Everlane: Michael Preysman | How I Built This with Guy Raz

Intro

In this episode of “How I Built This with Guy Raz,” host Guy Raz interviews Michael Preysman, the founder of Everlane, an online retail platform known for its transparency in pricing and ethical production. Preysman shares the journey of building Everlane from selling t-shirts to becoming a successful direct-to-consumer brand. He also discusses the challenges faced by the company, including the impact of the COVID-19 pandemic and controversies surrounding transparency in the workplace.

Main Takeaways

Building a Transparent Brand

• Everlane’s social mission is a key factor in consumer behavior.
• Everlane’s transparency in pricing and ethical production attracts consumers.
• Consumers want companies to do less harm, leading to the rise of social enterprise.
• Everlane was one of the first direct-to-consumer brands that emphasized radical transparency.
• Everlane educates consumers on the true cost of making clothing and shows them how to buy ethically.

The Early Days of Everlane

• Michael Preysman co-founded Everlane after being inspired by Guild Group, which changed how people bought luxury items online.
• Praseman knew he needed a co-founder who was technical, and he found Jesse Farmer.
• They explored various ideas at Dog Patch Labs before deciding to become the manufacturer and sell directly to consumers.
• Everlane raised $1 million from investors including SV Angel and Kleiner Perkins.
• They discovered that basic t-shirts were marked up seven times their actual cost, which seemed unethical.

The Growth and Challenges of Everlane

• Everlane launched with 1,500 t-shirts and a waitlist of 80,000 people.
• The company faced overwhelming demand with more demand than supply.
• Everlane expanded its product line, but not all ventures were successful.
• Everlane became profitable in 2017, hitting $100 million in revenue that year.
• The company faced challenges from competition and controversies surrounding transparency.

Lessons Learned and Future Plans

• Everlane learned the importance of sustainability and is committed to reducing emissions and removing virgin plastic from the supply chain.
• The company is rethinking its growth strategy and approach to transparency.
• Transparency can have both upsides and downsides, and companies need to find a balance.
• Continuing to focus on sustainability is critical to building a profitable business.
• Exiting a company while still being involved can be a self-reflective experience.

Summary

Building a Transparent Brand

Everlane’s social mission and transparency in pricing and production have made it a popular choice among consumers. The company educates consumers on ethical buying practices and the true cost of making clothing, aligning with the growing trend of social enterprise.

The Early Days of Everlane

Michael Preysman co-founded Everlane after being inspired by Guild Group and realizing the unethical pricing practices in the fashion industry. With the support of investors, Everlane started as a direct-to-consumer brand, focusing on selling high-quality plain t-shirts at a lower price point.

The Growth and Challenges of Everlane

Everlane’s launch with a waitlist of 80,000 people and overwhelming demand demonstrated the appeal of their transparent brand. However, the company faced challenges from competition and controversies surrounding transparency in the workplace. It became profitable in 2017 but experienced setbacks in 2019.

Lessons Learned and Future Plans

Everlane learned the importance of sustainability and is committed to reducing emissions and removing virgin plastic from its supply chain. The company is rethinking its growth strategy and approach to transparency, understanding the balance between transparency and discretion. Continuing to focus on sustainability is critical for long-term success.

Conclusion

Everlane’s journey from selling t-shirts to becoming a successful direct-to-consumer brand showcases the power of transparency and ethical production in today’s consumer market. Despite facing challenges, Everlane continues to prioritize sustainability and adapt to the changing landscape of the fashion industry.