Today’s episode is featuring Hannah Davis, a young entrepreneur. Hannah is the founder of BANGS shoes, a footwear company who’s mission is to make the world a better place.
The company is made up of people from all walks of life who all strive towards making their vision – “provide footwear to cultivate a meaningful community with lasting impact” – a reality
This podcast focuses on the process of setting up a company, specifically a virtual one, and all the experiences that come with it.
Some of the things you will learn:
- What it is like to set up a virtual company
- Building culture in an all virtual company
- Recruiting the right people, firing the wrong ones and how to deal with it
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business. Today, my guest is Hannah Davis. Hannah is really a [inaudible 00:00:52]. She started her company BANGS Shoes when she was 24 years old. By the way, Hannah that’s where I started my first company also. She has footwear that helps people start businesses around the world.
We’ll probably get into a little bit about that. She’s been able to invest in 800 entrepreneurs in 64 countries. She’s only been doing it organic, social media. We may talk about that also. We have lots of things that we’re going to talk about today.
So, let’s bring Hannah on air. We’ll start the conversation. Hey, Hannah how are you today?
Hannah: I’m doing great. How are you?
Josh: I’m well. So, Hannah tell me something— you’re 24 when you started your company and you have no traditional marketing operations or budget. You’ve done this without VC Funding and you’re doing quite well. You said beforehand you got 15 people that talk to your company every day. How do you manage to do that?
Hannah: So much trial and error. I founded this company a couple of years outside of school after I graduated from Clemson in South Carolina, Go Tigers. I have a political science degree and a minor in Mandarin. So, when I started BANGS I really had no roadmap that I was following which I think some people might say is definitely a disadvantage to [inaudible 00:02:04] it’s starting a business with no traditional background or training, but I think it actually ended up it working in my favor because there was no structure that I was trying to fill.
I had this big vision and I was inspired by companies that have done similar things like TOMS and Patagonia, businesses that have leverage their sales to make a difference in the world. I wanted to follow in that social business category so I decided to launch a company that helps entrepreneurs around the world. The inspiration behind the brand comes from my time teaching in Western China.
The brand name BANGS actually comes from the word ‘help’ in Mandarin. That also meant that when I came up with this idea I happen to be in the manufacturing center of the world. So, when you say how do you do it? I guess I got like a little bit of luck. I would happen to be at the right place at the right time and I had blind passion and ambition and five years later, here we are.
Josh: Oh, cool. Have you been profitable for the last five years just out of curiosity?
Hannah: No. I’ve been profitable for the past two years. When I started this business, my mom was like, “If you can get out of the black in under five years, you’re doing okay.” I was like, “What? We’ll be out of the black in six months.” Two years later, I’m like, “Uh, Mom you’re right.” But then we got out and then the more people I talked to through this process, I think she was right. You know, the five year mark is not many businesses make it to this mark and the businesses that do might not be profitable at this point and we’ve been able to reach that pretty incredible milestone.
Josh: So, you told me you run a virtual company?
Josh: Let’s talk about that for a second. How do you do this?
Hannah: A lot of sitting in front of my computer. So, we only sell online, a 100% of our sales since 2015 have been from our website. We went the traditional route of building an apparel company through wholesale the first couple of years and we can talk more about this if you’re interested, but we like basically failed on year one from the wholesale perspective. We started seeing some exciting results on social media so we just fully switch our sales strategy to focus a 100% on our website.
I think like any small company or any company actually and no matter what size you are, you are always looking for ways to cut your expenses then grow your sales. We are also trying to do that. So, we found— one of the things we never invested in was an office. At the beginning we didn’t need one because it was literally just me sitting on my house, but then in time as we needed support and help we’re looking for people with very specific skill sets. We found people that might not live close to me like the best people aren’t necessarily within a convenient geographic radius around you.
We started finding this super talented people that could fit our niche needs. It wasn’t like we sat down and we planned our strategy like launch a 100% virtually operated company, but just based on our needs and our finances. It just sort of, “You know what, this is actually really a great model” and it’s kind of unfolded from there. So, we have a warehouse in Virginia. I live in Austin, Texas— customer services. We have some support in North Carolina. Our website developers are in Manhattan, our factories in Vietnam.
We found a way to build successful operations online and also build culture which I feel like you can have the most issue— there could be issues with all of it but building culture online in theory doesn’t sound possible but we definitely been able to have some semblance of that.
Josh: Okay, so let’s talk about that a bit because in my opinion that’s a hugely big deal. I strongly believe and I’m giving you lots of examples of this, is that the only companies that are sustainable ultimately are [values like 00:06:05] companies. How did you that?
Hannah: I think it kind of goes back to why I started the company to begin with. Like I said, I have a political science here and a minor in Mandarin so I was definitely one of those people in college that was like business is [inaudible 00:06:18]. I really don’t know why I subscribed to the school thought, but I think the people that I respected— it was black and white to me. So, when I started things I knew I want to leverage this company to make a difference and so this was kind of secondary for me. It was always about the impact and I think people can read you intentions based on the marketing that you put out, the conversations that you have.
So, I think starting from a place of philanthropy and then building the business around that and then keeping that at the center. It’s easy to have good intentions and then you kind of spiral out of control once x, y and z might happen. Once you build out the business and you have sales and you have numbers you are trying to hit, it’s easy to move away from that mission. But, if you keep it at the core and if the real authentic mission and you talk about it and whenever you have marketing you’re like, “Let’s not forget why we’re here.” It’s thoughtful and its strategic but it’s also very real. That makes it easy.
So, building out our values as a core part of our company was never really like an option. It’s just sort of once. It is what it is. I think people feel that and our community also believes in our mission and what we’re trying to do as well. That again, flows out and everything like whether we we’re communicating internally from colleague or communicating with a customer or we’re communicating on a podcast. I hope that social mission stays at the center. It typically does.
Josh: I get that you’re clear about your social mission and what’s your values are. What I don’t understand is how do you screen your associates so that you’re a match for a values match?
Hannah: I think it’s a process. We look at of course like writing style, phone conversations and this is a kicker—social media. What types of stuff are they are putting out on their personal Instagram? You can read a lot about somebody by their social media especially if they’re in the target demographic. We typically hire people who fit in the target demographic of our customers. Not because we’re trying to do that because it’s just those are the people that really I think got what we’re doing. It makes them great marketers and great customer service people because it’s like your customer talking to your customer.
It’s just super authentic way to grow. We look at all these people from again phone conversations and this is another kind of cool thing I think about not having a full on employees is that people have to prove themselves over time. We’re never like just go and hire somebody like having a face to face interview with them and then offering them a sign contract— the job for a year. Typically, the way we’ll bring on people is would be trial period. We’ll be like, “Okay, we’re going to do this in three months. We’re going to see how it goes.”
The other thing that this having 100% virtual operations implies is that people have to be incredibly self-driven with their time management and you can’t fake that. You can’t talk in and out like you see if somebody submits their hours to me and then like I’ve been working for 10 hours and I’m like, “What have you done?” You don’t see the results it’s like easy to see.
Josh: The question I have is, have you ever fire anybody yet?
Hannah: Yes. I think I was more of [inaudible 00:09:30] than they were. To be honest, it was funny because I guess like the first person I sort of like though was a volunteer. I think it’s just as important for anybody that’s just starting out and just listening to this because I think people who are supervisor of a volunteer feel like guilty or obliged to the people they’re volunteering because “donating their time”.
It’s still like if an intern or volunteer somebody isn’t pulling their weight based on the expectations that you laid out, you’re in every right to sort of find somebody who can meet those expectations and help you build out what you’re trying to do. The very first conversation I had was somebody— I must have been 24 and I was like so upset. I lost sleep over it, but it was definitely the right thing to do for the brand. I’ve also kind of been like let go but I haven’t been fire from any jobs but from collaborative relationships. That’s like a form of being let go and it’s hard from both sides. Those have been tough conversations for sure.
Josh: So, when you have had—by the way, my experience is the first time you have to let somebody go is way harder on you then it ever is in the person you’re letting go. The other thing I’ve learned along the years is when you finally get around to letting you somebody go, you always wonder what took you so long to get around doing it because you know they’re not a fit also.
Hannah: Yeah. I think that’s true. The first girl that we sort of let go, she ended up consoling me. I was like, “This is ridiculous. I’m an adult.” But clearly I had some work to do.
Josh: It’s a challenge. I mean if you’re a bad fit, you’re a bad fit. The best thing you can do for both parties is to separate and go your own ways. It’s the sort of my thing there. So, just going back to values a bit—do you have your values written down by any chance?
Hannah: I really hope that you weren’t going to ask this because I have to tell you, no.
Josh: By the way, you’re not any different in like 97% of the companies in the world. Can I give you a little hint that you want to do?
Josh: You want to get really clear about what the five core values that you hold you are and that you want to say you and your partner when you have conversation about how you can move that into your company. The new one already clarifying statement around those values and you want to use that every single day that you got to work. For example, in my business one of my values is personal responsibility.
So, if you’re going to blame or justify your way through life, you’re not going to be successful working with me. So, I’m very clear about this. My other one is a term called [minesense 00:12:20] taking the complicated and making it simple. There are my value statements. The definition of what [minesense 00:12:23] is. My job in life is to take jargon— I’m a jargon master.
So, there are also sort of things that I have found during my life as a business owner has made me much, much more effective as a manager because now I have these values, but your [inaudible 00:12:40] use to say whether you’re a good fit for my company or not. Does that make sense?
Hannah: Yeah, that’s for sure.
Josh: Are you familiar with the book “Good to Great” by Jim Collins?
Josh: That’s one of the great management books have written several years ago. In there, he has the term called “right person right seat” and I’m going to ask you something has ever happened to you. Have you ever had somebody in your company who was brilliant at a job they did, but they just weren’t a good fit for the company?
Hannah: I think so. I know that type of person you’re talking about but we ended up not moving forward with them because their true colors came out early enough on in the conversation, but I can envision those conversations clearly.
Josh: Right, well my term for that is what I call “the brilliant jerk”
Hannah: That’s exactly whom I thinking of.
Josh: Right, I figured that. The truth is, you can’t have a brilliant jerk in your company because they ruin the company.
Hannah: That’s true.
Josh: So, right person right seat. The brilliant jerk is right seat usually wrong person.
Josh: So, of the two, here’s my free advice—the right person is way more important than right seat.
Hannah: I agree.
Josh: Because right people are easy to work with. It’s a none effort to get them to be on board with you. Right seat is a lot easier to get than right person. I know it’s a stupid question. This is just a question out of the blue. My podcast have lots of questions out of the blue. Have you ever heard of a thing called “Benefit Corporations?”
Hannah: I have before, yes.
Josh: Are you thinking about becoming to be a Corp?
Hannah: I started the application process a couple of years ago, but it ultimately ended up being so time consuming and I heard along the way that they’ve lowered the price of applying and we just decided that the opportunity cost of it so the value that we got off the stamp wasn’t worth the energy or the finances that go behind it. I don’t know it that’s tacky to say but it was just a decision with limited resources that we have to make. That was probably in maybe 2013 that we made that decision and we sort of been like chuck it along—
Josh: Up here in the People’s Republic of Vermont there are a lot of big Corps—it’s part of the [inaudible 00:14:55] where Vermont is about. It’s not really surprising that this is one of the epicenters of big Corps of the country. I would think that your customer based and your employee group would find a huge amount of value because you’re already there.
You’re already doing all the things that a benefit corporation is all about which is by the way I’m going to give you a quick definition. Benefit Corporation is what’s called triple bottom line company which stands for People, Planet, and Profits. It’s really clear to me that you’re checking all these boxes that you’re doing that. I would think that it would be a hugely beneficial thing for your company.
Hannah: Well, I’m open to it. I guess it’s just we have to make a judgment call. Anything in the business is the time and the money that we put into it where the—
Josh: Absolutely. I’m not saying you have to this by any stretched imagination. I’m sort of an anti-certification person as it goes. Anyhow, but in this particular case it happen to big Corps a lot of it I think makes sense. I’m encouraging anybody I know who runs what I call “Millennial Business” and you fit in that world— to investigate that especially if you want millennials to work with you and buy from you.
Hannah: That is a possibility, but I also feel like the thing that millennials want is flexibility and they want to work for a brand that they believe in and that they think is cool. I don’t know if it necessarily have to be a big Corp to do all of these and I could be wrong, but—
Josh: [inaudible 00:16:23] you don’t have to. The reason I like big Corps for that particular purposes [inaudible 00:16:29] by the way—for that particular reason and I’m actually morph into this conversation which is the conversation around social proof. I mean it’s really clear that your company has tons of social proof. So, let’s talk about that for a bit— what are you doing to create social proof that you’re walking the talk?
Hannah: I think the best thing that we do is provide information. I mean as simple as that might sound, we are super transparent on our website. We put the information out there whether it’s about how our shoes are made or the materials that go on our shoes. Our shoes are 100% vegan by the way.
We talk about our factory, who owns that factory and again the process that makes the shoes. We talk about how we choose our entrepreneur, the process that we go through, why we do the things we do. We put it all out there so that if people have questions and we get a lot of questions, we just say, “Hey, look here’s our information on our website. We’re not trying to be sneaky.” We say we’re doing this and then, “Look, this is how we do it.” They’re going to ask these questions and if you want more information, this is how you reach us. We’re just super transparent, super available and we try to pre-empt questions and have them answered before somebody accuse us or attack us with anything especially with the social mission.
I actually think this is a good thing that customers are at least today are holding companies accountable. People are demanding transparency and so sometimes we’ll get somebody on our Instagram that might be a little sassy side and it used to bug me. It is actually a good thing because it means that our customer based— they are not just saying they care either, they actually care enough to hold us accountable.
This is as simple as providing information which I think goes into other pieces of business as well. I’ve talked to other companies who are maybe nervous about doing a pre-order. It’s like, just tell your customers what to expect and if you’re honest with them and even if you don’t know just to use the pre-order example again, “Hey, we’re expect the shoes to come in, in six weeks, but United States customs can take anywhere from two to three weeks it could be up to ten weeks.” Even though that might seem to be a lot of words, people [inaudible 00:18:45] and they care as long as you’re open and transparent with your customers. It’s just about language and communication that’s [inaudible 00:18:52] enough social proof.
Josh: That’s incredible. I love what you’re doing and how you’re doing it. I think it’s just a very, very cool thing.
We are unfortunately, Hannah out of time for our podcast episode but we’re going to continue on to be live. I have more questions for you.
Josh: I’m going to bet people are going to find your company, find you or find out more about what you’re doing. How they go about doing so?
Hannah: Our website is bangsshoes.com. That’s B-A-N-G-S and then another S-H-O-E-S. If you can just Google Bangs shoes, we’re the only one who will pop up. Our Instagram is the best business part we have if you want to tell people about it. Show off our Instagram. It has great images. It takes you how to wear the shoes and how to lace them up. My personal contact information, the best way to get in touch with me is through my Instagram as well. It’s hannahcdavis and if you don’t have Instagram you can get in touch with me through the contact us page on our website.
Josh: Cool. I also have something I want to tell you folks about, which is my new book is coming out. Actually my first book is coming out it’s called Sustainable— a Fable about creating a Personally and Economically Sustainable Business. If you want to learn more about this book and join our Facebook group which will be lots of fun. Just go to www.sustainablethebook.com that’s all one word www.sustainablethebook.com. Click on that button on the front page and get to join our Facebook group. We have lots of fun over there.
This is Josh Patrick. You’re at the Sustainable Business. Thanks a lot for stopping by. I hope to see you back here really soon. Thank you so much.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802 846 1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.