Parachute Home: Ariel Kaye

27:48Yeah, exactly. Something like that. So you were making pretty good money. Yeah, it was great. I could afford my life. Yeah. Yeah. And you were like 28 at the time. So, you know, it's it's not super risky. You can definitely recover from a failure at 28. You can recover from a failure at 40 or 50. But still, I mean, in that period of time, January, February, when you were like, I'm leaving my job, I'm going to do this. Did you ever hear from anybody who was like, you know, it's tough to do this as a category like that's dominated by four players and like you're just going to get into it and you're going to be crushed.

28:20Like, did anybody say that was everybody encouraging?

28:25So, you know, I think probably more people should have said that. I mean, I felt there was a moment where I started telling people that I was going to do this. Yeah. Not because I had so much confidence. It was more like I wanted to hold myself accountable. You know, I was like, if I put this out in the world and I say I'm going to do this, then people are going to check in with me and they're going to say, how's that thing going? Exactly. And I'm going to be like, well. But yeah, so I was fully consumed. And in March, I went on this trip to Europe. You quit your job and you're like, I'm going to go to Europe.

28:58And this was to visit? Factories. Factories. Okay. And you just emailed them. I emailed them. And then I had this, our friend Arthur in Paris, who was, you know, able to call some of these factories. He had some contacts. How did you know Arthur? Through Eddie. Oh, this is through Eddie. Yeah, this is Eddie's friend. And they had done some business together. And so he was helping me set meetings up and he had offered to drive me through these countries. Wow. And this was and you were basically saying, hey, I'm going to I'm starting a company in the U.S. and I'd love to meet with you. That's what you would say to them?

29:35Yeah. At that point, I was like, there's nothing that's going to stop me. I'm going to figure out 15 factories to visit. I know I'm going to go to Portugal and Italy because these are the places where there's heritage. There's factories that have been around for 100 plus years. This is where I can tell that quality story. And it's going to be great. I mean, I was just so excited. You know, I think there's like this like. I can hear it now. Yeah. I mean, I was so excited and I maybe was slightly ill prepared because I just was like, I'm going to figure this out. And I also had this idea that I wanted to create the first bedding brand that wasn't just sold as sets.

30:12Because if you went to any big box retailer, you could buy a pillowcase. But beyond that, you're buying a fitted sheet, a top sheet, and two pillowcases. And I personally don't use a top sheet. I know that that's a very triggering statement for people. You just use the bedspread, the duvet, and that's it. Yes, and a fitted sheet. Okay. That's it. Fine. That's my style. No judgment. Thank you. Well, people do judge. I'm secretly judging you, but no judgment. Okay. So, but one of the things that I learned is that about 40 % of people do not use a top sheet. And so I was like, huh, this is just another opportunity for me to do something different and better.

30:50And then if you go to Europe, they don't use a top sheet. They just use a duvet. They just use a duvet or a comforter or a quilt. And by the way, I get that because many times in the middle of the night, I'm trying to move and my wife is sleeping on top of the sheet and under the duvet. And I'm under both. And I can't. Yeah, it's annoying. And I have to wake her up and say. I'm sure she loves that. Yeah. Yeah. You're on top of the sheet. Yeah. And then in the morning, no matter what, no matter how you sleep, that fitted sheet is curled up in a ball at the bottom of the bed. Oh, yeah. It's always the bottom.

31:26Yeah, exactly. And so then you're making your bed. It's an extra step. For me, it was not the vibe. So, you know, I found myself when I was living in New York as I bought sheets. I had this like stack of top sheets that were in my closet. And I realized I was paying for that material because you're paying for the set. So, you know, I had this idea that I was going to go and create this new way of buying bedding. And my point here is that when I went to Europe and visited these factories and I said, I want to sell a new type of set, they were like, yes, yes, finally. Because they were used to selling these full sets to American brands.

32:04Yeah. And they're like, why are you doing this? What's the top sheet? It's just not it's not a European way of sleeping. So there were certain things and I was like, and I don't want to talk about thread count because I know that thread count isn't what matters. And so they were intrigued by my desire to package products differently and to create an option for a top sheet instead of a mandatory top sheet. So we did have a nice rapport. Yeah. And did you in that on that sort of tour of these factories, I have to imagine that most of them were like, well, the minimum order is, you know, five hundred thousand or two hundred thousand.

32:39Like were any of these factories like, yeah, I can I can start with a small order. Yes. There there were probably two. But, you know, I had to pay up front with the PO, you know, it wasn't like they were like going to talk about payment terms or like any sort, you know, it was like, OK. Give us money and we will make you some sheets. Yeah, I mean, I'm wondering about that because you were going to these factories, as you mentioned, these like, you know, multi-generational factories and probably mostly men. And, you know, I imagine they were nice, but you were you had no business. You had no money.

33:15You had you were I mean, even the fact that they were kind of showing you around is almost implausible to me, like that they would give you the time. It reminds me a little bit of Sarah Blakely trying to start Spanx. Like she was around the same age and would go to these textile mills in North Carolina. And most people were like, I just – I'm not – I don't have time for you. Oh, by the way, I work with many of these factories now. And let me tell you, they love to remind me of how ridiculous I was in that first meeting and how little – and how they cannot believe that Parachute is actually a real company.

33:51and that, you know, they most definitely laughed at me and thought that I was ridiculous and never thought that they were going to hear from me again. And it comes up every time we talk. All right. So you are going to come back to the U.S. and really start to work on this project in earnest. Let me ask you for a moment about design, right? Because I imagine, you know, sheets are just standard. There's a standard design, right? I mean, so what kind of imprint could you put on these sheets that you were ordering? I mean, the colors maybe and the fabric they use. But I mean, you were trying to create a brand for sheets that really wasn't out there.

34:34Like nobody was like, oh, yeah, I buy Cheetos sheets or Coca-Cola sheets. Like no one does that, right? So how are you going to make that come alive? Yeah. So, I mean, there were a few different things. So one was being able to package a set without the top sheet. So that was one differentiator. The other was my knowledge of thread count. So I was going to just go with good old, like, true thread count because that is actually the best quality. I wasn't going to use any toxic chemicals, artificial dyes, or synthetic finishes. and then I had this idea that I wanted to create a more polished clean modern pillowcase so normally pillowcases have the side opening which leaves this flap of fabric and the pillow can kind of move within the pillowcase and that always bothered me so I decided to create a back envelope pillowcase.

35:33I'm not the inventor of a back envelope pillowcase, but it's something that you saw more use for like shams. And so that was those were some of the differentiators. All right. So you get back to New York. And the idea was to to do what at that point? I mean, you had to find the money you had to. There are lots of things to do. But tell me what your plan was at that point. This is like, you know, March, April 2013. So I decided to move back to Los Angeles, which is where you grew up, which is where I grew up. And so I came back to LA and I was like, okay, now I need to raise money because I don't have any money and I can't actually buy this inventory and companies with good ideas raise money.

36:17Like that's what they do. They go talk to an investor and investors like, yes, this is a great idea. Here's the money. And so I started to get some introductions. And you went with your pitch deck and everything? I went with my pitch deck. I went with some pillowcases. I had like a Mary Poppins box of fabrics. I mean, I felt like a traveling saleswoman. And what would you say in the pitch, basically, what you're describing to me now? Yeah, I would say you spend a third of your life in bed. Yeah. There is no brand in this category. I'm going to build a home brand for today's modern shopper. And I'm going to start with Sheets, but I'm going to build a massive brand.

36:55We're going to be a billion-dollar business, and there is no one doing this. And these are the products that you touch and use every day. This is special. And no one wanted to give me money. But I mean, this was the summer of 2013, like sort of the beginning of the big boom in direct to consumer. And there was a lot of money pouring into that space. So when you talked to investors, was there any excitement about what you were describing? Yeah, there was. I mean, for some more than others. I mean, I got a lot of, oh, let me talk to my wife about this. Oh, I never bought sheets before. People buy sheets.

37:37I'm like, well, do you sleep on sheets? I think you might. So, yes, people are buying them. You know, I was a sole founder. So, like, there were a lot of questions about why don't you have anyone doing this with you? I mean, this is a common question, right, that investors – and by the way, in their defense, it's a good question to ask. Sure. Like, why aren't you doing this to somebody else? because solo founders statistically fail more than co-founders do. Yeah. I mean, the questions I kept getting were, why don't you have someone doing this with you? And I can't invest unless there's a technical co-founder or a technical partner.

38:11Because you were going to be a D2C business. Because I was going to be a digital business. Yeah. And so in those early days, too, you know, I thought I was supposed to play it cool. You know, I'm sure that I did not walk into those rooms with the intensity that I felt inside. You know, I walked in being like, I've got this great idea. Like, come on, we're going for a ride. So what I kept hearing was like, cool, keep it up. Let's talk in a month. Let's talk in a few months. Why don't you show me a model? Why don't you do this? Can you show me a site? Can you how can you show that there is interest here?

38:44Like, can you put up a website and drive some early sales? They were saying you're pitching us too early. Yeah. Because at that point you hadn't had inventory. You hadn't had a website. I mean, you had no money to do these things. Right. Yeah. It was hard. You know, I mean, there were days, you know, I would have a great meeting and be like, I'm on top of the world. I'm the most successful person ever. This is going to be amazing. And then I'd, you know, have another meeting and I'd be like, I quit. And it was it was exhausting. But I finally did raise thirty thousand dollars. My good friend Eddie brought three friends to the table and I got thirty thousand dollars from them collectively.

39:16It's a start. It's you know, it's a decent start. Yeah. I started working on a website. Right. And by the way, I mean, I imagine when you were going in because you were like 29, you know, maybe 30. And I mean, I remember being that age and, you know, just naturally, you're not as confident as you are when you're 40 or, you know. No. And so probably that kind of chill, laid back approach you took was an attempt to show that you weren't like this giddy young person, right? Like that you were actually confident in that. But but it sounds like they wanted to see this like hustle, intense kind of like we're going to, you know, crush it.

39:57And and just a very kind of almost overconfident pitch. Yeah, for sure. And, you know, there was a day where I was running really late and I was going for a meeting and I came in and I like had this like crazy energy because I was like, oh, my God, I was like trying to do this and I was that. But the feedback I got was phenomenal. from that day. It was like, this is the person you need to be. Yeah. And I was like, so I need to be running late. I need to be like sweating profusely. I need to have bruises on my arms because I like dropped a box of product on me. I was like, oh, got it. Yeah. I mean, I think this is, it's, it's an interesting idea because there's been so much talk in the last 10 years about authenticity, authenticity.

40:38And I actually think that word is a little problematic because what does that actually mean? I mean, in some ways, we're all performing to a certain extent, like all the time. It doesn't mean we're inauthentic, but there are different ways of presenting yourself and interacting with people in different ways. And sometimes you need to turn it up. Totally. And I did need to turn it up. And it was the best feedback I got was turn it up because people aren't mind readers. And you learn that, if you want something, you need to ask. And if you want people to know how you feel, It's important to tell them.

41:11Yeah. All right. So you raised this initial$30 ,000 from your friend Eddie Kim and a few others. And then I guess toward the end of 2013, you also joined a startup accelerator program in L.A., right? And it was run by a friend of yours? Yeah. Yeah, so my friend Sam Teller, who ran this accelerator program called Launchpad, and some really great companies came out of Launchpad. I was actually in the final class. And basically they would give you some— They gave$25 ,000 in office and resources, which, by the way, when people ask me about raising capital, that was invaluable to me. Yeah. That$25 ,000, so I had raised$30 ,000, which allowed me to start building this website.

41:59And then that$25 ,000 came in at the 11th hour and allowed me to buy inventory. And that is what allowed me to start this business. And I actually think that one of the biggest things that I learned in that experience was how to ask for help, which, by the way, is a superpower. It is. It's hard. of my superpowers. And I think a lot of founders go through building companies thinking that asking for help is a sign of weakness. But I was forced to ask for help and I needed help. I mean, I knew so little about what I was trying to do and I was figuring everything out on the go. And also being around other founders, I finally felt like I was not crazy because I wasn't just in a bedroom by myself.

42:41I had people to talk to. And I think at that point, that was when I I knew the amount of sacrifice that I was going to be making. Which meant what? Work always came first. You know, like that this company was going to be my life. And that meant missing weddings, missing dinners, missing social events, missing parties. It meant this was going to be it for me for many years. Like this was going to be my number one priority. But with that initial – I mean the$30 ,000 plus the$25 ,000 you got from Launchpad, I mean that's still not that much money. No, no. Right? I mean – It's nothing. And with that money, you had to build a website, order some inventory.

43:26And do you remember how many you ordered? I mean with – you couldn't – it wasn't going to be all that$55 ,000 because you had to – I think I probably ordered about$300. Okay. $300. And in the meantime, as a solo founder, you know, you talk about – you sort of alluded to this idea that it was overwhelming. What was overwhelming? What was your to-do list? My to-do list was endless. My to-do list was everything. I mean I actually remember one day like catching up with a friend and my friend being like, so what do you even do every day? And I burst into tears. I was like, what do you mean what do I do every day?

44:05And, you know, I think it's so interesting because the phase of pre-build, especially when, like, no one around you understands what you're doing, is really dark. It's really lonely. I mean, being a founder in general can be really lonely and really isolating and feel like you're an island of one. But before you have a physical product to show someone, I mean, to be fair, it was a fair question, you know? Like, what do you do every day? I mean, I was figuring out how to import. I was figuring out how to get boxes. I was figuring out how to get a website. I was figuring out how to take pictures of products.

44:38I was I mean, I I did not know how to do anything. Yeah. While you're sort of building the website, first of all, the name Parachute Home, was that easy to get? Was that a domain that was available? No. So credit goes to our design agency for coming up with the name Parachute. I walked into a meeting. We were eating a bunch of sandwiches and we had been working on a number of other names, none of which were right. But at some point we had had to incorporate. So we had like picked a name that, you know, to just use as a placeholder. What was the name? Oh, it's so embarrassing. You got to tell me.

45:16It was Saffron Oak. OK, that's fine. Well, so my rules were that it couldn't have an ampersand and it couldn't have any missing vowels because that was a very popular thing at the time. And I, you know, saffron's like the most expensive spice. It was like luxury and oak is how you build a home. That's where it came from. Anyway, but I walked into the sign meeting and the owner of the sign company said, you know, I had this idea. What about Parachute? Immediately when I heard the name, I said yes. Actually, Eddie was in that meeting with me. We looked at each other and we were like, oh, my God.

45:50And it was inspired by, you know, the movement of the fabric when you make your bed and the sheet billows down like a parachute. And one of the other insights that I had going into starting this brand was that, you know, this was a predominantly female centric category. Like women were buying sheets. And I felt like there's this huge opportunity to create a brand that appealed to both men and women. But, yeah, it was parachute. It was from that moment on, it was like go time. It was, I mean, it was a home run. Okay, so you've got inventory and you launched this website. I think you launched it in early in 2014, right?

46:33In like January of 2014? Yeah, January 16th. And how did you get the word out? I mean, you have a website, but there are lots of websites out there. So you need people to find your website and order your stuff. So presumably you started by telling your friends, right? Like you sent a blast email out to everybody you knew? Yeah. So I sent lots of emails. I did a few like holiday trunk shows and gifting markets. And at that point, the website was finished so I could like place orders and just fulfill there. Were you doing this on like – I mean you were going to be D to C. And so did you like do Shopify or – No.

47:14Square Space? No. So I worked with a design firm. And so the thing about these days was that Shopify and it was like Shopify and Magento and neither of them had very sophisticated CMS platforms at the time. I mean, they did. But what I was told by the designers that I worked with was that we needed to build a custom platform. And so we did. That's expensive. Sure is. That must have eaten a lot of that 55 grand. It was the majority of it. And it took a long time. And it was complicated. And we built this custom CMS program. And that's what we used to launch. And about three weeks after I, well, almost immediately after I launched, I realized when I was like, oh, I see this like error.

48:02We got to fix this. We got to fix that. They're like, oh, that'll be two weeks. That'll be three weeks. It'll take. And I was like, no, no, no, no, no. And we actually quickly had to move on to Shopify. And it was about an almost$40 ,000 mistake. And how did you – what was the thing that you were telling people? Like, these sheets are better than anything else because they're made in Europe and they're really high quality. Like, what was the thing that – what was the message? Yeah, our first tagline was like a designed in L.A., made in Europe, delivered directly to you. Right. You know, and in those conversations, I was educating people about thread count.

48:36And that was like a big – I mean, people love that story. You know, people love learning that thread count is a marketing gimmick. And so that became a real hook for people. But, you know, and in December as well, I did a big photo shoot. So, you know, I rented an Airbnb and I shot all these products and I hired a PR agency with my last$3 ,000. You hired them to do like a blast? To do the launch. Yeah. So having worked in PR, I actually really did believe in the power of PR. I knew and I knew the power of a launch moment. You know, it's like you only launch once. And especially in that moment, a new direct to consumer brand in a category with very little, you know, innovation or certainly never an online brand.

49:22I mean, that was unheard of. I mean, we were really first to market. And so I hired an agency and, you know, they took a chance and, you know, I promised that I would pay them more later, you know, once we had money. But we launched in January of 2014 with incredible press. They got you guys' attention where? El Decor, Harper's Bazaar, Apartment Therapy. I mean, we had, and then we got more press because of the press, you know? And so the first few weeks, all of a sudden it went from, you know, two orders a day to three orders a day to 10 orders a day to all of a sudden I'm looking at my order list and I'm like, I don't know any of these people.

50:02These are I've never even heard of these towns. Like what is happening here? When we come back in just a moment, Ariel makes some bold marketing moves like running photo ads that show beds with actual people in them. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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52:51Hey, welcome back to How I Built This. So it's early 2014, Parachute is live, and orders for luxury linens are starting to roll in. As for Arielle, she's working out of the startup accelerator launchpad, but managing the entire business on her own. And she can barely take a breath. And so every morning I would get the orders from the day. I would print out my packing slips. I would print out the shipping label. I would fold the boxes together. I would take home these packing slips. I'd go directly to the storage unit. I'd pack my car full of the products. I'd come to the office. I'd pack the boxes, call UPS.

53:27And then in the middle of the day, I'm doing customer service emails. I'm trying to pitch investors. I'm doing all these mentorship calls. I'm like, I am out of my mind. Like I am, it's like, but when I look back at this time, I can't help but smile ear to ear. Like this, it was incredible. And also, by the way, I'd been in this accelerator program for like three months at this point and people were like, what's going on in that corner? Everyone else is building software companies. Like I am the only person that has a consumer product. And so everyone's, you know, making their websites and apps and things.

53:57And all of a sudden I launched this business and I'm like, everyone out of the way. I've got boxes coming in. It was happening, you know, it was like I did not there was not one minute of it that I was not loving. Yeah. Do you remember how much you made in sales that first month? Oh, I don't remember. I mean, maybe 30 ,000 or something. I mean, it's pretty good. Yeah. Yeah, it's pretty good. What was your price point? Because I imagine that had to be significantly higher than Marshall's or TJ Maxx. Yeah, I think all in, if you bought the whole set, it was about$249. So I have to imagine you weren't making that much money off that.

54:38No, our margin wasn't great. I mean, it wasn't horrible, but it wasn't great. We weren't losing money when all was said and done. I mean, I wasn't buying anything at scale. So like there was no economies of scale. Yeah, it was, you know, I wasn't losing money. Yeah. And now you had something to go back and show to investors. But were you able to, I mean, you know, you tried in 2013. You couldn't really raise any institutional capital. Now it's 2014. Now are you having more luck? Yeah. So one of the benefits of being and one of the reasons why I wanted to join Launchpad, I mean, there were so many benefits.

55:18But one was that this was a time where investors reached out to accelerators and said, what's going on here? Like, how do we need to deploy capital? You guys have access to these companies. Who should we be investing in? And so as a result, I was getting meetings with the top investors in L.A., San Francisco, New York. And I was able to run a process quite quickly because at Launchpad, they were able to say, you know, this brand just launched. It's a consumer brand. And they got product market fit. You know, the press has been amazing. Sales are through the roof. You know, there's something really happening here.

55:55And they were a trusted resource for deal flow. You know, I remember being at South by Southwest that year and I had brought about 2 ,000 eye masks that said Dream Big, ParachuteHome.com. I was wearing them like headbands, passing them out, running around to every party, throwing them at DJ booths, like meeting investors there. I was able to close some additional investors there. And all of a sudden I had raised almost a million dollars. So this is 2014. And now you've got some significant cash and you have this sort of PR machine. And it's growing, right? Because people are starting to learn about what you're selling.

56:32But it's still D2C. I mean, you could only buy it from a website. Correct. Yeah. And then we sold out. I mean, we sold out really quickly. We had this blurb in the Wall Street Journal that really put us on the map. I mean, it was maybe three sentences in a larger story. And we sold out of everything. And then we put our products on pre-order and sold through the pre-orders. I mean, it just became a bit of a disaster. So we had all these orders on pre-order and some of that inventory was going to be, you know, it was two or three weeks late. But then we had accidentally sold through the pre-order.

57:10So I had to go and email, you know, 75 people and say, hey, you're not going to get your bedding for four months. I mean, it's a good problem to have, but a bad problem to have because then people might sort of write you off. It was a good problem to have. And it was a devastating problem for me at the time. You know, I thought that it was over. It was a good lesson in communication and just how to be transparent with customers and say, this is what's happening. And we're a growing business. And we sold through our inventory. It's getting made in Italy. We're going to give you a play-by-play and, you know, part of this journey.

57:40And we're so grateful. And, you know, I'd say about 90 percent of the people were like, congratulations. Congratulations. We're proud of you. And yes, we can wait four months for our sheets. You know, we got a few people were like, you don't know how to run a business and we're out and refund us. And, you know, of course, you know, you can expect some of that too. But there was a moment where, you know, we're out of stock and everything. And I felt like, you know, people are going to forget about us or they're just going to move on or no one's going to trust us. And, you know, it was It was really upsetting.

58:10But we made it through. So I wonder, like, as you were, especially in that year, you raise a million dollars. It's encouraging. But, you know, some of these other brands, competitors, for example, Brooklinen and, you know, maybe Bowlin Branch and some of these other brands were just really growing. and doing things like advertising on podcasts, which created a lot of awareness. You know, I didn't, and forgive me because I, you know, I follow brands and I try and buy stuff all the time just to be aware of what's out there. But I didn't know about Parachute at the time. Was that frustrating for you to see some of these competitors just like growing, growing, growing, growing?

58:56Yes. It definitely caused some anxiety in the sense that I felt a little blindsided. You know, like here I was with my head down building this brand and thinking I had this great, unique idea. That nobody else had. That nobody else had, obviously, because it was my idea. And then three months later, other brands are popping up. And so, you know, presumably we're all working on these products at the same time. But, you know, I think the reality was is that, you know, I looked and I was like, look, this is a$30 billion market. And when you looked at all of our websites, they all had a very different look and feel.

59:33They all had a very different value proposition. And while, of course, people are going to compare shop, we are all slightly different price points. I just decided that I was going to keep my head down. I mean, obviously be aware of what's happening because that is your job. But the thing when I think about this time is that venture capital, especially at this time, thinks you can build brands quick. That was the whole thesis. Brands can be built quickly. And I just didn't believe that. And it's not true. It's very rare that a brand can be built quickly. Yes, exactly. And so I think for me, there were moments like, yes, moments of deep anxiety and fear, and we're not doing this quick enough, and I don't have enough money, and I can't do this, you know, I can't spend$200 million on marketing to become a household name overnight.

1:00:27But when I could come out of that spiral, I could put myself back into a place where I could say with confidence, both to myself and my team, and frankly, my investors, that building a brand does not happen overnight. And I think also because I had started this business after an early crop of companies had raised too much money and kind of crashed and burned, there was this cautionary tale. And I think I just like, I believed, I wanted to grow with the customer. I wanted to build trust. I wanted to move into different categories. I knew that would cost money. I wanted to build the right team. I just, I don't know.

1:01:13I, you know, and I, I had venture investors, but I think I only took their advice like 50 % of the time. Yeah. And today, one of my biggest issues with the startup venture private equity world is that no one gives credit for financial discipline. Right, right. Nobody, I mean, now, of course, everyone's like, well, we need you to be profitable. But then, you know, 2015, 2016, even up until recently, people are just like, grow, grow, grow, grow, grow. And then we'll worry about profitability later. Exactly. And I just was like, committed to building a healthy business. Were we profitable every year from day one?

1:01:53No. like that we were trying to grow and we had venture investors telling us to spend millions of dollars on marketing and once we started to do marketing and we did do some podcasts we were actually the first podcast advertiser on pod save america and that changed our business um that was one of the most successful advertising things that we ever did i mean it was crazy what it did those guys were talking about um how they love to sleep on your your linens yeah they were wearing our robes to their live tapings. I mean, they were we were one of their first, I think, two, maybe three advertisers.

1:02:29We were before they even launched. And we we just had a hunch that because it was a political year, you know, and election year that that would be a popular podcast. Yeah. And how did you I mean, you really had had no experience managing people in your previous job, which isn't necessary. But now it's like on the job training, like you are literally managing a team of people. How did you find that? Did it come naturally to you or was it hard? You know, it came naturally. I mean, I think that the team of two to team of 20 is a really special time. You know, everyone is somewhat sitting around the table together.

1:03:09There's a lot of communication and collaboration. And of course, there's like, you know, various issues that come up. But there was just so much energy and excitement. I think what helped me the most, to be honest, is that my first few jobs out of college, I had pretty challenging managers and I worked at companies with pretty poor culture. And so while I didn't necessarily have a model of what to do, I had a very clear model of what not to do. And that went a long way. Um, Ariel, one of the things that you guys really leaned in on, I mean, you mentioned this early, early on, which is you never like to have a fitted sheet, right?

1:03:51And so the idea of like, you know, every time you'd go like even today, if you go to a department store, and you go to the bedding section, like, the beds are crisp, like military crisp, and you guys were the opposite. You had this sort of like, laid back, I guess, like a lived in look, you know, it was like the beds were not I mean, the, it wasn't like crisp sheets and a crisp duvet cover. It was like, you know, somebody just got out of bed and just kind of threw the duvet back over the bed. Yeah. One of the things that I believed was an opportunity was to humanize this category because, you know, it was a brandless category.

1:04:28And I looked around and realized that there were no models ever in a bed. No models, human models in a bed. Humans, humans. Yeah. There were no like imagery of beds to sell bedding never had a human in them. There was never a family curled up. There was never a person snuggling with their blanket. Never thought about that. Yeah. And so I felt like, you know, while we we weren't going to put the word parachute all over our sheets, we weren't going to brand them. We weren't going to make we weren't going to move into parachute T-shirts, you know, as branding opportunities. But we did need to create a look and feel and an aesthetic that was recognizable.

1:05:08And so for us, that meant this art of the undone bed, this effortless luxury, this very specific vibe. Which is kind of Southern California, too. It's California cool. Yeah. Which is where we're from. So it was very authentic to us, you know, I mean, and it was just like, this is all this is how we lived. You know, It wasn't like we had to hire an outside branding agency to tell us how to do this. We were just like, but this is what our bed actually looks like. Why don't we take a picture of that? And then why don't we put a model in there or a person? In the early days, we just had friends and people that were real people because we wanted it to be really real.

1:05:52And it worked. Yeah. All right. So you guys were obviously primarily only direct-to-consumer, but with some of the success that you were having. And do you remember – do you have a sense, by the way, what your total sales were in year one roughly? About a million. OK. So pretty good. A pretty good year. A million dollars in sales and obviously, as you mentioned, not yet profitable. But that's OK because you could see a path to growth and eventual profitability. You decided in or I guess in 2015, you start to experiment with pop up stores, which you had kind of done a version of early on when you're going to these like Christmas markets and stuff.

1:06:33But this would be was I mean, was the idea that it would be like a dipping your toe and potentially opening a brick and mortar store? So I knew that retail was going to be part of our strategy from the beginning. I mean, it's in my first pitch deck. This is a category where historically 90 % of purchases were made offline when I started this brand. So we were already doing something very different. And I knew that there was just going to be this consumer that it was going to be a much harder shift in their behavior to buy online. And so we rented a window of a store, like a little window area in Venice, and we put some signage up.

1:07:20And we just saw the way that people responded when they touched and felt our products that it was a real selling point. Like our products felt good. And, you know, I think because we knew that everyone was buying offline, it just felt like, you know. It made sense. This had to happen. It had to happen soon. So, OK, you open up your first store in Venice. I think this is in 2016. And that year you raised serious money. So Series A, I think you raised about$10 million in that Series A round. So you had some, you know, real heft behind you. And you're launching in different categories now. And you knew that it was going to be a home goods brand from the beginning, but you start with sheets and bedding.

1:08:10So how did you – I mean, for example, what did you go to after bedding? Did you go to towels after? We went to towels. So we were focused on bedding for the first two years. But then we also had an incredible customer base that were asking for more. I mean, and we were building that trust with them so that they would say, you know, I want this and I want that. And can you I'm having a baby and I want products that are also clean and don't have chemicals and look just like yours, but in a miniature size. And so we were leveraging the customer feedback. And over time, we started moving to their categories like rugs and window treatments and kitchen and pillow like decorative pillows and and then eventually into some furniture.

1:08:55When you introduced furniture, what was the initial idea that, you know, you could buy sofas and other furniture from Parachute? That was the idea. Yeah. I mean, we wanted to be in every room of the home. So as we looked at the home and we looked at the revenue opportunities, you know, furniture is a huge lion's share of, you know, this home category. Yeah. And so we started with bed frames, which, again, made sense. But we decided that we wanted to do furniture in other rooms, so in the living room. And it was successful in many ways, and it was unsuccessful in others. I mean, the logistics were just so complicated.

1:09:31And I think we were unprepared for how difficult getting the products from our manufacturer to the customer would be. And in an effort to focus on profitability, we've slowed that part of our growth down for now. I mean, we've got some incredible furniture in our office that we have designed and are designing. And, you know, it's the category will come back. We just are going to relaunch it with more information and a better supply chain. Yeah. Ariel, you'd mentioned when you started out as an entrepreneur, you knew there were going to be a lot of personal sacrifices, you know, hanging out, family, friends like you.

1:10:12It was heads down. But I guess eventually you did you did were able to have some time to focus on your personal life. And you you started a family, I think, around 2018. Is that right? Yeah, in 2018, I got married. On my way to my rehearsal dinner, I signed a term sheet. And two weeks later, I opened a store in New York City. And a week later, I found out I was pregnant. May 2018 was a busy month. So you were – and that's like in the thick of it. I mean you were growing and you were raising money. But still, I mean it was – I mean at that point I think you raised about$46 million total, which is a lot.

1:10:59But with that money comes expectations. And you were going to become a mom. How did you manage all of these different huge changes in your life? It was tough. I mean, it was a big change. You know, I think up until that moment of becoming a mom, my career and this role as leader and CEO and founder was my entire identity. And it was also important for my team. I mean, you know, at that point, I had some really strong leadership. And it was great to be able to watch people step into these bigger roles in my absence. And I love being a mom. I mean, being a mom is one of my greatest joys. And being a mom that can share my company and my success with my daughter and now son, you know, is amazing.

1:11:59I mean, I love bringing my kids to parachute stores and the whole thing. Yeah. We don't always talk about people's personal lives on the show unless it's relevant to the story. But sometimes we do because I think it's important to illustrate the sacrifices people take to start a business. And sometimes we don't always know what's happening in people's lives. We show up at a meeting and we may not know there's a crisis going on. There's a sick parent or there's a marriage collapsing. I know in your case, your marriage split up. It broke up while you were trying to scale this business and you had two small kids.

1:12:40How did you deal with that, you know, the challenges in your personal life and also still, you know, come to work every day and just have the energy to do it? It was the hardest time of my life, honestly. You know, I think a lot about when things started to fall apart in my personal life and the gratitude I had for my professional life. because while things were somewhat in chaos and crisis behind closed doors, I had this other door that I could walk through where things were seemingly perfect and where things were positive and there was growth. And even during some of our more challenging times at Parachute, I was very private about what was going on.

1:13:33So, you know, most of my executive team members didn't really know what was even happening. And I felt very guarded and I felt very alone and in many ways ashamed of what was happening. And also this real desire to show up as this like super professional human that could function. And in reality, I couldn't. And I'm very pleased to say that in the past year and a half, two years, I've really prioritized a lot of my own personal development and growth. and have done a lot of what we like to call in LA the work. And in retrospect, again, I wish I had asked for more help. I wish I would have said, you know, I'm going through this.

1:14:17And I think what I would have found out is that I was not alone. And I probably would have been connected to a number of people who had experienced similar things. And, you know, I think people often tell me how strong I am, especially now knowing what I've gone through. And I hate that word. because it just implies this ability to ignore pain and not feel and not fall apart. And I think that there needs to be more space for people to fall apart in a way that is supportive, where people can say, I've got your back. Yeah. What got you to the point where you felt like you could give yourself time to focus on you?

1:15:01I made a choice in 2021 that I was going to make time. I was going to make time at whatever cost. I had to. But then also at the beginning of this year, I actually stepped down as CEO and I passed the baton to our former COO. and it's also allowed me to get back to the parts of the business that I love, which is the creative side of everything. And so I'm spending all of my time now focused on the brand evolution and who we are and who we're going to be for the next 10 years and the creative and that's been really fun too. What does that mean for R.E.L.K.? I know that you're no longer the CEO, but you're obviously involved with the company.

1:15:49But at the same time, you know, you're still young and you can do other things or you can step down and, you know, probably get a nice check and live a nice life with that check. I mean, you've been grinding away at this for 10 years. What do you think? I love what I do. I truly do. And I love the people that I get to work with. And I'm in it for the long haul. I mean, there's going to be exciting moments for consumer brands that have strong customer bases in the next few years. And for me, as long as I'm continuing to learn and grow and feel challenged, like I am engaged. And that has never slowed down.

1:16:33Yeah. You've kind of alluded to this a little bit in your answer, but I'm going to ask you it anyway because it wouldn't be a high-built interview unless I did ask you this question, which is when you reflect on your career and where you got to and the ups and downs and also the pain and the joy and everything in between, how much of where you are today do you attribute to how hard you worked and how much you put into it and how much do you think had to do with luck? Luck is certainly a part of it. I mean, I think from a timing perspective, you know, being first to market, launching in 2014, you know, the market was not nearly as saturated as it was today.

1:17:14I mean, you could get to decent scale spending relatively little marketing dollars. I mean, it's just a different world. And in some ways, it's so much easier to launch a company today. I've worked pretty hard. I mean, I've hustled, man. I've hustled, you know? But I've also been so lucky to have such strong people around the table. But yeah, I mean, this was it. This was the vision. And it feels like it's been a million years and five minutes at the same time. That's Ariel Kay, founder of Parachute Home. By the way, what's your favorite karaoke song? I actually just went karaoke recently and I started with Whitney Houston Dance With Somebody, which is not an easy song.

1:18:03That's hard. How do you hit those notes? It's a very hard song, but you know what? It really just turns it up. You know, the room gets excited. You need some good, fun, upbeat musics to kick everything off and to get people in the mood. You can hit that Whitney Houston high note. Wow. Amazing. I mean, I'm not comparing myself to Whitney. Let's be clear. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. This episode was produced by Chris Messini with music composed by Ramtin Arablui.

1:18:39It was edited by Neva Grant with research help from Catherine Seifer. Our audio engineer was Josephine Neonai. Our production staff also includes Alex Chung, Casey Herman, Carla Estevez, JC Howard, John Isabella, Carrie Thompson, Malia Agudelo, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

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