Unbound Merino: From crowdfunding campaign to a $40M global ecommerce brand

Dan Demsky: Even though our ad spend for Meta, since Instagram and Facebook has been our bread and butter of our marketing spend, YouTube was selected more than Facebook ad or Instagram ad, and we weren't spending any money on YouTube.

Dan Demsky: Some of our customers were influential on YouTube.

Dan Demsky: They used our product in a very real way.

Kailin Noivo: Welcome to another episode of the Ecommerce Toolbox Expert's Perspective.

Kailin Noivo: Joining us today, I'm really, really excited for this episode.

Kailin Noivo: We got Dan Demsky.

Kailin Noivo: He's the CEO and co-founder of Unbound Merino.

Kailin Noivo: He's not too far from me out in Toronto, and I was telling him before the show, I'm excited to do an entrepreneurial story, which is often not what I get to do on this podcast.

Kailin Noivo: So welcome, Dan.

Dan Demsky: Well, I'm glad I could scratch the entrepreneur itch, and I'm happy to be here.

Dan Demsky: So, thank you.

Kailin Noivo: Cool.

Kailin Noivo: Dan, you gotta tell us.

Kailin Noivo: How'd you go from the Indiegogo campaign to a $40 million ecom business?

Kailin Noivo: Talk to us a bit about the good, the bad, the ugly.

Dan Demsky: Well, you know what?

Dan Demsky: The crowdfunding campaign is a really good way to validate if you have product-market fit.

Dan Demsky: So, I wanted to create this business.

Dan Demsky: I felt like there was a good idea, and I didn't know how to go about getting into this industry, how to get into the clothing industry, how to start an ecom business.

Dan Demsky: And the crowdfunding campaign was a way to, one, get the funds to fund the inventory, two, do it cheaply because, you could put all your effort into the brand and into the video, into the photography, and all of that stuff, and the prototypes, obviously.

Dan Demsky: But you get the validation that you found the product-market fit.

Dan Demsky: If the crowdfunding campaign is successful, you get the money.

Dan Demsky: People have basically said, yes, we want this, and they're voting with their wallets.

Dan Demsky: So, we put all our energy into that and once that was done, we felt almost with certainty.

Dan Demsky: I mean, we might be a little delusional.

Dan Demsky: We're like, this thing's gonna work for sure, but it doesn't work until you have your own website and people are going to your website and checking out.

Dan Demsky: That's a real business.

Dan Demsky: But it was, kind of, frictionless from there that we put all the energy into grinding it out and getting that crowdfunding campaign going.

Dan Demsky: And once that was going, we had 2,000 customers that were looking for us and fell in love with our product and were wanting to buy it, come back and buy more, and they were telling their friends.

Dan Demsky: So, we set up our Shopify store, which would be a little under half a year after our crowdfunding campaign was successful. Before we even launched, there were people finding our website and buying stuff.

Dan Demsky: So we were open for business, like, the day we launched the site.

Dan Demsky: And from there, it just started snowballing.

Dan Demsky: And we started doing Facebook ads, and we started dealing with influencers and all that stuff you need to do to get people onto your website, but we had the momentum right from the get-go.

Kailin Noivo: Very cool.

Kailin Noivo: Was this your first startup?

Kailin Noivo: Or did you have other companies ahead of time that weren't successful?

Kailin Noivo: Or did you just kinda start off with this and hit the jackpot?

Dan Demsky: I would say my first startup was when I was maybe, like, seven or eight years old.

Dan Demsky: Not actually not like a real business, but I was like, it was always in my blood.

Dan Demsky: I was going knocking on doors, shoveling snow, doing whatever I could to make money.

Dan Demsky: But I never finished school.

Dan Demsky: I started my first business sort of inadvertently.

Dan Demsky: I was doing freelance video production with my best buddy.

Dan Demsky: And we would go on Craigslist and we'd look for some gigs and we worked really, really hard to deliver really good, whether it was videography or editing or the whole, soup-to-nuts video production.

Dan Demsky: We worked really, really hard, and we started getting more and more gigs, and the small little projects turned into small companies, into medium companies, into big corporations, and we incorporated our own business and started hiring people.

Dan Demsky: So, my first business sort of happened without us really planning on starting a business.

Dan Demsky: And that was my early twenties, and we had a team of about 18 people.

Dan Demsky: I ran that for seven years and it was really, really fun and really exciting.

Dan Demsky: But toward the end of it, I really found myself exhausted, and I wanted to create an ecommerce business.

Dan Demsky: I had this idea in the back of my head that it was a better business model because all the effort that we put in, we could scale it differently, and you can make money while you sleep.

Dan Demsky: So, I knew that rather than selling our services to clients, I'm like, I wanna sell products to customers.

Dan Demsky: Didn't know what that product would be, but I thought about it for years, came up with ideas with my other friends, or with my co-founders or my best friends.

Dan Demsky: And that sort of led to Unbound.

Kailin Noivo: Very cool.

Kailin Noivo: And I mean, it makes a lot of sense, and it's very similar to our founding story where we wanted to start a business more than we wanted to solve this exact problem.

Kailin Noivo: But how'd you land on Merino?

Dan Demsky: We would come up with ideas.

Dan Demsky: We would meet up every one to two weeks and just ideate.

Dan Demsky: So, we'd sit around at a pub with a scrap piece of paper and a pen or around a chalkboard or whatever it was that we could just, sort of, map out ideas that we thought of on our own and try to stress test them with each other.

Dan Demsky: And we did that for a good, it must, I'm forgetting the timeline, but it was over a year, under two years.

Dan Demsky: We just come up with ideas, and the idea for Unbound came from my own need for it.

Dan Demsky: So, I was looking for a way to pack light when I traveled because I found bringing a medium or a large suitcase when I was going to certain places was just really cumbersome, and it kinda got in the way of the trip.

Dan Demsky: So, I was on Reddit and on Google, and I was digging around trying to find ways to pack with just a carry-on for overseas travel.

Dan Demsky: And I came across this Reddit thread, and this guy was saying, “My hack for traveling light is I pack Merino wool t-shirts because they're antibacterial, they're odor resistant, and they're wrinkle resistant.”

Dan Demsky: So if I'm going overseas for a couple weeks, I don't need to pack 14 t-shirts.

Dan Demsky: I can pack three because I can rewear them.

Dan Demsky: And even if I sweat through them, they'll never smell because they're antimicrobial, antibacterial, they're wrinkle-resistant.

Dan Demsky: They're like a miracle for traveling.

Dan Demsky: So, you can't find the laundry machine for a few extra days.

Dan Demsky: It doesn't matter.

Dan Demsky: And I thought, wow.

Dan Demsky: That sounds interesting.

Dan Demsky: Let me go find some Merino wool t-shirts.

Dan Demsky: So I went on a hunt to find shirts. I went to all the stores in Toronto that would sell them.

Dan Demsky: So, there were these outdoors, like, outdoor outfitters kinda stores, and Patagonia, and MEC is, you know, you wouldn't know MEC because you're from Canada.

Dan Demsky: It's like REI in the States.

Dan Demsky: And I found Merino wool t-shirts, but they're all made for the outdoorsman.

Dan Demsky: It had the boxy cut.

Dan Demsky: It had a reflective logo.

Dan Demsky: It wasn't stylish, not for going out for a nice dinner.

Dan Demsky: You couldn't dress it up.

Dan Demsky: However, I did buy a few, and I fell in love with the fabric.

Dan Demsky: I'm like, this thing actually works.

Dan Demsky: It performs just as promised.

Dan Demsky: But I felt like I couldn't go to the places where I wanted to go when I traveled because I wasn't going portaging with a canoe over my head.

Dan Demsky: I was going to a cocktail bar in Hong Kong.

Dan Demsky: And I remember sitting in a place like that and feeling like, I don't know.

Dan Demsky: I feel out of place.

Dan Demsky: I feel underdressed.

Dan Demsky: And I was wondering why is it that nobody's making nicer fitting, nicer looking Merino wool t-shirts that I can put on a nice pair of pants, put on a nice watch, and I feel like I fit in.

Dan Demsky: It has that nice fit.

Dan Demsky: It looks good.

Dan Demsky: It looks sharp.

Dan Demsky: And then I'm like, oh, wait a second.

Dan Demsky: I'm looking for an idea.

Dan Demsky: This is it.

Dan Demsky: That's it.

Dan Demsky: I'll make it for myself.

Dan Demsky: And I was so into wanting to make these t-shirts that I almost didn't care if it didn't work.

Dan Demsky: Because I'm like, if this doesn't work, I'll go make a box full of these prototype t-shirts.

Dan Demsky: I'll have, like, a hundred of them or whatever it is that I have.

Dan Demsky: So I'm gonna, this is a win-win.

Dan Demsky: I'm gonna walk away with a box of t-shirts that I really, really want for myself or my dream business.

Dan Demsky: So, hopefully it's the dream business, but I'm all set.

Dan Demsky: At least I've scratched the itch.

Dan Demsky: And it turns out there's a lot of people who thought that was a cool idea, or maybe it appealed to them.

Dan Demsky: A lot of people may be just like me.

Dan Demsky: And that was validated by the crowdfunding campaign.

Dan Demsky: We tried to, our goal was to sell $30,000 in preorders, and we did $400,000, and we're off to the races.

Kailin Noivo: So, is that kinda like your seed round then, or did you have to go and raise additional capital to actually get it off the ground above and beyond the crowdfunding?

Dan Demsky: Well, that wasn't a seed round.

Dan Demsky: Those were not investors.

Kailin Noivo: I mean, it's kinda acting as if it's like a seed round.

Dan Demsky: Yeah.

Dan Demsky: I mean, it was enough money.

Dan Demsky: So, it gave us enough money to cover our first round of inventory, and it was profitable because we made all this money with no overhead.

Dan Demsky: So, that was our additional money to fund a little bit of the business, and that included us going overseas to meet our suppliers, having a little capital in the bank to rent a storage locker, which served as our first warehouse to get packaging, all of that stuff.

Dan Demsky: So we had a little bit of money, but we never raised any money.

Dan Demsky: We still to this day have completely bootstrapped it.

Dan Demsky: I think the momentum that we had from the get-go allowed us to just run this thing with cash.

Dan Demsky: So never raised any money, and we continue to grow.

Kailin Noivo: And you even batted off, during 2020 to 2022, the crazy people that were probably after investing in you?

Dan Demsky: Well, 2020 was the first rough go that we had because we're entirely positioned as a travel product.

Kailin Noivo: Oh, that's interesting, actually.

Dan Demsky: Yeah.

Kailin Noivo: Talk to us a bit about that.

Dan Demsky: Yeah.

Dan Demsky: So, if you wanted to invest in us in 2020, maybe nuts because it was the first time where, it's like we had this explosive growth and completely flat-lined.

Dan Demsky: Well, something really interesting happened there, though, all the stores were closed everywhere.

Dan Demsky: So ecommerce as a whole blew up, but we were a travel product.

Dan Demsky: So, we kinda had opposing forces at work here.

Dan Demsky: It's like people were going online to buy everything, but they weren't looking for travel products.

Dan Demsky: And all of our marketing was really, really dialed in around the messaging of pack light while you travel.

Dan Demsky: Our website was really dialed in, pack light while you travel.

Dan Demsky: Like, all those little iterations you make and those A/B tests you do to refine the sales copy, you know, advertising on your landing pages and everything of that sort.

Dan Demsky: So all of a sudden, all of this work that we've done and all of this momentum that we were building was worthless.

Dan Demsky: And we had to pivot.

Dan Demsky: Like, who are we as a company?

Dan Demsky: And we tried to adapt.

Dan Demsky: So we did, we did cozy, it's cozy, it's comfortable, work from home, like, sustainable.

Dan Demsky: Like, all the other things that would make sense, we, sort of, leaned on for a bit.

Dan Demsky: And at the end of that year, 2020, we grew 1%.

Dan Demsky: Our growth was explosive before.

Dan Demsky: Like we were growing more than 100% every year.

Dan Demsky: And then we grew 1% and I sat around with the guys.

Dan Demsky: I was like, guys, we didn't grow like we did last year, but we grew.

Dan Demsky: Like, let's count our lucky stars.

Dan Demsky: So we were, it was a weird blessing in disguise because, you know, they say success is a lousy teacher, because we were doing really, really well, and we were growing with momentum.

Dan Demsky: We were spending money a little bit more loosely than we should have been.

Dan Demsky: We were getting a little heavy on the spend.

Dan Demsky: And when this scare happened, it forced us to look at everything we're spending money on and just cut, cut, cut, cut, and lean out the business.

Dan Demsky: We were very small at the time.

Dan Demsky: We didn't have, look, we had a couple of, we had a few employees, but we didn't need to lay anyone off, but we needed to cut the business coach and all the extra spending.

Dan Demsky: We need to be a little wiser with our marketing spend and make sure that it had a good return and we just tightened up and we became better.

Dan Demsky: We became a better business.

Dan Demsky: And then when things turned around, we were running a little bit leaner and better.

Dan Demsky: The same thing's happening with us right now with tariffs, because 80% of our customers are in the States and we're importing into the States, all of a sudden, the tariff situation has been the second coming of looking doom straight in the face.

Dan Demsky: But we're going through the same thing.

Dan Demsky: We're tightening up.

Dan Demsky: We're making sure that we have no superfluous spending and just cleaning up and you just get through it.

Dan Demsky: It's, kind of, like the cycle of business, and you have to stare it right in the eyes, stay optimistic, and keep moving forward.

Dan Demsky: So, fortunately, we're continuing to grow still.

Kailin Noivo: There you go.

Kailin Noivo: I love that.

Kailin Noivo: I didn't really look at it through that lens before, so that makes a lot of sense.

Kailin Noivo: And when I was doing research before the show, I saw that a lot of your marketing earlier on was, like, a lot of, like, founder-centric storytelling.

Kailin Noivo: It was kinda like, hey, I wore a Merino wool for whatever, 45 days straight.

Kailin Noivo: And that was very critical in part of the marketing early on.

Kailin Noivo: Like, is that still core to the strategy now?

Kailin Noivo: Have you since kinda scaled and tried to step away from that?

Kailin Noivo: How does that evolve as your sales go up?

Dan Demsky: So, I wouldn't say it's core to our marketing message, but it works, and it works really well.

Dan Demsky: So if the founders's in it, it could be, I look, I'm not a model.

Dan Demsky: I'm just a regular-looking guy, and maybe that works

Dan Demsky: For whatever reason, when my face is in it, it works, which I'll accept.

Dan Demsky: Like, if I could go into a video and the marketing team's always asking me, let's do a video with you in the warehouse.

Dan Demsky: Let's do a video with you on a plane and this nod, because it works.

Dan Demsky: I'll do it because the marketing works and it's fun to get out there and create some content with them.

Dan Demsky: But because it works, they put a lot of money behind these ads.

Dan Demsky: And sometimes I'll be sitting in a sauna and I'll see some guy staring at me.

Dan Demsky: And I'm like, why is this guy staring at me?

Dan Demsky: I'm just wearing a towel.

Dan Demsky: And then, they'll say, “You're that guy from those ads.”

Dan Demsky: I had someone in my building the other day say, “Are you Dan from those t-shirt ads?”

Dan Demsky: So, it's weird to get noticed for that.

Dan Demsky: But they work.

Dan Demsky: It's not the core of our marketing because a lot of other things work, like still photos, model photos, other messages, influencers, white labeling their stuff.

Dan Demsky: We just put a lot of creatives out there, and we look for the thing that has signs of life.

Dan Demsky: And if it does, we'll do iterations of that and just try to expand on that.

Dan Demsky: I happen to be, when I'm in the videos, it happens to be one of the things that still works, so we still do it.

Kailin Noivo: I love it. I love it.

Kailin Noivo: I also was reading, my marketing team was talking to me a bit about how you guys have done really well on YouTube without having paid placement.

Kailin Noivo: So, people are kinda just picking up your product, talking about it.

Kailin Noivo: Like, are you manufacturing those moments, or are those, like, truly organic?

Kailin Noivo: And how do you get there?

Dan Demsky: Well, it started truly organic.

Dan Demsky: We have this post-purchase survey.

Dan Demsky: Someone checks out and they buy something.

Dan Demsky: You've seen this before.

Dan Demsky: If you bought anything online, how did you first hear about us?

Dan Demsky: And you get to click Facebook ad, or radio, or whatever it is, podcast.

Dan Demsky: And even though our ad spend for Meta, just Instagram and Facebook has been our bread and butter of our marketing spend, and by far the most we've spent on marketing.

Dan Demsky: For many, many time periods, YouTube was selected more than Facebook ad or Instagram ad.

Dan Demsky: And we weren't spending any money on YouTube.

Dan Demsky: We weren't paying influencers.

Dan Demsky: We weren't paying for YouTube ads.

Dan Demsky: None.

Dan Demsky: However, some of our customers were influential on YouTube, not like these huge YouTubers, but they could have 30,000, 50,000, 100,000 subscribers, but those subscribers are very, very loyal to them, or they're very influenced by them.

Dan Demsky: They have, like, a really, really powerful connection to that audience, and they used our product in a very real way.

Dan Demsky: And they talked about it because it's, kind of, a travel hacker.

Dan Demsky: It's like a useful tip.

Dan Demsky: It's not like, hey, these shirts are cool.

Dan Demsky: These are the coolest shirts.

Dan Demsky: Like, these are useful.

Dan Demsky: This changed the way I travel.

Dan Demsky: So, for these people who are, kind of, optimizers in life, they would talk about all sorts of things that are going on in their life and how they live and how they do these little intelligent life hacks.

Dan Demsky: Our t-shirts being one of them, and they were just driving so much traffic and so many sales that we were like, we gotta look at this as a serious viable strategy.

Dan Demsky: I’m like, there was, so that was the largest driver of sales to our product.

Dan Demsky: And from that group of people, we would have a follow-up question: who's the YouTuber that sent you to us?

Dan Demsky: And 80% of all of that traffic was just three YouTubers.

Dan Demsky: So, we just got together and said, well, if there's three people driving as much, if not more sales than our entire Meta advertising spend, which is an enormous spend.

Dan Demsky: I'm like, what if we had 30 of these people?

Dan Demsky: How do we find them?

Dan Demsky: So, now that this is not that long ago.

Dan Demsky: So now we're sort of in this pursuit of, who are like the authentic, we don't wanna pay people just like anybody, like spray and pray and just hope that they drive traffic.

Dan Demsky: Like the thing that makes it work.

Dan Demsky: And I asked one of our creators.

Dan Demsky: I said to him, “What is it about you that you think makes it click for our customers that they actually listen to you and they go and they buy it?”

Dan Demsky: And they say, it's because you didn't come to me and convince me to just advertise for you.

Dan Demsky: I did it completely and utterly authentically.

Dan Demsky: And he said, and I think this is really, really commendable on his behalf as he said, a lot of these other big advertising brands that are venture funded have come up to him like BetterHelp and AG1.

Dan Demsky: And I'm not knocking these products at all.

Dan Demsky: I have no opinion on them.

Dan Demsky: But they have massive advertising budgets, and they just buy all the ad space on the internet.

Dan Demsky: They actually make it hard for companies like us because they'll spend whatever.

Dan Demsky: And he said, BetterHelp has come to me.

Dan Demsky: AG1's come to me.

Dan Demsky: But I don't use these.

Dan Demsky: So I don't talk to them.

Dan Demsky: I don't even answer their emails.

Dan Demsky: I said, but with you guys, I was talking about it without you guys talking to me.

Dan Demsky: Since then, we've worked a deal with him where we give him product, we give him an affiliate commission, but it's still authentic.

Dan Demsky: It always was authentic.

Dan Demsky: So, we're trying to find more people who genuinely make use of this, and they're talking about it.

Dan Demsky: Not because they're getting paid, but because they actually find it useful.

Dan Demsky: And that's just expanded that program a ton.

Kailin Noivo: That's really, really cool.

Kailin Noivo: I wish I would have known this.

Kailin Noivo: I'm, kind of, telling a bit of a joke between my wife and I, but, like, we go on trips, and I never check anything in.

Kailin Noivo: And when we went on our honeymoon, we're gone for two weeks.

Kailin Noivo: And I was like, yeah.

Kailin Noivo: No, we're not checking in any bags.

Kailin Noivo: So, I'm just a carry-on guy, so it's good to know.

Kailin Noivo: I'll have to check out.

Kailin Noivo: I didn't know about Merino wool, like, candidly, I didn't know the t-shirt.

Dan Demsky: It's going to be a game changer.

Dan Demsky: It's gonna be a game, it is like, if I discovered Unbound, exactly as we've made this brand when I was looking for it ten years ago, before we had the idea to start this thing.

Dan Demsky: I would just be a loyal customer.

Dan Demsky: Like, it's just a game.

Dan Demsky: They're just great fitting.

Dan Demsky: And, look, I know I'm trying to sound like I'm selling my product.

Dan Demsky: I am, and I always will talk about it, but it's like, it's legitimately just a sort of, it kind of, changes the paradigm and how you look at clothing or, like, you never really thought the clothing could have a dual purpose and have a benefit outside of just being a shirt you put on your back.

Dan Demsky: And it is.

Dan Demsky: I also find my, like, my closet is very, very light on clothing.

Dan Demsky: I only have, it's almost like I have a uniform.

Dan Demsky: I have probably more than I should have because I'm always testing our new products and new colors and things like that.

Dan Demsky: But I'll go through my clothing and in every few months, I'll donate a bunch and just, like, have, I just like living with less.

Dan Demsky: I travel less.

Dan Demsky: I live with less.

Dan Demsky: It just feels great.

Kailin Noivo: I love that.

Kailin Noivo: And as we're looking to wrap up, something that I'm really curious to hear because it, kind of, mirrors a lot of our story.

Kailin Noivo: Sounds like you built the brand with some of your best friends.

Kailin Noivo: I mean, there's no silver bullet, but obviously, there's ups and downs in business.

Kailin Noivo: There's a lot of pressure that starts to blend between professional and personal relationships when you're working with your friends.

Kailin Noivo: Talk to us a bit about, like, how have you kept that in check?

Kailin Noivo: Any kind of high-level thoughts or tips, or tricks on that front?

Dan Demsky: So I think working, so you hear it all the time - business and friendship don't mix.

Dan Demsky: And I think it's just the craziest advice of all time or the craziest saying or craziest adage, whatever you wanna call it.

Dan Demsky: I go to work every day with people I like.

Dan Demsky: And work is the thing that you do where you spend the most time in your life.

Dan Demsky: Most of your waking hours, a big chunk of it is working.

Dan Demsky: Why would you not wanna do it with people you like?

Dan Demsky: The thing that makes it work, working with your best friends, there's a couple things.

Dan Demsky: One, I think we're already aligned on a lot of our core values.

Dan Demsky: That's why we're friends.

Dan Demsky: And core values are a really, really important thing to have run really strong in your business.

Dan Demsky: We're also able to be really candid with each other.

Dan Demsky: They tell me when I'm sucking.

Dan Demsky: And I know this is not, like, out of trying to hurt me.

Dan Demsky: It's about trying to make me be better.

Dan Demsky: They have my best interest at heart.

Dan Demsky: We care about helping each other win.

Dan Demsky: There are so many reasons why it works, but we're willing to have the hard conversations.

Dan Demsky: And when things get hard, we have a thing once a month that we do called the same page meeting, where we reserve, like, hey, I really need to, I really need to rip into you right now.

Dan Demsky: Like, you're being, you're awful at this or whatever.

Dan Demsky: And we check our egos at the door.

Dan Demsky: We try to help each other grow, help each other get better, and we still have fun as friends.

Dan Demsky: We still make time to go hang out, go to concerts, do what we need to do together, but the business always gets infused into it.

Dan Demsky: And we like talking about the business.

Dan Demsky: So, I think business and friendship it's like the best combination of all time.

Dan Demsky: It's like a perfect wine pairing.

Dan Demsky: You just gotta make sure that you guys have the hard conversations, but also you do need to have complementary skills.

Dan Demsky: You can't do it just because you're friends.

Dan Demsky: Fortunately, I got lucky.

Dan Demsky: My best friends happened to fill a lot of the gaps, and we happen to be complementary opposites when it comes to work, which has worked out really well for me.

Kailin Noivo: Very cool.

Kailin Noivo: I think you and I have very similar stories on that front.

Kailin Noivo: We've been at this for almost a decade, and how it is.

Kailin Noivo: So no.

Kailin Noivo: That's really cool.

Kailin Noivo: I mean, Dan, this is awesome.

Kailin Noivo: Great episode.

Kailin Noivo: Really excited to have you on.

Kailin Noivo: I appreciate you taking the time, and, yeah, I'm gonna check out your store for sure.

Dan Demsky: Awesome.

Dan Demsky: Thanks for having me, man.

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