Blank Label had its pre-launch in 2009, just after the crash. What was it like starting a business then?

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1 Handmade, tailored clothing used to be reserved for royalty and the super-rich., the founder of Blank Label, has created a brand that seeks to make this kind of custom clothing more accessible. He launched his company in 2010, starting as an e-commerce site but shortly recognizing that greater opportunity lay elsewhere. Bi is now on a path to opening several new stores in the coming two years. Born in Shanghai, raised in Australia, and educated in Boston, Bi started the company based not only on his interest in fashion, but because of an incidental visit to his hometown in China. Today, he s integrated his international background into a solid business strategy that delivers a product that has won awards and buzz aplenty. Rather than building a loud, in-your-face fashion house that scrambles for attention, Blank Label makes menswear that is simple and sleek everything from formal suits to chinos and casual wear all of which is bespoke and made-to-order. Below, we talk to Bi about the struggles of scaling up a business that is all about complete customization, how a trip to Shanghai sparked the idea for Blank Label, and about his own personal fashion philosophy.

2 Tell us about how you got into fashion. It was a little bit of a surprise. When I was a young teenager, growing up in an Asian household, the expectation was to be a lawyer, doctor or banker that s what I thought I d end up doing. When I was 13 or 14, I started to get into men s wear and clothing. If you ve ever seen the show Modern Family, the character of Manny Delgado I was like him. I started wearing jackets to places where other people were wearing t-shirts. So, I ve always had an interest in it. After working in finance for a couple years, I had this idea to make clothing more accessible and more affordable. I figured, I ll give it a go for a year. Blank Label had its pre-launch in 2009, just after the crash. What was it like starting a business then? It probably had less to do with the economic conditions to be honest, and was more about switching from a stable, paying job to something that needed to generate pay for myself. In terms of the market, it probably wasn t such a good idea on the macro level, but it turned out that at that point in the downturn, it was a good opportunity because people wanted more affordable clothing. I wasn t thinking about that though I wasn t that smart I guess! For me, I just wanted to try and give it a go. Looking back at the early days, and knowing what you know now, what would you do differently? We definitely had a few big learnings. The first one was that, when we went to market in

3 2009 we were e-commerce only. We entered with the value proposition that you could customize your own dress shirts you could have a spread collar, standard pinpoint collar, even a different fabric for the inside of your collar. You could have a stylish dress shirt that would also fit you really well. We invested a lot in building this online customization tool, where you could see the shirt change as you were customizing it. It turned out people weren t interested in that. We d been getting customers over the course of a couple years, and when we were doing customer feedback, they were saying, We really like what you guys are doing, and when we asked how they felt about the customization, they said it was cool, but it was really more about being comfortable. We looked through our orders and realized people were getting standard white and blue dress shirts. Listening to our customers early on and identifying the pain point was really important, because we learned that we went to market with the wrong channel. Three years in, we built our first store, and it proved to be a much more effective experience. You still have the customization tool though, right?

4 That s right, we still have our e-commerce business. Anyone all over the world can order custom shirts or chinos, but by far, the biggest and fastest growing part of our business is brick-and-mortar. Consumer research also led you to realize that your target group was not your customer rather than the young hipster set, it was attorneys in their thirties. Is this still true? How has your customer changed? Indeed, that s something we learned through talking to our customer. Our core customers are the working professional wearing a dress shirt if not a jacket 5 days a week. Blank Label is all about customization, both online and in the store. What is the biggest difficulty in running such a system? You can get access to the same product category on and offline, and the same customization. The reality is that it s terribly complicated to run a customization business; it s been much harder than we expected. For the first few years I was making frequent trips to our manufacturers in China and trying to figure out what was going on why was it that 1 out of 10 orders was going wrong. The best parallel I can offer is when you go to a restaurant or a coffee shop, and you order something off-menu, like add extra carrots or soymilk, anything that deviates from the norm, it creates problems. And that s the reality of our business, is that everything we offer is off-menu. Everything is completely unique, which makes for a very complicated supply chain, and which means we had to invest a lot in our systems and quality control.

5 You have an office in China, correct? Yes, in Shanghai. We have three main focuses at that office: vendor relations, to make sure manufacturers are doing their job, second is quality control, everything that gets made goes through there; and third is our customer service. If a customer needs to know where something is or has a question, it gets routed through our Shangai team. What s the best part of running your own business?

6 There s two parts. One is definitely freedom there s a lot of independence, and you get to see the direct benefit of what you put in. The second is seeing people grow. It s awesome to see people at Blank Label that are pushing themselves. Has there been a strategic advantage to avoiding more fashion-focused cities, like New York? It s busy and it s noisy. There are also custom options in those cities already, and we feel that it s just very competitive, and that there are a hundred cities where we can go and reach hundreds or thousands of potential customers, and we can be a quick leader. On the fashion angle, we don t really see ourselves as a fashion company. Most of our customers are wearing pretty conservative clothes to work for the most part what s in isn t that big of a concern for them. They wear two grey suits a week, three blue suits a week, and maybe a sports jacket on the weekend.

7 What is the biggest challenge you ve faced as you ve scaled up the supply chain? The increasing complexity as we ve added more products. When we went into brick and mortar, we added in-person fittings, and more products, such as suits, topcoats, and waterproof trench coats. Then came corduroys and denims and polos all custom made to people s measurements. Then we released casual shirts. The biggest challenge has been making sure that we have all the sizing down for each product category for each person, that s probably the most complex part as we ve scaled. You re giving me a headache just thinking about it! How were you able to bootstrap the business originally? Starting online was one way. Also, one of the benefits was that I wasn t paying myself and I was able to find two co-founders who were taking a big pay cut for owning equity. We were able to start generating business pretty quickly, mostly through working PR really, really hard in the first year. We got a good amount of buzz and links, and that helped us to be highly ranked in search for custom dress shirts. It was really PR and organic search that allowed us to avoid paid marketing, and that sustained us until 2013 when we raised a million dollars. Then we were able to build out our brick and mortar strategy. What is your most effective marketing channel? It s kind of corny but it s the truth referrals. We have a pretty vanilla referral program it s $50 for $50, so if you invite Michael, he gets a $50 credit and you get a $50 credit. We

8 really invest in building a great experience. Most of our customers come from Macy s or Brooks Brothers, and they hate it they have to try on three different shirt sizes, they feel annoyed they have to wait in the dressing line, to get waited on by someone who gets paid $7.50 an hour. It s just not a great experience, and I think that s why men hate shopping. They come here and they get a one-on-one appointment with someone who s paid a good salary. It s private and it s something that really wows them, the experience itself, and the clothes look good. Men tell other men this, and we were surprised at work they would say Hey, you look sharp, and they d say they got it at Blank Label.

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11 How do you think your international background has impacted your approach to Blank Label? I was born in Shanghai but I spent most of my life in Sydney, Australia, until I came to school in Boston. I was interested in fashion and what sparked this idea was in 2008 when I was visiting a friend in Shanghai, and he took me to a custom tailor. I got a few shirts made and when I went back to work people were literally complimenting me about my clothes, which hadn t happened to me in a professional setting. They were like, Hey Fan, nice shoes, where d you get that? and I said it was custom, and they couldn t believe it and how affordable it was. Had I not travelled to Shanghai that time, none of this would have happened. How do you know when a shirt looks good? It s subjective. There are some general guidelines on how our garments should fit how sports jackets or shirts should fit but it s still subjective. Two people could be 6 and 150 pounds, with the same measurements, and they could both want different sizes and they could both be the right size. Some people like their clothes tight, some like them loose, some like them long, some like them short. With our online customers, we ll have them send photos of them wearing their clothes and we ll offer advice and touchups. What s your personal philosophy about style? What do you like to wear? To me, it s all about the details. I dress pretty conservatively right now I m wearing blue

12 corduroys and a blue tie and a grey jacket and I don t have anything loud. Also, I ll rarely wear a two-piece suit; I ll wear something different on top and bottom, trousers and a sports jacket, or chinos and a dress jacket. How was your experience working with? Awesome. Really genuine, we talked to quite a few lenders in this process and was definitely the best experience. They made sign-up incredibly easy, it took 10 minutes to sign up instead of filling out a bunch of paperwork. We had a couple of calls and then we got an offer. It was a really quick, easy process, and quite frankly, the speed of it blew the other lenders out of the water. With others we had to follow up or re-fill out paperwork again that went missing, but was incredibly easy.

13 What will the financing allow you to do? Our strategy is to continue to building out our brick and mortar business. We re currently opening two more locations this year, and we ll open three more next year. And is giving us not only the opportunity to build this time around, but also the opportunity to refinance again in 6-12 months to continue our expansion. I think they really have a longterm view, which is great as long as the business is going well, they want to grow with us. We re really excited to have this relationship. What s one book every entrepreneur should read? Jim Collin s Good to Great One brand that your admire: The brand that I probably most admire is Nike. I think staying at the top of the industry for the three or four decades that they have, their ability to transition from a very technical function running shoe for an athlete into an entertainment brand, because of this, I think they ve done incredibly well.

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