit about what your new venture is.

Yeah, for sure. The new venture really sits in a huge interest of mine, which is I really believe we're moving from a world of designer clothes to designer bodies. And you and I were just talking about this. Everybody wants to know, how do I live longer, healthier, better? And with that, they're paying attention to what am I putting in my body and who are the doctors I talk to, et cetera. So the first brand that I launched is called Magna. So it's an electrolyte brand focused on how do we get more of the right nutrients in our body through supplementation.

And you know so much of this from entrepreneurship. People burn out and they can run themselves to the ground. And I like to say you only have one life, but it's actually quite long. if you live it right. And so we're really out there to inspire people to play the long game. Nice. I love it. All right. Michael, a lot, a lot of entrepreneurs, of course, struggle to get attention. You're just talking about your new venture, and it's a different world than when you start Everlane 15 years ago. And this doesn't matter what industry you're in, right? There's, I mean, at any point, there's like at least a dozen or more people trying to do the same thing. You obviously knew that at the time there, you know, there were hundreds, thousands of clothing retailers, but you weren't thinking about like initially by comparing your product to anyone else's.

So how did you think about getting eyes on that first shirt, you know, when even then people online had a bunch of different options? Well, I'll say two things. First of all. It wasn't as many options as we think. I mean, this was the time before even Shopify really existed. Yeah. So we were very early on in the days. It was like Warby Parker had launched.

And I know you did a great interview with them. They had launched a year and a half ago, but it was before Glossier, before Harry's. So it was still quieter online. So we had a bit of an advantage that way, even before Instagram ads. So it's very different. When Everlane started, it was part of a two-decade period that I call the period of authenticity. It's the period where people really cared about where their products came from, local, organic, sustainable, transparent.

That was a reaction to the 70s and 80s, which was all about greed. We are now past that phase and what I call into the attention economy. It's going to be two decades of obsession around attention. It's why we're seeing all the growth around celebrity. It's why we're seeing all the growth around how many followers, how many likes to you have. A brand that's really hot for like two years and then. And then no one cares. And so I think we're in the smack middle of this.

So there's two things happening. There are people like you and me and the people who listen to this podcast that still care about those things. But the bulk of where the attention is and the growth is happening is around this attention economy and celebrities. Now, I believe we're still got probably a decade left of that, maybe a little bit less. But it really puts into perspective, how do you get attention today? And how do you grow your business?

Well, lots to talk about. Let's bring in our first call because I think, Michael, you have got a, I know, you got a lot to offer and a lot of great ideas. So hello, caller. Welcome to the show. Please tell us your name, where you're calling from and a little bit about your business. Well, hello, Guy and Michael, thank you so much for having me on the show. I'm a big fan. So this means a lot to me. My name is Todd Weinberg. I am calling from the San Francisco East Bay Area. I'm the founder. I'm the founder. of Kitchen. We are a pickleball-inspired lifestyle, apparel, and accessories brand. Our goal is to really bring a fresh and elevated sense of style and aesthetic to the pickleball space. And we want to be the go-to brand that people think of when they want to look good and feel good both on and off the court. All right. Pickleball, I've played it a couple times. I love it because it's like ping-pong. Anybody can basically play right away. You don't have to, It's not like golf where you have to start when you're like seven.

But remind me, what is kitchen? Because the kitchen is a thing in pickleball, right? Thank you for asking. And actually, when I was listening to Michael's interview, I think you had mentioned that a name isn't all that important. But I think in this case, the name Kitchen is very important for this particular brand. So from the net to seven feet on each side of the net, that area inside there is called the kitchen.

And so that's how we derive the name. Okay, pickleball, there's been a lot of hype around it. You know, first of all, what are you selling? Are you selling pickleball rackets? Are you selling pickle balls, those whiffle balls? Like, what is the product? Right. So we're mainly focused on apparel with some accessories.

And the brand launched only November of last year. So we're not quite even a year in the public yet. So we're still developing the product line. but currently away from the active wear side and into t-shirts, hoodies, crewnecks, uh, sweatshirts and lots of hats.

Okay. How did you, uh, I'm assuming you're a pickleball fan and you're thinking, hey, because there's golf, I mean, there's a whole billion dollar industry around like golf lifestyle brands,

right? All these, uh, companies that basically built these huge businesses, uh, with like golf shirts and stuff. So I'm thinking, you're thinking,

hey, there's an opportunity here. How did that, how did it come about? Yeah, so briefly, the origin story is that I did not set off to start this company in the way that it happened. I was sort of semi-retired. I'm the old guy on the call today, and I have a couple of businesses here in the East Bay Area that were kind of on autopilot, and I decided that I was getting a bit bored. I wanted to do something else. And I love pickleball. I picked it up during COVID. Got super inspired by the game. And my kids love it. My family plays often. And also grew up in the fashion industry. That's another story. But I just had an interest in pickleball apparel. So I just started doing some research and found that this side, not the activeware side, the activeware side is very crowded. But the lifestyle side,

the more off-court side of the business is more open. And so that's, That's the niche I've been going after. Pickleball is an emerging sport. It's the fastest growing sport in the world right now, certainly in the country. And it's just taking off. But I think currently 16 to 17 million players in the U.S. And so we want a piece of that pie, but it's a piece of the lifestyle, slice of the pie. All right.

And before we get to Michael, tell me the question that you have for us today. What I'm most concerned is a new brand is how can you, to best build community and engagement with my specific demographic. You know, it's a pretty nichey space even still. As popular as pickleball is, it's still quite nichey, especially in our demographic, which is really ages, let's say, 22 to 35 is kind of our sweet spot. And how do I reach them best? Before we answer Todd's questions, do you have any questions for Todd about the business

and the brand? First of all, congratulations. Always, it's not for the faint of heart to go into apparel. and especially in in this market, it's gotten harder and harder. So you better love it because otherwise it's not worth it. It's quite difficult. Yes. And I was going to ask you, you know, I guess two questions.

Like when you think of what you want to be when you grow up, as they say, you're like six months, you know, call it almost a year old. What do you want to be when you grow up and what's not working right now for you? Okay, I love that question. And there are a few brands out there that really inspire me. And one of them is a brand called Malbin. They are a really fantastic golf lifestyle brand. And they've really started to take off in the last couple of years. I mean, you're probably more familiar with a Travis Matthew, right? Travis Matthew has been established for many years as the 800-pound gorilla in the space. I mean, you could wear Malbin or Travis Matthew to church. on a date night. It's that kind of a vibe. Yeah. Okay, cool. And what do you think is not working for you right now?

Where are you struggling? There are a few areas. I would say we're really trying to figure out how to resource our materials so that we can build margin, having a difficult time just resourcing because I want high quality. You know, I want to have that Lulu lemon aloe quality at a price point that might demographic can afford and I'm really struggling and that's probably just finding our margins is probably the biggest struggle right now. So the two most important hires for me in the early days in an apparel brand are sourcing in production and creative. And I think I think both address

the pieces that you're talking about from my perspective. One on the source can production, getting that right is so, so critical because if you don't get that right, the challenge of apparel is everything's this iterative cycle where you buy, it takes a while to get in, you sell. So unless you can get the supply chain really tight and short, it takes six, 12 months to fix something properly by the time you sell through the inventory. Maybe you can do a bit faster. So I just think getting an advisor or getting somebody who can join you or help or consult,

if you have the ability that can just make sure that you're pricing, your quality is spot on and you're costing. And I've had tons of friends who've started streetwear brands and it's always

the ones that are successful have that production nailed from day one. Just really, really. And if you don't, it cripples you. Michael, I'm curious. I mean, we talked about this just a couple minutes ago

about this idea that we're in the middle of the attention economy, right? And we got about another decade of it. And so with a brand like, this. If you can capture attention, then you can, presumably you can build momentum, right? And so I wonder whether a brand like this, like you mentioned this golf brand, Malbond. I'm looking at their, I was looking at their website, and they are clearly doing tons of collaborations with like all these other brands and, you know, and this is a big thing. Now, it's a golf brand,

and there's something aspirational about golf because golf, you know, is expensive. and people type business on a golf course. So the pickleball community is not exactly a one-to-one comparison. But I wonder, and Michael, you may have some thoughts on this. I mean, is there a world where Todd really, you know, needs to kind of lean in on this kind of, you know, collab style influencer kind of thing to really start to build momentum? Or is that just like, you know, a money pit, just pouring money down the drain? I don't think it's a money pit.

I think you hit the nail on the head, though, with something interesting, which is golf is aspirational. And the other one is, of course, tennis is aspirational, which is where you see brands like sporty and rich on the female side and just so many different tennis brands that have been successful. There is an opportunity for that to happen here, but it's not there yet. I think there's a bit of how much you want to invest in creative so that you're creating a bit more of an aspiration in pickleball. And I think that could be really interesting because that isn't yet owned in the world of pickleball. And is anyone providing that aspirational lifestyle? Right now, I would say when I look at kitchen, it's a little bit more casual. Right.

When I look at Melbourne that you're talking about, there's some casual, but it's got a vibe to it that feels cool. And being cool, just expensive cool. Yeah, it takes work. It takes creative execution. And so, you know, it's interesting because at Everlane, any time we wanted to drive growth correctly, it was always about the product and the creative. That's what's beautiful about apparel is the marketing is built in because people want to wear it. And so I would really dial in with your customer and with people who aren't your customer to ask them, what's resonating with you in our brand? what would you like to see more of? What kind of feeling do you get? Because the thing about

apparel is it's all about the feeling that people have when they put that on and they feel something. And so what are the feelings they get with the brand kitchen? I was just going to mention that, you know, in the last, let's call it a year of launching the company, we came out with some kind of like throw a bunch of stuff on the, throw spaghetti on the wall and see what sticks, right? So you're trying different things here and there. But to get to the area to the point where I can actually start doing collabs. I feel like that's just a whole other level. You know, that's just it's a whole other ballpark. We're not even close to being there yet. So I'm trying to get to from point A to point B and just trying to build some like build the wave and the critical

mass that we can get there. I think that makes sense. I mean, I do think the more you can get, and this is why I keep coming back to creative is that the creative is resonating. Figuring out who the influencers are in the space and making sure they're obsessed with your brand is the next level of this. And you can't. can't pay to play here, they have to love the product and love the brand. And so that's why I keep coming back to if the creative's great, the influencers will want to wear it. It's like, why does Justin Beaver want to wear Malvin? Because it's cool. Because the design's cool. The couple's cool. The vibe's cool. So he feels status in that. And that's the reality with apparel is if you want to

build a lifestyle brand, it needs to be that level of aspiration, which is, by the way, really hard. So I commend you for doing this. Thank you. Thank you. Yes, I'm realizing that. Todd, congrats. A brand is called Kitchen. Good luck.

We're going to be following you. And I can't wait to see what you make of it. Thank you, guys. Thank you very much. I appreciate it. All right. Thanks for calling it. Awesome.

Congratulations. Awesome. You know, I love pickleball. But every time I go to the pickleball courts in my neighborhood, they're all taken. They're all taken by these, like, aggressive pickleball players. And, yeah, I'm, like, sitting there and waiting and no dice. So.

Yep, I know. Well, it is a hot sport. But, you know, what I would say is I'm not sure yet. It has the aspiration. You know, it doesn't have the rich history that tennis and golf have that allow it to play in the world of streetwear and luxury. So I just think we're a little early, perhaps, and I think he's probably got the right idea of it a little early. Well, that's nothing wrong with that. You were early, and look what happened, right?

It's true. It's true. So we'll give it to him. Yeah. Stay with us, because after the break, we'll talk to another founder working to take their business to the next level. That's after the break, I'm Guy Raz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Michael Phraseman. the founder of the online clothing retailer Everlane. All right, let's bring in our next caller.

Hello, welcome to the advice line. Please tell us your name, where you're calling from, and a little bit about your business. Hi, Guy, hi, Michael. Lovely to meet you. My name's Anna Babbage. I'm calling from Bondi in Sydney, Australia. So I'm the co-founder of Earthlings United.

We're a kids' clothing brand that's designed to fit for longer. So our intent is to reduce the amount of waste surrounding kids' clothing. So when you say welcome the show, thank you for calling in. When you say it fit longer, what do you mean that it's designed to last longer to fit them longer? So we've really considered the areas where kids grow. So think track style pant that has an extended cuff that you can fold up and down.

We have a dress, we call the dress top that has elastic drawn size that you can release. So starts out as a dress on like a two, three-year-old, and then when they get to a four, five, six becomes the top. and we have a short that is worn as a pan as a two-year-old, and then it's got a drop crutch, so they grow into it and wear as a short, four, five, six. So we just do two sizes. So you only have two sizes, and it's designed to fit kids aged.

Can you tell me the ages again? Yeah, two to ten. Two to ten years old. So you just have to buy two sweatshirts and two whatever bottoms, and you got the whole thing for. eight years. Yep. Don't shop for eight years. Yeah.

That's cool. What a cool idea. So now, and it's like most, it's sort of like sweat pant, like sweat like gear, right? Like sort of Yeah, it's all super comfortable, organic cotton and natural mineral dyed. But yeah, we want it to be comfortable. We want kids to want to wear it. I love that you're doing that because I have got to tell you, and I'm going to get in trouble

because some of my friends listen to this show and they make this stuff, I'm getting increasingly concerned about the amount of plastic I wear. All the performance where I is plastic. Yep. Plastic, plastic. It's everywhere. And I'm like, why am I wearing so much plastic? And you're, now you're here telling you're doing organic cotton and

natural dye is awesome. You know where I sit with plastic. Yeah, please. As little bit as possible, please. I love this idea. Two sizes, basically the clothing adjust to the kid over time.

That's super cool. Tell me about the idea. How did you come up with it? Well, my brother's my co-founder, and we had kids. And, you know, the piles of Hammytowns just pile up and pile up. And it was getting frustrated. But the true inspiration was these pair of pants that my son wore, and they were just a cotton jersey pant. They wore when he was one. And then he kept wearing them when he was two, and they started to turn into shorter pants. He was three. And then four, they were shorts. And then he wore them for five years. And so I just thought, these pants are amazing. Why can't all kids' clothing evolve with them like these

pants? And yeah, that was really the inspiration. I love it. So, okay, when did you guys launch? When did you, when did you start? We launched three months ago, but we started three years ago working on it. And right now you're selling it direct to consumer through your website. Yes, but we just opened a pop-up in Bondi a month. In Sydney. Nice. In Sydney. And tell me what before I forget to ask you, what's your question for us today? So the number one request we receive from our customers is to create adults' clothing. So nearly every second day on Instagram, someone's saying, please create adults, an adult's line.

And so the problem we went out to solve was the fact that kids grow up so quickly and, you know, create so much waste. But adults don't grow up. They grow out, perhaps not grow up. And so it's, that's not sort of an area. We want to go, you know, look at babies and then older children, but we're never going to do adults. So how do you know when to pivot and listen to your customer, even if it sort of strays from your original business intent? That's interesting.

So you've got the whole idea was to make it so parents wouldn't have to buy a bunch of crap every year and throw it away. But now you've got the parents saying, hey, hey, I want this stuff for my size. I want this comfortable jersey cotton and, you know, to wear around the house. Michael Paisman, what do you think? I mean, we're, I mean, the car customers are demanding asking for this, but she's so early in the business. What does she do? Oh, my goodness.

I mean, first of all, I'm with you. What a great idea. I have a seven-month-old. And so as we, as we think about all the clothes you got to buy, it's like every two, three months, new clothes. It's always, uh, it's just a train. have new clothes. And then you're just hoping you have more kids so that they can grow into. And then eventually you have to give it all away. So it's a very cool idea. And what I like about what you're doing is the positioning. And I was telling guy, positioning is so important. You have a very clear positioning

in the market. And I, I guess my question for you is, what are adults looking for in your clothes? Like, what are they, do they just love how they bought it for their kids and they just love how comfortable it is? Like, what's the, what's the story there? They love the natural mineral dye colorways. I think it's also the comfort too, but everyone is drawn to the colors. So that's sort of something, our main focus was the fit, you know, when we went out to design these pieces. But we managed to find this factory in Portugal, and they've painted this technology to use natural mineral dyes that don't run. And so we sort of got lucky, and everyone is obsessed and so drawn in by these colors,

because they're these quite unique muted tones that you can't get. Yeah, they're cool. It's like lavender's and like these greens I'm seeing and these sort of blues. Dusty rose. So they're just like, oh my God, I want that for myself. And I think also is that whole market of matching with your kids that adults, I don't do that, but some people do that. Yeah.

And so if we were to introduce adults, is it still, is a different sort of section of the brand? Or, yeah, it's hard to know. I think, yeah, I mean, what I would say is sometimes we start, and this was, guy knows, like, we started Everlane, we started selling phone cases. And then it ended up looking like radical transparency. So it's pretty different, right? And I think we always had this idea of like at the core reinventing retail and creating a better experience. When I look at what you're doing, I would just say, I hear the words earthlings united and I hear better for the planet.

Yes. And then I see your site and I see both it's better because we don't have to grow by as much clothes. but I also see it's organic, its mineral dyed, and it's trusting grace, and there's a lot of goodness in that as well. So I think at the core for Mia is that Earthlings United, which is such a fun name and the logo you have. Agree. You know, I totally agree with that, Michael. We did a story maybe a year or two ago, and it's worth listening to Anna with a brand called Primary. And their whole point was, hey, we want to make kids basics that's less expensive, that is without a label, without a, you know, and eventually the adults were asking for stuff. And so now they do adult clothing as well.

So I agree with Michael here. I'm looking at your website. I see Earthlings United. And yeah, I might say, hey, kids grow up, clothes should too. But you could also have a window that says, hey, we make stuff for grownups too. You know, I mean, I don't, I don't see a whole lot of a problem because your name, Earthlings United, doesn't say, hey, this is just for kids. It's like, it's a, it could be a universal brand. So I think it's a really interesting thing to consider.

Yeah, the way I would think about it is do a couple pieces for adults and see how they sell because it might be that the, that the notion is that the, and again, I think about positioning. The positioning becomes the eco-friendly first through the lens of the fabric, and then the kids becomes a subset of that. Yeah, I think that's a good idea. Like maybe we test out a couple of sweaters or something and do a smaller run, and that could almost be exclusive or something just to test the adult market. it. But I did take a lot of inspiration from listening to your podcast episode, Michael,

because I remember you saying, and I took this inspiration when I was walking past this site before we open this pop up, because I remember you saying, oh, we never intended to do brick and mortar stores. And it's very early days, but I was walking past this closed down location, and I just happened to inquire. And so we've kind of taken a bit of a leap by opening this little pop up. But I think that's a good example, I guess, of just sort of pivoting in your business and seeing how it goes, I guess. Yeah, I think that you have the opportunity to create like a hype machine. You got to do a drop. You're going to do just like have a, we're going to do a limited drop of adult, you know, maybe just do two sizes of adults too or something, you know,

two men sizes, two women sizes, and for now, and you just try them out. Because, you know, Performance Wear really kind of exploded in the last 20 years. Lulu Lemon really was one of the first pioneers of this. And I think a lot of people, they love it. They appreciate performance wear, but they are looking a lot.

A lot of people are starting to look for natural organic versions of this, which essentially is what we wore in the 70s and 80s, right? It was just cotton sweats. Like all, you know, that's what athletes wore. But I think there's a, there is an opportunity around that. And I really think that trying it as a limited time drop could be really cool. Because it's, because you already have, right? I mean, you're already working with manufacturers and suppliers who presumably could just make bigger sizes of this stuff.

Yeah, I really like that guy what you said about just still do two sizes because we, that is another one of, um, a point. of communication, we say just two sizes, and maybe that's how we can carry that into the adults and streamline it. But the one thing I'll tell you is don't get too hung up on your communication, because that might not be what the consumer's hearing. What I'm hearing, you say, is that the consumer's hearing these incredible dyes, and one of the things I've always seen with founders is these, what I call sacred cows. And the question is, for me, what are the sacred cows the consumer?

What do they really care about as it relates to your brand? Is it the eco-friendly? Is it the quality and the comfort? Is it the fact that you only do two sizes? And knowing that hierarchy from your consumer allows you to figure out what you're talking about and maybe change some things in the future, because otherwise you can get stuck. Yeah. And I think that's such an important point, right?

And maybe it might be worthwhile, and you may be doing some of this, but it might be worthwhile to even do a limited survey. You know, ask people, what is it about our clothing that was interesting to you? And find out, is it the two sizes? Is it the fact that it's cotton? Is it the fact that it's natural dyes? Because I think, Michael, you're on to something here. I think you might be surprised about what you learn. Yeah, I think that's really good advice, actually, because you get stuck in your head, you're just like operating this vacuum.

and you make all these assumptions. And I think that's a really good idea that we should conduct a survey because I think we should be quite surprised. Awesome. All right. Well, I really can't wait to see. I'm going to keep checking your website out because if you're making an adult size, I'm going to order one. The brand is called Earthlings United, Annabababage.

Thank you so much for calling in. Good luck. Thank you so much. Congratulations. Thanks, Michael. Thanks, Guy. Thank you. I want to go to Bondi Beach right now.

I want to go there now. I want to be sitting on Bondi Beach and just watching the sunset. I don't know if the sunset, if it sets there. I don't know the geographic orientation. It probably does. I think it does, and I think it's pretty beautiful. Oh, it's east coast. It's east coast of Australia.

The sun sets in the west, but maybe it doesn't in Australia because it's on the other side of the earth. I don't know. I think she's making cool stuff. I think it's fun. Totally. Absolutely. Okay, next up after the break, another caller with another business challenge. I'm Guy Raz, and we're answering your questions right here on the advice line on how I built this lab.

Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Michael Paisman, the founder of the online clothing retailer, Everlane. All right, let's bring in our next caller. Hello, welcome to the advice line. Please tell us your name, where you're calling from, and a little bit about your business. Hey, guy, hey Michael. I am calling from British Columbia, Canada, and my business is called Mr. Lid. We make a plastic container with an detached lid, so you never lose the lid. And tell us your name.

Oh, Paul Moussayev. Paul, I believe we have met before. Yes, sir. I believe he met at a trade show that I went to speak at. Yes, sir. Yeah, I remember Mr. Lid. I'm so glad I got a chance to run into you guys. Well, so tell us about Mr. Lid.

So Mr. Lid is a plastic container attached lid, never lose the lid, solving one of the biggest frustrations people have in the storage game. You've been in my kitchen and you've seen all the empty lids that I have missing orphaned lids. Yes, keep going. So a bit of a, Mr. Lid's actually been around since 2011. I am not the original founder of Mr. Lid. I ended up buying the company just over a year ago. It's made in Wisconsin.

It's a USA made product. I bought it because I saw a need for a container company to be fun, to be trendy, to be modern. We did that. And then people started to write in saying, hey, love what you guys are doing. I've been using Mr. Lid for over 10 years. In fact, I still have some of the same containers. And that's what really prompted us to develop this vision around replacing single-use containers. So we're very much focused on reusability.

We're focused on alternative materials. And that's kind of the purpose of the company moving forward. Where are you selling right now? Mr.lid.com and Amazon. Got it. Okay. And tell me a little bit about, the challenges that you face. I mean, you bought this, I guess, in 2023, and it was an established

brand, but are you, I mean, are you facing any challenges? Are you facing any headwinds or so far smooth sailing? The response to the brand is good. We have a lot of work to do, but we have some early signs that our messaging is working. We're obviously going against some very big competitors in this space, some long-standing competitors, you know, kind of timely with some of the news that came out yesterday. You're talking about Tupperware, right? Because Tupperware just declared bankruptcy. Correct.

And if I could say, I actually sat on Mr. Lid for a while before I purchased it, one of the reasons I bought Mr. Lid was reading Tupperware's earnings report from early April. You know, despite some of the issues, they had claimed in their report that they were having a hard time connecting with the younger audience. Yes.

And that's, that set off a lightball by said, you know what? well, first things first, you got to understand your audience. So we went out there and I polled and I asked questions and I wanted to know what did a younger audience want from a container. And that I thought I thought Mr. Lidd had some of those attributes. Paul, I'm looking at your website and I see your bio and it says a long time tech entrepreneur. How did you go from tech to getting this plastic container company? So that's right. I was an entrepreneur at the age of 16.

I was very much engulfed in tech. I loved, you know, I was friends with my janitors at school because I was tinkering in the computer lab. So I found a passion very early on. I kind of grew up in the VC era, thought I should be able to invest in companies. And I tried and I failed and I'd consult. And then I'd tried again and I failed and I'd consult. And I went through this cycle of trying to get, you know, one startup off. off the ground at a time. And I just remember the last one that we were involved in. I said to myself,

I said, I don't know if I want to do this anymore. I want to find boring, profitable companies. Love it. Where I can add, you know, my flare, my personality, my ideas into and grow. So when I had the chance meeting of meeting the owners of Mr. Lid, when I heard container with a lid attached, I just said, oh my gosh, this is so simple. I can understand this. Everyone can understand this. There wasn't a six-month sales cycle. You know, there wasn't, it was just, oh, container with a lid attached.

It just made so much sense. Yeah, I love that story. It's like, why don't more people just buy laundromats or car washes, you know, like these businesses that just have this recurring cash flow. Anyway, that's a different conversation. What, Paul, tell us what your question is for us. Well, so I mentioned baked into our vision statement is this idea of replacing single-use containers. So how can we change consumer behavior and turn Mr. Lid into an accessory that replaces takeout containers? Interesting. Okay. That is a big challenge, right, to create a whole category, or I guess to change consumer behavior, not a category.

But Michael, we can go to Paul's question, but you may have a question. of your own forum, so please. Well, yeah, first of all, I love the idea of buying a business. You know, it's having, being somebody who helps people start them and starting them myself, it's like, why not just go out and take something that's already working a little bit and say, hey, let's, let's not create something completely new. Let's build on what's out there. So congrats on that.

You know, it's a big vision to say, let's create a new category like a water bottle. what's what's the use case like can you tell us like where would we take this how would we take it how would we use it when you think about it replacing the world of takeout containers so the first the first use case we were going after is very specifically when you go out for you know lunch when you get some fries with the guys and you got some leftovers we are trying to encourage the behavior where you reach into your bag and you pull out your litty and you say instead of taking home a piece of garbage you know I you're the container that they provide you. So you asked the server, can I please put that in my Mr. Lid? So we're trying to, we're trying to take that on first before we take on bigger use cases. It's interesting because I would have thought about this a bit differently, which is it's so hard to change consumer behavior, you know, to get someone to take something like this and put it in their bag and carry it around and then go to the store. Whereas, and it took a lot of, long time for, you know, it started with, by the way, water bottles that were throwaway

to then getting people to move to refillable water bottles that were for performance, to then moving towards Stan Lee's or whatever it is where people carry them all day. So these things take decades to switch. You know, what I instantly started to think about is like, how do you get these restaurants or these grocery stores to start packaging things in Mr. Lid like a tote to say, This is a reusable container. This is a Mr. Lit. It's super cool.

It's super rad. And you can reuse this forever. I love it, Michael. I tried. I feel like a lot of restaurants are so, they're very busy. They're focused on their food. They're focused on their experience. When a guy wants to talk to them about containers, they kind of say, okay, not, I'm too

busy. But I do think there is a world where a restaurant would be excited by the fact that the fact that they're able to sell a reusable container. They can minimize how many of the singles that they're purchasing. They encourage customers to bring it back possibly for a dollar off their meal, pay for the container. And one of the things we can do with the Mr. Lid is it's called IML. It's baked into the plastic graphics. So now you're putting a container in someone's house with your graphics on it, reminding them that you're a brand that cares about reusability. The optics of that are I love that.

So we do, I will say we actually had a really recent development where a school district has called us and they're ordering 3,000 of our containers to hand out to young school children, elementary school children, to teach the benefits of reusability. And so when that occurs, that's in discussion right now. When that occurs, we're going to jump all over that with our press team and try to encourage other schools, you know, to follow that sort of behavior. I mean, that's what gets me excited. There's a couple of sayings, and I can't pin the one for this one.

One of them is, you know, education requires tuition and tuition is expensive. And so to get people to re-educate them on how to use this product is hard. And that's where I like all the opportunity you have in the branding and the storytelling and creating this sort of reusable container and making it fun. That I get excited about. I love it. I do too. Yeah. One of the things that I keep where my brain keeps coming back to, and Michael, you're going to deal with this when your little girl is in just a few years, which is school lunches.

And I know, and I'm looking at your website, I know you've got like a bento box insert and stuff. But that to me seems like a real opportunity to really use fun pops of color. And maybe even like a, I don't know, maybe there's maybe Mr. Lid is a character. Maybe Mr. Lid is like a monster, like a friendly monster with a, you know, with a lid head or something. Yep. You know, where it's like a, there's a character here and he's Mr. Lid and he's on the side of your bento box. I don't know. I love it.

I love it. And so Michael, Guy, I have three little girls, nine, seven, and seven. I've got identical twins. And I could tell you, kids are the biggest lid loser. around. So making the product accessible, regardless of if it's for, you know, school age children or adults, having that design or, you know, brand affiliation or collab, there's no reason we can't do a collab with like a famous singer or an NFL team. It creates that connection to the product. It's a bit of a signal and it's really key to making this something that people actually want to take out. You know, the

reason I think it doesn't occur now is there's a bit of a stigma around it or it just doesn't look cool. I think I think building on what guy says, I'm like, yeah, where do all these lids go? Mr. Lid can tell the story of where all these lids disappear into the world and why with Mr. Lid you don't have this problem. There's just so many fun stories to tell that way. That could be, that could be a really great angle because in this world, content matters. And so I think less about I know your initial question was how do we change consumer behavior? And I think more about exactly what

guy's saying in your building on, which is how do you create personality and personalization that gets people really excited and connected to this product and a part of their daily life. Yeah. I think there's a real opportunity to create

some like low, low cost content here. None of you guys have teenage boys or middle school boys. So you may not know about skibbitty toilet, but any parent listening knows what I'm talking about. It was teenage children or elementary school. This is a very weird phenomenon that start on the internet in the last couple of years. It's a toilet.

It's videos of a toilet saying skibbitty toilet. And every kid says this is so weird, but I can see like Mr. Lid, you know, like an animated Mr. Lid kind of thing, like munching up, you know, all this garbage and plastic or I don't know, something like that. Like stop motion Mr. Lid because it's a tacit. because it's attached to the thing. Yep. I love it, Guy. And we're trying to create connection two ways.

We want the product to be fun, but we also want to let people know how serious we are about reusability. You know, one of my favorite emails is from a young woman who told me that her family bought Mr. Lid when she was 11. She's taken them to college with her. She's 22 now. They still work. She keeps one in her car to pay for the coffee, holds her change. Nice.

It still works like they did on day one. And it just, it makes me so proud that, you know, we can do something to kind of mitigate how much of that garbage is being generated by throwaway containers. I love it. I love it. Paul, good luck. The brand is called Mr. Lid. We're going to show you on, man.

Good luck. Thanks, Guy. Thanks, Michael. Congrats. Thanks so much. Thank you so much for calling in. Yeah, I mean, do you know what I'm talking about the skibbitty toilet? You probably don't.

I do, actually. I've seen it before. You do. He needs skippity lid, skippity lid. Skippity lid. So crazy. One of my kids was saying it like, you know, about a year ago. I just didn't know it. It's so weird. We live in a weird time. It'll only get weirder. Michael, before I let you go, and I'm super psyched about your new brand and it's going to be awesome. But when you started this out, you know, you're Everlane back 15 years ago, if there was something you kind of wish you knew at the time that would. have been helpful to you? What do you think that might be? I'm going to say, I'm a marketer. And so when we launched Everlane, it was so much about storytelling. And even when I do things today, it's always the positioning and the storytelling. And what I'll say is that what I think is so

important if you want to build an enduring brand is that when you have phenomenal product that's differentiated, that's high quality, or the lowest price, whatever it is, that the product itself delights people, boy, it makes marketing's job 10 times easier. Everlane was lucky in the early days because we were at a, we had such a unique marketing position in a world that wasn't as crowded as it is today. and eventually our product caught up with our marketing. But that didn't happen for five or six years. And once we did, that's when the brand went from $50 million to $200 million in three years.

And so I think I go back to the product has to be amazing. And if the product's amazing, it'll go a very long way. Michael Praseman, thanks so much. Thank you. It's always fun. It's great having you back on. And by the way, if you haven't heard Michael's original how I built this episode, you've got to go back and check it out. You can find a link to it in the podcast description.

And here is one of my favorite moments from that interview. So the strangest thing you would never expect, if you were to build a brand today and you start with a t-shirt, your next product might be denim. Our next product was literally ties and bow ties. Ties and bow ties. It just seems like kind of a just throwing a dart at a darkboard. Let's do bow ties. It is weird. Yeah. We didn't have a lot of connections and it was we would have to wait six to 12 months to be able to launch a sweatshirt. And our alternative was we had a guy that could make ties and bow ties in two months.

And how did those do? We never made ties and bow ties again. Let's just put it that way. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at guyraz.com. com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues or questions you'd like help with, and hopefully we can help you with them.

And make sure to tell us how to reach you. You can send us a voice memo at hibt at ID.Wondery.com or call us at 1-800-433-1298 and leave a message there. And we'll put all this in the podcast description as well. This episode was produced by Carrie Thompson with music composed by Ramtinara Blui. It was edited by John Isabella. Our audio engineer was Robert Rodriguez. Our production staff also includes Alex Chung, Chris Messini, Carla Estevez, Elaine Coates, J.C. Howard, Catherine Seifer, Devin Schwartz, Neva Grant, and Sam Paulson.

I'm Guy Raz and you've been listening to the advice line on how I built this lab.