On this episode of Honest Ecommerce, we have Russ and Mike. Russ and Mike are the co-founders of Freestyle, a modern parenthood company. We talk about the balance between co-founders and their skill sets, the unique challenges of running a diaper brand, using an organic ingredient as a main component, and so much more!
Russ is a repeat startup founder with a consistent track record of getting companies from zero to 8 figures+ of revenue. He’s previously on the founding team at Hello Bello.
Mike is an entrepreneur and angel investor with 10+ years experience in consumer tech and products. He’s previously a founder of PRNCPLS, Co-Founder of Cameo (acquired by Vimeo), Partner at Parlor Coffee.
Freestyle's diapers and wipes are sold at over 1000 grocery stores around the US, including at all Whole Foods locations nationwide. See their latest designs at www dot freestyle dot world.
In This Conversation We Discuss:
Resources:
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Mike Constantiner
I've been in co-founder relationships in the phase where both people were trying to do the same thing and it created a lot of tension. And ultimately, I think it was a big part of why the company failed.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce.
Today, I'm welcoming to the show not one, but two co-founders of Freestyle, a modern parenthood company.
Russ and Mike, welcome to the show.
Russ Wallace
Thanks a lot. Glad to be here.
Chase Clymer
Absolutely. Let's talk about Freestyle, a modern parenthood company. What are the types of products that I would find on your website these days?
Russ Wallace
Yeah. Freestyle is currently selling diapers and wipes. And so those are forming the core of what we intend to be a wide future product line that hopefully helps young folks who are thinking about starting to have kids all the way through the time when their kids are in diapers.
Chase Clymer
Awesome. So take me back in time. Where did the idea for this business come from?
Mike Constantiner
Yeah. Russ and I got connected a few years ago, when we were both figuring out our next moves professionally.
We got connected through a mutual friend with the only context being that we were both dads and we both liked consumer brands.
And I was living in New York at the time, Russ is in LA. We hopped on a phone call and just hit it off, I think. I think we shared a lot, both being dads. Russ, having previously worked at a baby care company, had some ideas in the space just about doing things differently when it came to baby care.
And it was really interesting. And obviously the relationship seemed to be very complimentary from a skillset perspective. And so, you know, it was just one of these things that wasn't really planned. It just kind of naturally evolved over time and tested out a couple of different concepts.
And then we finally landed on what became Freestyle because Russ had a relationship with the supplier. What we launched with Freestyle was the first and only tree-free diaper on the US market.
So every other diaper in existence uses tree pulp in the core of the diaper, which, depending on the size of the diaper, roughly 35 to 45% of the material used in the diaper and about a billion trees are cut down every year to supply the global diaper market.
So we thought it was really interesting to kind of explore that. We started working with them. We did a bunch of actual lab testing.
And the beauty of what we did was instead of using trees, we used organic bamboo. Bamboo has a 30 to 90 day harvest cycle. It's technically a grass, it's the fastest growing plant in the world.
But the beauty was it's actually like a dryer material when processed. And so the diapers actually outperform all the leading brands in the natural space, like across the board.
And so we got really excited about the product. It gave us a lot of conviction to go out and get this thing live.
Chase Clymer
Awesome. So let's walk through that timeline here quickly.
So you guys meet, you see that there are some complementary skill sets. Can we talk a bit about how to identify if someone would be a good co-founder for those out there that might be going through the same journey?
And I like how you said complementary skill sets, not the same skill sets. Let's talk about that.
Russ Wallace
Yeah, yeah, I can. I can share my perspective on that because, you know, when I first got on a call with Mike, it was actually in the context of him as an investor, potentially.
And we just got to talking about, just like he said, our shared experiences, dads and what we thought were opportunities in the parenting and baby care space in general.
And what quickly became clear was, you know, he was sharing his background and having launched a CPG brand that had, feel free to to re-characterize this if you think it's unfair, but it had kind of street wear or kind of like skating influences, which were something that was, this is 2020, everyone was talking about hype brands and drops and street wear.
And it just felt like such a cool opportunity because if we could somehow leverage that experience with this concept of the supplier that I knew at the time, nobody's done this in the baby care world, right?
And one thing I knew about my own background was that I think I'm very good at deal making and at convincing folks to do big things and take risks, but candidly, I don't know that I trust even my own taste.
I know what good looks like. I have no idea how to create it. I think that was what was awesome about talking with Mike as it became clear that the things that I like to do were things that he didn't like to do and the things that he was able to do were things that I was totally unable to do.
Chase Clymer
Absolutely. So there was some clear delineation in where the workload would be balanced between the two of you from an early onset.
Mike Constantiner
Yeah. I think... I've been in co-founder relationships in the past that were where both people were trying to do the same thing. And it created a lot of tension.
And ultimately, I think it was a big part of why the company failed, or like why it didn't have, you know, another one where like, I think it could have been more successful.
And it's not to say that Russ is totally disconnected from the brand and marketing side, and I'm totally disconnected from the kind of business and operations side of it.
We're a team and I think we're both well versed in both sides of the business where if one of us needs to step in and help out with something, we can do that.
Both of us have ideas, we can bounce ideas off each other to get that feedback.
So it's like sometimes we're stepping into each other's shoes. But ultimately, at the end of the day, we know each one of us has the final say on that side of the business. And I think we respect each other's decisions on that.
Chase Clymer
Absolutely.
So let's talk through the ideation a little bit more here. You meet in an interesting way, and you're talking about the opportunities in the baby care space, and Russ comes to the table with this connection to a manufacturer.
How quickly was it from that conversation to say you had a prototype in your hand?
Russ Wallace
It was not fast. I actually did my best to persuade Mike that we shouldn't go into diapers, despite this relationship and potentially unique advantage just because I had spent the prior couple of years helping a team launch a very big diaper business.
And, my role was largely to oversee that supply chain. And it's just very difficult.
And the unique thing about diapers is that, I think in Ecommerce space in general, that category of entrepreneurship is and was created because it can be very straightforward and simple to run what feels like a big brand out of a small shop.
That is absolutely not the case with diapers.
Unlike, say, a little Amazon widget like this, like a clip on a phone or a beauty product, which you can fulfill out of your closet in your bedroom, diapers require just for the minimum order, like a 40,000 square foot facility that you've got to pay for and you've got to maintain.
And without massive sales velocities, that stuff can sit there for a long time and just the carrying costs can be very expensive.
So, that was, I think the thing is that we really tried hard not to go into diapers, but at the same time [even] our own market research we're very driven by what the consumers were telling us, right?
We had a group, we're fortunate to have a partner early on who had a Facebook group with 4 million people in it, mostly dads.
And we started pulling them like, what do you want to see in space? Where do you see the opportunities are? Where do you feel like you're not spoken to well and in which categories?
And it was just super clear moments like, look, diapers and wipes. Like there needs to be a better, more modern story told about what the world is like raising babies and the best product through which you can express that story would be the thing to use the most, which is the diapers and wipes.
Mike Constantiner
Yeah. And we actually hired just a random designer on Dribble to mock up some diaper patterns. And we put together a free Shopify site. I mean, the jankiest version of a free Shopify site.
And we ran some ads over, I don't know, maybe 5 to 7 days and actually had people check out. And then we just refunded their order, sent them an email saying, sorry, we're sold out.
And then we asked them to hop on a quick phone call with us. And so I think that process, obviously there was a grain of salt because the website and the designs and all that kind of stuff was very minimal.
But what we saw through that test was there's actually something here, some of it is beginning these inklings of the idea of what we want this to become.
There was actually a good response to it. So I thought that was a really interesting test for us at the time.
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Chase Clymer
I would love to dive a little bit deeper into that test because that's such a great way to test a new product into a new market and get valid feedback from consumers.
You said over a week about how much budget you put into this test?
Russ Wallace
I think we had 5 or 6 different ads going each day. I don't know, it was $25 or $50 cap per day. It wasn't a ton of money.
And full credit for the 4-hour workweek, that's where we got this idea where it was like a Tim Ferriss concept of, okay, don't just take someone to a lander and ask for their interest. Take them all the way through checkout because that's the only way you know your real CPA.
Because everyone will tell you they'll do something and then in reality, they won't.
But that's what we spread-sheeted out was like, okay, what's our CTC? What's our CTR? What's our CAC? Because these would have been real sales.
And then you just cross your fingers that after the fact, the folks that went through checkout won't get too frustrated when you tell them you're out of stock.
Chase Clymer
Going back to that timeline question, I never got a clear answer from you guys.
So you have you guys meet...when did you get the first prototype? And then when did you launch that test? Or was it almost concurrently?
Russ Wallace
It was like Mike said, it took two years actually. So we met, we tested some concepts, we raised a little money literally for a general new modern parenting company, very small amounts to build a site.
We started with a different skew entirely, which was more focused on dads. And then quickly realized that there was an AOV challenge there. We needed more SKUs to be able to pay for the advertising costs to drive these folks to the site.
And then that was when we started testing these ideas of like, okay, if we're going to add on a new SKU, what's it going to be? Everyone said it's got to be diapers.
Then we said, okay, well, what kind of diapers and how do we think about how we're different in this category that's clearly dominated by two massive players? And then everyone, that's when these ad tests came up.
So from the time of meeting to launching Freestyle was about two and a half years.
Chase Clymer
Absolutely. And so you guys run these tests, you get some awesome data. What do you do with that? What's the next step?
Russ Wallace
Throw it in a deck and fundraise. I mean, literally. Yeah.
Mike Constantiner
Yeah. This is like, as Russ mentioned, the thing about diapers is the minimum... The MOQs are so high.
Our first order is like, I don't know, I think like 15 shipping containers worth of diapers. It's huge. And so you just have to have capital on hand to get going.
And unless you're just super loaded, it's not something that you can really bootstrap. And so we had to raise capital to get this thing up and running.
So we were raising money as we were going through the R&D process and closed out that pre-seed round in 2021.
Chase Clymer
Awesome. So you guys take these numbers back to investors, and raise a bit more money.
You get your final product and you're now headed towards your official launch. Is that what it was?
Russ Wallace
Yeah. So you're... I love the specificity on the timeline. So let me give it to you and lay it out so you can map all these numbers.
Meet in 2020, test for about a year and a half. Settle on. We're going to do diapers.
Raise for about 6 months. And 2021 is where we're at at that point.
And then we order the diapers, get the brand ready. Now we've got cash in the bank to actually build a brand and design, hire whoever we need to hire to get things ready.
And then takes, call it four to six months for the diapers to actually arrive and because there's testing and changing the specs and samples, all of which had been going on for a long time.
Diapers finally hit, site goes live June, 2022.
Mike Constantiner
I mean, everything that we could. Yeah, I mean, it's like, we didn't have any creators attached to the brand. We were effectively starting from zero for the most part.
A lot of it was just content that we put out in terms of trying to look and appear different, telling a totally different story around parenting.
We did a lot with influencers. We have a whole series that we do called the Baby Makers, which is like we send a photographer to a family's home and do this really cool photo shoot, do a Q&A.
And we also launched a bunch of like limited edition merch and accessories, which are kind of products that are non-core to the business, but really are just like these like marketing opportunities for us, especially at the time when we only had diapers, you can only talk about your diapers so much, right? Before people start getting like, you know, a little bit tired of it.
And so, you know, the idea with the merch and the accessories was like in those kinds of steady states, like we were able to kind of bring new content and new products and collaborate with different brands and different influencers to kind of tell different stories.
So that was the main thing that we were doing at the time.
Russ Wallace
Yeah, I mean, I think this is probably a good moment to clarify where Freestyle I think is very different on the market. And I think that informs this approach that we took off like an ensemble of what you might think of as more micro style influencers.
The story of a notable famous person launching a diaper line has been told so many times it feels like at this point that we just knew that we couldn't take that approach from day one.
And as parents, even when we were going back to the dad concept, what Mike and I really aligned on was like, look, you know, for the story of parenthood has always looked the same. It's that you move to the suburbs, you get behind a white picket fence, you put on tackies and you become boring.
And that's really like, I don't know why that's the story we've told ourselves as a culture, but I mean, you almost fall into it even almost especially as a dad.
I found myself at the preschool talking to other dads and I go, “Oh, it's hard. I'm tired. Yeah, it's kids. I don't go out anymore.”
And I just felt like, you know what, that first of all, I'm choosing that and that's not true. And second of all, what if we told the exact opposite of that?
And what if we talked about how becoming a parent is in fact like the greatest expression of your best parts of you. And it doesn't change who you are as a young person, as a creative, or as an athlete, or as a chef, or whatever it is.
And then we built a brand that was kind of inspiring in that way, and that also had these great product attributes that really support those principles.
So we got lucky in having a supplier who had this great sustainability and like future forward story. That was great. That fits the modern kind of storytelling we want to do.
How do you tell that story? Well, I think, you know, the answer we came to was like, let's not put all our bets on one person. Let's get a whole group of just people doing awesome things who also happen to be parents and then get them to just sort of share what their life is like.
And then that was the intent. That the story will naturally support everything else we have to say. And it took a minute, you know, realistically, we didn't have some big splashy launch, you know, like a launch party or anything like that.
And as Mike said, the steady drip of collaborations and content series and really cool people with really dedicated communities all talking about Freestyle at the same time, you start to get that overlap with those audiences.
And I think that's where you really started to see the compounding happen.
And so I would say, it wasn't until like fourth quarter last year that the brand really started to feel like this, it's got legs.
Chase Clymer
Absolutely. So you were doing all these micro, macro, however you want to title it, influencer campaigns, building out these relationships, building out amazing content with these people.
And now are you taking all that content and all that organic traffic and goodwill that you're building and then starting to pump it into retargeting through advertising, texting, emails? How are you trying to drive people back?
Russ Wallace
Yeah. We actually don't spend much on top of the funnel, like paid, at all. And so almost all of our budget goes instead to exactly what you're describing, re-engagement of audiences that have found their way to us and through this kind of quote unquote organic means.
Which of course are all, there's always money behind it in the end, but it's not like direct Facebook click to sale. That's how we look at the business.
We also heavily emphasize retail from day one as a significant channel for the business, largely because the reality of being a parent, I think it stems from, you know, we actually are parents who started this business, right?
So we bought diapers, had diaper needs. And the reality is like, you know, you run out of diapers one day, you're just going to go to a local store because you have to have it in a minute.
Nobody's got time to get on a website, order diapers and sit back and wait for five days when you need them. So, you know, you've got to have a really broad presence to support whatever D2C business you build in this category.
And we worked hard on that.
And we're really fortunate to, you know, to hustle our way into, what we think of as the nation's premier grocery chain, which is Whole Foods, who's rolling us out currently nationwide.
And on top of them, we have another, several dozen grocery chains that carry us.
And so those things all support those multiple touch points that hopefully parents have with our brand, where they see us in the aisle, they see or hear some of our content that we're creating, and then they find their way back.
We do really well on performance lists and lists with bloggers because the product is so fantastic. It truly is like, we arguably should be charging like 50% more for these diapers. They're insanely good.
And so that I think is a deliberate strategy on our part too, I say I think because, we'll see if it all pays off. Having other people wanting to write about it because they have such great experiences really supports the paid strategy, which then is to retarget everyone and make sure they never forget that, they found us in this really cool way.
Chase Clymer
Absolutely. I think one of the biggest secrets to building a direct consumer business is just having a really good product.
Russ Wallace
Yeah. Seriously. That's what we fundraised on in our second round was like, look, nobody's going to be blown away by our top line yet, although the growth is exciting.
But what you are going to be blown away with is our retention rates, which are just like, off the charts, good. It looks more like Netflix than a DTC brand.
I think that was absolutely what convinced many of our investors to re-up and what brought some new folks to the table.
Chase Clymer
That's fantastic.
Now, if I'm a new parent, I'm listening to this podcast. Where should I go to check out the product?
Russ Wallace
You could check out any of the Whole Foods stores nationwide. They carry our diapers and our brand new wipes, which are amazing. EWG Verified, bamboo wipes, plastic negative. Just a fantastic product.
Both of those products are on the shelf at Whole Foods nationwide.
And then you can also find us at freestyle.world where you can sign up for subscriptions and get the best price.
Chase Clymer
Awesome. Thank you guys both for coming on the show today and sharing your story.
Mike Constantiner
All right.
Russ Wallace
Thank you, Chase. Appreciate it.
Chase Clymer
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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Until next time!