As the sale of Dollar Shave Club to Unilever for US$1 billion last month showed, subscription boxes are big business. In Australia the likes of Bellabox and Her Fashion Box, HelloFresh and MarleySpoon, and a host of others have established themselves in the market, with Bellabox, one of the pioneers of the space locally, attracting $6 million in funding from Fairfax-owned Allure Media back in 2014.
Catching on to this growth in the space is US startup Foot Foot Cardigan. Founded in Dallas, Foot Cardigan sends subscribers a new pair of funky, colourful socks each month for US$9 plus shipping. After a few years of steady growth, cofounders Bryan DeLuca and Matt McClard took to Shark Tank US without pants, won a deal with Mark Cuban and Troy Carter, saw subscriber numbers skyrocket, and now they’re getting ready to launch in Australia.
DeLuca, CEO, said the idea for the business came in the early days of the subscription box boom, when he saw the first viral ad for Dollar Shave Club in early 2012.
“As I watched this video, I was immediately drawn to this idea of a subscription business. I thought to myself, here’s this guy who is taking something really boring like razors and making it cool and relevant, what other products have faded into obscurity that we could revive with the right attitude? I settled upon socks, something that everyone needs, but no one ever thinks anything of,” he said.
After setting up a dummy site to gauge potential interest from consumers, the cofounders figured there was enough for a viable business and launched Foot Cardigan; the process of developing the idea through to launch took less than 90 days.
“The biggest challenge was trying to communicate to people that a sock subscription was even a thing. How do people know that they want something if they’ve never heard of it before? We needed to bring socks into the convenience economy conversation,” DeLuca said.
“Most of our family and friends, while encouraging, were pretty nonchalant about the idea; some got it immediately, but most didn’t. That being said, I’m thankful to have friends and family that will ask me tough questions like ‘who the hell is going to buy a sock subscription?’ This is why we tested everything before building the business. I didn’t want to spend time and money on building something that people didn’t want.”
DeLuca said designs for the socks come easily; to decide on creatives the team often has meetings where they will go around in a circle and simply put concepts on paper.
“There’s constantly stuff in our heads, like, ‘Oh hey, let’s make a sock that is a kraken eating a guy on a unicycle. That makes sense’,” he said.
Foot Cardigan is up to almost 50,000 subscribers worldwide, with 15 percent coming from outside the US in 2015. Around 65 percent are men, according to DeLuca, with a growing number of women signing on. Most are young professionals in their 20s – the New York Times chronicled Silicon Valley’s love of funky socks last year – though a significant portion are those of all ages who simply like fun socks and the convenience of getting them delivered.
While Shark Tank helped boost those subscriber numbers significantly – over 7,000 came on board in the days following the show – DeLuca said that the previous three years were spent committed to pairing the fun, quirky product with personalised customer service, where the team tried to inject its own personality into the product delivery as much as possible – this too is evident from its website. They also have some special one-off designs, such as the current ‘United Socks of America’ deal allowing customers to buy Bernie, Trump, or Hillary socks in time for the November election.
“We earned trust early on and have been reaping the rewards of the ensuing word-of-mouth promotion ever since,” DeLuca said.
As many Australian startups have no doubt felt over the last two years, going on Shark Tank wasn’t the easiest decision to make, with DeLuca saying the application sat on his desk for six months as he wasn’t sure the show was the right direction for the business: the cofounders knew how they wanted to scale the business, but they needed the money to help them get there.
After winning deals from Cuban and Troy Carter on camera, DeLuca said that they realised the sharks’ investment strategies and Foot Cardigan’s growth strategies didn’t align, and they walked away from the deal. However, DeLuca said Cuban was generous is offering the cofounders advice and letting them come to him with questions.
“There’s just so much more to negotiations than the numbers,” DeLuca said.
The decision to launch officially in Australia came after the startup identified the market as one with significant increases in traffic and subscriber rates.
“Aussies are really getting on board on the convenience economy and we’re seeing more businesses like Vinomofo and Menulog really flourishing, so hopefully, they’ll love us too,” DeLuca said.
This coming spring Foot Cardigan will be launching a range of new products including no-show socks, luxury socks, and more traditional styles to keep expanding its reach.
Image: Bryan DeLuca. Source: Supplied.