The Workshop

Behind the scenes of building: The Workshop

TL;DR

Influencers are looking for new ways to monetize their audience. Many are interested in launching a brand, but lack the resources to do so. We built The Workshop to democratize product creation for influencers of all size by bringing private label suppliers, design, logistics, and ecommerce capabilities onto one platform.​

Our MVP used a mix of no-code tools and manual services. We engaged 4 clients and brought products to market across apparel and accessories. In just a few months our brands earned $4k in revenue and reached over 150k followers on Instagram. 

Ultimately, we were unable to validate a core assumption that a majority of customers would be sourced organically from influencers' followers. Instead, paid acquisition costs drove down margins and made unit economics unfavorable.

Background

​I began exploring new markets and problems to tackle after putting Tribe on hold. A few months prior, I came across Li Jin's post, "The Passion Economy and the Future of Work." The concept that anyone can leverage technology to turn their passion into a business resonated with me as an entrepreneur. ​

While browsing my Instagram feed one day, I came across a short sleeve button down that I loved. It wasn't from the brand's page, but a golf influencer I follow. I clicked on the influencer's affiliate link and made the purchase. In that moment, I realized creators have been marketing products for other companies for years. What if they could create their own products just as easily?

Customer discovery

Research

Most creators launching their own line of products were celebrities with millions of followers on social media. Examples include Kim Kardashian's SKIMS, Kylie Jenner's Kylie Cosmetics, and Alicia Keys' Keys Soulcare. Each of these companies were formed with major brand partnerships, established financial backers, or large teams behind them.

Problem hypothesis

Influencers typically fall into the category of micro / mid-tier with 10K - 1 million followers on social media. Unlike celebrities, they lack access to manufacturing networks, financing, and DTC experts. As a result, brands have the leverage. They tap into large influencer audiences, but only pay out small fixed fees for posts or single digit affiliate commissions. 

The problem: Influencers are looking for more ways to monetize their audience, but lack the resources needed to launch their own line of products.

Customer persona

To help visualize customers who have this problem, I created personas. This illustrative snapshot included demographics such as age, gender, and location, as well as their goals and frustrations.

Interviews

Next, I chatted with target customers. To source interviews, I searched Instagram with key hashtags like #ad and browsed the explore page. Personal emails were conveniently listed on public profiles. I was able to book over 40 conversations within a few weeks. During each call, I set the stage by describing the problem and asked a set of questions to validate my core problem assumptions:

1. Have you ever considered launching your own line of products? If not, why haven't you? If yes, can you walk through that process?

2. Are you happy with existing monetization options?

3. Are there any other pain points you face as a creator?

   
   

The feedback was incredible. ~60% of folks I spoke with had contemplated starting their own line of apparel or accessories in the past, but faced many challenges. They didn't know where to start or how to manage a DTC business and felt like it was too complicated / expensive to find manufacturers. Some tried to launch their own Shopify store, but were limited because of a lack of private labeling and custom packaging options. My co-founder and I were also surprised to hear excitement about launching products as a new way to increase engagement and differentiate themselves from other influencers. 

Solution

It was clear that influencers were looking to launch their own product line, but faced a number of blockers. My co-founder and I were confident that technology could abstract away many of the complexities of owning and operating a brand. We laid out key jobs to be done for the customer, including product development, financing, shipping / fulfillment, marketing / sales, and operations.​

We wanted to bring the entire process into one marketplace where influencers could come with a design idea, choose a private label supplier, receive samples, purchase small run orders, and have their product drop shipped to customers.

Our vision was to build an all-in-one marketplace / platform for creators of all size to launch branded products and manage their business

Next, I laid out assumptions for each branch of the Jobs to Be Done framework. This would set the foundation for experiments to run and ultimately building the MVP to validate the solution.

Assumption testing

Suppliers

We started validating assumptions on the supplier side of the marketplace. We needed to confirm that small batch samples would be economical and low minimums were possible for private label products. This would keep inventory financing requirements low.

​I reached out to a number of high quality Chinese manufacturers on Alibaba as well as U.S. contract manufacturers. International private label suppliers were open to orders under 100 units, while U.S. suppliers required at least 100 units per style. Providing samples was not an issue, but drop shipping private label items in low quantities was met with resistance. We would likely need to set up our own inbound warehouse facility to manage order fulfillment for clients.

Influencers

Next, we moved to validating influencer assumptions. Are mid-tier creators willing to invest $1k+ for inventory? Do the value props of our platform resonate? Will creators continue to own content creation for their brand?

​To answer these questions, I put together a landing page and reached out to our interviewees for another discussion. The feedback was positive and influencers reiterated their interest. To our surprise, people were willing to invest more than $1k for larger orders to drive down the unit cost, assuming quality was up to their standards. Furthermore, one of the interviewees, a micro influencer with 10k+ followers, agreed to be our first pilot partner.

MVP

Goals

With a pilot customer verbally committed, we turned to planning our MVP. Our goal was to validate assumptions that remained open:​

1. Creators will be satisfied with the quality of our curated suppliers

2. A large portion of the influencer's customers will be sourced organically from their audience

3. Unit economics for creators are favorable even if ad spend is required ​

Additionally, we set a target of launching products with 4 different influencers to diversify the results of our MVP and validate demand more broadly.

Design challenge and product scope

For the MVP, my co-founder and I were faced with the choice of coding an early version of the platform or using no-code tools and manually providing services that would later be automated. We agreed that optimizing for speed to validate assumptions was far more important than coding at this early stage.​

Going back to our "Jobs to Be Done" framework, I scoped out major product features that would be required if we were to build a web app from the ground up. I then translated these features into ideas for the MVP that can be accomplished without the use of development resources.​

For example, rather than building out a marketplace for suppliers to list their product catalogs, we could "fake" the supply side and manually curate relevant manufacturers for our initial clients. We could also design and build a no-code ecommerce shop on Wix instead of spending the time to create our own in-house version.

Melon by K.

Product ideation

To kick things off with our pilot influencer, Kellyn McMullan, we held a planning call which included an overview of the process and a review of product ideas that Kellyn prepared. She provided images of brands as inspiration for her collection. Categories included glasses, hair accessories, earrings, and apparel. After discussing each concept, we decided to focus on a pajama set. People were just starting to work from home at this point of the pandemic. There was an opportunity to tell a great story around having loungewear that is comfortable and stylish around the house.

Supplier curation

After choosing to focus on pajamas as a product category, I reached out to China-based white label manufacturers on Alibaba. Within a few days, I had a list of reputable suppliers with low minimum order requirements that could meet our product specs. I also built a financial model to show the required investment and profits at various volumes. I selected three suppliers to recommend to Kellyn and packaged information such as product materials, photos, unit costs, and shipping timelines into the document below.

Contractor agreement

Kellyn reviewed our recommendations and was excited by the tie dye pajama product catalog of the supplier named Shenzhen Misi Garments. We decided to do a soft launch for her brand and start with a small order of 20 units to test out demand from her audience. We put together a contractor agreement outlining key workstreams, timelines, and legal points (term, services, disclaimers). The Workshop would pay for 50% of the inventory and pay out a 50% commission.

Samples

Before purchasing the initial inventory run, we ordered samples to confirm quality. The tie dye pajamas arrived a few weeks later and looked amazing. Our client was excited and moved forward with the soft launch order. This was a big milestone for the MVP - we confirmed an open assumption that creators will be satisfied with the quality of our curated suppliers. Our client had conviction in the sample and was willing to invest over $500 to make her brand a reality.

Ecommerce shop design + build

Next, I designed the website in Figma. We chose light pink as our primary color to complement the product's tie dye. Kellyn was able to use her photographer friend to do a photoshoot in the sample pajamas. Once the website design was approved, I built the ecommerce store on Squarespace.

Marketing plan

The last step before launching Melon by K. was to formulate an effective launch strategy. We worked together on the below plan, which outlined a cadence to releasing content as well as concepts for content across Kellyn's main platforms (Instagram & Tik Tok). Giving her complete creative control over messaging and branding resonated. Larger brands often do not afford this freedom and are more rigid in expectations.This insight would later translate into a value prop communicated during sales calls. 

Launch day!

Within two hours of posting the shop page link across Kellyn's platforms we sold out of all sizes. It was a magical feeling to see all the hard work pay off. Her audience was incredibly engaged and able to interact in a new way by being part of her brand and "twinning" with their favorite creator. We set up a waitlist to vet demand for a larger reorder, which quickly grew to ~75 people.

Shipping and fulfillment

Being scrappy is at the core of an MVP. My apartment served as our warehouse and fulfillment center. As orders came in, I would sew / iron on custom neck labels, fold the item, pack it, print a label, and bike to the nearby USPS to ship. My room was filled with boxes of inventory and supplies. Although it was not an ideal setup, especially being in a small NYC apartment, I was able to minimize risk at the earliest stages without compromising value delivered to the customer.

The results

With clear demand, Kellyn agreed to restock the summer pajama set. We ordered an additional 50 sets based on the size of our waitlist. Within weeks of restocking we had sold out again. This was the second major milestone for our MVP. We confirmed that a large portion of the influencer's customers will be sourced organically from their audience. However, we knew this was a sample size of only one client. We needed to vet this assumption further with more influencers. That said, early indications were tracking well.

​In total, we sold 70 units and earned $2k in revenue with 40% margins. Our website traffic was strong as well, with 900 unique visitors and a ~6% conversion rate. Our restock sale occurred around the time of the George Floyd protests and we were able to donate 100% of the profits to charities that support the black community such as Black Lives Matter, Campaign Zero, and Equal Justice Initiative.

Feedback

After the pilot, we wanted to get feedback to understand ways to improve. Kellyn was very happy with the results, but highlighted a few inefficiencies. First, she pointed out that it was hard to stay organized during the project because she manually put important updates / timelines in a spreadsheet. Additionally, she was frustrated with the inbound shipping time for inventory. It took ~4 weeks to receive our restocked units, which delayed our plan.​These insights were extremely helpful and shaped how we thought about our future product roadmap. For example, we prioritized developing relationships with local manufacturers to cut down shipping time and added project management features to the creator dashboard on our pipeline.

Growth

Setting the stage

At this stage of the MVP, we had positive signals on 2 / 3 assumptions: 1) Creators will be satisfied with the quality of our curated suppliers and 2) A large portion of the influencer's customers will be sourced organically from their audience. Our third assumption that remained open was: Unit economics for creators are favorable even if ad spend is required.  100% of Melon by K. revenue was sourced organically from Instagram and Tik Tok followers, so it was unclear what portion of sales would be inorganic for other clients. Our target was to work with 4 influencers during the MVP to diversify the results, so we transitioned from execution back to outreach.

Automated outreach

To streamline outreach to new influencers I set up no-code data extraction automations using phantom buster. Based on key hashtags, I extracted Instagram profiles, then filtered by keywords in bios, and ultimately scraped bios for emails. My response rate on outreach emails increased by 75% now that I had social proof of concept with the pajama set in the market.

Three new clients

Fast-forward 2 months to July and The Workshop had 3 new micro-influencers as clients. We soft-launched new product lines across apparel, yogawear, and nightlife accessories. Our brands reached a cumulative audience of 140k Instagram followers and earned $2.5k in revenue over a 2 month period.

Conclusion & learnings

MVP findings

The new products we launched had mixed performance with a smaller than anticipated portion of sales driven organically. We sold 30% of the long sleeve tiger shirts (SAMHZ) and nightlife accessories (unkvrd) within one week of launch. However, order velocity quickly slowed. Meanwhile, the yogawear line (Om Yoga) struggled to gain traction out of the gate.​Our clients turned to ad spend to promote their brands outside of their core audience. Although this strategy lifted revenue, our average CAC was unsustainable at ~$80. Rather than 40% margins in a 100% organic sales case, these products fell to ~10% margins. After accounting for The Workshop's commission, transactions were breakeven or unprofitable.

Ultimately, we did not validate our core assumptions. Creators required paid acquisition, which led to unfavorable unit economics.

A tough choice

At this point, my co-founder and I were at a crossroads. On the one hand, we could brainstorm potential pivots to be more agnostic to individual product performance. On the other hand, we could put The Workshop on hold and move on to a new project. After some back and forth, we felt that our new ideas for how to change The Workshop strayed too far from our original mission: to democratize product creation for influencers of ALL size.

One new pain point that we saw firsthand during this experience was dealing with product returns. Refunds are extremely expensive - ~50% of retailers offer free returns just to stay competitive. Customer service contacts, item inspection, and shipping put a strain on margins and resource allocation. Returns were a massive problem in the industry and an exciting challenge in our eyes. We decided to put The Workshop on hold and dive deeper into the pain point of product returns and the ecommerce enablement space.

Learnings

In hindsight, I would have done more diligence on audience engagement levels before onboarding influencers as clients. We only considered data such as total follower counts or follower:likes ratios. Although these stats are helpful to screen for, they were not indicative of the audience's purchasing intent. Instead, I would have looked at the influencer's performance on prior brand partnerships and affiliate link promotions. This approach would have helped us understand the quality of engagement and screened leads more effectively.