How to Build an E-Commerce Giant That Gives Back — An Interview with Nathan Rothstein, Co-Founder of Project Repat
Nathan Rothstein (left) is a co-founder at Project Repat along with his business partner, Ross Lohr, a company that turns t-shirts into t-shirt quilts. Somebody once Googled “two guys t-shirt quilts” and found us, and that’s probably a better name. Repat is short for Repatriating textile jobs back to the U.S. Nathan graduated from UMass Amherst and then joined AmeriCorps in post-Katrina New Orleans and worked to gut-out houses that were flooded by the storm. He has tried a lot of new ventures in the for-profit and nonprofit sectors, often failing, but has now stumbled upon something that works. Apparently, people want an affordable way to preserve their t-shirt memories.
We interviewed Nathan to learn what it takes to build a power player in e-commerce while focusing on a mission of improving people’s lives.
Nathan Rothstein has always been motivated by giving to others. It’s why all of his entrepreneurial endeavors have always sought out some greater purpose than simply turning a profit.
His latest venture, Project Repat combines an impactful mission, a great business model, and a damn good product that people love. When those three things align, the results can be huge — you can turn millions of old t-shirts into millions of dollars, all while doing some good along the way.
Shaping the entrepreneur
Nathan credits two early experiences for him becoming the socially-conscious entrepreneur he is today. First, he went to a school with over 25,000 students — UMass Amherst — during which he had to learn to fend for himself.
“I always talk about how going to a big state school like that, you have to learn how to advocate for yourself at a young age. If not you can kind of get lost in the flow.”
Secondly, he performed relief work in New Orleans with AmeriCorps after he graduated in 2006, less than a year after Hurricane Katrina ravaged the city.
“It was a really interesting time to be there because the city was dealing with the after-effects of Katrina, about 80% of the city had been flooded. It was all about how to rebuild a more equitable city. Everyone that was down there was hustling in a way and had to navigate the different sectors to figure out how to get back into their homes.”
After performing work in the nonprofit and government sectors, Nathan became enthusiastic about the idea of doing social good through a for-profit business.
“I got to a point later in my 20s where I started thinking about how to solve social problems through for-profit business. You don’t have to get people to donate something. Instead, you create something that has value and that people want to purchase, and it does some inherent good.”
With this in mind, Nathan first set out to build a marketplace that would fund educational needs by donating small amounts to teachers when consumers shopped at local businesses. It turned out no one wanted to shop that way.
“Everyone told us how great of an idea it was. But when we launched, no one bought it. The smartest thing we did was shut it down pretty quickly.”
That’s when Nathan first teamed up with his eventual business partner for Project Repat, Ross Lohr. Ross had been doing non-profit education work in Nairobi, Kenya and had the idea to take the unwanted t-shirts sent out of the U.S. overseas (think Atlanta Falcons Super Bowl Champions t-shirts) and use them to make upcycled products like tote bags and resell them in the U.S.
The products would create fair-paying jobs in Kenya and prevent all of these t-shirts from simply ending up in landfills. It was a great idea. But a terrible business. No one wanted to pay for what they were selling.
Despite this, Nathan and Ross did get repeated requests for one product…
“We didn’t know anything about quilts”
“Many of the people we were trying to sell to asked us to turn their t-shirts into quilts. We weren’t really interested in that. We were two guys in our late 20s; we didn’t know anything about quilts. But everything else really wasn’t working — our bank accounts, personal and business, were dwindling.”
Nathan and Ross pitched their newly-developed t-shirt quilts to Groupon. And things took off.
“Apparently that was what Americans wanted. They wanted an affordable way to turn their t-shirts into a quilt or blanket, some way to preserve the memories.”
In one week’s time during August 2012, they sold 2,000 t-shirt quilts. They now had $100,000 in their bank account. With another Groupon round of 5,000 shirts in January 2013, they now had enough capital to start putting money back into promoting the business, focusing almost exclusively on e-commerce marketing.
“The reason that we’ve been able to continue to grow and be successful is that we’ve really focused on e-commerce marketing. We’ve gotten really good at that; that’s what has helped us grow so much.”
Doing good by doing more
In keeping with their original mission of providing jobs in the textile industry, Project Repat works with two U.S. factories, one in Massachusetts and one in North Carolina, to produce all of their product and help bring textile jobs back to the U.S.
“We have focused on how to make the biggest economic impact with our supply chain — how do we make as many jobs in the U.S. and how do we upcycle and recycle as many t-shirts as possible?
What’s nice about our business is that if we’re focused on selling as many of these as possible, we know that more people are working on this and more people have access to work in the U.S.”
Today, the company has sold over 200,000 t-shirt blankets and plans to sell a million sooner rather than later. They were named the 9th-fastest growing retail company in the U.S. by Inc. Magazine in 2016 and have never raised a round of financing.”
On their path to becoming a growing success in the retail industry, Nathan has drawn many lessons from his experiences as an entrepreneur.
Potential “customers” lie to you
“I wish I had known this from the beginning — when you’re testing out an idea and you’re just starting off and trying to get customer feedback, don’t ask people if they’d use something if it existed.
People want to say yes. They want to be nice. Try to offer the product as quickly as possible. Create an MVP as soon as you can. Have them test out a real product to see if people will actually pay for it.”
It’s okay to not know what you’re doing at first
“At first, customers would send their shirts to our office and once the room was full we would literally rent a big truck and drive it down to (the factory in) Fall River, MA. And then we would pick it up when they were done. We would do all the shipping ourselves.
In the beginning, we didn’t know you could buy a printer and get a pickup from the USPS. We would pack up 100 blankets and bring them over to a post office and have them check every single one in.
There’s a lot of stories where we sound like idiots, but somehow we managed to be smart enough to stay in business.”
Focus on selling your product, not on your margins
“You have to be 100% focused on offering something that customers want and figuring out how to get them to buy. One of the things that worked really well for us starting out; we didn’t worry about margins. We didn’t care how much money we were making off every blanket we were selling.
We knew that most businesses didn’t go out of business because it was a bad idea, but because not enough people found out about them before they ran out of money. Focus on selling as many of the product as possible. Don’t worry about margins when you’re just starting off.”
Do good, but don’t lose sight of the ultimate goal
“If you’re thinking about creating a business with value and you want to do something that does some good in the world, focus on doing good with your supply chain vs. donating a percentage of your revenue to different nonprofits or a buy-one-give-one model. You can make the most impact with your supply chain and you’ll stay in business much longer because you’ll be focused on sales and it won’t distract you from other things.
We can only fulfill our mission if we’re focused every single day on selling as many blankets as possible. A lot of entrepreneurs lose sight of the ultimate goal, which is to stay in business.”