Thriving in a difficult industry by being customer and values obsessed with Fran Dunaway of TomboyX

Maren Kate
Welcome to From Five to 50, the podcast dedicated to helping startups and founders survive and thrive through the early stages. I'm your host, Maren Kate. And we're here with Fran Dunaway of TomboyX. Fran, welcome to the show.

Fran Dunaway
Hi there. Thank you so much for having me.

Maren Kate
Absolutely. So I'm super excited to chat about your founding story about TomboyX. I was just on your site. But just to get started, when did you found TomboyX?

Fran Dunaway
We actually founded the company in 2012. But we bootstrapped for a year, prototypes for our first line we came out with button up shirts. And so we launched that via Kickstarter campaign in 2013. And it wasn't until 2014 that we added underwear, which kind of pivoted us into the whole new trajectory that is, now TomboyX.

Maren Kate
Got it. So just in 90 seconds or less, tell the audience what you do and the why behind starting it.

Fran Dunaway
We are a gender neutral apparel company with a focus on foundational garments that are all about fit and quality and durability. We carry everything that we make in sizes, extra small through 4X, and are working on expanded sizing beyond the 4X next year. And we really are a company that wants people to have confidence and be unapologetically who they are all day every day, and to be comfortable in their own skin.

Maren Kate
That's awesome. And you said you bootstrapped originally, what was the impetus for being like screw it, I'm going to start this fashion company?

Fran Dunaway
I just wanted a cool shirt. I wanted a cool shirt like a Robert Graham or Ben Sherman, but made for a woman's body. And, I go shopping and it would be in the women's department flimsy materials that that didn't have the quality hand that you could find in the menswear. And I just thought that was ridiculous. And so it was this little side project that my then girlfriend and now wife started, she really got tired of me complaining when we go to the store. So she's the one who said well, how hard can it be to just start a clothing company and kind of the rest is history.

Maren Kate
That's amazing. And you bootstrapped. You did Kickstarter, you said correct?

Fran Dunaway
Yes

Maren Kate
And then I'm in the more internet online side of the world, I'm always fascinated by physical goods because it's just amazing to make something that you can touch. But I assume that takes a certain amount of capital to start to scale up, right?

Fran Dunaway
Indeed, it does. Indeed it does. You know, we chose to build a digitally native vertical brand. And so wanted to have that relationship engagement with our customer, which has been critically important to us from day one. This is really what it's about. And when we started this company, we recognized that during the Kickstarter campaign, that the name was resonating in a really powerful way for a demographic of people that had never felt seen or heard in the fashion industry. So that became more of a responsibility. And then what do we do with that? And then growing that, so we wanted to maintain control of that, but absolutely, I mean, we introduced the first boxer briefs at the time, and we were touting it as the first boxer briefs for women, we actually got to fit in qualities that works so well that it works on every type of body. And so what we did was in 2014, when we launched, we pre sold the boxer briefs, we had them in two different leg length, so four and a half inch, and a six inch, and we launched in 2014. But we did two weeks before they arrived, hoping that we could sell enough of them to pay the bill when they got here. And what happened was we sold out in two weeks. And then in six months, we tripled our revenue. And so it just that's when it became a real treadmill of trying to keep products on the shelf as well as continue to grow the company. And that was really a challenge we have had the entire history of the company until we just closed our series B in May. And that's the first time that we've been fully funded.

Maren Kate
That's amazing. And how much how much have you raised that you share publicly?

Fran Dunaway
All told it's about 11 million. No, I'm sorry. 17 million.

Maren Kate
You've lost that 6 million there real quick. And how did you go about finding investors? Did you raise from venture capitalists? Did you raise from companies that are larger that are aligned? Or how did you approach that?

Fran Dunaway
Well, I'm sure you're aware of the challenges of women led companies receiving funding and that number and statistic is real. It was definitely a challenge. The other factor is that we aren't 25 year old kids with this unicorn tech idea. Instead, it was a consumer brand that was taking on challenging Victoria's Secret when the guys in the room would wonder what what's wrong with Victoria's Secret?

Maren Kate
Even though they know shop there, of course,

Fran Dunaway
Exactly, exactly. Or yeah, they really think that it's totally fine. And it's really because we wanted to focus on fit and quality and comfort. And that was just kind of a foreign concept for men's perception of women's underwear. So that was a challenge. But at the end of the day, it ended up our Seed Round 90% of our investors were female. And even with our A Round 85% were female, and then our B Round, that numbers is not as high. But it's just part of the journey and getting people that believe in what you're doing and believe in a long and steady approach to growing a brand are the people that invested in us. And so it's a win-win, because they're happy with what we're building, and we're not having to just drive the revenue to hit some sort of portfolio target.

Maren Kate
Yeah, absolutely. And what's the current size? How many people are you guys right now?

Fran Dunaway
We have ramped up in the last six months. We're at 37.

Maren Kate
Okay, and what's the environment? Are you guys all in one office? Do you have distributed teams? How do you think about that?

Fran Dunaway
We are, we're in one big happy office above a Krispy Kreme in Seattle, Washington, First Avenue. So we get to say were the sweetest underwear in town. And we have an open space layout and not enough meeting rooms and not enough rooms to go into, we use closets and elevators, and any way we can, we're kind of jammed in here right now. But we're hunkered down for at least another year in this space. And it makes for a nice, friendly, homey environment.

Maren Kate
And then where do you get everything manufactured?

Fran Dunaway
We started in Vancouver, BC, with a woman owned factory. And then as we scaled, we worked with factories affiliated with her. And so she's still involved, but is kind of the liaison, but we are currently working with all women owned factories in China, South China.

Maren Kate
Oh that’s amazing. And I'm assuming you get to go over there and visit as well.

Fran Dunaway
Absolutely. And they come and visit us. We have a very strong relationship. They know what we want in terms of working conditions in terms of what we pay the workers and the quality of the goods. We have had some experience with a factory, a couple of factories over there, that just couldn't get their head around the fact that quality was more important to us than keeping the cost down. And so that was something that was a real lesson for us. But we have found really strong great partners that happened to be all women owned. But yeah, we have some real great friendships and partnerships there.

Maren Kate
So how have you grown the company? Especially considering that there's a lot of things that come out so cheaply, and there's that race to the bottom? Like if you think of H&M or Zara where they're just pushing out things really inexpensively or even Victoria's Secret. I mean, their quality is not good. And I remember when I was a teenager, I thought that was like the height of luxury. I was like damn so fancy. And now I'm like what was wrong with me? But, but how do you guys, how do you compete? How do you position yourself? What does the marketing side looks like as you’ve grown?

Fran Dunaway
That's a great question because one of the push backs that we get quite often from customers is the price and I really want consumers to educate themselves on what it takes to make cheap clothing thing because I guarantee you, it's not the H&M 's or the Victoria's Secrets that are suffering, it's the people in the factories that are being squeezed and pinched. And you know, the quality of the fabric that then they have to produce and the processes of how they make those fabrics. And so we build products that we want to last three to five times longer than your Victoria's Secret. And for that, to pay a little extra, so that that we are making sure that it goes all the way down through the chain, the supply chain to make sure that everyone's being treated well and fairly, including our environment. So that's where my values are. That's where my wife and I are in alignment, that’s where our company values are. And so I think that that's one of our challenges, not really challenges, but one of our opportunities is to educate the customers on the fact that that's how we go about doing business. And so we're not luxury price, but we're not Victoria's Secret, either.

Maren Kate
Are you telling that story while you educate a new market that you exist, what you do? What's your biggest channel for growth?

Fran Dunaway
We are digitally native. So it's all online. And I think that we're doing an okay job, I think we can do a much better job of telling that story. And really articulating how our product is made and where it's made and the attention to detail, we were doing a deep dive with the product and branding team a few weeks ago, and we're having our head of product come in and talk to the work, and the thought, and the continue innovation that they put into to getting these products, the quality that we have. And you know, in most retail companies, the return rate is anywhere from 25 to 35%. We offer a Love at First Wear guarantee so you can keep the underwear, we'll refund your money, and only 2% of our consumers do that. So and that still frustrates our head of product. She's like 2% is still too high.

Maren Kate
That's amazing 2% versus 25%, 35%.

Fran Dunaway
Yes. So that really is a testament to our quality and fit. And I don't think we're doing as good a job as we hope to be, we're working on it, we want to make sure that that story gets out there. When you look at the fact that we've got 1000s of five star reviews on our on our product. Couple that with with how we're making our product and our how much we care about the environment and sustainability and taking care of people. To me that's that's a winning combination. And that's what we're selling.

Maren Kate
Do individuals purchase just through your website, would I go on just your website, or would I also buy on Amazon or Zappos?

Fran Dunaway
We have some of our products on Amazon, but the rest of it is all just direct to consumer off of our website, TomboyX.com. We are going to have some holiday pop in shops and and we will be popping up in various cities around the US for the holiday season this year, which we're really excited about.

Maren Kate
Oh yeah, I can see those just like absolutely selling out here in New York. And I mean, it's it's inspired by Europe, but we have Christmas Markets. So different parks are taken over. And I always think it's the most fun to go and get your gifts for whichever holiday you're celebrating from those little shops, because it's such a different experience than going to like a Macy's or whatever, you really feel a connection with the brand and you can feel connection with the mission.

Fran Dunaway
Mm hmm. Well, funny you should say that but because it's like Nordstrom is doing these pop in shops for direct to consumer and also Macy's. And so they have a marketplace within Macy's. And so they're trying to replicate that exact feel. So they're they're doing some of that where they're recognizing that is what's missing, the consumers in these kind of big box stores. Sothey're looking at doing some of that very thing.

Maren Kate
It's like the the farm market idea. You buy things individually. As founding and leading this company, what do you think your biggest failure has been or something that you look back and you're just like, wow, like, really biffed it there? And what did you learn from that? I ask because as early stage entrepreneurs, someone who maybe has a few people and is just getting their direct to consumer off the ground, it's always great to hear so much about other people's successes, it's always amazing to understand when people stumbled and how they did, and then what they learned.

Fran Dunaway
There's a common refrain that someone very wise told me when we started, and I didn't take it quite to heart as much as I probably should have. “And that's hire slowly and fire quickly.” You know, when you're in a startup environment, the skill set that you start out with, and the people that you need at the beginning, is not the same skill set, you might need a year or two down the road. As much as as you want to be building a company that can develop and have an opportunity for growth. That's really not what startups need need to survive and thrive. Because the skill sets really change, and you just don't have time to kind of bring people along. And as founders, you've got to stay ahead of what the next lessons are. And so recognizing when those on your team haven't kept up, and then doing the hard reset of that, which is, the sooner you do that. The better off it'll be because otherwise it gets painful and drags on and isn't helpful or productive.

Maren Kate
How did you guys lay your cultural foundation when you were starting to go past 10 people? Did you do a formal exercise? Or did you just take the values you and your wife started with and expand them?

Fran Dunaway
Yeah, I like how you put the caveat of 10 people, I looked at it more as like 15 people. You know, when you've got 15 people just talk to each other and have a conversation and isn't really about culture, it's more about this is a scrappy team that's just getting this work done. And so, thinking about culture, I think at that point is a little premature. But to your point, the personalities of the founders is really going to permeate kind of the rules or terms of engagement. And so, you know, the fact that we're married co founders, obviously, we're okay with conflict, and we work through it in a positive way. And so we just want, we have an open door policy, I really believe in like the Brene Brown methodology of accountability and clarity is kindness. And so just being clear, clear, and direct and open with people and being willing to listen and get feedback that can sometimes be hard, but make that an environment where there's opportunity for growth and learning within the company that can permeate through the whole culture.

Maren Kate
I love that. I'm so curious when you guys were fundraising, was that a push back? That you were married co-founders? Were people concerned about that? Or did it actually give you more credence, because if you can make a marriage wor,k like a business is not as hard.

Fran Dunaway
I think that there's some of both and it just depends on the person observing or making that judgment. A lot of people can't work with their partner or spouse and for good reason. But people spend a short amount of time with us. And those fears are pretty quickly allayed because we have a natural kind of division of what we do. And we're very similar, but we're very different as well. And so I think it's just a very complementary team. That is apparent pretty quickly.

Maren Kate
I guess it's it's similar to working remotely. I really flourish working remotely. And there's some kinds of roles that are great remote, and then there's some people that want to be in an office and there's some types of companies and types of cultures that need to be that colocation. So it's not that should you work with family or not, I get that question because in my last two companies, I've worked with different family members. I think more its are you the type of person that does well at that, and what are the personalities of the family members or the spouses?

Fran Dunaway
Right. That's exactly right. I mean, it can certainly present challenges. And then obviously, you take your work home with you, but it works for now. And because we couldn't have done it without the other. So it just has become our lives and it's changed our lives and in pretty drastic ways, and it's also changed our milieu of people that we prefer to spend time with, we find ourselves surrounded by entrepreneurs these days, which is pretty awesome.

Maren Kate
Yeah, it's invigorating, isn't it? It's exhausting, but invigorating.

Fran Dunaway
Exactly.

Maren Kate
So in Seattle, we're in one of the tightest labor markets and I think last 45 years, what are the roles you find the most difficult to fill?

Fran Dunaway
Oh, gosh, you know, finding a really strong digital marketer. That's a tough role. We actually have an opening for that right now someone that really knows Facebook, advertising and all the various on media channels, that that's a continuing challenge for us.

Maren Kate
Mm hmm. Yeah, that's, that's a pretty hot role right now. Okay, so my final three questions. I always ask these and I love them. First of all, what is your favorite book or podcasts from the last year?

Fran Dunaway
Hmm. Let's see. I'm trying to think about which book I want to pick.

Maren Kate
You can name a few if you want. I'm a book junkie, so I’ll write them down.

Fran Dunaway
Well, I've just been reading, Measure What Matters. And that that's a good one in terms of finding ways to talk about OKRs and deliverables and accountability, which I think is really enlightening, and then the new Jeanette Winterson book Frankisstein. I've always been such a fan of Jeanette Winterson. She just sings with her with her words, and it's just something to behold. So that's my nice escape right now. And then podcasts. I've always like listening to Richie Siegel over at Loose Threads all over it was threads and, and How I Built This, of course, because when I'm listening podcasts, I'm usually wanting to be learning things about other entrepreneurs.

Maren Kate
Oh, yeah. How I Built This is great to listen to each one.

Fran Dunaway
Oh, How I Built This. Yeah.

Maren Kate
What's the business tool that you guys couldn't live without?

Fran Dunaway
Well, spreadsheets Excel. That's a big one. You know, Shopify, the commerce platform has really opened up the world of small business for people around the world, really. And so that platform has enabled us to really build this business, and if we had had to spend, you know, 50 to $75,000, at the beginning to build something on Magento and then have an in house engineer, I think that would have would have been crippling to us. So I think that it's a very base level. Without Shopify, we wouldn't be here.

Maren Kate
And you think about you think about timing like five years ago, 10 years ago. I actually think maybe you'll remember this. But was there a How I Built This with the founder of Shopify, there was oh, that was so good, I listened to it twice.

Fran Dunaway
It was so good. He’s amazing.

Maren Kate
I highly recommended it and how he started it just because he wanted to sell used snowboards.

Fran Dunaway
And he’s still that humble guy. Yeah, it was really cute.

Maren Kate
Okay, so last question is for founders who are listening who are in that five to 50 person stage. Especially people in the consumer facing. Any kind of things where they're selling something physically online. What's the best piece of advice you've received, during your time at TomboyX, from an investor, or an advisor, or anyone?

Fran Dunaway
I'd think probably not going too fast and learning what you need to know in the present and in the short term future and not lose sight of that because you have your eye on the long term vision. And learning and growing in the moment from your customers, from what the data tells you, from what you're building, so that you can build it stronger at the foundation as you grow.

Maren Kate
I that can't be that can't be said enough too, I think especially with the the 25 year old in hoodie mentality of San Francisco, we hear that, move fast and break things. Slowing down, especially at the early stages and getting it right or even if you stumble in your five people or 10 people that's so different than if you're 50 or 100, or 1000.

Fran Dunaway
Absolutely, absolutely.

Maren Kate
So how can people find out more about you? And how can they find TomboyX online? And where can they shop for you? It's all online, no stores or maybe the popups?

Fran Dunaway
Yeah, we will be having some pop ups starting in November, and in December, and we will be going live on Nordstrom, but we encourage people to come to us via our website, just tomboyx.com. We have discounts for first time buyers. And there's bundle pricing. We have a lot of new things coming along. And there's a whole lot on the site. And so spend some time, look around because we've got swimwear, amazing swimwear, we've got sleepwear, we've got loungewear. And of course, underwear, everything from a thong to a nine inch boxer brief. And our bra collection keeps expanding. We just added adaptive bras. In fact, we're going to have all of our bras that we offer from here going forward, will be adaptive meaning you can put inserts for our trans community as well as our mastectomy customers.

Maren Kate
Oh, wow. That's so awesome. Yeah, so I'm definitely by the end of day, I'm going to get some underwear. I was already looking before we talked. I was like, This is amazing. So great.

Fran Dunaway
Should we should we offer a discount code for some of your listeners?

Maren Kate
Heck, yeah.

Fran Dunaway
Don't you think we should do that?

Maren Kate
Yeah I think that'd be amazing. Okay, give it to me and I will put it in the show notes. This podcast has been brought to you by offer talent, a firm dedicated to helping startups grow their teams from five to 50 and beyond. To learn how offer can help your company schedule a free consultation at offer avratalent.com That's A V R A Talent.