Credibility Before Scale: FURI's Zero-Ad Growth Strategy

0:00My name is Andres Figueira and I'm going to be your host for the day. And with me right here is Michelle Spiro, the co-founder of Fury Sport, a direct-to-consumer sports lifestyle brand that develops high-quality gear that lets you play harder and play longer. So, Michelle, it really is an honor to have you come on the show with us. And just so that we can start giving the audience a bit more context as to who you are, what Fury Sports actually is, would you be able to give us a bit of your background and how everything started? Oh, of course. I am actually a recovering fashion executive who worked in the fashion industry for 30 years.

0:38And I worked for a big brand, started at Macy's, but worked for big brands like Donna Karan, Ralph Lauren, and Calvin Klein. And then I was beginning to start to think, what's my next chapter? As in corporate, you're running teams and it's super exciting and you're running big businesses. But I also was running really high operating profit margins and not really seeing, I didn't see the benefit of that. If I'm going to grow high profit margins for a company, I'd like to have more of a piece of it. So in thinking about that, Superstorm Sandy hit the New York City area in 2012. And my building was surrounded by six feet of water.

1:21And I was on the roof, because that's all we could do to see what was going on. And the National Guard was rescuing people off my street. And I got a text that the company that owned Calvin Klein underwear, which I ran men's underwear, was being sold to PBH. and I thought this is mother nature's way of saying it's time to move on it's time to make your life extraordinary it's time to take a risk and I had fallen in love with Paris years before I'd gone back every year for my birthday I built an intentional community there and I said why not what do you got to lose so I my last day was February April 7th of 2013 and I was in an apartment in Paris by May 15th, 2013.

2:08And I did that for three years, which was super exciting. And if I gave advice to anyone and people have asked me, you know, if I could, if I could tell someone one thing that they should experience in their life, that is definitely living abroad. It changes you in a way that you didn't even know that you could be changed. It opens your eyes to things you didn't know you weren't seeing. And it gives you a whole new perspective on how you look at everything, including business and including communicating with consumers and people. And what are you doing as a business, especially in marketing? You're building a community.

2:44And so you need to do that intentionally in business, but doing it intentionally, personally really just enhances that. Of course. Now, and I must say, Michelle, I totally empathize with that because I'm originally from Venezuela and I've been here in Argentina for seven years already. But me and my family, when I was four years old, We moved and I've lived in England, Ecuador. I studied a while in the States. So I've been around. And I must say that living abroad really does open your mind. And it gives you a different perspective on everything else. Just because you've known so many different people that it's like you're able to place yourself in a lot of people's shoes.

3:21And experience different cultures because things are different. Exactly. I agree. It's nice to get best practices from different cultures because it'll only enhance your existence. And I have a core belief about getting older, and that is that we don't need to ever get older. We need to continue to evolve. And if you continue evolving, then you will never get older. And I am fortunate enough in my life to have really amazing women who are in their 80s who are continuing to evolve and doing cool things. And I aspire to be them. And I think it's always important to always have a North Star, no matter where you are in your life or in your career or where you're going, because once you stop evolving, you stop living.

4:08So that transitions well into me starting Fury with my co-founder, Eric Mathalier. And basically, I was consulting when I was in Paris, and I really enjoy consulting, and I love doing it as an additional piece of whatever I'm involved in. But I really like building. And when you're consulting, you're in and out, and you don't know whether they're following what you're building, and you don't get to reap the benefits of the results of the strategies that you're putting together. And I had a dear friend at the time who drew me a diagram because coming from corporate, I needed structure. And the diagram was an ellipse like your eye.

4:49And if you're starting here, he allowed me, he advised me to networking is so incredibly important and such an incredible skill to really master and to enjoy. A lot of people dread networking and don't know the right way to do it. So he said, cast your net out into two roads. And one of the roads was being a consultant or working for a corporation. And if I did that, then living abroad was perfectly fine. But if the other was starting a business, which I would have been doing for the first time, living in a foreign country for the first time and starting a business at the first time is too many first times.

5:30So I kind of tested my net and had tons of meetings and I split up my ellipse in three month time periods. So once I got to the middle of casting my net wide, I then started to narrow the net. And then by the end of six months, I had to pick which road I was going on. And the road I picked was to start my own business. And that's when I moved back to the States. I'm listening to your story and I'm loving it because it's such a nice progression of how you got like the main trigger was this natural catastrophe that occurred in the States of Perkins Sandy. And then it all matched up with the email you received and how your life took a few turns.

6:12But just continue because I'm just enjoying the story. Oh, thank you. Thank you. So I met Eric in 2014. I had a consulting firm with a with a actually a former colleague from Calvin. and we were working with different brands and I knew that I wanted to start my own thing. And I met Eric and I knew we became friends and I knew his story. And his story is that he's first generation Haitian American, born and raised in Brooklyn, found tennis at 10, got his first plane ride at 14 to a tournament in Bermuda and ultimately got a division one scholarship to college. And that coupled with, like I said, when you move abroad or even when you leave corporate, when I was in corporate, I had tunnel vision.

6:59I knew my business. I knew my category. I knew what was going on in the fashion industry for the most part from the luxury lens, but I didn't know what was going on from the cultural lens. And once I left and moved to Paris, which was not the haven of this, but I at least have my eyes open to see it, I became obsessed with streetwear. And the reason why I became obsessed with streetwear is because it changed the currency of fashion. In the luxury market, you need to have money. That is your only point of entry that you need. It's the only barrier and it's the only ticket. If you have money, you can go into the luxury market, no problem.

7:39But if you are a streetwear consumer, the way that you get into that market and into that community is by being in the know. And that is a huge shift in currency. And what it allowed is for this new inclusive exclusivity to be created. And there's something about that was really resonated with me. And I became very, I started to study Supreme and North Face and Carhartt and Vans. And so I really started to look at all of those cultures and see what are these brands doing that make them so important? And what they were doing is that they were all authentically a part of the communities that they were representing in their brands.

8:31Supreme and Palace and Vans, they're all skateboarding people. I'm a skateboarder and those are like my favorite brands. Now, I am totally empathizing with what you're saying right now because their logos and everything they represent for, they truly are ingrained in their specific cultures and in their niche cultures. And it's a given that they'll be there because they've always been there. Exactly. They're not jumping on a trend. They're not doing something because it's popular. This is truly who they are. And the other thing I love about it is that I have a Supreme sweatshirt that I bought, not resale.

9:07And when I wear that sweatshirt, because it's a Comme des Garcons collab. So for me, from being in the fashion, the Comme des Garcons collab with Supreme, it wasn't me faking it. It's something that I'm really interested in. So basically what Supreme has done is it's taken clothing and invited other people, even if they don't skateboard, into their community. And when I wear that sweatshirt, I'll get an 18-year-old who'll give me a head nod. I'm a middle-aged white woman and it doesn't matter It doesn't matter what color you are. It doesn't matter how much money you make. It doesn't matter where you come from All that matters is that you're in the know And that if you have this on you're in the know and I just Loved it and then I thought about eric And tennis and tennis has always been married to fashion since its start Tennis sweater tennis shoe tennis bracelet tennis skirt tennis dress There actually hasn't been a sport that has been more married to fashion than tennis.

10:09But for some reason, they never brought it out of the country club. It's always been white, affluent, country club exclusive. Here, Eric has this amazing tennis story that has nothing to do with any of those things. And how do we build a brand around that? And if we want to have a streetwear part of the brand, and we want to do it right, then we really need to make equipment because we want to be credibly part of the culture and part of the sport and not just a trend. And as we see, tennis has really expanded since COVID. So many people are jumping onto the bandwagon and trending with the clothing.

10:52They're all keeping it very country club, very preppy, very one sort of the side of the track. When in actuality, if you look at the growth in racket sports, tennis in particular, but we are looking at all racket sports. If you look at tennis in particular, in the United States, participation grew by 6 million players from 2019 to 24, and it still continues to grow. That's really impressive, and it's 33%. But if you break it down, it's mind-blowing. The percentage increase is coming pretty much solely from diverse communities. So in that same time period, the amount of Latino Hispanics that started playing tennis increased 105%.

11:41Black and African Americans, 63%. And Asian and Pacific Islanders, 49%. 99%. That means that what's driving that 33 % increase are diverse communities, because if you take them all out, the other, so basically the white community, increased by 17%. So who's talking to those people? And who understands their story better than someone who lived it? And so we are bringing tennis and other racket sports, ultimately, as we grow out of the country club and into the city and everything we make has flexibility because we're not building for a club culture. For example, our bags are flexible because when you live in a city, you go from work to your workout or to playing, whatever you do, to the bar or to dinner or to brunch.

12:37You don't go home between each thing and you don't have a car to throw your bag in from place to place. so we knew when we were making our bags that they had to be flexible, that you could use them for work even if you weren't playing tennis. You could stick your racket in there if you were going to play tennis that day. Eric was a Prince racket player when he was growing up, and he had a Prince bag, and he said he wouldn't be caught dead with that bag in his neighborhood. And so we really needed to make them cool. We needed to make our clothes be able to be worn in any environment. And so we did do a streetwear capsule and we did it in a high quality way because we don't love the word accessible.

13:24And this really targets how we talk about and voice the message of the brand. Accessible gives a connotation that certain people from certain places can't afford certain things and don't deserve the same quality. Because normally when you're making something accessible, you're taking something away from the quality. So we have an intention around using the word relatable and the word approachable. And we give a high value for the quality that we are producing. For example, the rackets that are in our category of quality are all at least 50 to 100. They range from 50 to 100 dollars more than we charge.

14:06So you're not getting less quality. you're getting a value a better value quality relationship a brand that you can identify with better and feels more genuine to you and that goes for everybody and then we wanted to use the clothing to allow people who don't play tennis in because the fan base is huge no it really is and tennis i feel racket sports in general because it's the way a great way how you framed it like specifically in Venezuela per se, paddle has become... That's what we're actually prototyping a paddle racket, a paddle right now. And what I'm seeing is that a lot of people learn how to play paddle.

14:45They love it because it's easier. It hits, it's less impact on the knees and stuff, but they're hopping on over to tennis when they get too good at paddle because it's like a new challenge they can tackle. But like I'm hearing you speak about Fury and I checked out Fury's website before the podcast and I must say that I loved it. the main thing that caught my eye it wasn't even the rackets or the bags it was just the fact that you have these black tennis balls that look so different from every other tennis ball i've seen and i'm like okay if i see a black tennis ball then that would be fury but that's cool let me tell you about the black tennis balls so the black tennis balls are not for playing they are they are symbolic and what they are symbolic for is the fact that when eric was in high school the tennis This team did not have its own tennis courts and they had to paint lines on the asphalt and the yellow balls turned black.

15:38And so really they are our symbol for city tennis. OK, that makes it even better. So that that is what's behind the black tennis balls. And they're just they're great gifts. Chanel makes a black tennis ball. Bulgari has got made a black tennis ball, but they're just all for there's no story and authenticity around them. Whereas we really do have a story behind it. Adding that lore around the black tennis ball, it just gives more substance to the brand and more things that people can identify with. So I believe that is just amazing, Michelle. Okay, I didn't want to cut your story, so please continue.

16:14No, thank you. No, we met in 2014. And we, in 2015, the end of the year, I was talking to some kids about tennis rackets and then and streetwear and it just came together in my head and Eric had his own media company and was actually doing an event with Airbnb for Art Basel in Miami. and I call him and I'm like, I've got this random idea. I had to call you. And so when he got back, we just started mulling it over for probably a year. Then we went to a, so Eric grew up playing at Prospect Park Tennis in Brooklyn. So for anyone from Brooklyn, shout out to Prospect Park Tennis. And one of his, he had a reunion the year before of all the people who played there growing up.

17:01And one of the people that he reconnected with actually had become a certified master racket technician and at the time had two pro shops. So we went to him and said, what do you think? He said, you're out of your mind. And to be honest with you, had we known what we'd have to go through to get here, we were out of our minds. It's actually good to be, sometimes it's good to be ignorant. And exactly. So he said, why don't you guys start with strings and grips. See if there's even an appetite for a new tennis brand. So he introduced us to a vendor of his. We bought$6 ,000 of strings and grips and we gave them out for free on Instagram.

17:42And we asked people, what do you like? They actually didn't love the strings and we didn't go forward with that vendor for the strings, but they did like the grips. So at that point we did go forward with grips, over grips from that vendor. But the vendor was from Japan. And he knew we wanted to make a racket. And he said, we can white label a racket for you. And I was like, I just didn't give up my 30-year career to start over to have someone white label something for me. If we're doing this, Eric and I were like, we're doing this. We're creating a new technology. We're creating something new in the market.

18:15Otherwise, why bother? So this guy took, we just got lucky. And he said, my boss knows someone in Japan that I should introduce, that hopefully I can introduce you to. and this was someone who worked for Wilson and Head for 30 years in Japan and he is our equipment guru and he designed our rackets and he got us all our factories and he manages all our quality control and testing along with Eric and he's a huge part of who we are today and without him I'm not sure we would be able to have the quality of product that we have in that we were we got runner up for new racket of the year in 2022 by the foremost global tennis racket reviewer in the world the tennis nerd and it was up against the yonix e-zone which yonix is one of the four legacy brands in tennis so we really have created something that the market needed and that's always what we think about when we do something.

19:18We are not making something just to make it. It's why it's taking us so long to launch our active clothing, like technology clothing that you can play in, which we'll be doing next year, is because everyone has wicking properties. And so if we weren't going to do something new, we weren't going to do it. And we actually found a technology where the technology is in the weave. It gets actually stronger as you wash it and it brings the moisture to the top so it evaporates versus moving it from side to side like regular wicking does. Wicking is also a finish, so it gets weaker as you wash it. So we're very intentional.

19:53It may take us a little longer, but we have to be doing it. Everything has to have a reason. Otherwise, what marketing story are we going to put behind it? Because being genuine and being authentic, although it is becoming similar to the word curated, so I try not to use words that are becoming so common. But authenticity is the reason why streetwear brands succeed. And also with social media and with the increased education that consumers can get on products, it's that much more important to be truthful and honest and bring something that's necessary and not just more stuff, because the last thing we all need is more stuff.

20:34I totally agree with that, Michelle. And as I hear you speak about the brand, I can totally understand where your background in fashion has come in so handy and helpful. because as you're describing the wicking properties of the clothing and how you want it to be different because you know how it works and then you don't want it to just be the same. I'm like, wow, this lady really does know her stuff and that way you can provide an excellent product that doesn't add on up to the whole fast fashion trend that's going on nowadays because people can't find clothing that is different and makes you feel authentic, but it's fast fashion so it gets damaged easily and it's not that functional and me as a person like what I'm looking for right now is exactly white sweatshirt that I can use to play sports that'll last me four years that I can even give to my little brother later because it doesn't get old it gets better with time with what I heard you say so that is crazy and it sounds super cool so congratulations for that and okay Michelle and in terms of theory per se in and in at the present moment what marketing channels are working for you guys because I imagine you are trying to be more in contact with a more youthful demographic and more of like the upcoming tennis players and because I feel like the more pros are already sponsored by these other legacy brands and everything like that.

21:54The first question everyone asks us is which pro are you? And I'm like okay Wilson got Roger Federer at 12. Babalock got Rafa at 12. You don't just get them unless you want to give them millions of dollars to change and I will give you a big secret about the rackets that the pros use. They are all custom. So any tennis players out there who think that they are playing with the Roger Federer racket or the same racket as Joka or the same racket as Rafa, you're not. They changed it for commercial people. And then they paint them like the rackets that you can buy. Wow. Okay. Because racket customization is, of course, for the pros, an automatic.

22:40They need to perform at the very best. And they also use much heavier rackets than any regular player could use. They really have it completely tailored. So it's the paint job that you're singing. It's not the racket that you're buying. Wow. I did not know that at all. I'm just learning so much about tennis that it's blowing my mind. So that is my secret to whoever's listening today. Okay. Okay. And in terms of exactly how you're using your marketing channels to find new prospects or to even get people to start using your product even more? What's working for you guys? Believe it or not, really grassroots and word of mouth and reviewers.

23:17What we're finding is that when we are in the Financial Times, which we were, or in the New York Times, those like blew our website up. So truly credible people talking about is what brings us the most audience. it's not so much fluffy little advertising or showing people playing tennis when we collaborate with other brands and events and non-profits that's another way that people seem to really reacting when we get the most engagement on social media believe it or not because we are a small company and are starting a raise of capital to intensify primarily our marketing we've not done any paid marketing to get to where we are and i will say that that is something that i always thought was a mistake but with things changing so much and algorithms changing so much it's almost like a heroin paid media and i'm glad that we haven't become addicted to that and we can use it with strategically with ai thinking more clearly about targeting because it's all become so much more sophisticated.

24:30But with sophistication also comes a smaller reach. So being able to put that into our strategy for going forward, and also creating a part of our business that is just about content. Because we want to be building a community and be part of a community. And yes, am I here to do commerce? Am I here to make money? Am I here to do a profitable business that I can make money for my investors, but also really important to me, especially at this point in my life and Eric's, is to have an impact. And so the bigger we get, the more we're going to be able to give back to helping to restore city courts, for creating youth programs, for supporting youth programs.

25:14We've already done that with equipment just because we don't have the resources financially to start our own, and nor do we need to reinvent a wheel that's working well. So we already give rackets to Girls Rule the Court for the USTA and for Kings County Tennis League, which is a program that was started in the Marcy Projects where Jay-Z is from. And a guy put up a sign saying, if you want to play tennis, I'll give you free tennis lessons. And like three kids showed up. And today it's in five different projects with over 400 kids. and so these are the things that we want to be supporting we want to help refurbish we want to do that and we're too small to do that now but it is absolutely a huge part of our strategy because this is where we come from this is eric's story i was born in queens so i true too am a born new yorker and it's not just new york but we definitely have our core here and working in youth and city environments is what we are here for too.

26:15This is my legacy. I'm not 23 years old trying to make my first, sell my company. One day, I hope that it does, but it's also at this point in my career, in my life, this is my legacy. And I want this business and this company and this community to mean something. And so that goes behind everything we do and is a big part of how we market. So we've actually done a rebrand that we've not executed yet. So watch in the next few months, because you're going to see a total difference. I appreciate your compliments on the website, but it's going to blow your mind when we're done with it. And so we are really plugging into content that our customer and our community will find interesting.

26:58And it may not make them buy anything from us at that moment. But just being part of our community and spreading the word and being a voice and encouraging more people to care about communities and grow things authentically. That's really what we're about. And I come from corporate, so I know how to build a business. I can grow a business by$50 million in four years, been there, done that. And I know the right way to do that. I know the right teams to build it. I know how to make a team, a family, to ensure that happens so we're all enjoying the ride. And I think that when that bleeds into your marketing, the voice of a company and the way in which you communicate with your audience has to match with your content.

27:43And when you see that disconnect, that's when people get confused about a brand and don't understand where you're coming from. And so we want to make everybody who uses our product an ambassador for what we do because they believe in what we're doing and want to spread the word. And we've been fortunate enough and blessed enough to have a returning customer rate of 45%. What we now need to do is grow our new customers. And that's when paid marketing is going to come in. But we needed to establish our credibility first. And we've reached that, which is now why we're raising money, is so that we can take that credibility and get it to more audiences and also look to distribute in other countries.

28:28Because of our articles and our reviews, we've sold in 15 countries without a distributor. And that means the customer has to pay for shipping, pay for whatever taxes their country charges, because we're not distributed there yet. Okay. And that means they believe in your mission, like they're willing to pay even more. Exactly. And that's really important to us. And so we want to start highlighting people who are doing similar things, people with similar stories to Eric, people with similar stories to me, becoming thought leaders that help brands become more authentic, that think about diversity communities, that think about how to build an audience in an authentic way and really believe in what they're doing.

29:12and I come from corporate. Bottom line is ingrained in me. I ran P &Ls for the biggest companies in the world. That is incredibly important, but there's a way to do that with authenticity and emotional intelligence. And I love how you've already walked this path before, but now you're trying to do it in a much more, I want to just say, in a much more respectful way to the customer and the consumers and just making sure that you bring them along for the ride as well with you because that is how you create more what's it called people they start to believe in the brand and they won't leave it and that is why you're getting such a nice return of consumers for what they buy and that is so cool michelle i really am impressed with the whole story it is unbelievable how it started and to where it's gotten and i can't wait to check out the new website once it's done and if i get march and i think it's okay okay it's closing up the year for Q1, we should be expecting it.

30:11Exactly. But if I ever see a Fury Sport racket like around here in Argentina, there are a lot of tennis pro shops. I'm just going to be so glad. There actually are some. And the way you can recognize it is we're very intentional about how we come off in the market. And so in the V of the racket is the New York skyline with all of the numbers, like the weight, All the statistics on the racket are in the New York skyline. And it is a clean black racket with just color coming from the name of the racket and the brand. So we're trying to modernize tennis. And preppy is fine, but we're trying to take that and modernize it.