No Brands Were Built Overnight, Ariel Kaye, Parachute, Episode 55

Ariel Kaye is the Founder and CEO of Parachute Home, a retail business with the mission of supplying consumers with the best sheets, bedding, and home essentials on the market, as well as inspiring a community around sleep, wellness and creating a comfortable home. Ariel and I discussed how her background in branding and advertising really informed her ability to thoughtfully and methodically build her business from one sheet to entire home goods and lifestyle brand.

Joanne

I always say, well Ariel, first she did sheets, then she did sheets. Then she did sheets and then she brought a towel.

Ariel

Yep.

Joanne

And I think that’s the key to your success. But why sheets?

Ariel

So lots of reasons why sheets. But you know for me I think it was I was a super consumer so shopping a lot in the home space helping friends and family decorate their homes found myself at this like time in life where I was ready to do something different and saw this opportunity within the home space in general. But as I looked more and did more digging within the category I realized that your bedroom and the sheets that you sleep in are just such an important part of your life. You spent a third of your life in bed, sleep impacts everything and sheets historically have been this product that you buy off the shelf because it’s in front of you because you’re desperate because the current sheets you have have holes in them and are disgusting and you go into a big box retailer and you just buy something because it’s there. And it’s been this completely undifferentiated experience that has been also confusing and frustrating

Joanne

And not connected to a brand.

Ariel

And not connected to a brand. So zero brand loyalty at all and you know.

Joanne

And licensing crap.

Ariel

And it’s all the same. And so it’s all packaged the same it’s all stacked the same and there just really is no emotional connection. But yet this is a product that you like I said, use a third of your life and it really does have an impact. So I felt like there was this huge opportunity to kind of converge this wellness thinking and this emotional connection that you could have with the brain that I think consumers were yearning for and longing for with brands and actually just choosing for it’s like I don’t need to spend money with brands that don’t mean anything to me that aren’t valuable that aren’t adding some sort of you know education or whatever it is.

Joanne

So many like you know a lifestyle brand starting sheets but let’s go backwards. Yeah. So where’d you grow up?

Ariel

L.A.

Joanne

And you’re still in the L.A. area. And were you always sort of interested in you know how your bedroom looked and all that kind of stuff when you were a kid?

Ariel

Not as much when I was a kid. But definitely once I left the house and especially once I had my first apartment there was a real sense of pride. When I moved into my first apartment. I love hosting so I love having people over and cooking dinner and just having my friends around all the time. So I found myself really taking a lot of effort and really you know spending time decorating and refreshing and just you know and wanting to show that all.

Joanne

Well yeah, cuz you live in it. I mean it makes sense to me actually when I was a kid and I worked three jobs from the time I was 15 years old. And the first thing I do with my money is I renovated my entire bedroom and I like painted the stripes on the wall I was like I totally owned it, I was way into it.

Ariel

Yeah, and it was just so fun. And you know I was living in New York at the time and had this like first apartment and I just I cared a lot and that was really fun.

Joanne

So you left L.A. to basically go to New York to go to school.

Ariel

I went to NYU and then I went to grad school and I worked a number of different jobs and all sorts of industries and was kind of confused for many years in terms of what I wanted to do.

Joanne

Did you go directly into grad school?

Ariel

No I worked in PR. I worked as a publicist for a few years and before that I actually thought I was gonna go to law school. But after a few years found myself just kinda at a crossroads. I had had two PR jobs and an advertising job in the course of two and a half years. But nothing was sticking.

Joanne

So you really didn’t enjoy it.

Ariel

No I wasn’t. It wasn’t really satisfying. Like the both sides of my brain in a way that I was hoping it my job would.

Joanne

And so into the wild and you went to grad school?

Ariel

Yeah and then I found myself just sort of desperate for something different and realized that I could buy myself some time by getting more education and figuring out in your brain. Yeah. And actually it was in grad school that I started this home design blog. Just something to do because I was so into my home and at that point I had moved into an even better apartment in New York that was really big and just unusual for all intensive purposes. Yeah it was huge and just I had this massive bedroom and this huge living room and it really became the party hangout place for my friends and so I started doing a lot of renovation projects and then I started having friends ask me for their design input and helping them design places and so I had this blog that was sort of a scrapbook. Also this is like WAY before blogs were cool I mean I was like 2007 that I started my blog and so I just started.

Joanne

Which is a long time ago so I. Was we’re now 2018 and I started my blog 15 years ago. So yeah I mean that was really early stuff.

Ariel

I could have been a Blogger But I you know.

Joanne

I think you did all right.

Ariel

But yeah I had this blog and it was like it was a scrapbook It was fun. It was just I like but I had had this passion for home that I sort of realized in a different way through the blog and then found a job after grad school and advertising which I actually really loved for many years and feel like it’s been a huge part of the way that I’ve built parachute.

Joanne

Because of what you’ve learn when you were in advertising. Interesting enough is people that you graduated with in graduate school. Well isn’t it Karen.

Ariel

Oh yeah. Well Karen I was an undergrad. Yeah. Those are both undergrad. But yes that is true.

Joanne

I mean that’s pretty amazing. Those are two other women that are also entrepreneurial. So that’s pretty amazing.

Ariel

And like almost all of my close friends from high school all have their own companies too. We are like all a group of founders which has been also a huge support. And just like you know it’s really nice to be friends with people that you grew up with who also get what.

Joanne

Well you’re going through the same shit. What It’s like to build a company.

Ariel

Exactly and you can be like really you know go out to dinner and just commiserate or celebrate you know. But understand the highs and lows and everything in between. So that’s fun.

Joanne

That’s interesting now when you were in advertising you know what kind of products did you work on. What were you doing. Were you doing product. Were you doing.

Ariel

I was on the strategic side of Creative’s so I doing a lot of consumer behavior research both qual and quant and I was working I worked on American Express for a long time so with that it was I was working on everything from card products to membership rewards. But really there was like underlying like luxury consumer piece. And also I was like the token millennial and the token person that was like could tap into you know being the advocate for the millennial shopper and so I was that person that was you know they were trying to appeal to that audience. And like you know the emerging affluent you know mid 20s late early 30s consumer who was going to be getting an American Express card. So that was a big part of what they did. And then I worked on another bunch of other brands from time to time like Burger King and Comcast which is always fun. And Panasonic. I mean there was there was a ton of stuff. And actually my favorite thing to do is work on new business pitches because those were like mini startup projects we like got really deep and learned all about new areas and did some prototyping for different products. But I was also really connected to the New York startup scene during those times and I was sent to South by Southwest every year so it was really like.

Joanne

You’re watching it from afar but you weren’t in it.

Ariel

I was watching from far and wishing that I was in it. And so when so when I decided that it was time to kind of think about what was next I knew that I wanted to make the jump to something that was more entrepreneurial and definitely be in a just a quicker paced environment because being on an ad agency with a thousand people the New York office and working for huge mega brands. There’s so much red tape and just things don’t move fast and you don’t get to see the fruits of your labor in a way that you definitely do when you’re building something.

Joanne

So when you decided you know I mean because like anyone can have the entrepreneurial spirit. But it’s about having a good idea. Those are two separate things. And I think there’s actually I find it comical how they teach entrepreneurship in business school. But at the end of the day you don’t have an idea right. You can’t be an entrepreneur. Or you can but it might not go anywhere. And so when did you. Did you make the leap and start this prior to quitting ad agency or you just said Screw this I’m I’m closing shop and moving my apartment I’m moving to LA.

Ariel

I was it was the end of 2012 when like literally the last few days of the year when the idea for parachute really came into mind and I had you know I’m meeting with a friend in New York.

Joanne

And was just singing in your head?

Ariel

It was just like this is an idea. I mean what was going on though. Also at the same time was that direct to consumer businesses were just really starting to gain momentum right away. Warby Parker was really out picking up speed and I was just like wait a second. Like this makes sense and I really thought critically about it because I knew it wasn’t going to make sense for every category or for every product line.

Joanne

Although we’re trying to make it.

Ariel

Everyone is trying to make that happen. But just like in reality there are reasons why certain categories work direct to consumer and other ones don’t like don’t need to be or they’re just there’s too many other brands and there’s already brand loyalty and so I realize that a lot of the characteristics of what I believed would make a successful direct to consumer business were in. Like I saw that in the home space. So first part of the year liked it all throughout January. I was still working but was spending a lot of time working also on this idea. So like building a pitch deck and talking to anyone and everyone I knew that had worked in home textiles I was doing a lot of product research buying all the products that I could find in New York sampling just like seeing what was out there and trying to understand if this was actually a feasible idea. And then by mid February I was like This is it I’m taking the plunge I’m doing it which was like completely premature and you know.

Joanne

Yes and no.

Ariel

Yes and No. I mean it all it all worked out in the end but what I really wanted to do was. Well I wanted to move back. I knew I was going move back to L.A. to start this. But I also I wanted to know how these products were made because I’m not a textile designer by trade and you know I knew what I liked and I knew the aesthetic and I had this idea for a product assortment and a lot of that you know never changed. Like I really from the beginning and from those early inception moments like it’s the idea for parachute and how we’ve evolved was already there but I needed to understand like what it actually took to make a sheet.

Joanne

Well that’s interesting because you know you see a lot of these new I mean I’ve seen all the decks you’ve seen a lot of the companies of people that you know are graduating from grad school. They’ve decided we’re going to be in the world of making gym clothes. And nobody has ever designed a pair of shorts in their entire life. Yeah you know. Or. And that is such a personal thing to like style and clothing. I mean very different than sheets. Yes it’s a very very different business. And I see them all the time or like we’re going to start a company making this. But we’ve never you know we’re going to make a company in agriculture we’ve never spent any time in agriculture but we really feel that there should be this in the agriculture world.

Ariel

Yes. Yes. And you could argue that I was there at the beginning. I mean sheets are.

Joanne

But everyone uses a sheet.

Ariel

Everyone uses a sheet there are standard sizes you’re not designing for a body type although at this point now that we have robes we sort of are. But that’s a different product anyway. It’s not like clothes at all in reality but so I just needed to understand and so there was only so much that you know the Internet at that point could teach me about how to manufacture these products so I I found myself calling then like getting in touch with a number of different factories throughout Europe and for me it was always about Europe because I knew that building a brand required building trust and I knew that quality was going to be so inherent in that.

Joanne

It’s very different over there. I mean I just came back randomly enough from Paris doing the design of a house and those products. They’re not here. You literally cannot find those products here. And it’s really strange but you know they look at home is in a very very different way.

Ariel

Yeah. And to me it was really important that I was able to tell a story about what we were doing and who we were working with and.

Joanne

Well you learned it from your Ad days.

Ariel

Yeah exactly. Like I knew that there had to be a compelling narrative and this is like really interesting story behind that we could tell and that would be intriguing and inspiring for people so I went directly to Portugal and Italy because that’s where this heritage is and that’s like where the best sheets in the world have been made and found a lot of family owned factories that have been doing this for over 100 years passed down from generation to generation and just like these people are actual craftsmen like they’re actual artisans and that word also gets thrown out a ton you know in ways that aren’t really actually accurate but these are like people that know this craft. And they understand.

Joanne

I mean you look at the Gucci family or like you know. There’s so many different families Missoni family. I mean these are years that are Zenga I mean all of it.

Ariel

They’re really and you know they care so much it’s not just about they care about the product. They care about the land and they care about it. They breathe it. So I mean they like wear a three piece suit to the factory every day. I mean it’s just such a different culture. Yeah it’s just like appreciation for the finer things. And so you know for me it was about understanding if I could afford to buy these products and if we could sell them you know.

Joanne

At the price that makes sense.

Ariel

Yeah.

Joanne

Well you got rid of the middleman right there.

Ariel

Right. And you know and actually design a collection that made sense and so I brought like a huge suitcase full of all the samples of all the things that I liked and sat down and it was such an eye opening experience. I mean what people a lot of people don’t know and we’ve actually shot a lot of videos now at our factories. But you know you need so much space to make a sheet. Like it the machines are huge huge like football field size, airplane hangers. And there’s many of them like. It starts at this thread and it goes throughout this like crazy process so many people touch the product. It’s so detail oriented and it just blew my mind. I mean it’s like all the excitement that I felt leading up to that but yeah they’re making it out of a thread. And even fiber before that. It’s just it’s beyond. And so I came back from that trip just like I’m completely consumed and ready to hit the ground running but also had no idea where to begin. Which was fun and confusing sometimes sad and sometimes exciting. All of the emotions but I really like realized that you know this could be something big and it was something that I felt so passionate about. And just it was like Game on. Like this is it it’s time.

Joanne

And so what was the first move i mean parachute which is a great name and how did you come up with that?

Ariel

It’s inspired by the movement of the fabric when you make the bed so that billowing sheet as it as it falls down when you shake it. But really I mean we had some bad names before.

Joanne

Doesn’t everybody?

Ariel

Yeah like that’s a tough part of the process.

Joanne

It’s really part of the process. And then you have to build a brand around it. So really it did in many ways in many ways the name makes sense but doesn’t make sense into any product because you have to just build a brand around it.

Ariel

Yeah I mean if you think about all these iconic brands it’s like so random what their name but now it’s like of course that’s just synonymous with whatever.

Joanne

And so when you raise money in the beginning -I don’t remember did you have a product or not.

Ariel

Yeah I raised money. I had launched. Well I got a little bit of money from being in launchpad and that basically went in one day and then out directly to the manufacturer the next to buy our first batch of inventory. Like the entire check. Every single penny of it was like oh cool I’ve got money in this bank account. There it goes. Yeah and then the product came in and then I launched in January of 2014 and was able to raise that seed round. I believe it was around March that it happened. So I launched- had a few months of data. You know I was like.

Joanne

Well it’s funny because I mean and my thesis has changed so much and just even in terms of, although I still think that the one thing I’ve done really well is invest in super scrappy people that are survivors. But I remember when you know Karen said you have to meet my friend Ariel she’s doing this company called parachute and you need to talk to her and I was like what is it exactly? And the minute she told me I was like oh my god that makes so much sense. It’s just so smart. I mean no one has done that.

Ariel

Yeah. I mean we were first to market and obviously this space has gotten way more crowded and like all of a sudden there’s a ton of mattress companies and there’s a whole bunch of things. But you know there had never really been a true brand. And for me coming from a brand background like that really like I mean I said it was a huge aha moment like wait a second I can do what I love to do which build build a new brand and a category that really needs one and that consumers would appreciate.

Joanne

Something you care about. And so but it’s interesting what you just said is to build a brand. I think that one thing that you’ve done in a lot of these brands are not doing is they’re they’re building jello shots. It’s not that they’re not building a brand but they’re not giving. I like to look behind the curtain and say how much are you paying for customer acquisition yet. How often is this customer coming back. How loyal says customer. You know and you know what you’ve done is you’ve been very methodical building a very solid foundation and being insanely scrappy about the amount of money you spend you know from building out your office to. We can talk about you know why you made the decision to do brick and mortar as well as an online business which I think was a really smart there. But you’ve always been very methodical and bought thinking about how you build that foundation.

Ariel: It’s always been super important to me I think also because I started this business at a time where I was already watching businesses kind of skyrocket to success and then sadly crash and burn. I mean I think we’re funding capital yeah with tons of capital and I really saw that as a cautionary tale I mean for me it’s always been you know we spent the past four years actually building the engine. Like to now transition into you know building something that’s much bigger, but from day one it’s always been about you know real business metrics. I think so many people focus on these top line revenue numbers. You know it’s like you’re going acquire the customer at any cost and it can be really detrimental you know and you can also- I mean we look at loyalty from the first time you see the brand and how we communicate. You’re really in the business of building emotional connections not transactions. And I think that’s a big difference in terms of what our strategy is in a a lot of people do. It’s like kind of smart. And you know for us what we see so often is that people you know you pay for. You incentivize your customers with you know 30 percent off or 20 dollars back on your first purchase and then you pay them to give you a good review and then you pay them to do this. You pay them to do that you pay that and it’s just you know it’s building this experience that isn’t authentic and it’s you know cutting a lot of corners and doing things that just in money pissing into the wind. The valuation getting you know ridiculously overpriced.

Joanne: I totally agree. So when was it you know did you always have in the back of your mind that the, or did you see it. I mean certainly we saw it with Warby Parker but you know- you have this direct to consumer business you’re growing it online. I’ve always been a fan of 80 percent online 20 percent brick and mortar. When was your like- ok, We need to open a store and now is the time.

Ariel

Well I think you know we always I always knew from the beginning that people like people historically have 90 percent of purchases made online. And when you look at all of them they still are yeah.

Joanne: Grocery’s 97 percent.

Ariel: You look at the incumbents it’s like you know any of the big big players you know between 75 percent 85 percent of their of their sales are happening off line and they’ve got hundreds of stores some have thousands of stores and you know they’re also mostly furniture brands at their core that also sell sheets. But you know I think what I saw was that people respond in a different way when they touch and feel the product. And you’re never going to be able to replicate that online although we try many ways with video and just images and bringing the products to life.

Joanne: At one point used to be able to get swatches.

Ariel:  You can still request them secretly and we’ll send them to you for free we just don’t. It’s like became too big of a deal. It’s a major deal yeah. It’s just is too much money. It’s a lot of labor to a lot of labor and we couldn’t automate that at just rush you cannot

Joanne: you can actually there are companies that can do for you and you can still be there.

Ariel: They serve a purpose for a specific customer we’re happy to you know give them the swatches that they need. But in general it felt like a lot go into the bedside drawer and it just wasn’t worth it. But you know the response that we were getting from people that were seeing the products putting it between their hands was just like Whoa these are so good. And I really are.

Joanne: Yeah and there they are.

Ariel: But you know I look at stores as a way to build you know a future things that’s obviously revenue you driving which is great but for us it’s like putting a stake in the sand and really having presence and this awareness play in this community driving opportunity for us because we’d look at our stores not just as again transactional you know locations they We host events we have pop and we do a lot of stuff within communities and so there really a way for us to bring the brand to life and drive this lifestyle brand and also create beautiful spaces. I mean I think what we do also that so differently than traditional retailers is like our stores are between 450 and 800 square feet.  Or I guess right now. Well yeah that’s where we’re tracking and that’s what we’re doing. And so they’re small. We don’t have beds on the floor like it’s we’ve got pillows and we’ve got all the fabrics you can see everything and see the colors together and the way that the fabrics look when they’re paired next to each other but it’s really like going into the living room. And people I want to buy the chairs and the tables everything.

Joanne: Yeah and you can continue to partner with companies that make sense to come in for like a couple weeks and to go to the store.

Ariel: Yeah it’s just really fun. It brings into life I mean and there’s also people like we want to be where our customers are and we are 100 percent aware that there are people that prefer to shop online and so we also want to be able to serve those customers and we get a lot of people that come into the store that like I’ve been following you guys forever. I’m so excited to see the product in person and then they’re ready to shop and then they shop online. And it’s you know it’s easy

Joanne: Right because they know what they want.

Ariel

Yeah

Joanne: But then you know you added more so you added these gorgeous towels that are amazing. Yes. And you know longtime I thin into towels and into robes now and children’s.

So you know that sort of happened quicker because you know you already built what you’re going to be able to do.

Ariel

Yep. So we launched we waited two years before we launched a towel and then we just launched one towel and we gave that like some breathing room and listened to customers and made sure that the product was working within our assortment and it was and then we launched robes and those were just like this huge success for us and then great. Yeah I’m obsessed with our robes. But then a year after we first launched our first towel collection we introduced shower curtains and bath mats and tub mats and so then we had this like full bath assortment. And that was really exciting because it actually gave us a chance to- It gave us an opportunity to really market those products as a collection and actually do so profitably which like you mentioned is really important from a customer acquisition cost and so we were able to acquire customers through bath in a more meaningful way.

Joanne:  so you’re in intimate areas

Ariel: Yeah we like, we’re in  intimate areas of the home and like we like to be. We like to think about all these places where you’re like we’re comfort can be enhanced and be the brand that does enhance it right.

Joanne: And nobody’s really doing that in the children’s space you know

Ariel: Yeah, I mean our collection with the baby and toddler and all that stuff is was completely by demand I mean our customers were you know wanted our products. We don’t use any toxic chemicals or synthetic finishes in our products for adults.

Joanne: Right. Larger people.

Ariel:  And so they were like why can’t we just get the mini like we like. It’s really actually hard to find great quality products and also the aesthetic. You know we like don’t want these bright colors always in our nurseries we want them to really relaxing. So we took a lot of cues from our customers there and we’re expanding that collection quite a bit actually in the next few months so it’s pretty amazing.

Joanne: And so where are you brick and mortar at this point?

Ariel: So we’ve got two stores today. We’re got one in Venice and one in Portland Oregon and we’ve got a few more coming in the next few months.

Joanne: So can you talk about where they’re going to be more opening in New York.

Ariel: Right. So on Crosby and Graham- we are also really excited to be able to host events it’s a slightly larger store and we’re making sure that we can host dinners in there and which is great.

Joanne: You did the right thing there too. It’s like – you waited until you found the right location.

Ariel: Absolutely. And we looked for a long time. It was really hard to find a great location. It’s so weird because there’s a lot available but it just wasn’t the right fit for us. But we did a pop up actually last December in New York and that was really fun, in that area. And it was you know it was great to just tell people like hey we’re coming and get that response and and just and just you know test what it would look like. But that should open in April and I’m super excited about that store. And then we’re opening one in Silverlake.

Joanne: Interesting. Fantastic. That makes a lot of sense

Ariel: We’re going to do a second in L.A. since this is our hometown we want to make sure that we’re covered here

Joanne: And Silver Lake, Venice, is like a different city.

Ariel: It is. And I mean we look at where our customers live it’s largely those are like two main hubs for us so and there’s so much stuff happening downtown in Echo Park and all of those areas so it feels like a great place because we like again we’re like we’re very much a product that people need. So as you’re moving you know we want to be around an area where we’re going to be as really fun. It’s got a lot of great neighbors and it’s great to be around.

Joanne: That’s fantastic. Any other cities?

Ariel: We’re hoping for San Francisco this year and potentially Dallas and Chicago. But we’re still very early in those stages but we want to be in five. We want the five new stores this year and could be quite a bit more next year.

Joanne: That makes sense. I mean those locations make a lot of sense.

Ariel: Yes so we look at it two ways it’s like we want to be where customers are and then there’s also areas where we under inducts a bit and we want to be like we want to have a presence so we can grow the customer base. But you know it’s fun in Venice and in Portland we get you know the locals and the people that live here. But we also get a lot of tourists coming by and people that are in town and have heard about us and just want to see the products in person. And so we again we want to be where our customers are and definitely major metropolitan areas is where we’ll start. But you know I see a world by like 2020 where you know 25 stores

Joanne: Which is amazing and how about in terms of product do you see you know you’re you know you’re in children you’re in full on bath. You know do you see other products.

Ariel: So we have tabletop right now too. We’ve got some table linens and napkins and placemats and that kind of stuff and that’s been really fun because it’s like the most communal

Joanne: And they’re beautiful I ordered, I saw them they came up and I want to try this out.

Ariel: They’re fun and we like we design them so that they could be machine washed easily and you know they don’t need to be ironed and very casual feel. Yeah exactly. Goes with the brand. Exactly like your everyday linens. I’m really trying to use more cloth napkins instead of paper towels. Personally it’s a goal. So you know it’s good to have them around and then. We’re like starting to think about rugs as a potential new category they’ll be like ways away.

We’re very early right thinking and trying to develop her point of view but I think for us what we what we try to do is like really understand our point of view what we want to be in this category. How are the products that we can. What are the products we want to introduce first. I mean we’ve got a ton of new stuff happening in bedding and bath and table and baby actually all this year. So we’ve got about 45 new styles coming out

Joanne: which is huge.

Ariel

Yeah that’s, it’s great.

Joanne: Yeah. All right well thank you so much for coming. I love your Parachute. Of course I’m an investor. In all full disclosure. But you know it’s been really fun watching your journey and it’s really you know it’s been interesting watching your journey and being involved in the journey as I see so many different consumer brands and I and I’m a big believer not only in the brand but how you have built the business in a very thoughtful methodical scrappy way. Not just by pouring a bunch of money into something and thinking it’s going to stick on the wall and I think that it’s one of the things that we keep talking about on this podcast which is it’s not easy and it’s not a quick fix.

Ariel:

It’s definitely not a sprint it’s a marathon.

Joanne:

It is a marathon now for sure.

Ariel: And it’s also I mean no brands were built overnight. So I think that’s like what I keep telling myself what our team talks about. I mean there there are reasons why brands take time and cutting corners just never never works out

Joanne: It never works out now. And you know I mean in 2020 when you’ll look back you’ll be having completely different conversations.

Ariel: I’m looking forward to that. But I love them. I’m willing to wait a bit. So all I know there is let’s take that slow but yeah I know it’s really exciting. I’m really excited about the brand and how things are growing and it’s going be a big year for us. That’s great.

Joanne: Well thank you for coming.

Ariel: Thank you for having us.