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Eric Powell was working as a consultant at Deloitte managing major litigation projects for Fortune 500 clients and top law firms, until his frustration in men’s dress shirts created a turning point in his career. Being 6’4” and skinny, meant that the shirts he bought never quite fit and often looked sloppy. This constant frustration motivated him to start his own made-to-measure shirt company called Ratio Clothing, located in Colorado.
Ratio Clothing offers customized, made-to-measure men’s shirts featuring luxurious materials and USA hand-tailoring sold online for about half the price of the off-the-rack.
MO: How has Ratio become a great marriage between your skills and passions?
Eric: I’ve been interested in clothing and technology since I was a kid. I started programming when I was in kindergarten on an Apple IIe. By the time I was in high school, I had three jobs – one working as a programmer at a software startup, one working a few shifts a week at Abercrombie & Fitch for a discount on clothes, and one running my own landscaping company. So, I’ve always had an interest in fashion, technology and entrepreneurism. However, I wasn’t actively looking for a business idea that happened to be at a crossroad of those skills. I simply became very frustrated with finding clothes that fit me well and noticed that others shared the same frustration. I had an experience with custom clothing on a trip to Asia and it was a revelation. I realized that technology had the power to democratize custom clothing, like it had done for so many other businesses, and I decided to explore starting the business. I knew that I had the technical skills to make it happen, and I knew that I had the level of passion and obsession over fashion and fit that I could be the right person to start this business. But, I still knew basically nothing about the inner workings of the apparel business, so I had to do some basic feasibility assessments and learning first. Obviously, I was able to get past those initials hurdles, and I couldn’t be happier with the results. There probably couldn’t be a more perfect business for me. It brings all my skills and passions together – technology, clothing, design – and it results in me bringing an incredible energy to the project that I’ve never experienced before.
MO: You were working as a consultant at Deloitte when you first started the process of putting together Ratio Clothing. What was the development process like and how did you balance it with your 9 to 5 job?
Eric: My position at Deloitte was very demanding and generally exceeded the 9-to-5 parameters, so the early stages of development took much longer than they otherwise would have, but I basically tried to use every free minute on the evenings and weekends to make progress. My programming background really trains you to break problems down into small, manageable chunks, so I’d set small goals and just tried to keep moving the ball forward. I’m also a big advocate of the GTD (Getting Things Done) personal productivity system, and that process really helped me to stay focused and not get overwhelmed.
Because of my technical background, I knew the manufacturing and sourcing process would be a much bigger hurdle for me than creating the e-commerce website, so I focused much of my early efforts on that process.
I think a lot of entrepreneurs probably face a decision whether or not to pursue the “side hustle” route or to quit their jobs and go all-in right away. I chose the former, but I’m still not sure what decision is the correct one. There’s no question that continuing working full-time in the development stage slowed me down, and as a result several competitors made it to market before me, but at the same time I was able to invest more in the business and I didn’t have the pressure to immediately generate income.
Also, while I am definitely a believer in the “Minimum Viable Product” and “launch early and iterate” philosophy, I still could have launched earlier. Like many people, I know I let my perfection get the best of me and launched with features that ultimately proved to be unnecessary. I’ve learned far more in the 6 months of operating live and selling to real customers than I did in the 12 months or so of development and private sales.
MO: How did you attain your knowledge about the clothing industry and manage to make the necessary contacts to carry out your vision?
Eric: Anytime I try to learn something, I generally head straight to Amazon. There’s usually a pretty good chance that someone out there has written a book about whatever it is you’re trying to do. I read several books about the fashion business and even read books about sewing and shirtmaking, to understand the process and terms involved. The fashion business is generally quite closed to outsiders (though that is changing), so a lot of that early learning is just so you can walk-the-walk and talk-the-talk. For example, if you’re going to call a factory, you need to know what CMT means (cut-make-trim). One of the books I read actually listed some contacts, including one for a fashion incubator whose sole mission was to help new designers. So, I just gave them a call. I didn’t quite fit their niche, but they were able to put me in touch with someone that really understood the custom and made-to-measure process. I ended up hiring that person as a consultant to help me develop my initial made-to-measure patterns and locate a factory. He was really well connected in the apparel business, so he facilitated introductions and taught me the ropes. Eventually, I learned enough that I was comfortable operating on my own, but those early connections were vital.
MO: How do you think that the inherent waste of apparel retail has created a platform of opportunity?
Eric: There are really two kinds of waste in the apparel business. The first, and the one most people talk about, is all the mark-ups that take place from manufacturer through to retailer. By the time you buy a shirt at retail, it usually costs about 5 times the cost of manufacturing. That, in and of itself, is wasteful, but the non-manufacturing costs (design, marketing, etc.) are significant enough to justify some of that markup. So, going direct to the customer can help eliminate some of that waste. However, plenty of businesses have taken the direct sales route to eliminate some waste and it’s really a small part of the waste we’re trying to eliminate.
The real waste we see, and the one that rarely generates as much discussion, is when products are manufactured that do not meet any real customer demand. This represents a lot of clothing that is made, and is the entire reason that businesses like Gilt Groupe, TJ Maxx, and outlet malls even exist. The efficiencies of mass production require that brands make clothing in huge quantities in only a few sizes, but they’re often making products that neither fit nor appeal to their customer.
Our model is to only manufacture something once a customer orders it, so we generate virtually zero excess inventory waste. As a result, while we definitely pay more to make our products, we can sell them for a more reasonable markup because we do not run the risk of sending a completed product to a discount bin or an outlet store.
Ultimately, it’s about the customer. With our model, the customer gets a product that is custom-made to their body and style preferences for a price that is cheaper or comparable to a similar off-the-rack shirt. Once customers are exposed to our model, it’s a no brainer, and they rarely buy off-the-rack again. We think that represents a huge disruptive opportunity, considering the size of the “off-the-rack” apparel business.
MO: How much influence did you have over the design of the shirts? Did you consider yourself creative before this process?
Eric: We’re still a small and growing business, so I’m entirely responsible for the design of the shirts at this point and I have a lot of fun doing it. I have always considered myself a creative person, though not in the typical “artistic” sense. However, I think a lot of menswear design is about being an obsessive detail freak, and I certainly fit that bill. It can be a detriment in some other areas, but serves me well here.
I’m excited about us getting to the point where I can hire a design collaborator, and we’ll be there soon. Down the road, I’d love for us to partner with major designers so they could deliver their designs through our custom manufacturing platform.
MO: When did you start to feel that you were really connecting with your customers?
Eric: As our first customers started receiving their shirts, we’d get emails that were literally gushing about how happy they were to finally get a shirt that fit them well. They couldn’t believe the difference. We’ve been trained by mass retailers to accept inferior, poorly fitting clothing, so when you get the real thing, it’s quite a difference. Actions speak louder than words though, and the best validation is when someone places a big order, probably replacing much of their closet, after receiving their first shirt from us. They’re basically telling us that they can’t go back to the inferior world of off-the-rack, and that means a lot to us.
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