From Idea Stage to Launching a Product-Based Business with Shannon Lohr

INTRO:

Hey hey, Kathryn here! I’m so glad you’re tuning in. If you’re new to the show, welcome. I’m so glad you’re here. If you’ve been around for a bit, you know I’m all about keeping it real with you. Showing you all the sides of entrepreneurship (& life). I mean it’s all connected, right? 

I shared one of my favorite Brene Brown quotes,  if you’re not in the arena getting your ass-kicked, I don’t want your feedback. Well, I want you to see me as your friend in the arena equally getting my ass-kicked but inspiring you to keep going because I get it. I’m living it too.

And that the perspectives I share on the show are real life, in the arena types of perspectives, like the one I’m going to share with you today.

But before I do, I’m celebrating the amazing live training we held on February 6th. Missed it no worries…because there is a replay available until February 11. Not sure what the heck I’m talking about…I held another free private training showing thought leaders, changemakers, coaches, and consultants how to create killer messaging in their business that not only sounds like them but sets them apart as a leading authority in their industry.

The training is money…and if there is anything a business owner should invest in, it’s their ability to articulate what they do in a unique and compelling way.

If you’re in business, you’re in the business of words! Words are what connect us and without connection, you’ll have a hard time selling let alone creating the change you want to see happen in the world.

So, if you want to catch the replay, grab the link in the show notes. Shannon Lohr is the founder of Factory45, the online business school trusted by over 500 fashion entrepreneurs since 2014. Over the years she's worked with aspiring designers, all over the globe, to launch or grow their brands in a way that’s better for people and the planet. Shannon got her start in 2010 when she co-founded {r}evolution apparel, a sustainable clothing brand for female travelers and minimalists that was featured by The New York Times, The Wall Street Journal and Forbes.com.

Now let’s dive into the good stuff for today. 

So without further ado let’s welcome Andrea to the show!

00:02 Kathryn

Hey, hey, I am super excited to have Shannon on the show today. And without further ado, I'm just gonna turn it right over to you, Shannon, to let our listeners know who you are, what you do and who you serve. Yeah.

00:13 Shannon

Yeah, thanks for having me, Katherine. My name is Shannon lore, I am the founder of factory 45, the online business school that takes sustainable fashion brands from idea to launch. So I have been working with fashion entrepreneurs all over the globe since 2014, to launch their fashion accessories brands in a way that is sustainably and ethically made.

00:35 Kathryn

So cool. And I know I have a lot of listeners who are like product based businesses and whatnot. And so I do want to dive into the stages of taking an idea to like a product launch, but I also want to dive into the whole sustainable fashion piece as well, because I think that's super cool. So what got you started in this?

00:53 Shannon

Um, oh, man. Okay, well, it takes us back to 2010. I was really just trying to not get a real job is basically what I was doing. I had graduated in 2008. From college during the peak of the financial crisis. I spent two years bartending my way around the world, I lived in Australia and South Africa, and traveled all over Southeast Asia. And I got back to the states and a girl that I had met while bartending in Australia sent me a Facebook message and basically said, I'm not getting a real job, you're not I know, you're not going to get a real job, let's do something together. And so the idea was to start a business so that we could keep traveling. And so we went down to Central America, we started researching different business ideas. And we started designing a line of versatile travel garments that you could just throw in a backpack to take with you for aspiring minimalist female travelers like us. And we went and we started researching the fashion industry, we started researching, went and visited an organic cotton farm in Nicaragua, and realized how much we didn't know. And that led us to go back to the states and sort of reevaluate what it would take to really start a sustainable fashion brand.

02:22 Kathryn

So cool. And like what an experience to travel. Yeah, all around the world realizing in those moments, yeah, you didn't want a real job and that you wanted to start a business of some sort. Why sustainable fashion?

02:34 Shannon

Well, it's funny because I was like, the last person to do this, I was a journalism major in college, I was a bargain bin junkie, like we go to forever 21 or h&m, buy a dress, wear it once on a Friday night, throw it into the back of my closet, like never wear it again. So I was part of the fast-fashion problem, for sure, at least bought into the fast-fashion problem. And really what happens with anything, you start to research as you start to get closer to the truth about what's actually happening in an industry. And so as we were trying to figure out, okay, like, alright, we need fabric, okay, we need a manufacturer. Alright, well, we're going to start building an audience, what does that all look like? You start to uncover a lot of the problems that the traditional fashion industry has. And that's what led us to really create something that we felt we could inherently get behind. Like, it was just a part of our business model from the start, because it was the right thing to do.

03:37 Kathryn

Amazing. Amazing. So what do you sell? Right? Do you have your own business right now then, alongside coaching and whatnot?

03:46 Shannon

I sold I ended up selling my well we're kind of jumping ahead I guess because so we ended up launching our and in at the end of 2011, we ended up launching with a Kickstarter campaign that became the highest funded fashion project in Kickstarter history at the time, it was featured in The New York Times forbes.com It was like this whole whirlwind, amazing experience, we quadrupled our production run, it was just really brilliant, really cool experience. And of course, it took a lot of hard work and steps leading up to that point. But we went on a sustainable fashion tour of the Pacific Northwest, we were doing all of these things, and then we I guess it was the end of 2012 and ended up selling my portion of the business to my business partner. And that led me to what I do today which is run Factory 45.

04:36 Kathryn

So cool. So back backstepping then again is so as a sustainable fashion brand. What would you say to somebody that wants to get into this or is interested in this, like what would be the first thing you would say they need to do or consider?

04:52 Shannon

Yeah, so this is what I do every day. I run Factory 45 which is the online business school that helps you know sustainable fashion brands launch. So the first thing I say to everyone is identify your unique selling position, right. So that's like general business advice. But especially in the fashion industry, when everything is so competitive, it's noisy, it's a crowded landscape, you have to determine what I have identified as two things that are the most effective in setting, setting yourself apart really, as a new fashion brand. And that is identifying a problem that you're solving. And identifying a target niche, an ideal customer target niche. So niching down is super, super important. And then solving a problem, like I'm not in this business to create another cotton T-Shirt Company, right? We want to create problems, that's or create products that solve problems for our customers. And, yeah, we've been doing that. I've worked with over 500 Fashion entrepreneurs since 2014. So that's what we're doing.

06:00 Kathryn

So cool. So what would you say then from a sustainable fashion perspective is a problem that people are solving? Like? Not necessarily, you know, something, you know, like, softer clothing or whatever. But is it more like environmental things that there's like problems that they're solving? Or what would you say is like, the biggest problem that most of these brands solve?

06:21 Shannon

So the first thing I say is sustainability cannot be your unique selling position. Okay? It cannot be though your primary marketing method, really, you're incorporating sustainability into your brand, wherever it makes sense, knowing that you can't sacrifice fit functionality, the durability of the product itself, right. It's just like sustainability is a part of the business model, because it's inherently the right thing to do. And you're trying to reduce your impact. So that begs the question, okay, what are some problems to solve? When it comes to fashion? You know, we're not probably solving like world hunger, you know, it would be nice if we were but that's, that's probably not something we're tackling. Instead, it's more like looking at who your ideal target customer is, and what challenges are they facing every day when they get dressed? Is it a mom with a two-week-old baby postpartum, like, she's trying to get herself out of bed and look a little bit more beautiful, feel a little bit better about herself every morning? Is it a child who is hearing impaired and has cochlear implants and wants accessories? Or a hat or something? To make them feel more confident? Um, is it a woman who wants to pare down her wardrobe because she's moving into a studio in New York City to pursue her dreams, and she just has no space and needs like, a few garments as a capsule wardrobe? It's things like that size, inclusivity all different things.

07:55 Kathryn

So cool. Okay, so yeah, so it's not the sustainability piece as the is the selling factor, because I was gonna say, it's that I mean, would be motivating for people to invest if they are passionate about buying into sustainable fashion versus, you know, the fast fashion so to speak, what would you say, is the most like one of the biggest mistakes a lot of new fashion brands make?

08:17 Shannon

Um, it's always not building an audience before you launch. Okay? Anytime I see a brand kind of launch and fall flat or not go well, it's because they didn't take the time to build an audience before they had something to sell. And this is like, the biggest thing, and the biggest hurdle that I find new entrepreneurs have to get over is like, Shannon, like, how am I gonna market on social media? I don't even have a product yet. Or, you know, I don't even have samples yet. How am I gonna email my list? How am I gonna start building a list? All of those things need and just must happen before you're ever asking someone to get out their wallet and pay for what you're making. And so that's a lot of what we do in the beginning of factory 45 is making sure that we're building out a platform for our brand that creates customers before we have anything to sell.

09:16  Kathryn

So how would they go about doing that? If they are in, the idea stage because it's the idea stage is so different in a product-based business than it is in a service-based business? Obviously, you know, if you're doing prototypes or anything like that, like how do they start to market before they might even have products in their hand to even take photos of or to promote or anything like that?

09:37 Shannon

Yeah, it's gradual, and it's not even about the product and the beginning. That's the thing. It's like, it's about your customer, who your product is going to serve or be worn by or help solve whatever, you know, issue problem, fashion related thing, but it's really like getting your ideal target customer involved. In your process in your journey. So maybe that is in the beginning, you don't have any. You don't have samples, you don't have anything to show for yourself. But you do have fabric swatches coming in the door. And every day you're looking at new swatches of fabric to consider for the garment you're making. So you share that on social media, you pull on IG stories, you create an email where people can vote on their favorite colors. It's things like that every step of the way, getting people involved sharing your process because it's the behind-the-scenes that people are most interested in. And it's also the behind-the-scenes that people connect to and really make them feel a part of your brand.

10:39   Kathryn

Yeah, totally. And so you know, how long of a runway or promotional period leading up to actually launching the product or the garment or the clothing? Like how long do you say they should be doing that for?

10:52 Shannon

Yeah, people are always shocked when I say six months minimum, it's more like a year.

10:57  Kathryn

Okay. Okay. So really planning out well in advance before you ever get that? Yeah, product in hand, so to speak. Would you say that that is? It would translate to other products as well, like not just the fashion industry, but just products in general?

11:13 Shannon

Oh, for sure. Yeah, I think and I think that's kind of the thing about being an entrepreneur. And these days, like we're not all going after the venture capitalists and the you know, private money and the seed funding, like, we're bootstrapping. And so if you're going to bootstrap, you have, you're the one responsible for creating that customer base. And you can do that so far in in advance of ever being ready to sell and you should, and that is really what like, when I see Kickstarter campaigns launch or other crowdfunding campaigns, like the ones that are successful are the ones who have a built in audience.

11:50  Kathryn

Interesting. And so would you say that contributed to the success of your Kickstarter than to

11:55 Shannon

Oh, for sure. And, and that was one of the things we started blogging a year and a half before we launched our Kickstarter campaign. So again, going back to like, sharing the behind the scenes, that's what we were doing, you know, this is before like, Instagram was really even a thing but, but it was when Facebook pages had just like organic reach, and you know, everyone's everything. What a world you didn't have to pay to play. There's like totally paid advertising. Um, so in some ways, it was easier in some ways. It was harder. But um, yeah, I think that is really like, for sure what set us up for success and why I am so passionate about telling people like, do not wait until a week before your Kickstarter launches, to start talking about it, you have to be doing that well in advance.

12:43  Kathryn

So do you recommend that most fashion brands then use something like Kickstarter, like how do they raise money if they're not going after big investors and that sort of thing?

12:53 Shannon

Yeah. So in factory 45, I teach three strategies. One is crowdfunding. So that could be Kickstarter, that could be I fund women, Indiegogo. The second one is pre-selling through your own e-commerce site. So okay, the one I recommend to Shopify. And then the third is pre-selling through a virtual pop-up method, usually on Instagram, which is kind of more of a smaller niche launch strategy, but it's a great way to test the market.

13:21  Kathryn

Okay, and talk about pre-selling like, What does pre-selling actually mean?

13:27 Shannon

Yeah, so when we talk about crowdfunding and Kickstarter, and you know what I did it, it's not donations, it's not charity. It's not people who are like trying to fundraise for you, you are pre-selling your product that you're making or your products. And so again, it doesn't matter if you're doing that on Kickstarter, on your own Shopify site, wherever you are testing the market, because people are saying, Yes, I want what you're buying, I'm going to open my wallet and pay for it in advance, and you're also reducing your own financial risk. So few of us have, you know, 10s of 1000s of dollars sitting in the bank to invest in a production run, that could be $20,000. So this way, you're having your customers essentially finance your production run for you, which is just, it's a win-win for everyone.

14:19  Kathryn

Yeah, that's and again, would that crossover for other products as well, like in terms of getting that pre-sale in because I was gonna ask, like, if you're promoting your business a year in advance, or a year and a half in advance, and but you're needing money to come into the business, right? Like it's, it is a long sort of runway. And so this is like a great way to, like you said pre-fund it, but would that translate into other products as well?

14:46 Shannon

Oh, for sure. Yeah. Yeah. Yeah. I mean, you see, you can see it with luggage, gadgets, shoes, all kinds of different things.

14:55  Kathryn

Yeah. And do you think you would ever expand into helping other product bases? Are you really set on the fashion line?

15:03 Shannon

Um, the fat the so manufacturing is what I know. So I do accessories, Home Goods, shoes, like footwear. But manufacturing is what I know. So I think that's my niche. I'm taking my own advice and niching down and stick into,

15:19  Kathryn

Totally. So why is sustainable fashion so important versus fast fashion?

15:28 Shannon

Fast fashion it's not sustainable for the planet. It is one of the leading polluters of the planet, it is detrimental to the people who sew and make our clothes. The entire model was created to perpetuate this idea that we need constant trends, it's now 52 weeks a year, we have a new trend. So 52 trends a year, to make us feel better about ourselves to make us feel worthy to make us feel confident. And that's the whole psychological part of it of that consumer, I need more and more and more. But then there's also the environmental part of it, which the majority of our clothing is now made of polyester and synthetics that take 200 years to decompose in a landfill. So we really, you know, if we're talking about climate change, and pollution, and all the other things that affect our planet, fashion is a major, major contributor with oil with animal agricultural agriculture, that we need to really take a hard look at. And so really, it's, you know, there's no other option than to start to move towards sustainability.

17:02  Kathryn

Yeah. And did you witness when you traveled around the world? Was that part of the fuel to do this? Like, did you witness some of this pollution and the factories that you visited? And those sorts of things? I know, like when you hear about the factories overseas and stuff, and how horrible the conditions are for the workers and that sort of thing? Like, did you experience that firsthand?

17:24 Shannon

Yeah, it wasn't even that as much as it was actually the second-hand markets. So you go to places like Nicaragua, or Tanzania, or Kenya, or Cambodia, you see, our clothing from the Western world has just been dumped into these other countries, like our trash is now their problem. And it is, you know, it majorly affects their local markets, right? The artisans, the people who make clothing locally in their countries, because when you can buy a t-shirt for $1 from a second-hand store that, you know, we dumped over there, then that's what people are going to do. So it's very, very complicated. But that was the thing I think that I first saw, that was the most eye-opening.

18:14  Kathryn

Yeah, I remember spending. I was in the Philippines for three months as part of my master's research. And I just remember being in his remote village, and these kids would walk out with like Disney T shirts on and I'm like, How the heck did you get that Disney t shirt? Because you're like, in the middle of nowhere, like there's no way that you have it. But yeah, they were walking around with Nike T shirts and Disney T shirts. And it was crazy.

18:34 Shannon

Oh, it's this. I'll plug my husband's company quickly. So he did the same thing. He was in Kenya secondhand markets. He saw a shirt that said, I danced my ass off at Josh's Bar Mitzvah. In the secondhand market in Kenya, and he was like, Huh, that's weird. Like started looking at this whole issue. Now he has a company that turns people's memorable T shirts into t shirt blankets so that we don't have to send our button mitzvah shirts overseas. But yeah, it's really it's a significant problem for sure.

19:12  Kathryn

Yeah, and I mean, it's such a good like I said in terms of what you're doing, like the mission behind what you're doing is so powerful. I was gonna ask, what classifies a brand to be sustainable is there like classifications or things that people need to consider when they are maybe venturing down this path? What do they need to consider?

19:41 Shannon

Yeah, so I mean I don't feel like we have that standard yet if we have some certifications right. We have wacko texts, we have got certified, we have fair trade like we still are starting to get labels. But in terms of like, what makes something sustainable, you know, it's sort of become like this. I hate to say greenwash, but like, it's kind of become this general term that people just like plunk onto their brand without actually being able to explain it. And so that's what I tell my entrepreneurs like, fine, it's, you know, we have to have clarity and messaging, right. So to say, I'm a sustainable fashion brand, most people can wrap their heads around that. But why what makes you sustainable, really getting into those details and communicating with your customer. We're sustainable in these ways. But we're not sustainable in these ways. And these are the things we're working on. I think that's what creates transparent transparency and trust with your customer. And that's what I would like to see more of in the industry, from the small brands all the way up to the big brands, like you know, h&m with their conscious collection. Okay, well, is it really conscious if you are churning out millions and millions of garments a year not selling them, slashing through them and chucking them into the landfill? No. So like having more of that clarity around what makes you sustainable is, I think going to become more important as the industry grows, but also just essential to the customer relationship.

21:18  Kathryn

Yeah, I love that. Because I think again, right, you can slap whatever name you want on it. And if the name becomes trendy, right, if it's like, well, sustainable or conscious brands, or whatever, we could just slap that on there. Or like organic foods, which is the same thing, right? It's organic. Well, what makes it organic, right? Like, and I love that, you know, it's like I'm sustainable on these things. But we're not on this thing. Right? So it's like, we're not 100%. But we're working on these areas to become more sustainable. What is the coolest idea you've seen come across your area? Yeah. What if like, what's, what's a cool, cool brand?

21:55 Shannon

People always ask me this. And I actually, like, I am not in the business of PR, like, judging ideas really? Like, because I would have never predicted like, crocs would be like a billion-dollar business. Right? Yeah. So for me, I get it. And I think this is actually like, sort of how VCs and investors frame it as well. I get way more excited by entrepreneurs like that, when I see people who are action takers, when they are like, not afraid of risk when they're not afraid of just putting themselves out there. That's what I get most excited about is working with those people. And the idea. Yeah, those are exciting, too. But it's really about the entrepreneur that I think is the most exciting.

22:47  Kathryn

Yeah, so cool. So in terms of the stages that people work with you, they come to you with an idea and they work with you until the idea is launched or like, Where does that relationship go after they've brought the idea to you and all of that?

22:59 Shannon

Yeah, so it's a lifetime program actually moving on, really unheard of in the fashion education space. So once you're in factory 45, you're in it for life. And this was something used to be a six month program. And what I saw and the feedback I was getting, you know, you of course, you have to listen to your clients, you have to listen to your customers, is the timeline just wasn't long enough, it takes a long time to launch a product based business to launch a fashion brand. And so I guess it was last year, two years ago, we expanded to making it a lifetime program. So you get support from an alumni mentor, someone who's already graduated from the factory 45 program is running their sustainable fashion brand right now. So you get to work one on one with them, you get to work with me. And then of course we have the whole online curriculum. And yeah, you're really in factory 45 Until you launch and even after that

23:54  Kathryn

beyond that's so cool because Yeah, it is a different ballgame. Being in like I said for that product based business right is like a just from product testing to rolling it out to all of the things versus like the service space where you just can basically get up and kind of get running

24:11 Shannon

and there's just so many things you can't control like you're waiting on fabric suppliers, pattern makers, sample makers like that you just have a now with all the supply chain issues like it's just a whole different ball game. So yeah, it makes sense to make it you know the I always say like create the journey that's right for you on the timeline that works for you because we'll you know we'll be here every step of the way.

24:33  Kathryn

Yeah, so amazing. Well, it's been such a pleasure chatting with you and learning about your business but also learning about sustainable fashion and basically taking your idea to launch. Is there anything else you'd like to share with our listeners that we might not have covered today?

24:49 Shannon

I don't think so. If you're interested in launching a sustainable fashion brand, definitely, you can go to factory 40 five.co and book a call to learn more About whether it's the right fit for you and your business goals.

25:04  Kathryn

Yeah, so cool. Is there anywhere else they can find you on social media? Instagram, Facebook?

25:09 Shannon

Yes, we're on Instagram @factory45. I have a YouTube channel. I also have a podcast about starting your sustainable fashion brand. Yeah, we're all over the internet. Find me. Yeah, Factory 45. Awesome. And

25:23  Kathryn

We'll also link all of those up in the show notes so that they can get their hands on those. But yeah, it's been such a pleasure chatting with you. And I always have ideas in my head of product-based businesses. I don't know if I'll do sustainable fashion, so to speak. But I'm always doing. I always got ideas going on. So yeah, you've given me a lot to think about from the product perspective. So yes,

25:42 Shannon

the mindset of an entrepreneur, right is always

25:46  Kathryn

Yeah, maybe I'll just stick with my niche. No. Yeah, totally. Well, yeah. It's been a pleasure. And I'm excited for the audience to have a listen to this one.

25:54 Shannon

Thank you so much, Kathryn.

Now on Episode #43 – I’m bringing on a Public Relations expert Lee Caraher, and we are diving into what public relations is and why it's important for your business. Be sure to subscribe to the show so you don’t miss it.