Ecommerce Fundraising: From Friends & Family to Institutional, The Planks Brand Story with Hugh Clow

Today’s show was recorded during our Chiang Mai Ecommerce Meetup in mid-December 2023. It’s a fantastic episode, featuring no slides or whiteboards, just pure knowledge, experience, and value.

Hugh generously shares his journey of leaving the corporate world, establishing an ecommerce brand, bootstrapping, raising angel rounds, and navigating debt and institutional funds. The insights shared are truly invaluable, and those present at the event were thoroughly impressed. Enjoy this treasure trove of information!

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√ Planks Ski Clothing Brand
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Thank you, Hugh, for generously sharing your insightful journey and experiences. And a big thank you to our listeners for tuning in!

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[00:00:00] Episode 423 of Global from Asia Podcast, and we are talking about e-commerce, fundraising, and a great case study and story of building a brand. Let’s tune in. Welcome to the Global from Asia podcast, where the daunting process of running an international business is broken down into straight up actionable advice.

And now your host, Michael Micheli. Greetings here from Ang [00:00:30] Mai Thailand, episode 423, where in 2024 as I record this, this show was recorded during E-Commerce Meetup in Ang Mai in late 2023 with Hugh Klau. He is an entrepreneur for sure. Definitely a gladiator in e-commerce arena that we say here at GFA.

And it was a pleasure to have him. He’s super busy. He’s been fundraising and growing his brand. For many, many years. We get him into this meetup and he’s sharing the [00:01:00] story. Many people at the session were fascinated with this discussion. Lots of questions, lots of good answers. I don’t think there’s many con, we kind of call this e-commerce fundraising today.

Which is a topic I don’t think we’ve done much of, if any. So it’s a really fascinating conversation of how he’s raised funds, how he’s been, you know, living his life and his business between Europe and Thailand and Asia. And talk a little bit about Vietnam and Thailand, China and. Kind of go [00:01:30] full circle like distribution and storefronts and e-commerce, D two C and various channels.

It’s a really, a really fun talk. Thanks Hugh for sharing so openly with us and letting us record this and share this on a podcast. Let’s tune in. Are you looking for USA banking solutions for your e-commerce business? I am proud to say mercury.com is supporting the podcast here, third year in a row at Global from Asia and we’re proud to say it ’cause we use ’em ourselves for many of our own.

Amazon Brands, e-commerce brands and joint [00:02:00] ventures with our US structures. And they’re super easy to do online application, no fees, and they have great customer support. Have helped us with trouble with Amazon Seller Central over the years about some receipts and statements and everything like that. So we’re so happy to say thank you, mercury, for supporting our show, being a great service and supporting other e-commerce sellers.

We’re really proud to say they’re a sponsor here and we also have a video tutorial as well as an overview and a special. A link with a little bonus for you as well for us [00:02:30] under certain conditions. Check it out@globalfromasia.com slash mercury for that information. Thank you for listening and thank you Mercury.

So I’m originally from the uk, um, and I did an economics degree and actually worked for a hedge fund. So long short trading fund. Which is quite kind of corporate and hardcore. So we had about $2 billion under management. It’s about 30 of us that grew to five and became like super intense. [00:03:00] And I decided to leave and be entrepreneurial.

Um, but I wasn’t really sure what I wanted to do. So I, I think what’s kind of interest quite intimate, I wasn’t really sure what to expect, but we could, there’s a few things we could potentially discuss or talk about. Like I’ve, I’ve, um, I’ve founded a clothing company called Plank’s Clothing. It’s a ski brand, so I effectively founded it kind of as a nomad.

It was a lifestyle business [00:03:30] originally. So I’d spend my summers here in Thailand, building the supply chain and preparing the winters, and then I’d go to the Alps and do sales and marketing. It sounds quite pretentious now, but it, we always had a, a very strong community-based marketing strategy. It was kind of pre-social, really firing.

Um, so we could talk about that kind of startup process. And then we transitioned the business we raised from equity and we transitioned more from a lifestyle [00:04:00] business to a scale up. And I’d bid part of a few funding rounds across quite a few different sources of income. So friends and family through to Business Angels crowdfunding.

Um, and I’m at a stage now where I’m transitioning out a day to day. So I, I chair my business now. I have a board of directors. I’ve just hired a full-time md so we are preparing now for institutional funding. So we were obviously, obviously set back by, by Covid a few years. ’cause 80 [00:04:30] 90% of our customer base is British.

Mm-Hmm. Um, so yeah, there’s a few, like, there’s kind of end to end really, like, literally from starting from nothing and building a purposeful consumer brand. Um, like, ’cause we’re so intimate, it’s not actually that many of us here. Are there any particular parts anyone’s interesting? Like I could give my founder story like I would to an investor if you like, or if there’s anything more around team building or like [00:05:00] psychology or coping mechanisms.

I know being an entrepreneur can be quite a lonely place sometimes can be, you know, quite stressful. Is there anything in particular you guys wanna get out of this? I. Lily. Yeah. Love to hear more about your fundraising. Fundraising. Okay. I, yeah, I think if I could put a suggestion, I think a lot of probably lifestyle businesses here, just generally, but I, I like the idea of the transition to scaling.

Okay. Also, you know, like, [00:05:30] yeah. I’m also just curious, your motivation. Do you, you know, why are you doing what you’re doing? Um, I. You know, I, I like to ask people why they do what they do. So I think it’s a really good one. So, so maybe we could, um, talk around psychology a little bit and motivation. So I think when you get to pro, I mean, looking around, we’re probably at that stage where, you know, we’re really working out what we really enjoy most and what we’re best at.

So I think maybe like through, through our twenties [00:06:00] we’re exploring, we’re having a good time, we’re kind of working out what’s up and maybe through thirties where we’re coming to get. Become really good at, at, at what we do, and then forties, it’s kind of nailing it. That’s kind of how I’ve seen my life.

Anyway, kind of pan out. But I think understanding your own self and your, your DNA and like, again, it sounds a bit pretentious, but like your authentic self and what really motivates you and what you are really passionate about. And I don’t know, like towards where I’m at now, I’m, I’m speaking to more kind of [00:06:30] investors and high net worths or.

Really quite experienced business people. So I’ve just brought on the founder of Camden Town Brewery onto my board, for example. So he built Camden Town Brewery, sold it for about 80 million to InBev, who’s the owner of Heineken. So he’s come onto my board just recently, like he was part of the last funding round, and he’s connected me to a few people within his network.

And I think I’m really privileged in that position to be able to speak to people that have kind of gone through that process of growing [00:07:00] up through their career and being successful at the end of it. And I think what they’ve all got in common is, yeah, that real passion for what they do and they’re really kind of comfortable with themselves and they’re really motivated and hardworking, but they know their shit.

Like they know, they know where they’re, you know, what, what motivates them and what interests them. So I think yeah, just working yourself out. Working yourself out. Right. Um. So, yeah, I left the, I left the hedge [00:07:30] fund for that reason. Really, I didn’t want to be locked into a corporate job. I’m from a kind of corporate family.

My dad was a partner of KPMG, so I’d kind of see, I could see that whole life ahead of me, so I broke out of it. Um, I actually went into Brazil, so I, I’d invested in some property in London, which was successful. And so I actually went to Brazil and developed some property in Iva Beach and blew off a bit of.

You know, blew off some steam. Yeah. And that was quite full on just as the 2008 [00:08:00] crash happened. So I kind of got my timing right. I was sitting on the beach where it’s a huge blood bath across all the financial markets and that helped me not go back to it, I suppose, so I could take some time and soul search.

And that’s actually when I first came here. So that would’ve been like early 2009. Um, my brother was an assessor for Cambridge University. So just said, come here, chill. You know, work out what you want to do. I’ve [00:08:30] always loved skiing, but I never really had a chance to ski. So I went and did a ski season and that’s where I met my co-founder, Jim.

So he’s an ex-pro skier. He’s British, so we don’t have many pro skiers. He’s like the godfather of free ski from the uk. So he was sponsored by like Oakley, Patagonia vans. It’s really interesting. So he worked on like the brand side. But also the retail side. So he knew what it took to be an athlete for a brand, so to promote ’em in the right [00:09:00] way.

Um, we look at it like aspirational and knowledgeable. So he had the aspirational part down. He knew what it took to look good skiing and kit, and to promote the brand in the right way. So kind of being around those big brands and really understanding their values and their marketing pillars and what you had to present as an athlete.

But also on the retail side. So he did a lot of um, like catalog work for retailers, especially in the [00:09:30] UK and some big UK chains. So he is actually really quite connected and he had a vision for a ski brand that would have the aesthetics and the values of a snowboard brand, but for skiers. So I dunno if anyone’s kind of into skiing, but you know, snowboarders have got that kind of, those disruptive values and skiers are always seen as quite mainstream.

And there was always that, like that Burton battle between skiers and snowboarders. So he was a really early free skier, but skiing with [00:10:00] snowboarders and part of that kind of scene. And so when skiing came out with twin tip skis and you could start emulating what snowboarders were doing, that was a big game changer for him and the ski scene.

Okay. So yeah, he had a vision for, for planks, which is the brand, and then we partnered, um. It was really an excuse to come back to Asia, to be honest, to come back to Thailand. I was at the end of the ski season. I didn’t wanna go back into finance. I had a passive income from my property. [00:10:30] So, yeah, and I love Chang Mai.

So basically I, it was really in the early stage when transparency was becoming a big thing in garment. So like Patagonia and Nike and Adida acid started publishing their, um, their supply chain. And so I managed to just find some of these supply chain lists and cross referenced it with Thailand and Bangkok and found a couple of really amazing factories in Bangkok.

So one that I still use, that I actually developed, um, recycle knitwear with. So they’d never done any recycle [00:11:00] before and managed to persuade them that this was the future, invest in it, we can work on it to together. And so we developed quite a few different fabrications using recycled yarns. So now for planks, we’ve recycled about 3 million plastic bottles.

Through our collection about 85, 90% of our collections either recycled or organic. Um, so yeah, I think in the early days Jim was a visionary in terms of skiing, but he was really purposeful as well. So even though our backgrounds was [00:11:30] super different, like he was from like north of England, really working class, I was from London, more middle class, we still had the same kind of common values.

So I think, uh, it’s really stood the test of time. Um. Yeah, and we managed to make it work. We built, yeah, we built a ski brand. Um, we took it to about half a million turnover in three or four years, purely organically. There was just me, Jim, and my, um, now who’s now our creative director, Rob, and it was [00:12:00] super efficient.

So like early days, everything went through us, so all decisions were made. Together, um, we could be super productive. So me kind of managing the organization and then Rob and Jim dealing with all the creative output. And yeah, we managed to get to about half a million turnover. We had a little store in Val there, it’s a quite famous ski resort in France.

And then we raised our first equity, so that was a, uh, friends and family round. So [00:12:30] we raised what, what’s called EIS equity in the uk. So that’s a, um, it’s a kind of government backed product that allows you to offset some of your risk against your, um, income tax. So it kind of de-risks for the investor.

So basically if you put a hundred grand into a hundred thousand pounds into a business, you’d get 30 K off your income tax bill, and then if the business fails, you get another 30 K back. So it really de-risks. Yeah. So it’s super helpful for raising equity for [00:13:00] startups. Um. So I know we, we’d created quite a complicated little business.

We had our own store in Valdes Air. We had an online D two C business. We weren’t really doing any performance marketing at the time. We had no budget for it, but we were organically selling all around the world to over kind of 30 countries. And I remember being really pulled apart by quite a big VC guy that we were connected to.

Um, and he said, you’re trying to show that you are global, but actually you’re proving disparate. So we’re saying, look, we’re doing 600 K [00:13:30] turnover across 30 countries. And we’re trying to show that with this big kind of potentially global brand, but we didn’t really have any volume or traction in one specific market.

So that was really interesting to go through that process and that then it really turned into networking. So working out who within our network could give us free advice from the kind of PE side really to create a more strategic roadmap. You know, we’d create this quite cool organic brand, but then how do we [00:14:00] turn that from.

Really like a hobby into, from, from a hobby into a lifestyle business. Then how do we scale? Um, and what does that roadmap look like? So we decided to try and scale all three channels. We used the, the Valair store and the kind of Val Suki resort in France as a model that we then wanted to replicate in different ski resorts.

And so we did, we opened three other stores in three other ski resorts, so that worked for, for marketing. As well as for [00:14:30] sales. And we incorporated a French business that jumped up our turnover quite quickly. And yeah, it was kind of working, but it was really complicated. Running an e-com business, doing all the design, all the production, all the distribution.

Um, and, but it grew, we grew, we grew 50% year on year, so we grew from like half a million to 2 million quid in three seasons. Um, and then Covid hit, which was pretty traumatic. But we’d just done our first institutional [00:15:00] round of fundraising. So moving from friends and family to business angels to then institutional debt.

So this is raising debt for working capital. Um, so as you grow and you become seasonal, it’s like the opposite of fast fashion really. It’s all recycled. So we have a really long lead time. So there’s a big gap between when, when we pay the factories and when we start selling. So we have to raise working capital for that.

And we don’t want to use, so we want to use debt over equity basically to, to continue to scale, to, [00:15:30] to limit how diluted we become. So that was quite a big step going from just business angels where you just really talk around the brand and you kind of work out. There’s usually like a spectrum across the head and the heart.

And really you wanted, we just had to find a sweet spot where you had experienced investors that had deep enough pockets. That could benefit from EIS, but we’re also into skiing and that’s where the heart comes in. And so you’re trying to offer them [00:16:00] something that kind of money can’t buy. Um, so it’s kind of understanding the psychology really of, of what the investor wants to get out of it.

So when you’re at that point and you are worth enough money to be able to be investing in small businesses, it isn’t always the head. It’s quite often the heart. And I found, like, you’ve probably seen it already with you guys as entrepreneurs, like entrepreneurs are kind of generous with their time. You know, they’re more generous than you’d expect because I think you kind of know how hard it is to be working for [00:16:30] yourself.

You know, having your, your team to be responsible for payroll every month, your family, like, I found a lot of goodwill with business angels and entrepreneurs. So if you are looking to raise money, then ask, you know, go for it. Ask. Because. Rich, successful entrepreneurs that have exited businesses, you know and done well, generally, they’re quite, quite supportive, and it’s just working out that kind of head and heart play and almost turning it around.

So when you pitch to ’em, giving [00:17:00] them a chance to talk, giving them an opportunity to give you as much information so you can read them, you can kind of work out which buttons to push and where you tailor your pitch. Depending on who you are, who you’re speaking to. So yeah, I look at it quite simply, like head and heart.

And if it’s super head like, and they’re really technical, then I’ll bring out lots of KPIs and stats. I’ll talk about performance marketing and ROAS and you know, how, how we measure and how responsive we are to, [00:17:30] to audience building and creative mapping and cohort analysis and all this good stuff that is central to scaling an e-com business.

Or if it’s someone that’s quite corporate, I might talk about corporate governance and say, actually, we’re a grownup business. We have a board, dah, dah, dah. We have non-execs, you know, that give us support and that gives us credibility. But it might just be that they’re into skiing, and then I could just say, well, you get a chance to ski with Jim Adlington is famous pro skier and they love the idea of that.

So I think a lot around fundraising at early [00:18:00] stages, networking to find the right, like the right kind of archetype of investor. And working out whatever that is. So whatever your value proposition is or whatever you are scaling, really try and build a pipeline out where you’re not wasting your time.

You’re speaking to people that are in the right space or have the right kind of interest. And then when you start pitching to them, let them talk a bit at the start and try and work out what floats their boat and [00:18:30] how you can tail tailor your pitch to the audience. It’s kind of reading the room. Um, so yeah.

Then you then as you move away from angels, where you have this kind of one-on-one conversation, you get them more into like institutional and then it’s all head. You know, you might get, you might get in through the heart, like there might be like a junior person that just thinks of, like, has heard about like, and my example, like planks.

Oh, this is a really cool brand. This is a good opportunity. So you might get a foot in the door to have [00:19:00] a conversation. But then as soon as you go up to a decision maker, it’s all head, it’s all numbers. It’s all very process driven. And so in transitioning from angels to institutions, we, we basically, we had institutional, an institutional offer just before Covid hit for debt.

And we went through a proper round of dd and that was quite hardcore preparing for that. It was really stimulating, like, but they were properly looking under the, the hood in a way that. Angels haven’t, like [00:19:30] angels quite often they’ll lean on the last person’s due diligence. So this is a good one. So like if you, if you can get a really good experience investor in from the heart, really you can then leverage that connection and that money.

So money follows money, right? And basically people are lazy in general. And so when I, when I raise, when I do a funding round, I’ll always start with the most sophisticated investors at the beginning. And that’s a very iterative [00:20:00] process. So you go really humble like, ’cause you are like, you are learning, like this is your, for me, this is like my first business I’ve built.

So you go kind of asking for advice and you almost collaborate with them. You sense check, you get their advice and they’re consulting. And then they kind of become emotionally attached because if they feel that they’re influencing your strategy, they’ll kind of feel part of it. And so. Quite often it’s like book building, right?

So you’ll get what we call an expression of [00:20:30] interest. So that isn’t a commitment, but it’s an expression of interest. So if you get to half a million, I’ll put in 50. And so you can use that then to leverage your conversations with people that are slightly less sophisticated as you move down the road, right?

So if you start with the most sophisticated investors, you get them on board with a plan. You may iteratively change the plan a bit and then go back to them and say, thanks for your advice. This is how we’ve responded to your advice. Now we’ve responded, would you back us? And then they might [00:21:00] say, well, yeah, I’m, you know, I’m interested.

And if you can get a number out of them, then you can then start book building. So if you have like three or four people that might put in 50 k, you get to 200. Say your, say your target’s half a million, you could book bill to say 200. You are almost at that half critical mass. And then you can start speaking to less sophisticated investors where it’s more about the heart.

And you could say, well, I’ve spoken to X and X. You have to ask their permission, and they’ve expressed an interest, and they’re leaning on the due [00:21:30] diligence of more sophisticated investors. And then it gets easier, like you get better at your pitch because you’ve already been grilled by the tougher audience, like the more sophisticated investors.

And then as you work down that chain, you get better at it, it gets easier, and you get to leverage the conversations you’ve had before. And you almost offer them stuff that they haven’t asked, and that then makes you feel that you are sophisticated and gives them confidence that there’s, you know, more than they do about a certain field and a certain [00:22:00] business.

Um, so yeah, then institutional gets harder. It’s more, um. It’s more the head. It’s all about due diligence. And yeah, we had a, we had an offer of about a million pounds, a million pound fund for working capital. And that failed because of Covid. But the woman that did the due dili, the commercial DD on us, kind of felt sorry for us.

And she became a non-exec director for us and helped us kind of navigate through covid together. [00:22:30] Um, and she invested in the business and like she’s a. Tan doesn’t really like her, but I, she’s kinda like my business therapist. Uh, she gave some quite scolding advice to Tan about. She said, oh, I wouldn’t wear vintage or something.

And yeah. Um, what would you say is the level of available funding now versus five years ago? It depends what space you’re in. So consumer’s really hard at the moment. Um, but I mean, generally it is quite [00:23:00] hard to raise money at the moment. You know, so much uncertainty in the world. Inflation’s high, unemployment’s highs kind of wars breaking out.

Um, it’s really general question, like it really depends Yeah. What area you’re in, you know. Would you say there’s 30 tough percent of the available funding versus, you know, five years ago in general? Or would you say it’s so that? Okay, so it’s a different question because actually there’s a lot of money available now, but people aren’t deploying it.

And so there’s a huge amount, like [00:23:30] Pess and VCs are sitting on a lot of cash at the moment, and it’s, but no one wants to risk it. No one’s, no one wants to deploy it. So there are opportunities where you could get a bargain at this stage, at this, at the moment. You know, and that’s where risk taking comes.

You know, you have to look at the market and take a position. So there’s a lot, I’d say there’s a lot of cash available, but not, not a big appetite at the moment. But again, I’m in a very small, specific space. I couldn’t really talk [00:24:00] generally. I mean, you are this, uh, sorry, what was your name? You, you’re, you’re in the PE space?

No. Yeah. What’s your, Julian, what’s your, sorry. Were you listening Julian’s saying, where do you see the kind of private, the PE markets at the moment? Yeah, similar what you said. I, there’s as much capital as ever waiting to be deployed, but less free. Yeah, less than this. I mean, like we’re talking thio, so in, [00:24:30] in Amazon, a lot of ’em are contracting or, or collapsing.

So the, the money was flying like crazy in 2021. Especially 2021, there was just money everywhere. Mm-Hmm. Especially in e-comm space. I think that’s when you, or maybe some people sold their, a lot of people sold their brands around 2021. Okay. I, I, I kind of wish I sold more than everything was selling or fundraising or exiting, but Yeah, it’s kind of fake.

It was, it wasn’t realistic. It’s money in the bank account. No, no, no. But the brands are, it’s a post [00:25:00] pandemic kind of boom. Yeah. That boom was crazy for e-comm then. It’s contracted a lot now. It’s hard. I mean that’s why they’re all collapsing because the interest rates are going up and uh, the margins are going down.

Everybody’s getting squeezed. So they’re getting flipped. They’re like burning money. Yep. So that’s why I think, I don’t know exactly why thre ratio, but I think that’s why, ’cause a lot of ’em took on debt and equity and they had all this like, you know, free money. Sounds like WeWork. Yeah. WeWork’s. Another reason [00:25:30] that they’re collapsed too.

’cause I think they went upside down. Right. Are you saying that Amazon, as a business model is, is going to experience a pretty significant, um, contraction because of these factors that you’re talking about? I mean, I’m listening to you talking about skiing, which is, it may be a great sport and it’s fun and everything, but.

Um, I mean, do, it’s a good question. Do you sell, is it sold on Amazon? Are you guys exposed to, we’re [00:26:00] actually considering opening it at the moment. Okay. Yeah. So we are looking at, uh, outsourcing. So we, we, we connected to channel advisor, I dunno, anyone knows that? Yeah. Familiar with that. And so we’re in a process now of deciding which marketplaces to go in.

Um, so where do you currently sell your product? So our main markets. The uk No, no, but what channels So direct. Yeah, we have our own website, like Shopify. Yeah, we have a Shopify site. Yeah. And then has the ski resorts in France, which [00:26:30] sounds really cool. Yeah, so we had four stores before Covid. So we’d built the brand to four stores and then we had to close three of them through Covid, which was pretty tough.

But it’s helped, it helped simplify the business and allowed for more focus. So we definitely came out of Covid. Um, yeah, with a more grownup business for sure. You know, there was, it was pretty stressful, you know? We had to close three of the stores. We managed to retain all our staff, but we had to use a lot of, you know, government support and funding.[00:27:00]

We raised more equity. We did a, a future fund round, which is where the British Business Bank matched equity we raised. Um, so that’s quite an interesting one for early stage fundraising is coel funds where you can get, I mean, in the UK I’m sure in the States there’s even more. ’cause their angel, their angel environment’s way more developed than the UKs is where.

You can get two or three angels together to, to back your business. And then the bank. So [00:27:30] the, the, the British Bank, so it’s the government backed British business bank will then lean on their due diligence and they’ll back as well. So you have, you have one lead angel that basically pitches on your behalf.

So they’re not really investing in the entrepreneur, they’re investing in the angel that’s investing. And so again, it’s kind of this thing, no one wants to do the due diligence, right. No one wants to take the time. They, everyone’s lazy. And so they’re leaning on other people’s dd. And so what the British Business Bank did is they took that concept but just said, you don’t need the angels.

If you [00:28:00] can raise any money, we’ll match it. So the crazy, random, like businesses that were able to raise, like the Bri, the British governments now probably the biggest PE firm in the uk and it’s, it’s now invested in the most random shit that would just be UNB backable And loads of stories came out afterwards, like, um.

Like sex toy businesses and like, like all sorts of random stuff that now we all as British taxpayers, we all own Ian, like the slicer. Where’s Ian? Where’s Ian here? [00:28:30] Ian, he’s, he’s from the uk. He does like really sexy lingerie. Okay. Me here. Yeah. Maybe, maybe he got some money out. Um, yeah, so we, what is, what is the, what is the actual state of the.

It’s the ski business because you know, you’re talking about if people are holding onto their money, skiing is, I would say more discretionary than, than I’ve gotta habit, you know what I’m saying? Yeah. So it is, they’re, we call them considered purchases, [00:29:00] but it’s quite a middle class sport. It’s a bit like golf.

Like if you’re into it, you’ll do it. Mm-Hmm. But we find that people are still skiing, especially, you know, generally people are investing in experiences more than products post covid. Right. So. We are seeing a down, you know, consumers being hit quite hard and so people are saying like, I still wanna, I have a bit more money in my pocket now actually, but I’m gonna spend it on experiences.

So planks kind of fits between the two really. Like you do need kit to, to go and [00:29:30] experience skiing, but it might be a considered purchase. You might think, well actually I’ll make do with with what I’ve got already. So we’re kind of, you know, somewhere between the two. Um, in general, like the, the ski industry, it’s not booming, it’s not growing.

There’s obviously a long, long-term risk around climate change, but out the outdoor business is growing hugely. So products, you know, technical features like waterproof breathability features that were developed by [00:30:00] technical, outdoor brands are now trickling through, into, into the market. So you’ll find a lot of street wear brands collaborating with what it like.

Palace and nor face did a CoLab. You know, vans and vans are using Gore-Tex and some pieces, you know, there’s a lot of trickle down now with, um, technology that’s been developed by outdoor companies. I mean, just look at the rise of the nor face, right? Like, and now Patagonia, how inner city people, but are wearing it just to commute in.[00:30:30]

Whereas these products were developed maybe five, six years ago for climbing mountains. Yes, true. Um. So, yeah, it’s an interesting space, like outdoors, very interesting, interesting space. Um, and then obviously it’s linked to sustainability because climate change affects certainly like winter sports heavily.

Um, so we are very careful with how we talk about. Our sustainability, um, marketing. So we have a, we are not eco-friendly [00:31:00] marketing campaign, so even though we do quite a lot with recycles and organics and we, we charity, we partner with Protect Our Winters, the Jeremy Jones charity. We are really scared of greenwashing.

Um, and we, yeah, we think that there’s gonna be a, I mean, it’s already happening now. Big, big kind of call out of big. I mean, I’ve been to massive trade shows where there’s been a huge Patagonia stand, you know, and they’re saying, we are in business to save our home planet, and there’s all this kind [00:31:30] of noise around it.

And then at the end of the show, it’s all just going into landfill. You know, and that’s, that’s Patagonia, right? They’re like the absolute pioneers. Yeah. I mean, Patagonia, um, built its business based on, um, the, the fleece was artificial, was recycled plastic, right? Yeah. Yeah. But that’s the thing, right? So like trade, when they go to a trade show after they’ve done the trade show, they dump all the crap.

Well, yeah, that’s kind of it, right? So there’s so much [00:32:00] bullshit. And greenwashing certainly in garment. Um, so we are quite conflicted. Mm-Hmm. It’s a real paradox, right? Like you are in the garment business to provide ski clothing to people that wanna ski, but actually you are, you know, adversely impacting the environment.

So do you make the jackets from the plastic bottles? Yeah, we do like the whole, as much as we can. Yeah. Yeah. So all our out wears all the, all the face fabrics made from, yeah, yeah. Plastic yarns made from recycled plastic bonds. And it’s [00:32:30] really interesting. So it’s about traceability, right? Like how can you really prove that it is what it is?

Like it’s crazy. Now in China there’s plastic bottle factories that are being made just to provide plastic bottled yarn to the fabric mills. So they’ve worked out that you can, it’s cheaper to just make a new one than it is to clean an old one. Wow. Yeah, it’s pretty fucked up. I mean, uh, yeah, I tried to buy recycled packaging in Ang Mai for some products.

It costs more than the new recycled packaging. Well, it will ’cause there’s [00:33:00] another process to go through, so you’re turning it in from, from something else into something. But yeah, it’s like, it’s still bad for the environment, you know, you’re still having to use a lot of energy up to process it. A lot of chemicals for dying.

Um, so we’re not. We are very careful and it’s, I mean, a lot of that’s due to our target market. So we are kind of 20 to thirties and people are becoming so much more educated now and soon the greenwashing is gonna get called out. So yeah, so we’re, we say we’re, if you look at the Planks [00:33:30] clothing website, it says we are not eco-friendly.

So it talks about what we do, but also what we don’t do. And we certainly don’t make out that we are good for the environment. ’cause we’re not. Yeah. Crazy. This is out of Thailand, or do you do Vietnam and surrounding? Yeah. Good question. So, um, originally when I first founded it, it was all just street wear and all the knitwear was done in Thailand, in Bangkok.

Uh, we did some headwear in China. Then when we started introducing outerwear, it was [00:34:00] in Vietnam, but I was sourcing the fa the fabric from Taiwan. So it’s all waterproof and breathable. So it’s really technical. And I was a bit of a control freak then, and I was really naive. And so instead of wanting to trust, um, agents, I’d just do it all myself.

So I’d go to the factory, I’d develop everything. I mean, it taught me the business, which has probably helped later in, in, in the stages of the business. But it was very hands on, labor intensive. And then [00:34:30] so we’d shipped the fabric to Vietnam and. What’s interesting about, so there’s, there’s big, amazing factories there, and they look like five star hotels, but they get to full capacity straight away and everything.

Probably 70, 80% goes to just what they call satellite factories. So they go to, to a factory outside into the countryside that have no r and d. They have no sample rooms. No one [00:35:00] speaks English there. It’s, it is not front. Facing. Um, and so what I, I kind of worked that out and I went straight to those. Um, I went to the satellite factories and that helped me avoid the minimums.

So I could, instead of having a thousand pieces per star, I could get down to like two or 300. Um, ’cause I was sourcing the fabric and a lot of the materials myself, I didn’t have to rely so much upon a big factory to do it for me. Um, and that, yeah, really helped us make a big jump from lifestyle [00:35:30] where.

It’s kind of 10, $15 a unit up to outwear, which is kind of 60, 70. So suddenly just to introduce one unit of outwear, yeah, you’re working capital requirements like three, four times as much as a piece of streetwear. So it’s a really big jump. So keep like any lean startup, right? Keep your minimums down to as absolute, as low as possible.

Put things out to the market. Get that kind of test, measure, learn feedback loop going. Without risking as much, and we just didn’t have the [00:36:00] budget to, it wasn’t like we were well funded at all in those days. So I mean, I think it’s good for us to hear like, what, what changes do you have to make in your business or even your lifestyle when you raise more professional funds from like angels manage your stress.

So yeah, coping mechanisms are a big one. That’s probably the biggest change in my lifestyle. Um, obviously I’ve got a very supportive wife next to me, so that’s, that’s helpful. Um, meditation. [00:36:30] Yeah, so meditation. Yeah. I meditate every day. I visualize. Um, it’s really helped, really helped me. So that’s from a personal coping mechanism, from a business point of view, it’s just systems.

So it’s about, I mean, you grow up from a strategic point of view where you are around. Much more sophisticated, experienced people. So your strategic planning naturally improves. Um, and then from a systems point of view, so, [00:37:00] so generally through that business planning and that strategic roadmap creation, you are then really understanding what your KPIs are within it.

And then it’s then, well, how do we actually report in these KPIs? How do we really measure these things that these really sophisticated people are telling us to measure? Um, so yeah, it’s bringing in bringing in more automated systems and moving from like a hundred page spreadsheets into, you know, into, into proper systems.

So we use Business Central and Power BI for reporting. [00:37:30] Okay. What would you say is your biggest need at the moment? So, so, right, so maybe, maybe a year ago, my biggest need was, um, to step out of day to day. So coming back to that idea of like knowing yourself. I became really like anxious and depressed because I wasn’t really doing what I wanted to do.

I was really locked into the brand, to planks. Um, so it was around kind of [00:38:00] recognizing what really makes me tick and it’s the entrepreneurial part. And so when I find that I’m in entrepreneurial parts of the business, like fundraising and business planning and the strategy, I then I. I become, I enjoy it more and around the, the management side and the day to day and the running of the business less so.

So, um, I hired an md, um, who was a non-exec director of ours already. So he’s [00:38:30] the ex GM of Burton Snowboards for EMEA. So he’s now on full-time for us, and that’s been amazing. So how did you find this person in. So just before Covid, I’d already started looking, not necessarily for like a full-time, but I started just networking and he’d just left Burton.

And so we became, we were connected. We met, um, at, uh, uh, ipo, I think in, in Munich. [00:39:00] Um, and then actually we decided that, well then Covid happened and it wasn’t the right time, and so he then became a non-exec director. So at the same time as, um, the women that did the due diligence, and so we did a funding round that he was part of.

So we’d already worked together and gone through that kind of trauma of surviving Covid. So we, you know, learned to work together well, and it worked well. We got through Covid and it was a really mutual thing. I mean, it’s great for [00:39:30] us because we liked, we already liked him before we’d known him, like he fitted the right.

Profile actually way beyond what we were expecting to be interested in. You know, he is the extreme burn. He was a sales director for Oak Leaf for EMEA before then. So he is super experienced. Um, and then, yeah, so that’s an interesting one. Like again, it’s about psychology, like understanding, well, why does he want to do it?

What are the risks, benefits, what do we have to look for in terms of making such a big decision. I think a lot of it with him was around [00:40:00] moving from a bigger brand. And does he really recognize what it’s like to be in a scale up where if you want to do something, you don’t just write a business proposal and it just gets signed off by head office or if something goes wrong, doesn’t really matter.

Try again. You know, the worst case scenario is you go bust, right? If, if your plans don’t work. And, um, that psychology of is he ready to move from a bigger business to a smaller one and understand those budget constraints? Um, but he really wanted to be [00:40:30] entrepreneurial. Um, he, he’d worked in big corporate all his life.

He’s more towards the end of his career, and he felt like it was a niche that he wanted to scratch. So I, so I really, um, trusted that that personal motivation was enough to give him that grit and determination to deal with, you know, being really stressed out, managing cash flow and what happens in two weeks if we can’t pay payroll, and do we pay a factory or do we pay, who do we pay first?

And going through that stress of. [00:41:00] You know, managing cash on, on a weekly basis, which is quite tough. Um, great. Um, I always have questions, I guess this, but I, I mean, it’s some more operational. So you’re a Thai company, a UK company for raising? We’re uk, we’re a UK company and we have a French subsidiary.

Alright. And then I think it seems like you’re, you said it, but just to highlight it, you’re fundraising mostly in the West, not in Asia, right? Yeah, all in the west, all in the uk. Okay. Would you recommend, I mean [00:41:30] for us, I guess we’d also probably fund fundraising would be more in the Western. Is there fundraising opportunities in Asia you think, or no idea?

Don’t know. Okay. And probably, I mean, it’s cap, you know, capital markets, I feel like generally the most who have fundraise in the west. Like I know some here have recently been fundraising. Uh, and then it seems like you’re already the operator. Right. Rob and Jim were more, like you said, the creator, creative people.

Yeah, so Rob’s our creative director. He’s our designer. Jim’s my co-founder. So a lot of what [00:42:00] makes Plank special, certainly like back in the day, was that collaboration where you get a lot of Jim’s, um, Jim’s kind of view of the world, plus Rob’s amazing technical abilities to turn Jim’s concepts and ideas into a usable, creative, nice.

Um, and that was, honestly, it was amazing. I could literally just say, right, Jim, come up with. Three T-shirt slogans and he probably microdose or go away and do his thing and it’ll macro dose or whatever. [00:42:30] Um, and yeah, like within 48 hours we’d have like skiing, his believing skiing rocks, drop lifts, not bombs all sketched out and his notepad.

And then we’d give that to Rob and he’d turn it into usable graphics. And it was always quite edgy and funny. And between the three of us. We, it kind of always had our seal of of approval and I think that’s when you, when you get into scale up, like we’re challenging with it now, how do you, again, coming back to your own like [00:43:00] DNA and what really makes you tick, it’s a, it is a challenge now because not everything is exactly what’s in his mind’s eye.

It’s not a perfect reflection of how he sees it because we’ve got a much bigger business now. Um, and that’s quite a challenge. So in the way that my role evolved and I’ve had to kind of work out what, what’s best for me as well as best for the business. He’s gone through that process, but more from a creative side rather than a kind of, kind of [00:43:30] entrepreneurial side.

Great. Do you think, uh, is there any, um, uh, difference do you think between, um, the UK market and the. Asian market because on the one hand I have a, my sense is that economies are kind of moving more towards Asia and on the other hand, um, dealing with Asian markets, in other words, if it’s one thing to market [00:44:00] to British people, it’s another thing to market to Chinese people and their mindsets are quite different.

Uh, but there’s a lot of money in China too, so you could really, you know, if you found the right Chinese partner, I would imagine that you could. Yeah, I mean, I, I’m not very experienced, like I do know that joint ventures can be really helpful to understand local cultures. They don’t understand. Mm-Hmm. Um, yeah, definitely joint ventures are always a good way to go.

If you’ve got a good product but you don’t understand the fit and you don’t [00:44:30] understand the local culture, then partnering with someone that does can be helpful. I mean, you’ve even got, you’ve got, um, I think there’s skiing on Doyon, isn’t there? Skiing on Doyon? I don’t know. You know, Doyon is the highest mountain in China, in, uh, Thailand.

I don’t know. I not, they’re skiing there. They might have a snowflake might once in the last 20 years. So, you know, that’s, they’re skiing in Hong Kong. My friend has to eat indoor skiing. I see. Interesting business. So, anyway, but I, I think that what I would say is, I [00:45:00] think. Building a brand in China is better to have a famous brand in the west than take into China.

Mm-Hmm. Chinese, like, in my opinion, like famous brands overseas. So the strategy I think would be building it in the west like he’s doing and then when it’s really established, Chinese will want to buy it because they want to buy the famous Western brand. Good point. Yeah. Just look out for copyright is quite challeng.

Yeah. File three more is protect yourself, especially in China. I, I heard that, I mean, I don’t know much about, uh, e-comm, but um, [00:45:30] I heard products made in Vietnam, there’s no taxes or duty to the US versus China. There’s like a lot of due tax and taxes and duty. Is that correct? So I’m not, I don’t import into the us I would know, but trade don’t know.

But Trait in the us we do, but we go by the uk. Um, so. We don’t wholesale to the us we have done in the past, but that was quite a while ago, so we just held direct to the US So it comes to the UK first, but yeah, so then [00:46:00] there’s uh, European double tax. Yeah. But there’s no tax under a thousand dollars. You don’t have to pay tax D to C to the us Yeah.

Generally, of course the trade war, especially with Trump’s times, uh, they were pushing Texas higher in China, lower in Vietnam. There’s still a lot of political risk around China at the moment. So with the Taiwan conflict and so on, so, so if a lot of, um, companies are moving into Vietnam from China, aren’t they?

Yeah. Yeah. There’s production. Yeah. Vietnam’s definitely [00:46:30] benefit benefiting from that for sure. I mean, of course India, even a little bit of Thailand, Southeast Asia, but even Mexico and the US a lot of people are going to Mexico.

What’s, what’s ahead for you in planks? Like what are you, what’s the, the dream of big vision? So that’s a really good question actually. So when you think about raising money, it’s about understanding the exit as well and having an exit strategy. So that’s always a good question to be prepared for. So [00:47:00] we are very committed to the brand.

It’s our life life’s work. Um, so we are looking for liquidity opportunity, but we’re not looking to sell the business completely. So that could be part of, um. A, a PE round or a VC round when we’re ready. Um, we are looking probably to do another equity round this summer to, to keep growing, but there won’t be a, a liquidity opportunity from that.

But yeah, three to five years we’re hoping [00:47:30] for a liquidity opportunity. Yeah. Can I ask something specific about the advertising, um, versus ratio to revenue model? Yeah. Ratio of advertising you’re putting into revenue. Yeah, sure. So you guys are more eCom focused? Right. So we work to quite a strict ROAS model.

So we, we, we run a four to one roas. So for every pound we spend on performance marketing, we expect four [00:48:00] back. So we monitor that on a daily basis. Um, when there’s heat in the market, we get behind it and we spend more. Um, but we, we, we do some testing. So we, we have a, we have a separate brand, digital brand bucket that isn’t part of the ROAS model.

So this season we’ll spend like 20 grand just amplifying our, our marketing stories. So we’re doing a bit more brand marketing now in resorts again, so we don’t have the stores anymore. So we’re looking at how we compensate that from a brand point of [00:48:30] view, but we want to digitalize it. So we have the systems set up in place to.

Be able to amplify and leverage those stories. So, um, yeah, we work to, to a four to one model. We look at lifetime value, but we are acquiring customers profitably. We do cohort analysis. So this season we’re front loading our performance marketing more to acquire more full price customers, aggressively in peak, and then using a retention strategy to drive [00:49:00] lifetime value through sales periods rather than.

Acquiring customers in sale because we’ve got cohort analysis that shows they’re not as valuable in the long run. So a lot of that data is very important for fundraising and for exit because you want to prove that you can not only acquire customers profitably, so you can scale, but you also want to prove that you understand the journey of repeat purchase.

So for example. If there was data to say that actually [00:49:30] if you sold someone a T-shirt and you got them hooked into the brand, it’s a less considered purchase. So it’s not a two 300 pound jacket, it’s just a T-shirt. If you could then prove, you could retarget them and gravitate them up to outerwear, then that could be a cool play, right?

But on the other side, if you get them into ware first, you’ve already found a customer that loves your brand enough. To already commit to spending 203, 2 300 qui. And then maybe it’s easier to retarget them with lifestyle after you’ve already got them [00:50:00] into the more considered purchase. So these are concepts that you can play with and you can kind of talk through from a strategic point of view and like a funnel building point of view.

But until you’ve actually got the data, you don’t know. And so for us, we’ve, we’ve proved out that actually we don’t spend any money on lifestyle products. We only spend money on outerwear. And now we’re really fun, like concentrating it down that we’re not actually spending any on like mid layers or it’s all like jackets and pants.

If we can sell someone a planks [00:50:30] jacket for 300 quid, there’s a high certain high likelihood they’ll repeat purchase two or three times over the next 12 months. If we sell someone a T-shirt, there’s a low likelihood they’ll gravitate up to elsewhere. So the more data you can get and the more sophisticated.

You can be in analyzing your customer behavior, the more efficient your performance marketing strategy can get. And that’s the kind of thing that comes with scale, right? Like it’s just the tyranny of small numbers, what the guy said at the start about the [00:51:00] disparate, like you’re trying to show global, but you’re actually disparate because you’ve just got lots of different people in lots of different places buying, and you can’t really get into the, into the detail of, of what, what’s scalable and what isn’t.

Very good. So you’re cashflow positive. Yeah. No, we’re, we are forecasting about 2 million turnover and about a 200 k loss. Oh, okay. I see. How do you track all your sales and, and digital marketing? Well, like what [00:51:30] platforms do you use, like more technically? Yeah, so we partner with a firm called Omni Commerce, and so they go into the backend of Shopify and they provide amazing insight and reports for us.

So that’s a data analysis firm. Okay. Omni Omni Commerce. Okay. Awesome. We’re a little bit over our normal scheduled time, but I think it was worth it. That was amazing. Really. Thank you. That was really valuable. No worries at all. Alright, uh, thanks for everyone’s [00:52:00] time. The future of e-commerce is waiting.

Load pipe is back. It’s a protocol. We are making the new way to do e-commerce with blockchain technology. This is very early stage and we have, Hamza is our first marketplace in this new ecosystem. It’s very epic if you wanna participate, we are on alpha stage in Q1 2024, where you can [00:52:30] be a buyer or a a vendor application.

Only check it out@hamza.biz for the marketplace or the overview of this protocol and subscribe for updates@loadpipe.com. See you there. Hope you enjoyed that great session. Thank you Hugh, again for sharing with us. We always have the show notes. Check in here@globalfromasia.com slash eCommerce fundraising and we will have [00:53:00] all the show notes.

Links to the bios, links to the various things that we learned as well as our meetups that we do, which is growing actually. There’s just so much happening. I’m really excited for the 2024 year. We’re already halfway through the show’s coming out right in the middle of January, 2024. But you know, some of my favorite things is people like years later, message me like sometimes about a podcast recorded.

In 2014, we had somebody email me about a podcast they enjoyed. From 2014, 10 years [00:53:30] ago. This show is longer than that, more than 10 years old and many more years to go. For sure. Thank you so much for watching, listening, tuning in, enjoying this like subscribe, maybe give a feedback, give a testimonial, something like that.

Appreciate it. Check out our. Answers and we are just gonna keep pushing forward. There’s no no end in sight to what we’re creating here at Global from Asia and the communities. You’ll start to see more and more coming out. We’ll get some interesting topics, and thanks again for [00:54:00] watching. Take care. To get more info about running an international business, please visit our website@ww.global from asia.com.

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