On today’s episode, Kunle is joined by Jordan Schindler, Founder & CEO of Nufabrx, an innovative healthwear that combines medicine and garments that solve patient compliance.
It all started with a pillowcase problem. Jordan Schindler was having issues with his skin and had tried creams, pills, etc. to no avail. His dermatologist recommended that he wash his pillowcases 2 to 3 times a week. For Jordan and most people, that would not be doable. Thinking of how to create a solution to his personal problem, Nufabrx was conceptualized.
Fabrics are around us and are one of the most unnoticed but affect our day-to-day living. We wear them, sit or sleep on them, and rub them on our bodies. Nufabrx’s innovation created a one-stop shop for our garments and medicine as they create healthwear products that are researched, patented, and created with the best combination of scientific research, customer feedback, and data.
This episode is especially exciting as you’d hear Kunle and Jordan talk about product innovation that will interest not only entrepreneurs but consumers themselves. This is an amazing episode for consumer brands to learn about risk reduction, product research and development, and most importantly, creating better products through customer and expert feedback.
Here is a summary of some of the most important points made:
On today’s interview, Kunle and Jordan discuss:
Q: What advice would you give yourself five years ago?
A: I don’t think I would give myself any advice. Looking back on how hard and complicated this was, I don’t know. People have said, “You’re an overnight success, 5 or 10 years in the making.” If I had known that from the beginning, I probably wouldn’t have done it.
Q: What book are you currently reading or listening to?
A: Essentialism. It’s about how you prioritize the 1 or 2 key things that will matter 12 months from now or 3 years from now.
Q: Thinking long-term. What’s been your best mistake to date? By that, I mean a setback that’s giving you the biggest feedback.
A: Launching the pillowcase products, that ultimately failed in the market. It caused us to develop this platform technology for where we are today.
Q: Are you a morning person?
Q: What are two things you can’t live without?
A: A notebook, a pad of paper, and my laptop.
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On this episode, we’re going to talk about category creation, we’re going to talk about moving from retail to DTC, and we’re going to talk about protecting your IP and patents. It’s a great episode you do not want to miss.
The 2X eCommerce podcast is dedicated to digital commerce insights for retail and eCommerce teams. Each week, in this podcast, we interview either a commerce expert, a founder of a digital-native consumer brand, or a representative from a best-in-class commerce SaaS product. We give them a tight remit to give you ideas you can test right away on your brand so you can improve commerce growth metrics such as conversions, average order value, repeat customers, audience size, and ultimately your gross merchant value or sales. We are here to help you sell more sustainably.
This episode is an interview I had with Jordan Schindler. Jordan is a global thought leader in healthwear. He’s on a mission to simplify health and wellness integrated into apparel. It’s a fascinating product in terms of Nufabrx. As the CEO and Founder of Nufabrx, Jordan has built the fastest-growing company in Charlotte and parts of America.
He is a Deloitte Fast 500 2nd fastest growing pharmaceutical company in North America and an INC 5000 top 50 fastest growing company in America. He was also the finalist in Ernst & Young Entrepreneur of the Year 2021. He’s developed and launched a new category of health and wellness products to eight figures in revenue and nationwide retail in stores such as Walmart, Walgreens, CVS, Amazon, and more.
He’s also gotten grants from the Department of Defense and MIT University, that’s Massachusetts Institute of Technology University. In this episode, we’re talking about Jordan’s journey from college to incepting Nufabrx back in 2014, the first few years of no revenue at all. They were just R&D-ing, raising a little bit of capital, and trying to build their prototype. Once they got their prototype, they blew up. They ballooned. This is a story of a marathon, not a sprint. They’ve been around since 2014.
Jordan displayed a lot of discipline in this episode, a lot of fortitude, and a lot of structured thinking in terms of not just his ideas but how he’s been able to focus on one thing over and over again till he’s made progress where they are now with 40-plus employees. A force to reckon with not just their region but the whole healthwear category.
They’ve created this category where you don’t need to buy a pain ointment any longer. You wear a brace and that brace, maybe it’s a knee brace or an elbow brace, dispenses painkillers into your skin directly. How genius is that? This is innovative. They come from more or less a retail background. When they launched to market, they went through retailers and now they’re making a transition direct to consumer. We talk about that transition.
On this show, we talk about the transition from direct-to-consumer to retail in many cases as what is happening but this is the reverse. It spun on its head. It’s retail to DTC. A phenomenal episode. He has an omnichannel mindset as you can imagine. They’re ambitious. Enjoy this episode and I shall catch you on the other side. Cheers.
I’m super excited. Typically, we speak with entrepreneurs that are DTC or eCommerce maximalists. This brand you’re about to learn about from the founder, Jordan Schneider, is called Nufabrx. They’re quite unique in the sense that they’re a drug delivery apparel company. Think about sleeves like your ankle sleeve, your elbow sleeve, or your wrist sleeve. You wear them because you’re trying to either protect that particular joint or you’re trying to heal from an injury.
What their company has been able to do is infuse medicines and drugs like paracetamol, ibuprofen, Nurofen, you guys call it Advil in the US, anti-inflammatory drugs, or any drugs whether supplements or painkillers, into these fabrics. You wear compression sleeves instead of applying cold therapy creams, heat therapy creams, or pain creams on those joints. It’s a wearable drug. Without further ado, I’d like to welcome Jordan for bringing this super innovative solution to the market. Welcome, Jordan.
Thanks for having me on. That was a perfect summary. We’re done. We’ve got it covered now.
It’s incredible. You guys are patented. It’s called healthwear technology. Is that correct?
That’s exactly right. We’ve developed a patent on how to embed medicine into clothing.
Out of the blue question, how big is your R&D? What do you guys do from a product development standpoint? It seems like a product development driven as a brand and company.
We have a number of PhD drug delivery scientists on staff. We have our own drug delivery lab on how we develop new active ingredients and put those into garments. We have a collaboration with our local university here in North Carolina on testing, validation, and ultimately launching products into the market that we think can help people solve patient compliance.
Jordan, we’re going to jump into your go-to-market strategy, how you guys are thinking about retention, how you’re implementing retention, and all of that good stuff. I want to know who Jordan is. What is your backstory? Where did you grow up? What kind of childhood did you have? How did that link to college?
I grew up in Arizona, in Tucson, upper middle class. Mom is a family doctor and my dad runs a number of nonprofits in Arizona for teen moms and foster kids. I have one younger brother. I grew up in the hot desert of Arizona. I remember, at an early age, going to garage sales and lemonade stands and trying to sell products and make an extra buck or two.
I couldn’t even count on one hand how many random one-off businesses. I was mowing lawns. I tried to start and create and convince my parents that they didn’t need this or that possession. They wanted me to sell it. I’m fortunate to have a supportive family that put up with that for lack of a better word. Parents and family love to travel. I’m fortunate in that regard.
I remember I was probably 12 or 13, we took an early trip to Hong Kong and I was astounded by this electronics market. I somehow convinced my parents to let me buy a couple of mp3 players in the early days and let me try to sell them on eBay and push my luck. Lo and behold, I was able to take those products and make a couple of bucks selling them on eBay.
That led to a business with some friends, middle school and high school, on buying and reselling mp3 players from China in the US market. I always had a passion for entrepreneurship and I knew that’s what I wanted to do. I didn’t know what I wanted to do but I knew that that’s where I got the energy and that’s what was fun for me. My personality trait is entrepreneurship.
An entrepreneurial family, too.
From there, I tried to find the polar opposite of Arizona, the sunshine, and the heat. I went to college in Seattle where you can get a lot of overcast and rain and have a blast. I went to the University of Washington for no particular reason other than it was different from Arizona. I had a great couple of years of college and that’s where the idea for Nufabrx came from, sitting in my dorm room one day.
One day, I was suffering from bad skin as a lot of college kids do, and wondering what the problem was. I was using creams, using pills, and not having much luck. Ultimately, I decided to go to the dermatologist and was informed that my pillow cases were one of the leading contributors to my acne. Dirt and oil build up on your pillowcase and clog your pores as you sleep.
Ultimately, his recommendation to me was to wash my pillowcase 2 to 3 times per week. As you can imagine, as a college-aged male, it was never going to happen. Almost a decade later and it’s still not going to happen. That’s what got me thinking. How do you create a benefit from a garment or fabric, something that contacts your skin all day every day? That’s where the foundation for Nufabrx and this healthwear category came from, trying to solve a personal heat.
What were the next steps after that? There are skin ailments. There are issues that happen to our skin. There is the possibility of dispensing or solving these problems with fabrics that touch our skin on a regular basis. When you’re in that situation, where do you go? What are the next steps? Are you going to research? Are you going to university papers? Are you going to research through papers online? Are you going to trade shows? Are you speaking to dermatologists for instance? What were the next steps toward getting that version one out there?
It’s a lot of what you touched on. I started researching patents to see what technology existed in the market. Fortunately, I was connected with a PhD drug delivery scientist who was using drug delivery technology but for the inside of the body. He thought he had a way to apply that to garments and fabrics. We teamed up in the early days on how you deliver medication through garments and look at what technology existed on the market.
It’s a lot of what you said, it’s researching. Fortunately, at our university, we had a lot of good publications. We had a lot of good professors that I spent time talking with and researching what technology existed on the market. We did not set out to create a new technology or a new solution, that was the furthest thing from my mind. I started the early days on what exists on the market and how can we create a solution and bring it to folks like myself that need it.
What was on the market at the time?
There was an existing technology that’s existed for 30 or 40 years called microencapsulation. That’s a lot of what you still see in the market today. It’s what makes scratch-and-sniff stickers smell. It’s a capsule that’s applied to a material or a fabric. That’s where we started. I took a trip down to China, to Guangzhou, and was trying to figure out how we get a product made. I was researching in Alibaba, I connected with a manufacturer overseas, and flew out there to try to figure out if they could apply this existing technology to fabric, into pillowcases. That was where we were trying to start from a product standpoint.
From there, that’s what sparked this development journey and development cycle. I met with a manufacturer. This is a funny side but we’ve been communicating online through Alibaba chat and their English is perfect. I flew over there and assumed that they would speak English. A naive young entrepreneur. No one spoke any English. I don’t know why I assumed they would but it was all over translation chat. They picked me up at the train station. We both looked at each other and said nothing. Eventually, we were able to communicate better by passing a phone back and forth on the translation side.
We ended up getting an early product made using this technology. It was manufactured overseas in China. It took probably 2 or 3 years. We launched our first pillowcase product. It was a pillowcase product with tea tree oil and lavender for your skin. We launched that from an eCommerce perspective on our website and thought we were done. I thought it was going to be a home run. There’s a lot to be learned there, for sure.
What about the offering for the pillow? Was it an internal pillowcase? Was it a pillowcase with different designs? Did you have a bed set, for instance? Was it a set pillowcase you put in a pillowcase or was it a pillowcase?
It was a pillowcase to go on the outside of a pillow. It’s a bamboo pillowcase that we started with. We had our logo embroidered on it, which ended up being negative because people didn’t want to brush up against it and raise their heads on their pillowcases. That was a separate learning. Quickly, we realized that it was not the right solution for the market. It hinged on these two fundamental questions. We would always get these two questions from consumers, “How long does this pillowcase with medicine last? What dose of medicine is being delivered to me as a user?” Two fundamental questions and we could never answer them.
We could never find an existing technology where you could deliver the same dose of medication as a cream pillow patch. That’s where we removed the product from the market. We paused and said, “This isn’t going to work. Back to the drawing board.” We regrouped and tried to figure out how we could solve those two questions. That was what was missing in the marketplace.
We started doing some research. Eventually, I was fortunate enough to get connected to an incubator of sorts in North Carolina where most US-made garments are made called the Manufacturing Solution Center. Quickly, I realized that was where we had to be. They have $50 million worth of textile testing, moisture, wicking, abrasion, and stretch, you name it, all the things that are super important to a garment. The consumer doesn’t necessarily think about it when they buy a pair of socks or a t-shirt.
We set up a shop there in North Carolina and got to work. How do we build a technology that can deliver the same milligram dose as using a cream? If you can’t do that, it’s not a replacement. It’s not a true drug delivery vehicle. It’s ultimately not solving a problem for consumers. If they can’t replace their traditional medicine cycle, you haven’t solved anything. That was what brought us back to the drawing board and we spent the next five years trying to develop that technology.
You had initial feedback from the pillowcase, the product brought out to the market. What was the timeline between taking the pillowcases out of the markets and then the first iteration of the more functional drug delivery-driven products?
A lot longer than I would have thought. It’s 4 to 5 years at least before we could get the technology to work. I probably underestimated the complexity. You have to merge two distinct industries. You have to merge pharmaceuticals, which have all of the regulatory compliance. We manufacture in clean rooms. You have to be able to deliver a consistent dose every hour regarding the garment. You have to combine that with all of the complexities of textiles. It has to stretch. It has to wick away moisture. It has to be comfortable. You have to produce it at scale. To merge these two things together was quite difficult.
Someone asked me if I would start this business again in these categories and I said not. We pick two complex industries that oftentimes are not combined together and there’s a reason for that. In traditional textiles, if you get a little too much white or black yarn in a garment, it’s not the end of the world. If you get too much of what we call our active yarn, suddenly you’re out of compliance with the FDA.
I use the analogy of a bottle of aspirin. If that bottle is supposed to have 100 pills and it shows up with 96, you have a big problem. That doesn’t work. You can’t launch that product to market. It was part product development and it was also part supply chain. How do we integrate these two different supply chains? We ended up taking 4 to 5 years before we could get a technology and a product to work.
Ultimately, that created this technology where we can deliver a controlled dose of vitamins, supplements, and medications through your clothing. That’s effective through fifteen-plus wash cycles. I can tell you exactly how many milligrams are delivered every hour as you’re wearing the garment. That’s ultimately what sets us apart.
Because it’s compression, every bit of the garment is going to touch your skin. You have a high degree of accuracy in regards to dispensing the drugs into the skin. Unlike a pillow where I might lay my head on there, depending on how I sleep, it might end up on my shoulder. There’s so much leeway that the accuracy of a pillow might not necessarily be there.
We think about it as milligrams per square centimeter of the garment. It’s a surface area calculation. We use the analogy of pixels on a screen. With that precision, you can pinpoint where each one goes in the garment. In our case, think about a t-shirt. You might only want pain relief in the shoulders and the lower back.
Our active yarn is only 5% or 10% of that total garment positioned wherever you need it. We can combine it with your standard cotton, nylon, polyester, and wool to create whatever use case people want in the marketplace. Ultimately, we created this platform that sits at the intersection of apparel and drug delivery. Ultimately, that’s the value that we’re bringing into the marketplace.
Has there been tension in the medical industry? You can imagine in hospitals. Let’s say I’m undergoing physical rehabilitation off the back of an accident with my knee. Rather than having to take drugs or rub creams locally, I wear a sleeve while I’m in the hospital or while I’m rehabilitating at home. It makes a lot of sense particularly if it has to be administered at a certain point in time. Have you got any interest there? Has it been predominantly customers and the general market?
We get a lot of interest from the medical side. To your point, ultimately, what we’re solving for is patient compliance. We are increasingly busy. We forget to take pills or use creams or patches that are directed. It’s hard to change consumer behavior. We all get dressed every single morning. Clothing contacts our skin all day, every day. It’s the perfect platform for solving health and wellness outcomes. That’s what we’ve created from a healthwear perspective.
You think about post-surgical as a good application area. we’re talking with active pharmaceutical partners. Imagine branded ingredients. It’s like what we’re talking about. Advil and Tylenol that you can deliver through a sleeve. It’s also branded garments. You can imagine Nike, Under Armour, and Lululemon. We are combining these two things. It’s a Lululemon garment with Advil. It’s a Nike sock with athlete’s foot medication. That’s this intersection at which Nufabrx plays.
Let’s go back to the question I’ve been itching to ask. In 4 to 5 years, how did you survive? Did you have funding for the R&D? Was it a side gig?
A lot of ramens and a supportive family. We raised some early capital, we call it friends and family. Some small Angel groups kept us going. It kept the lights on. It was like taking a salary. It was taking enough money to live and that’s it. I’ll use the analogy of swimming, it allowed us to the next buoy. What’s that next inflection point that you’re trying to get to?
From there, maybe the world looks a little different. Maybe a couple more opportunities open up and then you swim to the next buoy. That’s what I use a lot as I think about opportunities for our business. It was early capital. We’re fortunate we also got a grant from the Department of Defense through an MIT-run organization called AFOA.
There are a lot of military applications for what we’re doing. Think about soldiers hiking 40 or 50 miles a day with heavy backpacks on. They don’t want to carry extra weight or extra medicine. They’re certainly not going to stop in the middle of the battlefield and rub cream on their foot. Whether it’s a pain reliever in a uniform, a stimulant to keep soldiers awake, or an antifungal for different battlefield conditions, there’s a lot of interest as well on the military side. That early funding kept the lights on as well and kept us building the dream.
Having the staying power for that long also is commendable. Paint us a picture after the R&D was complete and you had your version two.
The staying power was there. I probably didn’t know any better. If you’re looking at it day one and it’s five years, that’s different from, “This will only be 2 or 3 more months.” It’s the eternal optimist entrepreneurial mindset that a lot of us have that kept it going. After that point, ultimately, what we had was what we call an active yarn. We were able to put vitamins, supplements, and medications into yarn that we could then control the rate of delivery to correlate to a milligram dose.
We had a cleanroom that we were manufacturing in. Our products were registered with the FDA. They fall into the monograph for topical analgesia. Ultimately, we could prove, “Here’s the dose that was being delivered every hour as you’re wearing that garment.” What we created was this package of pain relief yarn or moisturizing yarn that could then flow into the supply chain and be knitted into any garment. It looks, feels, and performs similarly to any other cotton or polyester nylon yarn.
That yarn could then be precisely positioned in a sock, a knee sleeve, a t-shirt, or yoga pants. Ultimately, we provide that tech pack and then we contract out all the garment production. We’re a technology company. We are a drug delivery system that’s utilizing garments as a platform for delivery. We’re not ultimately creating or validating new drugs. We’re taking known therapeutic ingredients and delivering them more conveniently to a consumer and that’s what sets us apart as a company.
With this iteration, was it paracetamol?
Capsaicin is the active ingredient that we use. It’s a potent topical analgesic like menthol or ibuprofen. It’s a similar classification on the market. We chose to use a natural ingredient. It comes from chili peppers. It’s what makes chili peppers hot but it’s a known therapeutic safe ingredient and that’s where we want it to start.
Now you had the product, what was your go-to-market strategy at the time?
Our go-to-market was who wants it? I don’t know that we had a clearly defined go-to-market strategy. We tried to talk to anyone and everyone who would listen to us. Ultimately, that broke loose a meeting with a Walmart buyer. We flew down to Bentonville and sat down with the buyer. In two minutes, the buyer goes, “I get it. There’s this huge correlation between people buying braces and pain creams. Why not put these two things together?”
For better or worse, they rolled the product out to every store. They didn’t even run a test. From there, we were able to parlay that success into relationships with Target, Walgreen, and CVS. We did the reverse. We started with retail and then we went back and did the commerce and use that awareness to drive our eCommerce brand-building.
What insights did you get from retail having rolled out Walmart? From my notes, you’re in Target and CVS. You’re in key retail. What aisle do you sit in? Do you sit in the medicine and pharmaceutical aisle?
We are in the elastics. We’re by the sleeves in the braces. We’re actively talking to OTC, sports and apparel, and first aid. This product could be positioned in a lot of different parts of the retail store. We’re fortunate, it’s turned into one of the fastest-growing new products in the category. We’ve been fortunate that consumers see the value here. They don’t now have to buy two products.
They don’t have to buy a sleeve and a tube of pain cream. It’s one product. It’s one solution. It’s not sticky. It’s not messy. You put it on in the morning and you don’t have to worry about it. Ultimately, it helps solve patient compliance. From there, we’ve learned a whole lot about what consumers want, what consumers don’t want, and also what control over that information we have through a retail partner.
It’s different working with Walmart than it is working with our own website or working with Amazon and that interaction that we have with consumers. in three seconds, does the consumer understand what we do? We have to continue to evolve and educate consumers on this new category of healthwear products.
How did a retailer like Walmart help you with customer education? Did they give you an enhanced space in the aisle? Did they give you any opportunities to demo new fabrics? Did they give you an additional graphic display to show that call to action? Did they leave you as another brace and then you had to do all the work with packaging?
Day one, it was nothing. As we’ve continued to build that relationship, we’ve gotten more of that. Day one, it’s, “Do you guys prove this out? Bring customers into the store and let’s hope that this thing sells.” It was a crash course. How do we bring consumers into a store and educate them on what we do? I spent a lot of time sitting in the aisle at Walmart talking to customers.
I was trying to understand what they wanted, what they were looking for, and what they understood or didn’t understand about the solution that we were trying to offer. We did a lot of work on the packaging side. Showcasing it to consumers and trying to get feedback was critical in terms of the evolution of what we’ve done. It’s grown steadily over time as we’ve learned but it certainly didn’t start off that way.
What key insights can you give readers toward thriving in a retail space?
A lot of it is how you educate consumers on the opportunity. Today, if a consumer is already in the store, they tend to choose our product because it’s a more cost-effective solution. Our consumers are actively going to the store looking for healthwear or drug-infused garments. In most cases, they’re not. In most cases, they don’t know about us. We’ve had to be cognizant of how we can educate the market and how we can drive people into a retail store. We’re doing that through a wide variety of different things.
We’re still a small company. We don’t have unlimited resources. We looked at, where are the opportunities that we can think outside the box? Where can we have the biggest impact? For example, we did a program with our local baseball team, The Charlotte Knights, called the Hall of Pain. What we did was this program where when a player is hit by a pitch, they get inducted into the Nufabrx Hall of Pain and they get free Nufabrx products.
We give some to fans and we say, “Scan the QR code. The product is available on our website and in these retail partners.” How can you do Guerrilla marketing activities the same way you do in eCommerce to drive awareness about what we do? We’ve done that through partnerships with sports teams. We’ve tried to do it through initial tests on connected TV, with influencers, and with social media.
It’s this holistic strategy and looking at the data and what works and what doesn’t. That tends to shift and change over time. One of the things that set small businesses apart is that they can move faster than big ones. That’s a huge advantage. There’s always new technology out there. Test, iterate, learn, see what works and what doesn’t work, and make quick decisions. That’s probably the best advice I can give to anybody.
Doses matter. If I had a quite severe fracture, the amount of painkillers I would need would differ from someone who’s had a sprain. How do you solve that problem in terms of adjusting to various degrees of pain?
That speaks to the early days and what we learned with a pillowcase. Within existing technology, you couldn’t. It was a one-size-fits-all model. Today, because this is a technology we’ve developed, we can control the dose in two distinct ways. One, how much medication goes into that yarn? Two, how much of that yarn goes into a garment? Do we want our yarn to be 5% in the ankle or on the toes? Do we want it to be 20% or 50% throughout that whole sock? You can now have an extra-strength version that has more medicine loaded into it.
I use the analogy of a bottle of aspirin. Do you want 50 pills in that bottle or do you want to have 100? What strength of those pills do you want to have? Those are all levers that we can pull with our technology based on the yarn itself. Imagine a transdermal patch as the closest analogy to technology, you can have bigger or smaller patches. You can have patches with more or less medication. We’re able to adjust that based on the volume, chemistry, and technology we’ve developed.
That is easier to deploy direct-to-consumer rather than through retail partners. Is that one of the reasons you’re going direct? You’ve been direct for how long now? Over 18 or 12 months?
Exactly. You can offer more products. You have more direct interaction with consumers. They both have their values. There are specific products that do well in retail and there are specific products that need more education, need more sizes, or need more colors. You don’t have the number of pegs in a retail store to do that.
We look at retailers as that storefront. It’s the awareness builder. That consumer can go back to eCommerce channels or they can now access our other product lines. Think about us as this platform. That customer that’s looking for a pain solution might also have acne. They might have eczema or psoriasis. They might have trouble sleeping. We can now create awareness and introduce them to all these other products in the healthwear product portfolio.
You’re looking at other channels as almost showrooms but functional showrooms that sell parts of your portfolio and then when they come directly to you, you offer the full experience.
Retail is a phenomenal way to learn. You have this incredible distribution channel and access to consumers we never would have. There are a lot of consumers that’ll shop in a Walmart that never would shop on our website or vice versa. It’s access to providing a solution to customers that we can help.
Also, you learn a whole lot. There are different demographics of consumers. One packaging or one way we talk about our product might work in retail and it might not work in eCommerce. There are ways that we can talk to consumers. There are ways that we get much more clarity around how to position the technology.
When you walk into a store, they’re surrounded by packaging. You have 2 or 3 seconds to identify the message. Whereas someone goes to your website, you probably have a little more time than that. You can have them click on a video or you can have them scroll through the pages. It has to be crystal clear on our messaging, which has helped us focus on everything that we do.
How long have you been in Walmart?
This will be our third year.
How do you solve the challenge of getting customer feedback, data, and customer sentiment beyond sales volume?
There are two ways to do it. The first is we try to engage at a high level with the retail partner. Beyond talking with the buyer, we’re talking to heads of health and wellness. We had the Walmart team come to visit us at our facility in person. That’s where you get a lot of those insights. They say, “Here’s where the general trend lines are going. We haven’t seen a lot of innovation in first aid or foot care. Could you do a partnership with antifungal socks?” We’d like to carry that in our store. We’re seeing that the wrist sleeve is outperforming the knee sleeve. Could you do innovation here? Could you do XYZ here?”
It’s engaging at a much higher level with the retail partners to try to get some of those insights. They have so much more data than we do and than we ever will. To learn from that is an incredible gift and an incredible wealth of knowledge that’s allowed us to better refine and design our products. It’s treating them as a collaborative partner and that’s what made the difference for us at the end of the day.
No one ever, at least on this show, speaks to the fact that if you’re speaking to a head of a category in a retail store, they’re not just interacting with your brand. You could have a head of product in your brand that’s collecting customer data in various ways from surveys to first and zero-party data. However, it’s not in comparison to more macro trends or category-level trends unless they do more research.
In that environment where they’re getting data from all of the products, they can give you a gauge of where your performance lies in comparison to every other item in that particular category. That’s insightful. You could take that and apply it to your insight DTC. I’ll be happy with all that data because you could make better decisions as an operator.
Not to mention all of these retailers have their own eCommerce platforms. Walmart.com is rivaling Amazon now and Walgreens.com. They can now mix and match that eCommerce data to retail. They might say, “In-store data is slipping but knee sleeves for eCommerce are way up.” We’ve been able to partner with them on direct ad spend programs. It goes with HSA and FSA. Insurance is reimbursable. There are all sorts of interesting programs that you can parlay one versus the other that gave you interesting customer insights. Whereas on our website, we have one part of the picture. Now we can get this broader piece of the puzzle.
This takes me to other multichannel platforms like Amazon. Are you active on Amazon.com and other marketplaces?
We are. We’ve launched Amazon. To your comment about a showroom, people go and use Amazon as a validation tool. You have to have a presence on Amazon. It’s great for people to be able to read reviews and see what people think of the products. Ultimately, they might buy on Amazon. They might buy on our website. They might buy on Walmart.com. We have the gamut of different eCommerce platforms that we sell on.
Ultimately, would we love people to go directly to our website? We certainly would. We can control the experience. We can educate consumers. We can try to create that lifetime value for the consumer. That’s our goal. We fully recognize that not all consumers want to buy on our website. They may be more comfortable buying on Amazon or Walmart.com. That’s totally fine.
For us, it’s trying to tailor the offerings to each partner. On our website, maybe we’re the ones that have multiple sizes. There are not enough retail pegs in a store for us to ever do that. Maybe it’s different colors. Maybe we launched a new ingredient that a retailer doesn’t want to carry. That’s where we can get creative and build good relationships with our customers. We try to have direct interactions, “What’s working and what’s not this? Did you like this? Did you not?” That’s ultimately how we can get better at the end of the day. What it’s about is, how do we make the best possible products for customers and how do we simplify their health and wellness issues?
You can pass those insights to retail teams and say, “This has worked direct. This might work in your environment. This is the data.” It’s like a testing environment in two ways.
It’s all that feedback loop and one feeds the other. The more prongs you have, the more iron in the fire and all of these different verticals, the better off you can be. You’re right, the retailers will say, “How’s this performing on your own website?” “This is our top-selling product on our website.” “Let’s carry that in-store.” “How’s this performing on Amazon?” “Not that well.” “Maybe we need to look at the price point.” It is that full-circle approach where one feeds the other.
What is the plan? What is the five-year plan with Nufabrx from a channel standpoint? Do you intend to have a head or a lead channel? Do you prefer to be more distributed when no channel takes more than 25% of revenue?
It’s important to have a distributed channel to reduce risk. Any one channel is hard to control. The retailer could go out of business or they could choose not to carry your products or XYZ could happen. The same for Amazon, Amazon could say, “This product category doesn’t work anymore. They launched a competitor.” Your product gets a bunch of complaints. Whatever it is, there are all of these different verticals that have their own challenges.
By having multiple opportunities, you spread out the risk profile. It’s not that 90% of our business is coming from Walmart. How do we have 30/30/30 or whatever those numbers are? The risk will also spread out the opportunity and use all three of those to feed each other. At the end of the day, we get the same question from retailers, “How’s eCommerce doing.” Vice versa. An eCommerce partner is going to say, “How’s retail doing?” They know that they all feed each other.
It brought awareness in the marketplace. That’s when we look at TV ads, Google search, or influencers. It’s not just once. I can’t remember what the statistic is but a person has to see your ad six times before they’ll act on it. Who knows where they’re at? Maybe they’ll be in a Target. Maybe they’ll be on Amazon. They’ve seen it this many times, now they’re going to buy it. They all feed each other.
You’ve not been DTC for a long while, as long as you’ve been in retail and Walmart. It’s comparable. You’ve been in Walmart or bricks and mortar for over three years. eCommerce, over a year now. What have been your big takeaways selling DTC that readers will benefit from so they don’t make huge mistakes? From a first principles standpoint, what should they be aware of in a DTC environment? What are the nuances and key principles to live by selling DTC?
The biggest one for us, especially coming from retail, is that with DTC, we control the experience. You control the data. You control how that customer interacts with you. That’s been the biggest learning for us. We can test stuff. We can get direct customer feedback. We can learn. We can implement new technologies quickly. For us, that has been the biggest selling point or the biggest advantage of using our eCommerce websites.
You can create that long-term interaction with the customer. That customer that bought our pain product, “We’re launching this new innovation. We’ve now partnered with XYZ pain brand to launch this new product category. What do you think?” It’s an opportunity to test, iterate, and launch new products a lot faster.
Now we’ve got a database of 30,000 email lists where we can send an email in the next hour if I wanted to write to consumers saying, “Is this a product you would buy? What price point would you buy it at?” It’s allowed us an opportunity to get smart about what our customers want and how they think about this category. Ultimately, for us, it’s educating the market in a way that we can control. Through Amazon and through retail, we can’t always control what the messaging is or what products are next to us or how our customer sees it but you can on eCommerce. You can swap that out, test, learn, and iterate quickly.
I’ll go back to something we were talking about earlier. What sets small businesses apart? They can react a lot faster. There are many cool new technologies in the eCommerce space. As much as possible, test, iterate, and try new things. If it doesn’t work, throw it away and try something new. It’s hard to do that through some of these other channels.
The other thing we’ve learned is to try to use the lens of, what insights do we have that nobody else has? For us, we’ve got a unique perspective on the intersection of traditional drug delivery in textiles. We spent the last ten years trying to build that out. Using that lens on, what new technologies do we think customers want? What new applications? What new product concepts?
For us, as it relates to clothing, what clothing can have the most impact on a consumer? Where are traditional medicines hard to apply? It’s acne, eczema, psoriasis, and athlete’s foot. How do we use those insights and learn to create better products based on that lens that we have that nobody else does? That’s what I would encourage people to use from an eCommerce perspective. What sets you apart? Where do you know more than anybody else?
It’s that competitive edge and then applying it in the commerce environment. I’ve learned a ton. What is the split now in terms of retail versus commerce? Walmart having to launch in every single store across the country must have been a supply chain challenge for you. You have domestic manufacturing in North Carolina. What was the first purchase order like? It must have been a lot.
Yeah. It’s astounding to go from selling pretty much 1 or 2 units a week to hundreds of thousands. It’s that order of magnitude. We’ve been fortunate that we’ve been able to produce everything here in North Carolina. Our entire supply chain is within an hour and a half from where I’m sitting. That’s helped in this day and age where there are a lot of supply chain issues and a lot of products coming from overseas. We’ve been able to swap in and solve for those empty pegs. We’ve yet to miss a real shipment. We can walk down or drive down the hall and talk to one of our suppliers and say, “We need this.” We’re able to react a lot quicker to opportunities in the marketplace.
Early on, you got to bet on yourself. We took a gamble. We took a risk. We raised a little extra capital and we built out the manufacturing. I would hope and think that a lot of the readers are here because they believe in what they’re doing and they believe in the vision. Make a bet on yourself. We scale manufacturing more than we needed at the time but that’s what allowed us to then launch into Target and launch into CVS and stay ahead of anybody else that’s potentially in the market because you had to.
Otherwise, we would be in the same supply chain issues as everybody else. Think about how much time we all spend building businesses and building entrepreneurship. It’s fun. You’re here. You’re already making a bet from your time. Why not do it from a resource perspective if you can? That’s what’s going to make you uber-successful or not.
Speaking of manufacturing, it’s a competitive advantage for yourselves. Are you contract manufacturing or are these your own facilities?
It’s both. We produced the active yarn. We’ve developed a proprietary way of embedding ingredients into yarn. That’s something that we own. We own our own cleanrooms. We manufacture domestically. We contract out the garment production. That yarn will go on a knitting machine and be turned into t-shirts, socks, or leggings. That’s the part that we contract out. That’s all done here domestically as well.
Yarn is the IP.
We embed active ingredients into the yarn.
It’s smart. That way, you control the core because they’re just weaving it. This is the core material. It makes a lot of sense. Harry’s, the men’s shaving brand, they’re now more of a wellness brand now that they cover a lot. When they started to raise capital, they were particular about manufacturing. They are not going to import or work with another factory or partner. They acquired facilities. They’re already making shavers in Germany. They did 2 or 3. They raised a shared ton of cash.
Do you think ambitious consumer brands need to have control in some parts of the manufacturing process? Do you think we’re well beyond that phase? You import a product, you put some lipstick on a pig, and you create a brand. That whole DTC story and then you tell a story and that’s it. Do you think that’s well beyond behind us now? Would it still work? Is the market evolving to a situation in which you not only have marketing competence on the front end but you also have IP and manufacturing competence on the back end? That’s what I’m hearing from your story.
You have to be able to own and have control over your supply chain. To this point of making a bet on yourself, if these last couple of years have taught us anything, a pandemic can happen. Global uncertainty can happen. Ports can shut down. If you don’t have some control over that, I don’t know how you put yourself in a position to scale the business as you need to.
One of the ways we were able to react quickly during the pandemic is we had our own knitting machines and we had our own lab. We were able to test products and iterate and react quickly. If we didn’t have that, I don’t think we could have gotten to market quickly. Look at PPE and face masks. One of the reasons the US and a lot of European countries got into an issue is that most of this stuff is made overseas. When the ports closed and the Chinese market needed all this stuff, it’s pretty much nothing left. There was no domestic ecosystem.
For a lot of products, you have to be able to have some control over your supply chain to be able to scale and plan for market uncertainty. That’s where I would say the competitive advantage for us also lies. There are lots of ways to do that. You don’t have to build your own manufacturing facility. You could have a strategic partnership or a joint venture with a manufacturer overseas or somewhere else. You have to have a bigger and more broad relationship than, “We’re going on Amazon and buying these things,” and then converting it. That sets you up for a lot of risk in this uncertain market.
Before I let you go, we have an evergreen rapid question section. I’m going to ask you 5 or 6 questions. If you could use a single sentence to answer them, we’re good.
I’ll do my best.
Good stuff. What advice would you give yourself five years ago?
I don’t think I would give myself any advice. Looking back on how hard and complicated this was, I don’t know. People have said, “You’re an overnight success, 5 or 10 years in the making.” If I had known that from the beginning, I probably wouldn’t have done it.
What book are you currently reading or listening to?
Essentialism. It’s about how you prioritize the 1 or 2 key things that will matter 12 months from now or 3 years from now.
Thinking long-term. What’s been your best mistake to date? By that, I mean a setback that’s giving you the biggest feedback.
Launching the pillowcase products, that ultimately failed in the market. It caused us to develop this platform technology for where we are today.
Are you a morning person?
I was going to ask you about your daily morning routine.
You can ask me about my evening routine.
What are two things you can’t live without?
A notebook, a pad of paper, and my laptop.
Jordan Schindler, it’s been an absolute pleasure having you on the 2X eCommerce podcast. For people who want to find out more about Nufabrx, it’s Nufabrx.com.
Thank you ever so much, Jordan.