“Work On the Business, Not in the Business” 5 Startup Strategies with Nisolo CEO, Patrick Woodyard
I had the pleasure to interview Patrick Woodyard. Patrick is the Co-Founder and CEO of Nisolo a fashion brand striving to push the fashion industry into a new frontier of social and sustainable responsibility. Nisolo empowers impoverished artisans through job creation by offering quality-driven, superior designed footwear, bags, jewelry and more to consumers around the world. Patrick graduated from the Croft Institute for International Studies at the University of Mississippi, where he studied Global Economics, Business, and Spanish. His experience with economic development ranges from the Mississippi Delta to rural Uganda to South America. While working in microfinance in Trujillo, Peru, Patrick met a group of shoemakers who possessed remarkable talent yet lacked access to established markets. With extensive exposure to such potential combined with a lack of opportunity in other countries, Patrick created Nisolo to offer impoverished entrepreneurs in the developing world access to capital, training, and established markets. Today, they have three modes of ethical production — their factory located in Peru, partner factory in Mexico, and independent artisans in Kenya and Peru where all employees receive well above a fair wage. Nisolo believes in holistic development for their producers, which is why they offer skills training, health, nutrition, English, physical education, & yoga classes to their producers & their families.
“For the first few years at Nisolo, we didn’t even have staff meetings much less retreats — yet if we had been working “on the business” rather than “in it” all the time, we would have avoided a lot of mistakes and would likely be further along today. This is about getting outside of your own head, well beyond your daily tasks and weekly worries. It’s about getting into a headspace where you can see things clearly, or “from 30,000 ft.,” as many people say. We call these our “balcony views,” and I ask that every member of my team do this for at least 30 minutes once per week — regardless of their position. This is a time to think strategically or creatively — whichever direction your mind takes you. Now we have staff retreats four times per year and a clear process for establishing and analyzing objectives and key results across the business. Working on it, not in it.”
What is your “backstory”?
The idea for Nisolo was born in 2011 shortly after I took an economic development job in Trujillo, Peru. After meeting remarkably talented shoemakers in the city, I learned that they shared common barriers to growth with entrepreneurs that I had met in other parts of the developing world. Learning that the struggling footwear industry in Northern Peru employed over 100,000 people, I envisioned the impact that a revitalized industry could have in Trujillo and the impact that could occur elsewhere if I started a fashion brand that committed first and foremost to the wellbeing of its producers.
Recognizing the need for fashion industry expertise, I sought out my Co-Founder
Zoe Cleary, who at the time worked for a major fashion label in NYC. The timing could not have been more perfectly, as Zoe was reaching a peak point of frustration with how little the brands she had worked for seemed to care for the planet and the people at the bottom of their supply chains. After envisioning the opportunity to pursue design and a greater purpose simultaneously, Zoe quit her job and boarded a one-way flight to Peru to join me.
Situated in a fashion industry characterized as the second most pollutive in the world and one in which 98% of the labor force does not receive a living wage, we co-founded Nisolo with a better vision: to push the fashion industry in a more sustainable direction — where success is based on more than offering the cheapest price — a direction that not only values exceptional design, but the producer and the planet just as much as the end consumer.
Can you share the funniest or most interesting story that occurred to you in the course of your career?
One of the craziest times at Nisolo was definitely 2016. We were coming off 2015 with 150% year over year revenue growth, and all of our marketing indicators pointed toward a comparable year for 2016. Without much of a warning, we discovered in March of that year that our factory was in no way prepared to double production once again. While we fought hard to find a quick fix, this ultimately led to a year in which only 40% of our inventory remained in healthy stock. Our waitlists for product reached nearly 15,000 customers, and we didn’t have inventory to sell them. Regardless of the demand, we were handedly missing our sales forecast each month, and a massive cash crunch ensued. While we had our supply chain challenges nearly buttoned up again, we were out of time.
September arrived, and we only had two weeks worth of cash left in the bank. The biggest problem? Investors wouldn’t further invest, we had already maxed out our short-term debt options, and I had already gone through the pain of laying off a fair amount of staff. Regardless of the pent up demand and nearly repaired supply chain, we were pretty much at the end of our rope and unsure how to get cash in the door or how to keep our customers happy. We were so burned out from the intensity of it all that I really think most sane people would have quit right then and there.
That’s when we invented a one-time, glorified pre-sale that we called the 5 for 5 Program. In 10 days from ideation to launch, we rolled out a rewards membership online that allowed customers to pay $500 in exchange for two pairs of shoes each year for the following FIVE years. The concept was beyond aggressive, but we had to roll the dice. And, it worked! We met our ambitious sales goal within two or three weeks, broke seven figures with the raise, and quadrupled our cash need before we cut the program off and got back to business as usual. Customers got a ridiculous deal, we got the cash we needed to fund production, and Nisolo lived to see another day.
So how exactly does your company help people?
With the end goal of pushing the fashion industry in a more sustainable direction, we make remarkable footwear in an ethical manner and offer it to customers at a competitive price point.
What do you think makes your company stand out? Can you share a story?
In order to understand what makes us stand out, you have to understand how broken the fashion industry is today with 98% of laborers being denied a living wage, and the industry itself being one of the most pollutive in the entire world. What makes Nisolo special is that as a Nisolo producer, you get beyond fair trade wages, access to healthcare, safe working conditions, and a slew of resources ranging from free financial literacy training courses to English and nutrition classes. And as a customer, you get the total package: amazing quality, a fair and competitive price, and a product that’s made in an environmentally and socially responsible manner that has a deep impact on the people who make the products.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?
We named the company Nisolo (“not alone” simplified in Spanish) for many reasons — one of which was simply because I knew it would take a village and that I couldn’t build this company on my own. I’m obviously beyond thankful for my wife, my incredible team, and all of the advisors who have leaned in to support Nisolo over the years. I’m forever grateful for Nick Meyer, a dear friend who played an instrumental role in the early years of Nisolo. And, I’m eternally indebted to Dick Gygi, my mentor and our most valued advisor. Dick has been there with me on the mountaintop celebrating our best sales days in history. He’s spent time dishing out blood, sweat, and tears in our factory in Peru. And, he’s even been the one to answer a desperate 1am phone call to hear me out and cheer me on while I walked around on my roof trying to figure out how to keep the company held together.
How have you used your success to bring goodness to the world?
Nisolo directly supports over 500 livelihoods across Peru, Mexico, and Kenya. The average income increase of a Nisolo producer after getting a job in our factory is 140% for men and 173% for women. Apart from wages, we are focused on the long-term impact producing Nisolo products has on our shoemakers. Whereas 10% of them had bank accounts before working with Nisolo, 100% are now in the formal banking sector. And whereas around only half of the shoemakers we work with in Peru were able to get a high school degree, 100% of their children are in school and 13% of them will soon be first generation college graduates. We want Nisolo’s production practices to be the new normal for the fashion industry, and I think this can happen within my lifetime.
What are your “5 Things I Wish Someone Told Me Before I Became CEO” and why.
1.) Numbers don’t make or break your business. People do.
Hire slowly and fire quickly. Or as Patrick Lencioni would say, hire people who are humble, hungry, and smart — in that order. Or as Jim Collins would say, get the right people in the right seats on the bus. There are a million other variations of this same simple concept. It’s true though, people are everything. And, until you experience what it feels like to have the wrong people AND what it feels like to have the right people, you won’t know the difference.
2.) Less is more.
For the first few years with extremely limited funding, I wanted to do e-commerce, wholesale, face to face, and any other distribution point we could think of. Midway through 2015, we dropped 85 wholesale accounts and made the strategic decision to focus only on e-commerce. By the end of the year, we blew through our original forecast only using one distribution point. Less is more. Don’t over complicate or overdevelop your business model. “Keep it simple, stupid.” Regularly evaluate where the 80/20 principles are across your business and continually lean into your winners and quit wasting time on your “not-winners” that you’re scared to admit are “losers” holding you back. If it’s not a “hell yes,” then don’t do it.
3.) Show Me, Don’t Tell Me.
I borrowed this one from Chuck Bowen, another trusted advisor. To me, this is about making sure you are tracking the right metrics and the right key indicators across the business. Major problems will inevitably come about, but if you can sniff them out early on by having the right metrics in place, you can navigate rough waters more easily. I nearly sunk the company in 2016 because I trusted the feedback of an overly optimistic management team in our factory in Peru. I was constantly being told one thing yet different results would arrive. If I had ensured that the right metrics were in place and forced my management team to “show me” progress rather than “tell me” about it, we would have recognized the gravity of our challenges a whole lot sooner and likely would have found solutions much faster as well.
4.) Work on the business, not in the business.
For the first few years at Nisolo, we didn’t even have staff meetings much less retreats — yet if we had been working “on the business” rather than “in it” all the time, we would have avoided a lot of mistakes and would likely be further along today. This is about getting outside of your own head, well beyond your daily tasks and weekly worries. It’s about getting into a headspace where you can see things clearly, or “from 30,000 ft.,” as many people say. We call these our “balcony views,” and I ask that every member of my team do this for at least 30 minutes once per week — regardless of their position. This is a time to think strategically or creatively — whichever direction your mind takes you. Now we have staff retreats four times per year and a clear process for establishing and analyzing objectives and key results across the business. Working on it, not in it.
5.) Clear direction is key.
For all of the times that I’ve been most frustrated with individuals on my team, there’s an argument to be made (and often has been made) that clearer direction could have been provided and that maybe I’m the one to blame. Casting clear vision, setting clear objectives and key results, and clarifying marching orders eliminates this devil’s advocate argument. It establishes accountability, and I’ve found that it leads to the best results. Giving clear direction and making clear asks is a place where 80/20 principles don’t actually work like you need them to. Go the extra mile to clarify exactly what you want done, and then trust your team to make it happen, even allowing them to go about it in their own creative manner if they’d like.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why?
I know this sounds ridiculous, but I’d have to say my wife, Sally Ward. She’s the reason I can come even remotely close to keeping it all together. Serving as the CEO of a scaling company takes away too many private breakfasts and lunches — if I could have one back, I’d celebrate it with her.