Any company that adopts the phrase “Unf*** the world” as an organizing principle isn’t scared of trying new things.
Nau wasn’t scared. Nau started with grand goals to change the retail apparel industry model while creating a grand environmental sustainability and social responsibility movement. Earlier this year they failed: not because of the ideals, but because of the more mundane reasons: poor execution and not enough money.
But they’re back.
The innovative clothing company Nau was supposed to transform the apparel industry. Instead, it tanked. So what went wrong, and what happens next?
Nau would soon go from sake-soaked dream to bona fide startup with more than 60 employees, $24 million in capital, and outsized buzz for its business practices. … It boasted an expert staff and stylish products. More important, its ideals differentiated the brand dramatically.
Barely a year after Nau’s clothing landed on store shelves in March, 2007, the company went belly-up, done in by overreaching ambition and a slumping economy.
Failure happens.
But it doesn’t always end that way. Business history is littered with examples: a company blazes in with a great idea, idea isn’t a winner in the marketplace, but instead of going under the company finds a way to channel the idea into another direction and finds success.
In June, [Gordon Seabury, the CEO of Horny Toad Activewear] bought what was left of the company for an undisclosed sum. This October, Nau will relaunch using the same farms and mills, with Verité continuing to monitor labor conditions. Already, the factories are cutting and sewing again. In its new life, Nau no longer has to worry about raising capital to birth a fully formed brand. Under Horny Toad, the company will grow organically, perhaps the way it should have from the start.
What changed? Thankfully, not the ideals or the commitment to sustainability, environmentally-friendly materials and social responsibility. But Nau has tightened up the execution model:
- The old stores are gone, as is the “webfront” retail model, replaced by a more traditional reseller model.
- The website (thankfully) is much faster and easier to use. The old website was a travesty for a company that based its business model on a transactional website.
- The plan to donate 5% of revenues to causes has been reduced to 2%, with fewer choices of nonprofits for customers.
- The growth plans have been scaled back and the company will focus on growing organically, relaunching with 100 less styles, less marketing and lower growth expectations.
Making everybody change they way they do things is hard. There’s a lot of value in it, but it rarely comes the way you originally plan. Be careful of the big bet; you can’t win if you aren’t in the game.
“If we have to leave some growth on the table in return for being a bit more cautious and successful in the long run, that’s okay,” Seabury says. “It’s all about lifetime impact, and you can’t have a lifetime impact unless you’re sustainable on the business side.”
We learn a lot more about ourselves through failure than success. Let’s hope you don’t have to learn as much as I have.
