The Internet Has Changed The Way We Make Products [PSFK NYC 2012]
The co-founder of innovative performance clothing company Outlier shares the story behind the company's origin and explains how the Internet changes the relationship between producer and consumer.
We’re happy to have Abe Burmeister as one of the speakers at our upcoming PSFK CONFERENCE NYC 2012. Abe is the co-founder of innovative performance clothing company Outlier and on March 30 he plans to share with us the story behind the company’s origin and how the internet is transforming the relationship between designer and customer. In his talk at this year’s conference he will explore why the web is changing the way physical products actually get designed and produced and why his brand has been built around challenging industry standards.
Outlier seem to have become a full-fledged business, after you satisfied a personal need — clothing you could bike and work in. Can you take us through the early story?
It definitely started with a personal need, I never set out to start a company I just wanted a pair of pants I could ride my bike to work in and not worry if it was going to rain. At first I assumed I could just buy them and set off looking, I thought it might take me an afternoon, but a year later I still hadn’t found anything close. It was at that point that I thought “if no one else is going to make these things I guess I’ll have to do it myself.”
The next phase was really about the garment district. Everything I learned about making clothes, the garment district taught me. I just rode over to 39th and 7th where there is a random button shaped kiosk. I’m not even sure how I knew it was there, but it’s there to help designers find things in the garment district. So I started asking questions, calling people up and bouncing around block to block and floor to floor trying to figure out how to make a pair of pants. Four or five months later I had a couple pairs.
I wore those pants every day for about a year. It was only towards the end of that year that I even thought about creating a company. I figured if I liked them so much other people might too. More importantly though I was starting to worry about what would happen when the pairs I had finally wore out. I had pulled the “I’m a grad student working on a project” card in order to buy my first batch of fabric, if I wanted more I’d need to start pretending I was a real company…
Luckily the pants I made were damn durable because it took months and months of researching how the clothing industry worked before I had any sense of how I could realistically make these pants into a company, and in April 2008 I finally caught a lucky break. I walked into my local coffee shop, and the barista said “Abe, give me your email you need to meet this guy Tyler, he’s doing exactly what you are doing.”
Tyler had about a year worth of clothing experience, he worked at a shirting company and was trying to develop a sweat resistant shirt he could wear to ride his bike to work in and not have to change when he showed up. His first prototypes had failed, but we were both thinking in the same way. It took a couple meetings but pretty quickly we realized we could start a company doing this and in June 2008 Outlier was born. All we had was a pair of pants and a name, but that was the beginning.
At what point did you realize that the Internet was not only supporting the way you sold your product – but had started to change your business?
From the get-go really. When I first met Tyler that was pretty much the only thing I had decided, that if I was going to do it I’d have to do it online. I had run the math on traditional apparel, and if I went that way the pants I had would retail for at least $300 if not $400 dollars. There is a market at that price point, but it’s damn small and more to the point, it wasn’t a market I could relate to.
If I was going to start this business I knew that I had to get the cost down to about a pair of designer jeans, so basically under $200. The only way I could figure out how to make that happen without compromising the quality of the pants was to sell them directly online. So that was really the hypothesis from the start, that we could sell a better product for less money by using the internet.
Why do you believe that the Internet is changing the way physical products actually get designed and produced?
Three things really. It changes the relationship between the designer and the customers. It changes the raw cost and time of doing business. And it changes the way that product information travels.
A few hundred years ago most products were sold directly from the maker to the user. If you wanted forks and knives you went to a silversmith. To get shoes you went to a shoemaker. The industrial revolution exploded all that, and gradually layer upon layer of wholesalers, distributors, buyers and salespeople have been added into the purchasing process. In the end you often find dozens of people separating the designers from the end users.
The internet has the potential to explode this game, but perhaps more importantly it also provides an economic incentive to. Most of those layers separating the designer from the user are layers that raise the price of the product and reduce the profit margins of the manufacturer. Gut out the layers of wholesalers and distributors and you wind up reducing the price of products and making more money at the same time. But to do this requires boldly throwing out the old business model. Of the established companies, Apple is close to the only large one confident enough to do it.
One of the craziest things about selling design on the internet is that there are no sales people. Not only can you eliminate layers of middlemen between the designer and the user, but you also eliminate the persuader at the end of the line. All of a sudden the product basically needs to sell itself, and anyone who knows how to google can turn themselves into an expert in hours. It’s a new environment and one in which the designer takes a much more important role in selling the product than they have in the past.
What the internet allows is for designers to get closer to the market and as a result build better products. Outlier is just one bit at the of the tip of the iceberg here, there is a wide open space for a new world of companies to take over and change the way products get made.
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