Building in the DTC hayday with Ariel Kaye from Parachute

Key Takeaways

hello and welcome to found the podcast that brings you the stories behind the startups it's me your host Dominic Mador Davis and this week I'm flying solo so there won't be an outro to this episode we definitely missed Becca but luckily we had a great guest today I'm talking with Ariel K the founder and CEO of parachute a betting and HomeGoods brand we talked about what it was like building in the D Toc Heyday the ups and downs of fundraising and the challenges of being a solo founder so let's get into it hey Ariel welcome to found thanks for having me so I guess the easiest way to start off is can you tell us a little bit about parachute sure so parachute is a home Lifestyle brand we launched 10 years ago in January of 2014 with a small assortment of bedding products and the vision was always to be a multicategory brand to create and design products for every room throughout the home and over the past 10 years we have expanded Beyond Bond beding into products like towels and robes and window treatments and rugs and baby and some furniture and a mattress that will change your life we've also opened 26 retail stores over the past few years so we are truly an omni CH Channel business today and known for quality and comfort and really believe that the products that we create can enhance your life and create a more comfortable home and so that is what we set out to do and what inspires us and keeps us excited about continuing to build what inspired you to launch the company were you looking to disrupt the betting category or yeah you know so my background was in advertising I was working on the Strategic side of creative at a big agency and spending a lot of time thinking about the consumer and the millennial consumer in specific and how to connect and motivate and so really loved just have always loved kind of thinking about consumers and what drives people to purchase and how to create brands that have real value in people's lives that are Beyond just a product or a transaction like how do you actually build a relationship and then simultaneously I was obsessed with home and design and was helping friends decorate their Apartments while I was living in New York and really became a super consumer in the space and you know had one of those moments where I was shopping for Sheets in a big box retailer and just you know was was surprised by the lack of quality by the way that products were being packaged and just the amount of marketing gimmicks that were being used to sell products like thread count and I I started to think more critically about the opportunity I mean this is also around the time we're in 2012 now this is around the time that D Toc Brands were just taking off and so I also really felt connected to that type of shopping but you know had one of those aha moments where I realized you know what if I could merge my love for home and design and my love for building brand and create something different so you know 10 plus years ago no one could tell you what sheets you had on your bed they could tell you maybe what store you went to but there was really no brand in this category and definitely nothing online and so I suppose there was a desire to disrupt because something like this had never been done before but really just a desire to improve the shopping experience to create you know more premium products at an accessible price and a desire to educate the customer that sheets and towels and products that are with throughout your home can really change the whole athetic of your home and really impact the comfort that I think we all desire from our home and so I just hit the ground running I mean I I became so consumed with this idea and decided that you know this was such a big opportunity I had to see it through yeah oh my goodness no it's definitely true with the when I think of millennial Brands like this it seems like there was a period I guess it was 2012 2014 the early DTC where Millennials came in and really said I want something more from everything that's already existing it has to be better it has to be more personalized too something that you really really connect with and so it's just really interesting to think about even like the towels and the sheets in your home as something that you really need to connect with well and that was the feedback we got early on which was so inspiring and so validating we heard immediately from customers I've been looking for a product like this you know I think this whole movement towards value and quality and cutting up the middleman and like what that means and brands that actually wanted to listen to the customer involve with the customer and create something that was different was really appealing but from the moment we launched we just kept hearing I've been waiting for a brand like this I've been waiting for a brand like this and so it became very obvious early on that we were on to something and that there was an appetite for this type of brand and people were looking for product like ours and they truly were not in the market so it was a very exciting launch moment moving quickly into that validation that there was just a real interest in what we were doing and that and that we could earn the trust of our customers to then expand Beyond just sheets and into bath and other categories throughout the home and so what was pre-launch like because I'm thinking when you want to launch a company like this what is the first thing you do really well the idea really came came to fruition at the end of 2012 I had a conversation with a friend of mine and said I have this idea I want to do this and you everyone sort of thought I was crazy I mean I think the idea of jumping into starting a business especially for someone like me who had never launched a business before had never worked at a startup that you know did not have any retail experience but I just became so consumed and so passionate and so I had been working in advertising I decided to leave my job I put together have a highlevel business plan of what I thought the opportunity was and what I thought the vision for parachute could be and I actually once I had sort of solidified that I got on a plane and went directly to Europe and met with 15 factories because I realized that in order for me to really do this I had to be able to do more than just conceptualize the idea I actually had to understand how these products were made and that's how my brain works like I need to get into the physical and to the you know actual product and so I took this trip I met with 15 factories many of which thought I was absolutely crazy for you know showing up with a suitcase full of fabrics and saying I want to do something like this but a little bit more like this and what do you have available and you know teach me everything and I came back from that trip more energized than ever and just so determined at that point to see this through and to really create this brand I moved to Los Angeles I met with a design agency you know I just I just started putting One Foot In Front of the other and you know those times were very exciting and also very isolating and nerve-wracking um because I had left this job and I was diving head first into something that was completely Uncharted Territory so it was a lot of learning on the go but really rewarding is the roller coaster wait is is Europe where most of the beddings are manufactured what's going on in America yeah you know so there many many years ago like centuries ago there was a lot of textile manufacturing happening in the US and these days there's almost none so vetting and vetting products are made throughout the world but for me I was really attracted to the European Heritage story because as I did speak to more people when I said where is the best bedding made everyone said Italy like Italy was where you know these very very high-end premium Brands were made and so as I started to get my footing and started to thinking about you know I'm going to be asking people to buy products from a brand that they've just only learned about that has no reviews you know is is not proven but how do I build that trust as quickly as possible and so it was about the quality and the Heritage for me because I figured that if I could say this is made in Italy it would conjure this idea of quality and really create you know a level of trust saying that this is the same type of quality product that normally would cost you know 2 3x more and the attention to detail and working with this Factory that's been around for over hundred years that story was really part of the launch and our manufacturing story continues to be a big part of parachute today I mean we really seek Heritage factories that have been in business for hundreds of years many of them are family-owned still and you just see the quality and you feel the passion in the product and you know we love telling the story of our of our manufacturers and and why we went to certain factories and why that makes such a world of a difference no that's so funny I feel like Americans do have like a European bias if you had like French or Italian in front of anything it's going to be like oh yeah it's probably like really good yeah you know it's sort of like the lab quot Theory you know you put a lab cat on and all of a sudden you're you're really smart and a doctor well I did want to ask about quality now because what are quality sheets like what were you looking for when it came to Quality and what were consumers looking for cuz I mean obviously I'm revealing that my sheets are probably not quality and so I'm like what are quality sheets there were a few things that was really important to me when starting this business one working with factories that were sustainable working with factories that did not use any toxic chemicals synthetic finishes or artificial dieses in their products so really creating the cleanest possible product that I could create and so that was a baseline for me so when I was identifying potential Partners I was really looking for factories that were committed to those principles and had the same sort of ethos and rigor around the fibers and where they're from the sort of ifications of quality that I was looking for and so that was an initial driver but really you know when I started the brand thread count was was the one and only quality like distinguishing Factor on the market people said oh if it's a high thread count that's what you're looking for and what I quickly Learned was that that actually was not the case that is a complete marketing gimmick and so as I learned and became more knowledgeable about how these products were made I realized that thread count became this idea maybe 20 years ago and what really matters is the quality of the fibers and so we decided to set out and create a brand that never talked about thread count and not because we're hiding it we just wanted to change the narrative to around what really matters which is the quality of the fibers the manufacturing process from end to end not using these toxic chemicals or synthetic finishes or artificial dieses and so it was a little bit of reworking and re-educating the customer which I think people really gravitate towards people like to feel confident in their purchase and I think that the debunking the myths of things is something that is exciting for the customer it gives them like a new sense of understanding and and so we were able to use that information as part of our launch strategy and really educate the customer about what matters most and that was at a time that no one was doing that I mean otex was a certification that no one had ever heard of and we were one of the first people to start talking about it loudly and now you see it everywhere and that means that there's no toxic chemicals or synthetic finishes throughout the entire manufacturing process and so holding ourselves to such high standards from the beginning allowed us to really set the tone and and to again build trust with the customer because we were very clear that you know we were going to only be introducing products that were as good for you as they were for the planet and also you know you know be lasting and and Timeless in their design oh that's so interesting yeah cuz you basically had to re-educate Consumers about this thing I I could just imagine someone saying like but despite all of this what's the thread count because now I'm I know that I would also be like what's the thread count and you know I mean ideal thread count is anywhere between 250 and 400 and so again and this is not we we're not trying to be secretive about you know what our thread counted it was really just how do we talk about what really matters for the customer and and pull back the curtain because you know this was a time especially when we launched where people were like 20,000 thread count 10,000 thread count you know and it was just these numbers that were used to elevate price when in reality to get to those numbers which are not they're not regulated so people could really say anything but the most basic you're using a double ply or triple ply in order to get these elevated numbers and then that actually makes the fabric thicker to the touch and coarser which is then why you have to use synthetics and why sheets are less breathable and why they pill so it's like it's actually the opposite of it so it was a fun process to be educator and to just bring to light what really matters how did you combine Aesthetics education and I guess also social media marketing because it seems like I mean 2012 2014 this is kind of like the beginning of really like the boom of Instagram and you know Twitter and all these things so how did you kind of combine marketing d2c and Millennial Aesthetics yeah I mean so I wanted to create a new aesthetic and I think that's what we have done most successfully was create this aesthetic that was more laidback and more casual which is what I felt that I wanted and what um many of my friends and peers and people that we spoke to was moving away from this very formal traditional bed a lot of prints that were happening back then a lot of like hospital corners used in marketing materials and and we wanted our products to feel like you know when you get out of your bed and you pull the duvet cover back and you walk away and you're like oh it just looks so good I got got to get back in you know so it was how do we create this livable aesthetic that is far more in line with the way that we're actually living how do we humanize our beds and our bedrooms and make them feel relatable and not so perfect or perfectly done that you know it you don't want to mess anything up and so you know as we set out to create this aesthetic um we use social media as a as a form of inspiration we wanted to educate our customers as well as in ire our customers and and we want it to be aspirational but attainable and so we spend a lot of time creating beautiful content for social media but also encouraging our customers to share and we were early to the hashtag game of you know encouraging people to submit images on social media using the hashtag my parachute home and being able to use ugc as a real tool to show just how versatile our products were and how beautiful they were in so many different homes and so many different styles and Aesthetics but really we think about our products as these foundational products and how can we work for any aesthetic it was a lot of encouraging that type of share and then also just making sure that we were sharing beautiful imagery because I think fundamentally people want to buy beautiful things and be inspired by beautiful products and Instagram and Pinterest were perfect platforms for us to Showcase these images but we grew alongside social media you know we were it was very early days when I launched and I think about building a brand today and the way that you can leverage social media in such a profound way I mean it was it was a different story back then more from this conversation right after a quick [Music] break and I definitely want to talk about you being a solo founder cuz being a solo founder is just hard um did you ever think about bringing on a co- founder and how has this journey been for you I guess by yourself in a sense yeah I mean I absolutely in the early days thought about bringing on a co-founder in 2013 as I started meeting with potential investors and just having conversations with people you know that was one of the first questions that I always asked why are you doing this alone and sometimes it was can't you find someone else that wants to do this with you you know I also was told by many people that you couldn't launch a brand without a technical co-founder and that was a prerequisite for a potential investment into certain funds the grass is always kind of Greener there were plenty of moments where I felt so lonely and being a soul founder can be so lonely and and feel like there's so much pressure on your back one of I believe my superpowers and one of the things that I learned very early on was what I'm great at and where I need support and so as I started building my team it was really important for me to hire people that could really complement my skill set and fill holes in into parts of the business where I needed that support and I needed to bring in experts and people that could really drive and and bring leadership and strategic thinking and today you know we've got an incredible team many people on our team have been with the business for nine eight seven year I mean people that have really been along for the ride it's it's hard you know I I look at some friends who are co-founders and I admire the way that they are able to build together and think how lovely that could have been in those early days where I really felt alone but there was also a lot of upside in being able to be very Nimble being able to be the sole decision maker being able to drive the business in a way that I really felt aligned with without other perspectives I don't think there's one right way at all but I definitely got push back from people in the early days about why are you a a soul founder it's so much more unusual and I think that's right I mean it's hard to start a business and it's hard to you know dive into something head first without someone else to sit across the table and say we got this right so when you're doing that by yourself I mean it just brings well it's just a different it's just a different experience I was going to ask who and what was your first hire so my my background is is creative is marketing and so I knew that my first hire needed to be someone that was more financial focused and so I hired someone who came with a banking background who could build models who could handle operations and it was sort of we divided it by front of house and back of house so like anything that was consumer facing product marketing thinking about customer experience people that was all me and he took on all of the operational challenges managing our manufacturers and supply chain and all of that of course then we built out the team but that was my first hire and it alleviated a lot of pressure I mean you know just being able to have someone that could be in the weeds and in the numbers so that I could focus on all the creative parts of the business which is where I have the most leverage and and what I love yeah and when did the first hire come about a month after launch so I launched the business and was um a med I mean I month after launch and probably six months too late you know I mean I was I was desperate for some support but I didn't have any Capital to pay someone and so I just you know I did it myself and then as we had this amazing momentum out of the gate and it started to become very obvious that I it was time so I was introduced to this person he came to our office he walked in I was answering the phone I was writing emails I was packing boxes I mean I was I needed 12 more hands to be able to to get the job done and I think that was inspiring for him to just see how much there was to do and I remember sitting down and saying this is a fast growing business forget about the sheets forget about the product like do you want to build something and he said yes and off we went and I definitely want to ask about the fundraising Journey because it it seems like you haven't raised well as much as much as I might have thought you would have raised you are correct I want to know what that Journey was like and pitching investors and what did they say um it's been different every time we've raised so we raised about $47 million which again to your point is much less than many of our dtoc peers who are similar size I mean we we have definitely we've been a very disciplined business but raising money never came particularly easy you know I think as a Founder you know in the early days people are investing in you in your vision and in this idea that you are the right person to lead and build this company you know I was able to raise a seed round about 3 months after I launched and that was because of the early traction that we saw and the product feedback and it was right on time because we needed that Capital to be able to invest in more inventory i me we were we had sold through inventory so quickly and then you know we raised another round in order to be able to start investing in marketing because we had never spent a dollar in marketing and for me it was really about find partners that believed in the brand and believed in my vision for growth which was to grow thoughtfully and to test and learn and that knowing that building a brand doesn't happen overnight I mean you know 10 years ago there was a lot of investment into brands with an expectation that you could become a huge unicorn in in two to three years and you know and and while that is nice I really was focused on building a brand that was incredibly healthy and disciplined and focused on the product and so being able to find partners that were aligned with that Vision was critical but fundraising is hard for every yes there were about a hundred Nos and it can be a very frustrating process and also inspiring process I tend to be the kind of person that uses a no as as fuel to my fire and as a way to really energize myself because of the passion that I have to build this brand it's hard and it's a full-time job and I think that that's something that a lot of people don't realize is that raising capital taks you away from the dayto day and it's timec consuming and it's also for me I learned so much through that process because people are dissecting your business they're looking for reasons to say no and you really get to know your business during that experience in a way that I think is much more granular than the dayto day yeah I mean imagine you also got a little bit more control over how fast you wanted to grow the business as well without having too many investors all in the say yeah being very clear about your vision and and the goal of the brand and the business is important and I think for me I always looked at my investors as partners I wanted them to be very connected to the brand into the business I'm a very transparent leader and so I think in order to get the most value out of your investors and your partners they need to know what's going on and so really building that deep relationship really understanding how they can create value as well is really important how long did it take you to become profitable through sales you know we've been profitable at different points in the business you know the first I would say six years were really just about growth and growing methodically and thoughtfully but really focusing more on Top Line you know we always understood the levers that needed to be adjusted in order to get to profitability I think that's really important and so we've had profitable years we've had growth focused years that are very intentional and today we are profitable and that's something that we will continue to be moving forward there's a balance you know people ask me that all the time should we be profitable from day one what's the right time to be profitable and I think really it's it's important to have a clear understanding of the business and what it would take to be profitable if you're focusing on growth and then knowing that in order to build a sustainable business and be in control of your financial destiny profitability is really important and we're seeing a lot of Trends moving away from growth at all cost to how do you build a a sustainable business especially with the market d dnics today and I definitely want to Pivot and talk about you as an entrepreneur and a Founder growing up did you always want to run a business oh no I I remember calling my parents and saying I'm going to start a company and I think they fell off their chairs I mean they were shocked you know I've always been a leader and I've always enjoyed taking a leadership role but I never thought I would start my own business and in fact when I was thinking about a transition in my career and moving outside of a big agency initially I thought I would join a startup because I was so inspired by the energy and I had many friends joining early stage companies and I just saw their excitement about building something and being so high impact and that always was very appealing to me and I was always happiest in roles where I could really get my hands dirty and really make an impact and really be part of something but no I did not think that I was a founder and in fact you know it took someone actually sitting down with me saying I think you could build something for me to even begin to dream about what that would look like and I think it's an Incredible Gift to be able to encourage people to follow their dreams or to even get them excited about what a dream could be yeah I I wasn't it wasn't part of wasn't part of the plan I was not on this journey of how do I become an entrepreneur what were some early challenges and lessons you learned about the entrepreneurial LIF style oh God there's so many you know I think everything takes longer than expected I think that feedback is a gift and can also be a curse I think staying true to yourself and your vision is critical people talk about resilience and I think that's sort of an overused word but there has to be this sense of determination and passion for what you're building that allows you to block out the noise and for me I think my the biggest thing early on was just like not to sweat the small stuff many entrepreneurs and Founders are incredibly type A and we love Perfection and we love making things perfect and I think part of the pressure that you feel as a Founders is if you make a misstep you know it's going to create this huge impact and derail your business or cause failure and I think it took me some time to realize that Perfection is not what is most important progress is really important and and we are our own wor worst critics and so if you can get out of your way and just focus on on progress not Perfection it's it can just it can unlock so much there's a community aspect for me that I learned early on how important it was to have a community of other Founders people that were just a little bit ahead of the journey people that were much further ahead in the journey to be able to talk to people that just really get it inherently I was talking to a friend the other day about the early days and I remember him specifically asking you know what do you do every day and like just being so soul in to even answer that I'm like what do you mean what do I do every day I do everything and so having a community of people that really get it like truly get it and have been there is so validating and so helpful especially during the tough times yeah I was definitely going to ask especially as a solo founder how do you take care and balance your mental health I do my best and some days I do it really well and some days I absolutely fail um you know I think for me prioritizing ing my physical and mental health is something that I've has been in and out of my journey but I exercise regularly I try to eat well I try to get sleep and as a Founder who has built a brand around sleeping well and comfort in the bedroom those days that you don't get sleep are pretty ironic but like I said earlier on I think i' I've done pretty good job of knowing when to ask for help I think being vulnerable as a Founder can be scary because people expect you to have all the answers and it can be easy to worry that if you don't have all the answers it means you're not enough or you aren't suited for the job and I think it's quite contrary I think being able to ask for help and knowing um when you need support or when you need to take a break or how to avoid burnout just allows you to be a better leader a better founder a better partner a better team player and so for me it's been really focusing on that throughout the journey as much as possible and when it comes to running a team how would you describe your leadership style I try to be very empathetic and transparent as a leader it's your job to be a Visionary to be able to set the tone to be able to get people excited about what you're building and I think that only happens effectively if everyone has the same kind of common goal and there's clear language around that and so I would say that I set to inspire and to support I think for me I always knew that I was happiest when I was learning and so being able to create an environment where people are always learning and growing I think is critical to retaining talent and also just getting the most leverage out of your team and so I try to be a real partner in career development and in growth and to keep everyone curious and excited and learning but I would say empathy and transparency has really been two of the things that I've focused on the most and it's I think it's it's paid off how would you describe also the work culture was there any type of working culture you set out to build as you were growing expanding the company like I guess even things where from your old corporate jobs where like oh I want to do this for my company as well or like I want policies like this yeah I would say many of my roles helped me set the tone of what I didn't want to do I grew up my early days were in jobs and PR and culture that I found to be rather toxic you know this idea that there's always someone waiting for your job and you know work harder and there's no semblance of work life balance which as an idea is doesn't really exist anyway but there was just this idea that you know you were there to work and to work and to work and if you didn't work there was like a competition around how many hours you would work a day versus how well you were working and so I think for me it was really about creating a culture that was supportive that believed in work life balance that encouraged people to speak up to have autonomy to be courageous to make mistakes and to learn I wanted an organization that felt very collaborative and I think one of the benefits of building a brand that people really connect with is that people connect with the brand itself and so much of who we are as a brand comes from who we are as a team and so we've been able to attract talent and people that you know believe in the vision and the mission which makes our job that much easier but also bring people in that want to be part or that feel that passion for who are and what we're doing organically and it creates just a really great environment for building but I really wanted to be kind of the antithesis of that culture of never stop working and and create an environment that encourages people to get inspiration from all over and to have a life and I think that when people are happy they work better and smarter and harder and so that's something that we've really focused on but really being committed to the people to Learning and Development and creating a culture that's enviable I mean that's always been one of our one of the most important things to me into the organization so I have one more question and that is what is next for you as a Founder but also parachute as a company we've got so much going on you know we are continuing to introduce new products new Fabrics new designs new categories we are leaning into more experiential events so you'll be seeing a lot more of that that's something that we're really trying to focus on from a marketing perspective I think we're seeing that as a trend throughout the industry people just really getting back to immersive experiences and things that bring Brands to life in a way that is not so much about the transaction but more about the relationship and that's always been something that we've cared about but really bringing that to life in our stores across the country and more but we've got a lot going on some exciting collaborations Partnerships ooh collaborations it's going to be a fun year well we're excited to see what happens yeah stay tuned but for now thank you so much for coming on it was my pleasure it was such a nice chat thank you for having me found is hosted by myself TechCrunch senior reporter Becca scac alongside senior reporter Dominic madori Davis found is produced by Maggie stamitz with editing by Kell our illustrator is Bryce Durban founds audience development and social media is managed by Morgan little Alyssa Stringer and Natalie chman Tech crunch's audio products are managed by Henry pikovit thanks for listening and we'll be back next [Music] week