1:00

Now a message from our sponsor vital

1:02

proteins. As we age, sometimes we can

1:04

start to produce less collagen, which is

1:07

the most abundant protein in our bodies.

1:09

That can lead to fine lines, saggy

1:11

skin, and your bones and joints not

1:14

moving like they used to. That's where

1:16

vital proteins comes in. Their collagen peptides

1:18

are a supplement that helps support healthy

1:21

hair, skin, nails, bones, and joints. Vital

1:23

proteins is the number one brand of

1:25

collagen peptides in the US. They're the

1:28

experts. In fact, as I get older,

1:30

I know it's so much more important

1:32

to take care of my body, and

1:35

I've been using Vital Proteins Cologen peptides

1:37

because I want to look, feel, and

1:39

move my best. Try Vital proteins. Get

1:41

20% off by going to W.W.W. Vital

1:44

proteins.com and entering promo code built. At

1:46

checkout, these statements have not been

1:48

evaluated by the Food and Drug Administration.

1:51

This product is not intended to diagnose,

1:53

treat, cure, or prevent any disease.

1:55

Imagine getting a message from your favorite

1:57

brand that feels like it was created just

1:59

for you. are they're using attentive.

2:02

The SMS and email marketing

2:04

platform designed to help brands

2:06

build and connect with their

2:08

ideal audience. Attentive helps marketers

2:10

create unique messages for every

2:12

subscriber, transforming the consumer shopping

2:15

experience and maximizing marketing performance.

2:17

But how does it work?

2:19

Attentives AI learns what subscribers

2:21

actually want based on their

2:23

real-time interactions with your brand.

2:25

That means it customizes the

2:28

content tone and timing of

2:30

every message so they always

2:32

resonate. Ready to take customers

2:34

on a journey created just

2:37

for them? Visit attentive.com/built to

2:39

learn more. I

2:49

went to visit one of our

2:51

fabric vendors and we were just

2:53

going through all these fabric samples

2:56

and I was like, what is

2:58

this? And I remember my sales

3:00

rep, she was like, oh Michelle

3:02

you don't want that, that's way

3:04

too expensive. And I was like,

3:06

no, I need this, what is

3:08

this? It's fantastic and it feels

3:10

really good. And I was like,

3:12

I don't care how expensive it

3:14

is. This is what everybody is

3:16

going to want to put on

3:18

their body. Welcome

3:26

to How I Built This,

3:29

a show about innovators, entrepreneurs,

3:31

idealists, and the stories behind

3:34

the movements they built. I'm Guy

3:36

Ross and on the show today how

3:38

Michelle Whaler went from

3:40

printing t-shirts for friends

3:42

to helping build a

3:44

massive active-wear brand, Beyond

3:46

Yoga. There

3:57

are two basic ways to launch

3:59

a consumer brand, whether it's food

4:01

or skincare or apparel or whatever.

4:03

The first way is to raise

4:05

a ton of cash from investors

4:07

and try and flood the market

4:09

with ads, promotions, and product. And

4:11

that can work. There are plenty

4:13

of products you probably know about

4:15

because these brands are well-funded

4:17

and outspending their rivals. But

4:20

it's also risky and there

4:22

are also... plenty of brands that

4:24

took this approach and no longer

4:26

exist. The second path is to

4:29

bootstrap or raise the bare minimum

4:31

amount of money and try to

4:33

hit profitability fast even if your

4:35

overall revenue is pretty low. This

4:38

approach usually means you will grow

4:40

more slowly and it's unlikely unless

4:42

you are really lucky that you'll

4:45

make an immediate splash. That second

4:47

path, that's the one beyond yoga

4:49

took. For the first 10 years

4:52

of its existence, Biod Yoga operated

4:54

pretty much under the radar. Bigger

4:56

brands like Lulu Lemon and Afletta

4:59

got most of the attention from

5:01

the media and consumers. But the

5:03

company did a few unusual things

5:05

that ultimately worked. It was founded

5:08

in 2005 by two women, Michelle

5:10

Whaler and Jodi Gooberbroughsky, though in

5:12

this episode we'll just hear from

5:14

Michelle. Anyway, they launched the business

5:17

with a relatively modest investment from

5:19

Jody's dad, and with that money,

5:21

they developed a line of yoga

5:24

apparel for women. Now, one of

5:26

the things Beyond Yoga did, which

5:28

was risky, was to go the

5:31

wholesale route. In other words, unlike

5:33

more aggressive startups, they didn't pursue

5:35

a direct-to-consumer model, at least not

5:38

at first. They sold their clothes

5:40

through boutiques, yoga studios, and eventually

5:42

department stores. And where Beyond Yoga

5:45

Actually Found its niche was in

5:47

making yoga clothes for women of

5:49

all sizes. Now today, that's pretty

5:51

standard. But remember, back in the

5:54

day, brands like Lulu Lemon had

5:56

a reputation for being designed to

5:58

make women look skinny. Beyond Yoga

6:00

took a different approach and

6:03

it paid off. Slowly, carefully,

6:05

and methodically, the brand found

6:07

a lot of loyal fans.

6:09

And by 2016, a decade

6:11

into the business, it became

6:13

the fastest-growing indie yoga brand

6:15

in America. In 2021, Beyond

6:17

Yoga was acquired by Levi's

6:19

for $400 million, and it

6:22

all started with a LinkedIn

6:24

message to co-founder Michelle Whaler.

6:26

How that deal went down

6:28

was also unprecedented, which you'll

6:30

hear about. Three years after the

6:32

acquisition, Michelle stepped down as CEO,

6:34

and today, the brand is looking

6:36

to compete with its much bigger

6:38

rivals. As for Michelle, she grew

6:40

up in suburban Maryland, where her

6:43

dad ran a chain of record

6:45

shops in the DC area, and

6:47

her mom took care of things on

6:49

the home front. She was, you know. the

6:51

mom that was involved in everything

6:53

and I loved having my mom

6:55

around and it was great but

6:58

one thing that was highly influential

7:00

on me is the fact that

7:02

my mom really struggled with her

7:04

self-esteem and how she viewed herself

7:07

and my mom is an extremely

7:09

beautiful smart kind caring person but

7:11

I think that she fell kind

7:13

of into the trap of just never

7:15

feeling like she was enough. and wanting

7:17

to, you know, we, we were, at

7:20

that time, it was a lot of

7:22

diet culture, and I think she thought

7:24

there was only one vision of

7:26

beauty, and that was skinny. And

7:28

when I would bring some of

7:30

my friends home, you know, she

7:33

was always talking about what everybody

7:35

looked like, and, oh, this person,

7:37

you have the best smile, and

7:39

she started giving superlatives out to

7:42

me and my friends, and that

7:44

was very important to her struggle

7:46

with her weight. and it was

7:48

just frustrating to me because

7:50

I really wanted her to

7:53

see herself the way I

7:55

saw her and she didn't.

7:57

And I also want to ask

7:59

about... your dad because I think

8:01

he was an entrepreneur. Yes, so

8:03

he had a chain of music

8:06

stores and he started off, he

8:08

bought one music store and it

8:10

was kind of funny because he

8:12

wasn't really that into music, but

8:14

he thought it was a good

8:16

opportunity. It was initially called Kent

8:18

Mill Records and he built this

8:20

business, you know, one store at

8:22

a time and I think by

8:24

the end he had over 30

8:26

locations. Wow. Yeah, Kent Mill was... The

8:28

record store in the DC, Maryland, Virginia

8:31

area. I mean, I remember it because

8:33

I lived in that area for some

8:35

time. You remember it? Is it huge?

8:37

Is it everywhere? That's amazing. Yeah.

8:40

Camp Mill. Yeah. Although I imagine that

8:42

around the 2000s, things probably started

8:44

to change a little bit as

8:47

young people started download music. and

8:49

for free or not paying for

8:51

it. Exactly. So once the, you

8:53

know, once MP3s came onto the

8:56

scene, once Napster, all of that,

8:58

that really shifted everything that was

9:00

happening with my father's business, and

9:02

I watched my dad lose his

9:05

entire company, which was really

9:07

painful to watch. And it

9:09

wasn't because he did anything

9:11

wrong, it wasn't because he

9:13

wasn't, you know, managing his...

9:15

numbers are paying attention, but

9:17

the industry just kind of

9:19

shifted overnight and sometimes there's

9:22

just nothing you can do about it.

9:24

And how old were you when that

9:26

started to happen? I was in high

9:28

school when this started to happen. It

9:30

was before I left for college and

9:33

I think he didn't really want

9:35

to be a part of the contraction

9:37

of the business. I think that was

9:39

just a little more than his heart

9:41

could take. So at some point along

9:43

the way he had two brothers who

9:46

became his business partners and he

9:48

ended up selling the business to

9:50

them. But it wasn't the exit

9:53

that I think he always imagined.

9:55

I think it was more of

9:57

a closing down and changing. of

10:00

guard there wasn't any

10:02

big financial reward out

10:05

of that situation. So what

10:07

did he do? So I think

10:09

it was hard for him to

10:11

realize that this had actually ended.

10:13

And I think there was a

10:16

large period of denial and you

10:18

know my father had been relatively

10:20

successful and so I think that

10:22

he thought he had a pretty

10:24

good runway in order to you

10:26

know figure out what he was

10:29

going to do next. And unfortunately

10:31

I never really saw that happen.

10:33

He started a couple different things.

10:35

He was going to do some

10:37

business consulting, but ultimately my

10:40

parents ended up moving

10:42

to Florida. So they

10:44

basically lost their home.

10:46

They downsized to like

10:48

a little condo in

10:50

Jacksonville, Florida. And my

10:52

dad tried to do sale, he

10:54

kept going on the sales path.

10:56

And he kept thinking because there

10:59

was a lot of upside. But

11:01

he wasn't a natural born salesperson.

11:03

And I think that was something

11:05

that he never really accepted. Yeah.

11:08

Yeah, I mean, this will sort

11:10

of circle back a little bit

11:12

to your own story. And then

11:14

we'll get there eventually. But I

11:16

know I know that for college

11:19

you went to the University of

11:21

Florida. And I read that when

11:23

you first got there, you were

11:25

thinking of. majoring in like pre-med

11:28

or even business, but you end

11:30

up studying graphic design, is it

11:32

right? Yes, so I thought my dad

11:34

was gonna lose it when I said I

11:36

was gonna do this, but he

11:38

actually was really supportive and he

11:41

was like, I absolutely think you

11:43

should follow this art path, which

11:45

I was surprised that he was

11:48

so supportive about, but he really

11:50

was. And were you like, kind

11:52

of already into art and... painting

11:54

and was that a thing you did as

11:56

a kid? That's like all I did as a

11:59

kid. I would draw. and paint and

12:01

I was always in the art

12:03

classes and the drawing extracurriculars and

12:05

that's always what I gravitated towards.

12:07

So when you graduated from college

12:09

I guess you moved to New

12:11

York to and I guess to

12:13

pursue a career in graphic design.

12:15

Yes. This is about 2001, right?

12:17

2001. So I moved to New

12:19

York and I really... I really

12:21

didn't know anything about New York.

12:23

I got two graphic design jobs,

12:26

but then very quickly 9-11 occurred.

12:28

And so both of those jobs

12:30

basically disappeared. And then very quickly

12:32

I just started waiting tables and

12:34

then every table. that I waited

12:36

on, I said, you know anybody

12:38

who needs a graphic designer, and

12:40

I would slip my little card

12:42

in, and it wasn't actually through

12:44

that that I got a job,

12:46

but eventually I got an interview

12:48

for a position at Sports Illustrated.

12:51

That didn't work out, but the

12:53

recruiter really liked me. And when

12:55

there was an opening at People

12:57

magazine, she called me again, and

12:59

I was able to come in.

13:01

So at People, I loved working

13:03

at People magazine. It was a

13:05

great place. I met so many

13:07

fantastic people. It was just a

13:09

very warm, nurturing environment. And I

13:11

got to see so much and

13:13

I got to learn so much.

13:15

And one of the things that

13:18

I saw that I wasn't as

13:20

excited about was all of the

13:22

Photoshop that was going on. Everything

13:24

is photoshopped. And so when women

13:26

are looking at these magazines and

13:28

they even if you think you're

13:30

seeing just a real picture of

13:32

somebody that's candid. It's not. It's

13:34

not really who they are and

13:36

everybody is, you know, getting their

13:38

legs elongated or their arms, you

13:40

know, nipped and tucked in in

13:43

these photos. And I realize that

13:45

was just continuing to perpetuate this

13:47

impossible image. what women are supposed

13:49

to look like, and it was

13:51

very frustrating to me. But when

13:53

I was working at people, I

13:55

started my first entrepreneurial endeavor, which

13:57

was called Unsweetened, and I made

13:59

this t-shirt line for women that,

14:01

you know, I drew women, and

14:03

I drew them as they are.

14:05

I called it the Unsweetened version,

14:07

or the unshuger-coded version of themselves,

14:10

and I would. Tell me, how

14:12

that, sorry, how did that start,

14:14

because... I know that you started

14:16

sort of a teacher business, but

14:18

was the intention to turn into

14:20

a business initially? No, it definitely

14:22

wasn't. So when I first moved

14:24

to New York, I was living

14:26

with my best friend from college,

14:28

and it was her birthday, and

14:30

I was trying to think, what

14:32

could I get Lauren, the girl

14:35

who... pretty much has everything. So

14:37

I made this really cute illustration

14:39

of Lauren and I bought a

14:41

t-shirt and then I put the

14:43

picture of Lauren in the center

14:45

and I gave it to her

14:47

for her birthday and then very

14:49

quickly all of my friends were

14:51

like I want an illustration of

14:53

me and so throughout that time

14:55

I started creating this collection, you

14:57

know, different women doing different activities,

15:00

different shapes, different sizes, and I

15:02

would put the pictures up on

15:04

my wall in the cubicle. at

15:06

People Magazine. And I had a

15:08

really good cubicle because I was

15:10

right outside of the publisher, Kathy,

15:12

and so people were always waiting

15:14

to talk to Kathy, so they'd

15:16

hang out at my cubicle and

15:18

they'd be like, oh, what are

15:20

these cool illustrations? And then I'd

15:22

tell them and then people would

15:24

be like, oh, well, your friend

15:27

Rachel looks like my friend Rita,

15:29

or, you know, could you do

15:31

one of me? And so I

15:33

started selling people, my t-shirts. while

15:35

I was working at people. And

15:37

then I started going to holiday

15:39

bazaars and I would walk up

15:41

and down the streets in New

15:43

York and I'd go into different

15:45

boutiques and I would sell them

15:47

my t-shirts. And I remember one

15:49

of my favorites. ones that I

15:52

got into was this store I

15:54

don't even know if it still

15:56

exists but I loved it. It

15:58

was called Pooki and Sebastian and

16:00

when I got in there I

16:02

felt like oh my goodness I

16:04

really made it and it was

16:06

it was very exciting. All right

16:08

so meanwhile you had a pretty

16:10

good day job in graphic design

16:12

but I guess you eventually decide

16:14

to quit and and and then

16:17

move from New York to California

16:19

for a change of pace and

16:21

I think it's around 2005. And

16:23

you still have the t-shirt business

16:25

going, right? Like, when you first

16:27

settle in California, I think in

16:29

San Diego, right? Yes. So, essentially,

16:31

I'm in San Diego. I'm not

16:33

really loving it. I am very

16:35

homesick for New York, and I'm

16:37

thinking I probably should go back.

16:39

But... My heart is like I

16:41

put so much effort into getting

16:44

out to California. I'm already here.

16:46

I can't just give up. But

16:48

then I, while I was still

16:50

in San Diego, I signed up

16:52

for a trade show in LA.

16:54

It was called the LA Gift

16:56

Show. And when I went up

16:58

to that gift show, I ended

17:00

up meeting a gentleman who ended

17:02

up introducing me to Jody, who

17:04

became my business partner. Yes. But

17:06

I want to get to that

17:09

in a moment. So you go

17:11

to the trade show, obviously looking

17:13

to see if maybe boutiques would

17:15

put in orders, and there was

17:17

somebody who was this person that

17:19

came by and started talking to

17:21

you? He was another vendor. He

17:23

had his own product he was

17:25

selling. His name was Brad. And

17:27

he came over and he was

17:29

just very friendly and he was

17:31

like, I'm really impressed with this

17:34

business you're building. And so I

17:36

stayed in touch with Brad and

17:38

I was like, hey, do you

17:40

know anybody who needs a designer?

17:42

And he said, actually, I just

17:44

met this incredible. woman and she

17:46

has this idea for an active

17:48

wear company, but she's just getting

17:50

started with some of her like

17:52

trademark and you know that information.

17:54

How did you do all of

17:56

that? And I was like, oh,

17:58

I just, you know, went online

18:01

and did it. He's like, would

18:03

you be willing to help her?

18:05

And I was like, of course.

18:07

So then I went over to

18:09

Jody's house or her apartment. His

18:11

friend was, or this woman he

18:13

had met is Jody, Jody Cooper,

18:15

yeah. Exactly. And was she in

18:17

the apparel business or was this

18:19

just a new thing that she

18:21

wanted to do sort of like

18:23

what you were trying to do?

18:26

She was just getting started with

18:28

this. She had been in the

18:30

apparel industry a little bit before

18:32

but this was her, she was

18:34

doing this on her own and

18:36

she needed some help and she

18:38

said like I'd love if you

18:40

could help me. I didn't have

18:42

any money. So I was looking

18:44

for side work. So I was

18:46

happy to help her. And then

18:48

very quickly, I fell in love

18:51

with the idea of beyond yoga.

18:53

Beyond yoga is the whole reason

18:55

beyond yoga exists. It's created to

18:57

make. clothing that are for women

18:59

of all shapes and sizes and

19:01

to make show what you know

19:03

show people that every body is

19:05

beautiful and all bodies are good

19:07

bodies and I remember hearing Jody

19:09

on the phone with this designer

19:11

that she was working with in

19:13

the very early days and she

19:15

was getting frustrated because the designer

19:18

wasn't capturing her intention and I

19:20

turned to her and I said

19:22

you know I know how to

19:24

do this I was like do

19:26

want me to fix those sketches

19:28

for you. I know exactly what

19:30

you're talking about." And she was

19:32

like, yeah, I do. And so

19:34

I said, oh, just forward me

19:36

the files, I'll work on it,

19:38

you know, over the weekend. And

19:40

then that night, I fixed the

19:43

sketches that she had, and then

19:45

I had some other ideas for

19:47

things that would be great for

19:49

Beyond Yoga, and I sent it

19:51

back to her. And then the

19:53

next morning, she called me, and

19:55

she was like, our relationship is

19:57

about to change. And pretty much

19:59

from that point on, I spent

20:01

the next 18 years building, growing

20:03

and leading beyond yoga. Well, let's

20:05

go back to that moment. You

20:08

were not you were not meeting

20:10

Jody to help found start this

20:12

business. You were really just kind

20:14

of giving her giving her advice

20:16

and helping out. But when you

20:18

when you sent her sketches for

20:20

apparel, she called you and said,

20:22

hey, basically said, hey, why don't

20:24

Why don't you come work with

20:26

me? Yeah. Yeah. Not just full-time.

20:28

She was like, let's do this

20:30

together. Let's be partners. Yeah. And

20:32

it was based, and how before

20:35

that point, how many times had

20:37

you guys met or interacted? I

20:39

think that we had been working

20:41

together for a couple weeks at

20:43

that point. It was very early

20:45

on. And did you, I mean,

20:47

what was your, did you initially

20:49

think, well, I've got my own

20:51

thing going or was it like,

20:53

I want to do this? It

20:55

was like I want to do

20:57

this because I really loved the

21:00

mission of beyond yoga and the

21:02

idea of creating clothing for women

21:04

of all shapes and sizes and

21:06

I you know continued with unsweetened

21:08

a little bit on the side

21:10

but for the most part I

21:12

was beyond yoga or bust. Did

21:14

she have I mean you I'm

21:16

assuming I don't think you had

21:18

a whole lot of money at

21:20

all maybe very little. I mean,

21:22

what did she offer you? Did

21:24

she offer you to be a

21:27

partner? Did she offer you to

21:29

be an employee? Like, how is

21:31

it going to work? In the

21:33

beginning, I don't even remember exactly

21:35

how we talked about it. She

21:37

had gotten initial funding from her

21:39

father. And eventually, as we continued

21:41

to work together, as we got

21:43

closer, as she saw that I

21:45

was just taking on more and

21:47

more and more and more and

21:49

more and more and more. then

21:52

we got into more of the

21:54

equity conversations and really solidified that

21:56

piece of it. Her dad, we

21:58

should mention her dad. is a

22:00

very famous Hollywood producer,

22:02

Peter Goober. He did like

22:05

big movies, certainly in the

22:07

80s. He did Batman and

22:09

the color purple and rainman.

22:11

And he's, I think he's

22:13

like a co-owner of the

22:16

Golden State Warrior. So I

22:18

mean, he's a very high-powered

22:20

dude and he gave her some seed

22:22

money. to start this, right? So there

22:25

was some money behind it. And so

22:27

now you're in this and you're working

22:29

with Jody and you want to create

22:32

a clothing line. But you were a

22:34

graphic designer, not a fashion designer, right?

22:36

So how did you start? You know,

22:38

we started working with the local

22:41

factory in LA. You know, they

22:43

helped us source the fabric, they

22:45

helped us with the patterns. I

22:47

would create the sketches for what

22:49

we wanted. So right from the

22:51

beginning, I started focusing on the

22:53

design, the sketching, creating the line

22:55

sheets. I hired the sales team. And

22:58

who are you looking to sell to

23:00

stores, to like boutiques? stores and

23:02

boutiques and so our first

23:04

store was a studio up

23:06

in Santa Barbara called Drishti

23:08

Yoga and then we got

23:11

into yoga works which was

23:13

huge. That's like a chain

23:15

of yoga studios. Exactly

23:17

and at the time you know

23:19

that was like the place to

23:21

go but we we started selling

23:23

to a lot of you know,

23:25

small mom and pop studios. And

23:28

the big goal was to get

23:30

the orders and then for them

23:32

to sell through and for them

23:34

to buy again. And that started

23:36

happening a lot quicker than we

23:38

thought it was, but it was

23:40

great. And, you know, we did

23:42

over a million dollars in our

23:44

first year of shipping. just trying

23:46

to do sales and getting the

23:48

product. And how many, I mean,

23:51

was it just you and Jody

23:53

and one other person? No, it

23:55

was just me and Jody in

23:57

the beginning for probably the first

23:59

two years. But we worked with,

24:01

you know, third parties. So, you

24:03

know, at the factory in

24:05

LA, they had pattern makers

24:07

and, you know, we would

24:09

go and we would have

24:11

our fittings there and we

24:13

would try clothing on our

24:15

fit model who was a

24:18

bartender at James Beach. So,

24:20

I actually want to

24:22

dive into the kind of

24:24

the strategy that you took

24:27

because really your strategy from

24:29

the and to basically sell to stores,

24:32

which a lot of early brands

24:34

kind of balk at certainly now

24:36

because obviously you've got to sell

24:38

in a discount and then you

24:40

don't always have control over how

24:42

they are sold in the stores.

24:44

But that was a strategy that

24:46

you guys pursued from the get-go.

24:48

Can you talk a little bit

24:51

about why? Yeah. So I'm a huge

24:53

fan of wholesale. And I've

24:55

always looked at this as

24:57

a way of reinforcing your

24:59

brand. I think of wholesale

25:01

as marketing that you get

25:03

paid for. So. Anytime somebody

25:05

goes into a yoga studio

25:08

and sees your product, they're

25:10

discovering you. You know, we

25:12

had a really diverse distribution

25:14

network too, which I think

25:16

was one of the things

25:18

that we did really well.

25:20

So we sold to, you

25:22

know, the Mom and Pop

25:24

yoga studios and the Boutique

25:26

Fitness Places. We sold to...

25:28

regular boutiques that weren't fitness-based,

25:31

we were on the cool

25:33

websites like Revolve and Shop

25:35

Pop. And when people would

25:37

see our products at all

25:39

of these different places, it

25:41

was brand validation and reinforcement.

25:43

So when you, I mean, when

25:45

you were working on getting into

25:47

some of these places, you mentioned

25:49

yoga works and some of these

25:51

other places, how did you... What

25:53

was the pitch? How did you

25:55

get into some of these places?

25:57

We, our pitch was that we are. you

26:00

know, the softest, most inclusive

26:02

active wear line. I'm obsessed

26:04

with fabrics and I love

26:06

the touch and feel and

26:08

I spend hours, you know,

26:10

just going through show rooms

26:12

and feeling every fabric and

26:14

that was really important. So,

26:16

you know, we were made

26:18

in the USA, everything was

26:20

machine wash and dry. We

26:22

tried to make it as

26:24

easy care as possible. And

26:26

then it was also this

26:28

concept of It's for your everyday

26:31

life. It is for your active

26:33

lifestyle. So we were among the

26:35

first to do this active layering

26:37

and transition clothing. So you could

26:40

get up in the morning and

26:42

get dressed. And maybe you weren't

26:44

necessarily going to the gym, but you

26:46

had all these things that you were

26:48

going to do and you needed to

26:50

look she can put together. And then.

26:52

at some point you're hoping to slide

26:54

into a class or be able to

26:57

sneak off and go for a run

26:59

or whatever the case may be. So

27:01

we tried to create these layering pieces

27:04

that made the outfits look pulled together

27:06

and then you could just pull off

27:08

this top and voila you were ready

27:11

to go to the gym. And tell

27:13

me a little bit about just learning

27:15

about how to run a business. I

27:17

mean I read that for you it

27:19

was really hard just trying to figure

27:21

out what to do and

27:24

how to manage inventory and

27:26

the books and doing sales

27:28

calls. Like those things didn't

27:31

come easily to you. Some of

27:33

it came easy, some of it was

27:35

just a complete learning. So, you know,

27:38

I remember one day I was alone

27:40

in the office and all of a

27:42

sudden we got back our first set

27:44

of samples on this pima cotton and

27:47

what should have looked like a shirt

27:49

ended up looking more like a tunic

27:51

and I was trying to get to

27:54

the bottom of why this happened and

27:56

the shrinkage on the fabric hadn't been

27:58

incorporated the right way. And so I

28:00

was on the phone with the mill

28:02

in North Carolina trying to understand what

28:05

was happening to the fabric as it

28:07

was going through the garment dye process.

28:09

And luckily, you know, this gentleman was

28:11

very helpful and he was like, listen,

28:13

each roll, you have to take it

28:15

and make a, you know, like a

28:17

square that's like 20 inches by 20

28:19

inches and you put that with a

28:21

sharpie and then you put it through

28:24

the process. and you have to see

28:26

how much it shrinks, and then you

28:28

have to apply that to your pattern.

28:30

You know, these are things you just

28:32

learn on the fly if you haven't

28:34

gone through formal training. So, all

28:36

right, so you, and I guess

28:39

you also took classes at UCLA

28:41

Extension, which is like their adult

28:43

classes, right, to kind of learn

28:46

about business, is that right? Yeah,

28:48

I took accounting classes, I really

28:50

wanted to understand. what was going

28:53

on with our finances, because in

28:55

the early days I was so

28:57

focused on sales and product design

29:00

and marketing, you know, and in

29:02

the beginning we were doing so

29:04

well. Like I think when you're

29:07

doing well, some of the important

29:09

things might get glossed over on

29:11

the financial side of things. So

29:14

In 2006, I was the first

29:16

year we were shipping, we did

29:18

1.1 million, then the next year

29:20

we did around 2.2, then the

29:23

next year we did... I think

29:25

we were around 4.5. Then the

29:27

global financial crisis happened and everything

29:30

kind of bottomed out all you

29:32

know at that point we were

29:34

primarily wholesale and we dropped in

29:37

2009 by almost a million dollars

29:39

which was a large percent to

29:41

go backwards and you know that

29:44

was a big setback. When we

29:46

come back in just a moment,

29:48

how competitors blunder turns into a

29:51

major opportunity for Beyond Yoga. Stay

29:53

with us. I'm Guy Raz and

29:55

you're listening to How I Built

29:58

This. Like

30:08

a lot of people your

30:10

New Year's resolution may be

30:12

to drink less alcohol. Luckily,

30:14

dry doesn't have to be

30:16

boring thanks to athletic brewing

30:18

companies fun and flavorful non-alcoholic

30:21

beers. Athletic has a huge

30:23

variety from IPAs, extra dark,

30:25

sour, hazies, Belgian-style whites, and

30:27

an Irish-style red. No matter

30:29

what you're looking for in

30:31

a great non-alcoholic brew, the

30:33

answer is always athletic. Atletics

30:35

brews are perfect for any

30:38

occasion. Plus, the zero hangover

30:40

the next day. My personal

30:42

favorite is Upside Don Golden.

30:44

There's nothing dry about athletic

30:46

brewing company non-alcoholic brews. Give

30:48

it a try and head

30:50

to athletic brewing.com/B-U-I-L-T to grab

30:52

some fun and flavorful brews

30:55

near you. athletic brewing company,

30:57

fit for all times, near

30:59

beer. While you're away, your

31:01

home could be an Airbnb.

31:03

just like the incredible home

31:05

I stayed in in Mexico

31:07

City just a couple weeks

31:09

ago. It was absolutely beautiful

31:12

and the perfect base for

31:14

exploring the city. Maybe you're

31:16

planning a trip for a

31:18

long holiday weekend and while

31:20

you're away you could Airbnb

31:22

your home and make some

31:24

extra income toward the trip.

31:26

Find out how much your

31:29

place is worth at airbnb.com/host.

31:31

How I built this is

31:33

supported by ultra-running. Ultra makes

31:35

performance running shoes that are

31:37

insanely comfortable with a roomy

31:39

toe box and zero to

31:41

low drop. This helps keep

31:43

your feet in a more

31:46

natural position so you can

31:48

move how you were designed

31:50

to. Perfect to the road,

31:52

trail, or gym, you could

31:54

wear them for miles and

31:56

forget they're there. What I

31:58

love... most about the shoes

32:00

is the wide tow box.

32:03

My toes have room to

32:05

spread, really, the way nature

32:07

design them. And I've seen

32:09

significant improvement in my running

32:11

gate. I also have a

32:13

pair of trail runners that

32:15

are super comfortable, super lightweight,

32:17

but also really strong on

32:19

rocky terrain. Stay out there

32:22

with ultra, try ultra for

32:24

yourself with a free 30-day

32:26

trial and free shipping at

32:28

ultra-running.com. That's a-L-T-R-A-A-running- Welcome back

32:30

to how I built this.

32:32

I'm Guy Raz. So it's

32:34

around 2011 and Michelle is

32:36

now officially the CEO of

32:39

Beyond Yoga. And even though

32:41

the company has more or

32:43

less recovered from the financial

32:45

crisis, its books are still

32:47

a little messy. At that

32:49

time, we were actually outsourcing

32:51

all of the financials to

32:53

a third party. And I

32:56

started realizing that things weren't

32:58

coded properly. You know, there

33:00

were items that shouldn't have

33:02

been in cost of goods

33:04

sold that were put in.

33:06

And so I just realized

33:08

that there was a lot

33:10

that was... a little messy

33:13

and unorganized and we needed

33:15

to fix that. And this

33:17

was too important of a

33:19

piece of the business to

33:21

outsource. And so I brought

33:23

that in-house. I hired an

33:25

accountant and that's when I

33:27

kind of realized, you know,

33:30

you have to lean into

33:32

all areas of the business.

33:34

The finance side of things

33:36

did not come naturally to

33:38

me. I definitely needed guidance

33:40

and to teach myself, but...

33:42

I also, you know, you

33:44

can't just do the parts

33:47

that are fun. You have

33:49

to lean into the ability

33:51

to just ask a lot

33:53

of questions and be comfortable

33:55

not being the smartest person

33:57

in the room. Tell

34:00

me a little bit about how

34:02

did you, when you sort of

34:04

started to make your hires, right?

34:07

And certainly your initial hires, how

34:09

did you, like, because I read

34:11

the first hire you made as

34:13

a production manager, so how did

34:15

you put those pieces together on

34:17

who to go to first and how

34:19

to build the team out? You know, in

34:22

the beginning, I did as much

34:24

as I could, I was originally

34:26

sketching. everything in the collection.

34:28

Eventually we brought on designers who

34:31

did that. But I will say,

34:33

I think one of the most

34:35

important hires I made was when

34:38

I ended up hiring my CFO,

34:40

who happens to be my

34:42

husband Jesse. You know, he

34:44

started, we started dating in

34:46

2009 and he was in

34:48

and around the business for

34:50

many years before we actually

34:52

got married and I think it

34:54

was like 2000 and... 14. And one

34:57

of the things that, I mean,

34:59

there's so many things that I

35:01

want to share with you about

35:03

how Jesse impacted the

35:05

business, but one thing that

35:07

was really helpful was when

35:09

he joined me and he

35:11

was really looking at our

35:13

finances. He's like, you're actually

35:15

not spending enough in your

35:17

team and in marketing. And

35:19

I was so nervous. And

35:21

I think because of, you

35:23

know, what happened to my dad and

35:26

seeing him lose his business, I

35:28

was always very nervous to get

35:30

out ahead of our skis. And

35:32

so when Jesse came on board

35:34

and he's somebody who I trust

35:36

implicitly and he said, you really

35:39

need to lean in and bring

35:41

on some great talent, that's when

35:43

I started spending more on the

35:45

people who were on our team.

35:47

And I think that was a

35:49

huge turning point. How did you

35:51

finance? the business. I mean you

35:53

got that initial investment

35:56

and how are you financing just you

35:58

know the growth of the business.

36:00

We were just reinvesting every dollar

36:02

back into the business. We never

36:05

took on any additional outside investment.

36:07

We had a lot of people

36:09

offer to invest and a lot

36:11

of people offered to buy us

36:14

at different points and we just

36:16

turned everybody down and we worked

36:18

with some great banking partners. The

36:20

people at Wells Fargo were really

36:22

helpful. The team at CIT helped

36:25

us get a line. a line

36:27

of credit to factor all of

36:29

our accounts, our wholesale accounts. So

36:31

that gave us the ability to

36:34

be able to, you know, finance

36:36

our inventory. And that was tremendously

36:38

helpful. I mean, meantime, you're seeing

36:40

other brands just explode. Lou Lemon

36:43

by 2011-2012 was massive. Massive. Probably

36:45

easily a billion dollar brand by

36:47

that point. There were others, athletic

36:49

and other brands that were just

36:52

growing. And I mean, you aren't

36:54

really even competing with them at

36:56

that point, right? And you were

36:58

just so small compared to them.

37:00

Were you worried? Were you looking

37:03

at those companies and just thinking,

37:05

were you always going to be

37:07

small? But I wasn't overly focused

37:09

on them either. I always looked

37:12

at Lulu Lemon as an inspiration

37:14

and as the company that made

37:16

it okay for women to buy

37:18

a hundred dollar pair of leggings.

37:21

And I felt like they paved

37:23

the way and I'm grateful to

37:25

them for that. You know, and

37:27

there were times when Lulu faltered

37:30

and there were times where. Beyond

37:32

grew. I remember when they had

37:34

the whole, you know, sheer pant

37:36

debacle. I don't know if you

37:39

remember that, but that was a

37:41

moment because at the time, I

37:43

think we were the number two

37:45

brand carried an equinox. But Lulu

37:47

was, you know, the lion's share

37:50

of the space. We were a

37:52

very distant number two. And the

37:54

minute Lulu had to pull their

37:56

product, my buyer from Equinox called

37:59

and said, hey, we've got a

38:01

situation. What do you have in

38:03

black leggings? And I was like,

38:05

we got you. And I shipped

38:08

everything we had. And we sold

38:10

through what we had. And so

38:12

that was a moment for us

38:14

to step up and... our product

38:17

got a little bit more floor

38:19

space and we sold through when

38:21

we performed and so that, you

38:23

know, in turn gave us more

38:25

floor space in the future. I

38:28

guess one of the train points

38:30

was you kind of came across

38:32

this fabric in LA, right? There's

38:34

a whole district like garment district

38:37

in LA, there's New York too,

38:39

and you were in a warehouse

38:41

looking, I think, in LA looking

38:43

just through... potential like samples of

38:46

different fabrics and you came across

38:48

this one fabric that would would

38:50

become like the the core of

38:52

what of what you make what

38:55

tell me about that fabric and

38:57

how you came across it. Yeah

38:59

that fabric is called Space Die

39:01

and I was downtown at the

39:04

LA Mart. I went to visit

39:06

one of our fabric vendors, they

39:08

had a showroom there, and we

39:10

were just going through all these

39:12

fabric samples. And I just went

39:15

through, you know, just touched, walked

39:17

around the room, touching everything. And

39:19

I remember when I found Space

39:21

Day, and I was like, what

39:24

is this? And I remember my

39:26

sales rep, she was like, oh

39:28

Michelle, you don't want that, that's

39:30

way too expensive. And I was

39:33

like, no. I need this. What

39:35

is this? And I was like,

39:37

I don't care how expensive it

39:39

is. This is what everybody is

39:42

going to want to put on

39:44

their body. And I'm really happy

39:46

that we decided to go with

39:48

that fabric. I wear that fabric

39:50

every single day of my... life

39:53

and I absolutely adore it and

39:55

it was worth it. What makes

39:57

it different? What made it so

39:59

unique? And why wasn't it being

40:02

used in other apparel by the

40:04

brands? I don't think other people

40:06

were using it because it was

40:08

so expensive. and I wanted to

40:11

make something that was going to

40:13

feel amazing for people. And I

40:15

don't think people at the time

40:17

were willing to spend that type

40:20

of money to get fabrics made.

40:22

And it was two different yarns

40:24

and it was weaved together in

40:26

a certain way and it had

40:29

a brushed hand. There's just something

40:31

about the way that those two

40:33

fabrics came together and then ultimately,

40:35

you know, I worked with the

40:37

mill to really work on. how

40:40

to get it as soft as

40:42

possible and there's some trade secrets

40:44

there. But... It's fantastic and it

40:46

feels really good. It has four-way

40:49

stretch, it has amazing recovery, it

40:51

holds color in a fantastic way.

40:53

You know, initially when I first

40:55

found it, I thought that it

40:58

was just going to be a

41:00

seasonal fabric, that we were going

41:02

to use, you know, once and

41:04

then we'd move on, and as

41:07

soon as my team felt it,

41:09

and as soon as the sales

41:11

reps got it out and our

41:13

customers were touching it, they were

41:15

like, you're going to have this

41:18

forever, right? Is it primarily cotton,

41:20

like what is it made out

41:22

of? It's a polyspandex blend. Okay.

41:24

And I mean, was it instant,

41:27

like, I mean, by the time

41:29

you started to sell this, which

41:31

was, I guess, 2014, because you

41:33

came across the fabric in 2013,

41:36

well, like, how much were you

41:38

guys doing in revenue? Were you,

41:40

at that point, over $20 million

41:42

a year? My years are all

41:45

jumbled in terms of where we

41:47

were. I know that. We had

41:49

double-digit growth, you know, pretty much

41:51

from that point on and so

41:54

We never had a I think

41:56

we ever had a down year

41:58

from that point on How

42:01

were you able to, because I know

42:03

that you also made some important hires,

42:05

like somebody came from Under Armour and

42:08

from Tom's, like, how did you afford

42:10

them? I mean, even then you were

42:12

still a pretty small business, so how

42:14

could you afford to bring on those

42:17

people who had so much experience? So

42:19

first of all, I wasn't the person

42:21

who was paying the highest salaries. I

42:24

definitely know that people took a little

42:26

bit of a pay cut to come

42:28

and work with us, but I think

42:31

that people really believed in what we

42:33

were doing. And once, you know, one

42:35

or two people come on board that

42:38

are really passionate about it that are

42:40

great, like I really believe that A

42:42

players want to work with A players.

42:45

And so... your team becomes your recruiting

42:47

tool. And, you know, when this amazing

42:49

marketer came over to our team, you

42:52

know, I didn't just hire her and

42:54

say, I'm going to give you the

42:56

biggest salary that I have, I said,

42:59

look, I can afford to pay you

43:01

this, but I also... know you're going

43:03

to need some people around you. And

43:05

we invested in building a team around

43:08

her. And, you know, the same is

43:10

true for what we did with, you

43:12

know, the woman from Under Armour, because

43:15

you have to give people resources once

43:17

they come on board. And people also

43:19

loved the fact that we were primarily

43:22

all female. It was funny, you know,

43:24

Jesse was pretty much the only white

43:26

male in our company for the majority

43:29

of the time that we were in

43:31

existence. That we were in existence. When

43:35

we come back in just

43:37

a moment, Michelle gets a

43:39

life-changing LinkedIn message from one

43:41

of the most venerated clothing

43:43

brands in the world. Stay

43:46

with us. I'm Guy Raz

43:48

and you're listening to How

43:50

I Built This. Have you

43:52

heard about the latest tech

43:54

partnership that's making waves? Lenovo

43:57

and Intel. have been working

43:59

together for years and now

44:01

they've really outdone themselves. With

44:03

the new Lenovo aura edition

44:05

AI PC imagined with Intel

44:08

you can work seamlessly with

44:10

smart experiences to block distractions

44:12

share photos in a tap

44:14

and instantly get expert support.

44:16

This isn't just any laptop

44:19

it's packed with AI capabilities

44:21

that could really give your

44:23

business a boost. Now you

44:25

can work without limits. It's

44:27

possible on your Intel AIPC.

44:30

Learn more about Lenovo-Oora edition

44:32

AIPCs at lenovo.com/ORA. A major

44:34

challenge that many employers face

44:36

is the pressure to hire

44:39

quickly. It's a tough hurdle

44:41

to overcome because it can

44:43

be incredibly time-consuming to search

44:45

for great candidates and sort

44:47

through applications. Well, if you're

44:50

an employer who can relate,

44:52

I have one question for

44:54

you. Have you tried Zip

44:56

recruiter? Zip recruiter has figured

44:58

out how to solve this

45:01

very problem. In fact, four

45:03

out of five employers who

45:05

post on Zip recruiter get

45:07

a quality candidate within the

45:09

first day. And right now,

45:12

you can try Zip recruiter

45:14

for free at Zip recruiter.com/built.

45:16

Zip recruiter's powerful matching technology

45:18

works fast to find top

45:20

talent. So... You don't waste

45:23

valuable time or money. So

45:25

relax employers and let Zip

45:27

Recruiter speed up your hiring.

45:29

See for yourself. Just go

45:31

to ziprecruiter.com/built right now to

45:34

try it for free. That's

45:36

the same price as a

45:38

genuine smile from a stranger,

45:40

a picture perfect sunset or

45:42

a cute dog running up

45:45

to you and licking your

45:47

hand. Again, that's Zip recruiter.com/built.

45:49

Zip recruiter. Zip recruiter. Zip

45:51

recruiter. the smartest way to

45:53

hire. Hey,

46:03

welcome back to how I built

46:05

this. I'm Guy Ross. So by

46:07

around 2016, Beyond Yoga apparel has

46:09

spread to about a thousand stores

46:12

across the country. And after

46:14

first holding off on direct

46:16

consumer, Michelle starts to embrace

46:19

it. As e-commerce started to

46:21

grow, we absolutely leaned into

46:23

it, but... as much as

46:25

ecom would grow, wholesale was

46:27

just growing quicker. I forget

46:29

the exact years and where

46:31

things were, but I would

46:33

say it was probably around

46:35

like 25% of our sales.

46:37

And, you know, then I

46:39

think it wasn't until COVID

46:41

that it really shifted and

46:43

became the lion's share of

46:45

what we were doing. How did

46:48

you pick stores to go into?

46:50

I mean, I have to imagine

46:52

like if you're in... you know,

46:54

TJ Max and in, you know,

46:57

Ross, that's different than if you

46:59

are in Bloomingdale's and in, you

47:01

know, Neiman Marcus. Exactly. I always

47:04

looked at our wholesale strategy

47:06

as our marketing strategy, and

47:09

we were very particular about

47:11

where we would sell, and

47:13

my team used to get frustrated

47:16

with me because I would actually

47:18

turn them down. for a lot

47:20

of opportunities and you know they're

47:22

like but we could get a

47:25

million dollars you know if we

47:27

would just sell QVC or if

47:29

we could do coals and I

47:31

said no I don't think that's

47:34

what's right for the brand I

47:36

mean we could have been larger

47:38

faster for sure but I think

47:40

it's very easy to go quickly

47:43

downstream and it's much harder

47:45

to continue to build

47:47

a really clean, high-end,

47:49

profitable business. One of the

47:51

things that you guys have done

47:54

is made virtually most of

47:56

your apparel in the United

47:58

States in Los Angeles. you're

48:00

based. And a lot of people

48:02

I think don't realize that there

48:04

is like still a pretty robust

48:06

manufacturing based in Los Angeles. Furniture

48:08

is made there and it's not

48:11

just like a city of Hollywood.

48:13

There's still things that are made there,

48:15

but that's more expensive. Was

48:17

there ever, I mean, as you saw

48:19

other brands and apparel brands moving their

48:21

manufacturing or even starting

48:24

them manufacturing in Asia, which was

48:26

a fraction of the price, did

48:28

you ever look at that option

48:30

or possibility? I very much enjoy

48:33

making product in LA. I like

48:35

the idea that I know the

48:37

people that I can go down

48:39

and pop in and see what's

48:41

happening at any moment. And if

48:43

you, you know, all of a

48:45

sudden realize that something's selling really

48:48

fast, you can ramp it up.

48:50

And if you, on the flip

48:52

side, realize that you're heavily investing

48:54

in something and it's a mistake.

48:57

A lot of times you can

48:59

just pull it from the line.

49:01

But it's also extremely rewarding to

49:04

get to know the people and

49:06

feel like you're supporting your community.

49:08

One of our contractors, she started

49:11

off as a sample house and

49:13

she wanted to do more production

49:15

for us. And she did phenomenal

49:18

samples. And we said as

49:20

soon as you get your

49:22

manufacturing license, we will start

49:24

you with, you know. some

49:26

small quantities and let's help

49:28

you build your business. We

49:30

built our business side by

49:32

side with so many of

49:34

these partners and that woman

49:36

who was our sample house,

49:38

she ultimately now has three

49:40

different manufacturing factories in downtown

49:42

LA, her daughter runs one

49:44

of them. You know, it's

49:46

very rewarding to get to work

49:48

with people and see those types

49:50

of impacts on their lives. So I

49:52

read that around by 2017

49:55

you guys had hit about

49:57

20 million in revenue and

50:00

And apparently around this time, you thought,

50:02

why don't we take a, why don't

50:04

we see if we can bring in

50:06

some investors to sort of supercharge our

50:08

growth, right? Because that's a great number.

50:10

And you spent, you decided to spend

50:13

some time making a pitch, going to

50:15

investors and I'm assuming you went to

50:17

New York and probably we're in LA.

50:19

Tell me a little bit about that

50:21

process. And am I right? I mean,

50:23

the idea was, let's bring in money.

50:26

Let's grow this thing. Yes, and we

50:28

were like, maybe we should be growing

50:30

a little faster than we are. We

50:32

did see, you know, everybody else moving

50:35

at what seemed like a much quicker

50:37

clip than we were. And so we

50:39

went out, we hired a banker, and

50:42

we did. We did the whole dog

50:44

and pony show, and I think even

50:46

though ultimately we decided that we didn't

50:49

want to bring on an investor, I

50:51

think it was a really invaluable. lesson.

50:53

And so the things I learned number

50:56

one was people were looking at the

50:58

business very differently than I was. You

51:00

know, at the time, everybody was focused

51:02

on D to C only and people

51:04

are like, what are you doing with

51:06

all this wholesale? Like you don't have

51:08

control over that. So they thought that

51:10

that was crazy. But then also We

51:13

were running the business to break even

51:15

and people were like, where's your profit?

51:17

And we're like, well, obviously, if we

51:19

did this, this, and this, there would

51:22

be profit, but we are continuing to

51:24

grow and people really just wanted to

51:26

see the profit. And as a

51:29

day-to-day operator. Like when Jesse and

51:31

I went around doing this, the

51:33

two of us were the main

51:35

day-to-day operators of the business. It

51:37

was extremely distracting. And I know

51:39

that it becomes a cycle where

51:41

it's like, okay, you raise money

51:43

and then you have to deploy

51:45

it and then you have to

51:48

raise more money. I wanted

51:50

to be back in the office with

51:52

my team. I wanted to be at

51:54

the photo shoes. I wanted to be

51:56

making the part of the business happen

51:59

that I loved. And when we spoke

52:01

to people, we were just too

52:03

small at that point. People wanted

52:05

to have majority ownership and that

52:07

meant that we would give up

52:10

control. And probably a lot of

52:12

the things that I really valued

52:14

would go away, like the ability

52:16

to manufacture locally and making sure

52:18

that we were size inclusive.

52:21

And I wanted to be able to

52:23

run a business the way we wanted. Yeah.

52:25

Was it kind of disheartening to go

52:27

through that a little bit? Because

52:30

you know sometimes people will think of

52:32

that as a validation like oh let's

52:34

let's go and sort of test us

52:36

out and get it validated in the

52:39

open market and you know at that

52:41

point it sounds like you weren't getting

52:43

that validation. Yeah I think it was

52:45

a little frustrating. I remember at the

52:47

time talking to Jody and you know

52:50

she was asking me what I wanted

52:52

to do and she was like I'll

52:54

defer to you and I was like

52:56

I want to take a, I want

52:58

to stop, I want to take us

53:00

off the market, I want to focus

53:02

on running the business, and I just

53:05

really don't want to play this

53:07

fundraising game. And she was

53:09

like, okay, let's go. Yeah. When

53:11

you, when you guys entered 2020,

53:13

from what I understand, you had,

53:15

this is before the pandemic, you

53:18

just purchased a lot of material

53:20

because you had a bunch of

53:22

orders, and then. you know, March or

53:24

late February of 2020, Yoga

53:27

Studio started to close, and

53:29

all of a sudden, I

53:31

think, by middle of March,

53:33

you start to get a cascade

53:36

of canceled orders. Yes, over

53:38

$6 million of cancellations

53:41

in one week. A lot of our

53:43

money. tied up in raw materials and

53:45

I had big orders placed with

53:47

our, you know, our fabric suppliers.

53:49

You know, we had to come

53:52

up with a new game plan.

53:54

And so I talked to my

53:56

sales team and I said, we

53:58

should assume every order is canceled.

54:00

unless you get written consent that

54:02

they want the order. And everyone

54:04

was like, are you kidding? Just

54:06

go ahead and ship the orders.

54:09

And I was like, we are

54:11

not going to ship because can

54:13

you imagine being that studio in

54:16

Boston and you can't open your

54:18

doors and all of the sudden

54:20

you've got Beyond Yoga product landing

54:22

on your. doorstep and you might

54:25

not be able to even bring

54:27

it in, let alone, you know,

54:29

sell it to anybody and then

54:31

there's going to be a bill

54:34

coming and you don't have revenue

54:36

coming in from your studio classes.

54:38

Like we cannot do this, but...

54:41

It ended up kind of being

54:43

a blessing because A, I feel

54:45

good about the way we handled

54:47

things and we weren't cramming product

54:50

down people's throats that didn't need

54:52

it. And also at that point,

54:54

everybody is at home and people

54:56

were working out from home, people

54:59

were wearing beyond yoga around the

55:01

clock. And our website was... you

55:03

know, in high demand. And then

55:06

also a lot of industries, as

55:08

you know, were pulling back on

55:10

their advertising because there was no

55:12

reason to advertise. So our customer

55:15

acquisition fees went rock bottom and

55:17

we were able to acquire a

55:19

lot of new customers and because

55:21

we hadn't shipped all of that

55:24

inventory to sit idly in a

55:26

store that wasn't going to be

55:28

open, we had it on our

55:31

website and we were able to

55:33

start selling that and turning that

55:35

back into cash and so that

55:37

was wildly helpful. I guess that

55:40

year in the fall of that

55:42

year, you got like a cold

55:44

outreach on LinkedIn from Someone at

55:47

Levi's and and this is just

55:49

to kind of like do a

55:51

you thought me like a brand

55:53

collaboration or something tell me about

55:56

that message Yeah, so I got

55:58

this message and it was from

56:00

a woman named Lauren and she

56:02

said we feel like there's a

56:05

lot of brands synergies between Levi's

56:07

and Beyond Yoga and we'd love

56:09

to talk about ways of working

56:12

together in a possible collaboration and

56:14

I thought we were gonna do

56:16

a collaboration and then she was

56:18

like great next steps I'd love

56:21

for you to talk to our

56:23

CFO and you know he said

56:25

to me I'm you know we're

56:27

interested in diversifying what we're doing

56:30

at Levi's you know our demographic

56:32

lens excuse more towards men and

56:34

I like the fact that beyond

56:37

yoga is primarily female and we

56:39

may want to acquire a company

56:41

or we may want to build

56:43

active wear on our own and

56:46

I said in my opinion I

56:48

think you should acquire somebody because

56:50

everybody thinks that they can build

56:52

an active wear brand and I've

56:55

seen so many people do it

56:57

and not realize how difficult and

56:59

nuanced it is and fail. You

57:02

know, I wasn't really trying to

57:04

pitch him on me. I was

57:06

just giving advice and ultimately, you

57:08

know, that conversation went well and

57:11

we had multiple others and when

57:13

they said that they were interested

57:15

in acquiring us, I was extremely

57:17

flattered. You know, we absolutely were

57:20

not looking to sell the business

57:22

at that point, but it... it

57:24

was Levi's. And the fact that

57:27

they've been around for 170 years,

57:29

I also was thinking about my

57:31

team and what it would mean

57:33

for all of us. I feel

57:36

like everybody who worked for me

57:38

was kind of in this like

57:40

scrappy startup mode, even though we

57:42

were at 16 years in at

57:45

that point, we had always, I

57:47

always felt like people were really

57:49

taking a chance on us and

57:52

I thought that This would be

57:54

a really great way to make

57:56

sure everybody was taken care of

57:58

into the future. So it was

58:01

announced in 2021 that they were

58:03

acquiring you guys. for $400 million,

58:05

which is an amazing deal. I

58:07

mean, you know, especially for a

58:10

company that started out so small,

58:12

what were you able to do,

58:14

like, almost immediately, that you weren't

58:17

able to do before? One of

58:19

the things that Levi's was really...

58:21

excited about when they acquired us

58:23

was the fact that we had

58:26

never opened brick and mortar stores.

58:28

And so that was probably one

58:30

of the most exciting parts of

58:32

the acquisition. And yeah, so while

58:35

I was with them for the

58:37

last two and a half years,

58:39

I was able to open six

58:42

stores. Wow. I think that your

58:44

dad passed away a couple years

58:46

ago, so he was able to

58:48

see this happen, right? He was,

58:51

and that was so cathartic to

58:53

me. I'm really glad. I kind

58:55

of feel like this acquisition was

58:57

kind of like he got the

59:00

exit that he always wanted to,

59:02

and I know he always wanted

59:04

to provide for our family and

59:07

take care of my mom, and

59:09

I know that when he passed

59:11

and knew he felt good knowing

59:13

that my mom would always be

59:16

taken care of. I know that

59:18

you formally stepped down from the

59:20

company in February of 2024 and

59:22

also Jesse your husband stepped down

59:25

as well and so what did

59:27

it feel like after you know

59:29

20 almost 20 years that was

59:32

your daily job I mean that

59:34

was what you lived and breathed

59:36

every day for 19 years to

59:38

all of a sudden it just

59:41

ends. It was really hard. Somebody

59:43

gave me some really good advice.

59:45

They said, you know, your first

59:47

day that you're not going into

59:50

the job, week up on vacation.

59:52

And so we, Jesse and I,

59:54

we decided we were going to

59:57

go to Mexico, which is the

59:59

Cabo, which is like our favorite

1:00:01

spot. And It was weird that

1:00:03

first day though, like I wanted,

1:00:06

you know, I'm so used to

1:00:08

being in constant communication with my

1:00:10

team and there are no emails

1:00:12

coming in and I actually spent

1:00:15

that entire day just laying at

1:00:17

the beach listening to episodes of

1:00:19

how I built this. The

1:00:22

thing that was the hardest about

1:00:24

this whole time though, or this

1:00:26

whole step down, was just not

1:00:29

being able to talk to the

1:00:31

team. And it wasn't that I

1:00:33

couldn't. But I think I had

1:00:35

this crazy idea that like, I

1:00:38

was still going to be coming

1:00:40

to the office and like bringing

1:00:42

people coffee and going out to

1:00:44

lunch with everyone. And I realized

1:00:47

that I just needed to give

1:00:49

everybody a little distance in the

1:00:51

beginning. And I needed to give

1:00:54

myself that distance too. I have

1:00:56

two small children that I want

1:00:58

to be able to volunteer in

1:01:00

their classroom, but I've also gotten

1:01:03

this incredible opportunity to just meet

1:01:05

so many female founders and get

1:01:07

involved in the, you know, the

1:01:09

female founder in community in LA.

1:01:12

And when I was running Beyond

1:01:14

Yoga, I was so heads down

1:01:16

and so focused on running the

1:01:18

business, I... barely ever talked to

1:01:21

people outside of my family and

1:01:23

my team and my immediate friend

1:01:25

group. And so I personally just

1:01:27

really want to be that person

1:01:30

for other people right now because

1:01:32

I feel very fortunate for how

1:01:34

this all ended. So you know

1:01:36

questions coming because you've heard the

1:01:39

show before. How much of it

1:01:41

do you attribute to luck and

1:01:43

how much of it do you

1:01:45

think had to do with just

1:01:48

the grind and the hard work?

1:01:50

You know, it's definitely a mixture,

1:01:52

but I do think that luck

1:01:54

favors the prepared mind, right? And

1:01:57

I think we put a lot

1:01:59

of really hard work into this

1:02:01

business and set ourselves up to

1:02:03

be lucky, but there's definitely an

1:02:06

element of luck here. And you

1:02:08

have, I mean, the rest of

1:02:10

your life and career ahead of

1:02:13

you, I mean, you're, you know,

1:02:15

you're still young in your 40s.

1:02:17

Like, what do you think you

1:02:19

want to do with the rest

1:02:22

of your life? That's a great

1:02:24

question. You know, one of the

1:02:26

things that I promised myself was

1:02:28

that the first year I... wouldn't

1:02:31

start another company and I wouldn't

1:02:33

join any boards. I would just

1:02:35

slow down and really enjoy, you

1:02:37

know, this time in my life.

1:02:40

And that's what I'm doing. But

1:02:42

I would be lying if I

1:02:44

didn't tell you that every single

1:02:46

day I think about starting another

1:02:49

company. That's Michelle Waylor, co-founder of

1:02:51

Beyond Yoga. By the way, these

1:02:53

days, Beyond Yoga has expanded way

1:02:55

past its original mission of women's

1:02:58

active wear. It now sells clothes

1:03:00

for men and toddlers. And in

1:03:02

fact, if you're not into yoga

1:03:04

at all, you could even buy

1:03:07

yourself a Beyond Yoga pickleball paddle.

1:03:10

Hey, thanks so much for listening

1:03:12

to the show this week. Please

1:03:14

make sure to click the follow

1:03:16

button on your podcast app so

1:03:18

you never miss a new episode

1:03:20

of the show. And if you're

1:03:22

interested in insights, ideas, and lessons

1:03:24

from some of the world's greatest

1:03:26

entrepreneurs, please sign up for my

1:03:28

newsletter at Guyra's.com or on Substack.

1:03:30

This episode was produced by Chris

1:03:32

Messini with music composed by Romtine

1:03:35

Arablui. It was edited by Niva

1:03:37

Grant with research help from Catherine

1:03:39

Cypher. Our engineers were James Willets,

1:03:41

Patrick Murray, and Robert Rodriguez. Our

1:03:43

production staff also includes Alex Chung,

1:03:45

J.C. Howard, Carla Estez, Sam Paulson,

1:03:47

Kerry Thompson, John Isabella, and Elaine

1:03:49

Coates. I'm Guy Ross and you've

1:03:51

been listening to How I Built

1:03:53

This. If

1:04:01

you like how I built this,

1:04:04

you can listen early and ad-free

1:04:06

right now by joining Wondery Plus

1:04:08

in the Wondery app or on

1:04:10

Apple podcasts. Prime members can listen

1:04:13

ad-free on Amazon music. Before you

1:04:15

go, tell us about yourself by

1:04:17

filling out a short survey at

1:04:20

wondery.com/ survey. It takes a

1:04:22

lot to grow your business.

1:04:24

You've got to attract audiences,

1:04:26

score leads, manage all the

1:04:29

channels. It's a lot of

1:04:31

long days and late nights.

1:04:33

But with breeze, HubSpots' new

1:04:35

AI tools, it's never been

1:04:38

easier to be a marketer

1:04:40

and crush your goals. fast,

1:04:42

which means pretty soon your

1:04:44

company will have a lot

1:04:47

to celebrate, like 110% more

1:04:49

leads in just 12 months.

1:04:51

Visit hubspot.com/marketers to learn more.