How a Simple Message and Smart Ops Built a $150 Million Brand

0:00We definitely believe that the customer is co-authoring the brand alongside of us. And the first way that they do that is by voting with their pocketbook. Hey everyone, I'm Shuang Esther Shan and welcome to Shopify Masters, your companion for starting and building a business. In 1994, two brothers with a van full of t-shirts and endless optimism launched a clothing brand with a simple three-word slogan, Life is Good. And that message struck a chord. The company has since grown into a$150 million brand known for its uplifting designs, loyal community, and mission-first mindset. Life is Good continues to reimagine their business by bringing production back to America, launching a new print-on-demand spinoff, and creating over 60 new designs every single week.

0:56Joining me now is Tom Hassel, the president of Life is Good. Welcome to the show, Tom. Thank you. I'm so happy to be here with you. Yeah, so happy to have you with us. Life is Good has had an incredible journey since it's been founded by Burt and John back in 1994. What do you think makes their message and the team's message resonate so well with its customers? So the brand started really with a conversation between Bert and John when they were returning on their way home from a trip up and down the East Coast selling t-shirts before Life is Good started. And they started talking about the fact that both then and now we are all bombarded by bad news from the media.

1:39And they wondered if there was perhaps a simple way to help people focus on the good in life. Because it's obviously better for your psyche to focus on the opportunities than the obstacles and the problems in the world. And so they got home and they designed a series of graphics that were optimistic and positive in nature. And they threw a keg party with their friends and had their friends vote on what the best graphic was in their opinion. And at the end of the night, there was an overwhelming favorite. And it was the message, Life is Good, paired with our iconic Jake smiley face figure. And so they used some of their last dollars to print 48 shirts, and they went out on the streets of Boston, and they sold those shirts faster than they had ever sold 48 shirts in the five years they had been out on the road selling T-shirts.

2:32And they knew they were on to something. So it's the positive message that has really attracted the community to Life is Good over these three decades, and it's why we continue to grow. Well, it's incredible to hear that Bert and John has built such a wonderful place and culture. I do think there is an interesting question for our listeners and founders alike, is that at what point do you feel like you should get someone else to join the team to take over the reins? And what kind of qualities should you be looking for? I would love to hear how you found yourself at Life is Good. Sure. So as far as founders knowing when the right time occurs, I'm not sure that there's a magic point.

3:18It really comes down to as a business grows in complexity, there's going to be a point where the founder realizes that in order to focus on what they love, they may need to bring someone else in who has expertise to deal with the growing complexity of the business. So, for example, in Life is Good, the business grew more complex from 2010 to 2015 as e-commerce came into the picture because we were no longer just serving the needs of wholesale customers, but we were also engaged in direct-to-consumer activities. And that changed the nature of the business in that it changed our operations, the way that we store goods, pick, pack, and ship goods.

4:05It also changed the way that we needed to run the business because we needed a whole new team to run and build e-commerce. And those were experiences that Bert and John, the founders, had not had in their past. And they realized that they should continue to focus on what they love and are so good at, which is creating optimistic garden messages while hiring someone with the expertise to do so. And in this day and age, and for the people who are on the Shopify platform, thankfully, there's now a whole universe of executives with backgrounds that are well-suited to run these types of businesses.

4:46The trick is to find someone who has operated in more than one silo and knows more than one piece of the puzzle. And in my case, I was very fortunate over the course of my career to have just about every job that you can have. So I suppose I was well prepared in that regard. Yeah, it sounds like a great crossroads meeting together. And you know, you talk about this really important scale up period for Life is Good. And often when people think about scaling up, they think about reducing costs and maybe looking for other places for production. But what's interesting with Life is good is that in 2019, you actually reshored production back into the United States.

5:33Talk to us about the kind of philosophy behind that decision. One of our messages to our customers is to take it slow, which may be great advice for how to spend your time on the weekend or in your free time, but it's not particularly good advice as to how to run a business. And prior to 2019, we were operating in a slow manner in that we were manufacturing all of our goods overseas and printing the goods overseas. So there was a six-month lead time between creating a new work of art and getting those products on shelf. And we were essentially purchasing those products speculatively. Sometimes they would sell quickly, Sometimes they would not.

6:15But in any case, we were just moving on to the next art and buying those and putting them on shelf. Meanwhile, we had this huge backlog of amazing art that had been created over the 30 year history of the brand. So we decided there had to be a better way. And we did a thorough study of the market. And thankfully, we found this incredible company that has these industrial print on demand machines called Director Garment. printers. And so we purchased our first printer in 2019. It took us about a year to learn how to use it properly because there's a fair amount of research and development involved in using water-based ink to print on a cotton t-shirt because it might wash off when you put it in the washing machine.

7:05So we wanted to make sure that we were shipping a quality garment. And once we got through that process, we were able to reduce our lead times from six months down to literally two and a half days. So if an artist creates a new graphic on Monday, we can be selling that graphic online on Wednesday afternoon because we're showing it as a virtual item and it doesn't actually exist until after the customer places the order. So a customer buys a T-shirt, we print that at, say, 3 o 'clock the next morning and ship it out the next day. And since 2019, we have dramatically increased our onshore decoration capabilities.

7:48And, of course, we all know what happened in March 2020. Everybody went home and we were very concerned about the future of the Life is Good company because we had just taken delivery of$20 million of T-shirts that were supposed to be shipped out to wholesale customers who were now shut down and could not receive any goods. so we were worried but we had this shiny new machine and we're optimists and we have a lot of great talented artists so we realized that we can make t-shirts about what we were all experiencing in the world which was the quarantine and so just a few days after we all went home we launched a graphic pack with messages like stay calm stay cool stay home and wash your paws with our dog Rocket, and they sold like nothing I've ever seen in my career.

8:40So we realized that this speed to market opportunity was something that would benefit us well beyond the quarantine. And sure enough, when we got to 2021, instead of offering, let's say, 12 St. Patrick's Day t-shirts, we were able to offer 200, and our business just took off. And then we were able to bring our back catalog of art from the history of the brand onto the website. And now there are literally millions of customer choices on lifeisgood.com. And we're able to do that while simultaneously reducing our inventory because we own blank inventory here in the States as opposed to finished goods.

9:21And we finish them after the order is taken. So we've eliminated a lot of waste in the system. It's much more friendly to the environment to print with water-based inks as opposed to the traditional plastisol of screen printing. So there's just so many benefits to bringing the production onshore. Yeah, it's incredible to hear because not only are you efficient in the turnaround, but also efficient in sustainability and actually making the shirts that customers want and demanded for. Are there any other complexities other founders should think about when they're contemplating if they should reshore and bring back some of the production into their country that they're operating out of?

10:05That is a terrific question. The answer is yes, because not only do you have to learn how to use the equipment to produce terrific products, but you also have to build out the systemic workflow to make sure that when you receive customer orders, it very efficiently creates a production order. And sometimes in our case, we have multiple lines of production because now we have embroidery. We have the ability to apply patches to hats. We can do what's called direct-to-film printing. And so sometimes we receive an order that has multiple means of decoration. And so being able to split that order out so that you're creating all the relevant production orders and then having those products marry back together so they go out in one box.

10:49and the customer has no idea that you've implemented this highly complex production methodology to bring their order to life. So in many cases, it takes longer to build out the systemic workflow than it does to figure out how to use the machines properly. So I would definitely account for that process and make sure that you have the systems in place to handle that type of workflow. Yeah, because you're right. You know, it's not just learning how the production works, but it's all the steps that follow production and all the steps that happens when someone does click on an order that has to be redesigned and reconfigured to fit like this new business model in a sense.

11:37For sure. There was a point in time in 2019 and 2020 where we had big bins of products that we were rolling around, and now it's so different. We've also implemented robotics into our factory and fulfillment center. And as a result, while we have just as many as employees as we had in the past, everything is so calm and so smooth that it's hard to believe that we ship over 4 ,000 orders a day. But it's really working out that system to make sure that everything is happening in the smoothest, most efficient manner possible. And when it works, it really works. And it seems like not much is happening, but in fact, quite a lot is happening in the background.

12:22Yeah, the clock is still turning, but it's also such an interesting change for you as well, right? I think when you do have production offshore, there's often low touch involved, but now, you know, there's 500 ,000 square feet facility. There's people actually working on the production. So how do you also adjust yourself mentally to kind of be thriving in this new environment that you've set up? So first off, production is extremely exciting. Our employees who have shifted from traditional pick, pack, and ship activities to production activities are thrilled. There's an energy about making things, particularly when you're printing shirts and you see what the customers have chosen.

13:11And the customers have the ability to customize products. And so seeing what the customer has created in front of your very eyes is a really exciting exercise. On a practical level, though, we have a quality team that historically made sure that the overseas factories were producing quality goods. Now that quality team treats our own internal factory as yet one additional factory that they get to examine the products and make sure that we are shipping a quality product. Whenever we introduce a new fabric or a new color to our lineup of products, we go to the state through a rigorous R &D process to ensure that that particular garment will take the ink from the printers and perform through 15 trips to the washer and dryer, which is a fairly rigorous test, but we want to make sure that after 15 trips, our products still look like brand new.

14:15And that is hard to achieve. And sometimes we aren't able to bring a color into our portfolio of our offering because for whatever reason, that color, the chemicals, the dye stuffs of that particular color shade don't want to play well with the direct-to-garment printing process. That's rare. And it's getting more and more rare as the equipment gets better and the company that we work with who makes these products has improved the efficacy of their equipment as well. And then also it's the task of like managing and motivating the teams of teams, because I think there is, to your point, a high level of precision and you want to make sure each item is as ideal as possible reaching the customer.

15:04So yeah, how do you adjust yourself when you're thinking about keeping the team happy and motivated? Well, in one sense, I'm lucky in that I love the fact that no two days are alike in my world and I get to focus on lots of different things. And so I'm able on one day to focus on an operations conversation and the next day I get to participate in an IT conversation. And the following day I get to work on things related to e-commerce or wholesale or a new private label division. So in that sense, I get a lot of fulfillment from being able to focus on a lot of different things. As far as making sure that everybody is working well together, that's one of the primary reasons that I have a leadership team meeting every Monday, like clockwork at 1pm, where we get together and talk about the most important things that we're facing each and every week and to make sure that everybody is in good communication with one another to make sure that important projects are moving forward.

16:08We also have shared goals throughout the company that we set at the beginning of the year where we identify. This year, we have top 25 shared goals. And every two weeks, we have a larger meeting where all the project managers for those 25 projects get together and report out to the leadership team and myself how the projects are going. And it's meetings like that that we identify if there are any impediments, and if so, what we can do to alleviate the problem so that the project can continue to move forward. So cross-functional communication is critical to ensure that a highly complex business continues to function well and continues to move forward because we wouldn't be moving forward if we weren't continuing to make investments in the business and to continue to grow our capabilities because, of course, our competitors are as well.

17:04And so we want to stay one step ahead. Sounds amazing. Also, to the point of competition, I think when a lot of people think about reshoring or bringing production back, they might be anxious about additional costs. So I guess, What would you say to them to kind of ease that decision making? We knew coming into this that our cost per unit was going to be slightly higher producing in the U.S. versus overseas, no doubt about it. But we realized that the benefit from having a much broader catalog of products from which the customers could choose would increase our business at a dramatic clip. And therefore, our bet was that while we'd see a slight reduction in gross margin percent, our gross margin dollars would grow because our revenue would grow so quickly as a result of expanding our offering.

18:00And that has proven to be the case. You know, there's a movement afoot where having too many choices is a tax on the consumer. that may be true in some businesses, but not when you're dealing with artwork. In our case, more is more because artwork is so personal that people really do need to find both a style of art and a message and a subject matter, all three of which appeal to him or her. And so it can take a hundred graphics to address one particular niche topic to make sure that you have something for everyone. And so we know that the more art we create and build out the catalog on Life is Good, the more business we're going to do.

18:48So to summarize, having a greater breadth of offering with the nimble ability to produce on demand has far outweighed the higher cost per unit. Yeah, you're enlarging your own pie in a way. And yeah, that sounds awesome. And then, you know, in addition to all of the change in operations and logistics, there's also a new brand spinoff with Keep It Simple. Yeah, talk to us about this new brand. Sure. So about 18 months ago, we realized that we had been doing all this work since 2019 to decorate in-house. And we realized that it was something that we could offer up as a service to other companies and brands and artists and influencers so that they could focus on what they do best, while we could bring their brand to life in apparel and other products by decorating on demand for them.

19:43So we realized that really all we needed to do was buy the same great products that we offer for Life is Good, but without any Life is Good branding. So we call them blank blanks, very creative on our part. And we then bring their brand to life on these garments. So customized back neck label, whatever art they choose to have. We can print anywhere on the shirt from the sleeve to under the arm. People call that a tattoo placement to traditional front chest locations. We've added embroidery and patches and we have sewing machines that we can sew down, locker tags and other labels. And it's been really exciting because there is such a need in the marketplace for high quality decorators.

20:36So there are plenty of people out there who make products for corporate and personal usage, and they do a great job. But we tend to attract a type of customers looking for a certain level of quality. And Life is Good has been known since its inception for a very high level of quality. Our products are built to last. And so there's been a real need in the marketplace for what we've been offering. And so it's only a year and a half in and we're off to a great start. I envision it's also really fun to see other brands or other artists being able to tap into kind of the knowledge that Life is Good has been able to uncover.

21:19So it's also enabling so many other creatives to share their designs and their message as well. Yes, and it's been so cool for us to see these other artists bring their works to our garments because the t-shirts and the sweatshirts look completely different when a different artist applies their vision to what we call our canvas. So we have lots of canvases, the primary one being t-shirts, but it's really neat to see how the products transform when other artists bring their works to us. And speaking to other artists and creatives, there's a huge team in-house that's designing, you know, 60 different designs every single week.

22:03How do you inject the creativity or is there any team rituals that kind of allows the creativity to flow, I guess? That is a terrific question. So when you come up with 60 new works of art a week, it takes a lot of people to come together to contribute to make that happen. The first step of that is getting together all of the business units and the marketing team and the art department to talk about what's working right now, what's not working right now, what new subject matters are occurring, whether it be in the social sphere or in the news, and what stories do we think that we could tell through an optimistic lens.

22:47It may also be something, it could be that we're coming up on Mother's Day or Father's Day, and we always create new works for those events. Christmas is a huge event for us and for everyone else, and so we spend several months getting ready for the Christmas season because so many people want to buy a Christmas-themed T-shirt. So we have a calendar that we plan out several months in advance where we divide those 60 graphics into two graphic packs a week. So one is delivered on Wednesday, one is delivered on Friday by the art department. And so we put together a brief for the art department in collaboration with them because we want to make sure that we're giving them something to work on that they feel inspired to create art.

23:35And then Bert, one of the founders, and a great team of artists get together and figure out what the subject matter and art style and message is going to be for the 60 works that we create each week. So it's a little factory of optimism. Amazing. Because I know that one of the things on Life is Good's website is talking about customer stories and also the community as the guiding compass for the company. So I'm curious to see how the community also fuels those designs and how do you make the customer so engaged and wanting to be a part of this community? We definitely believe that the customer is co-authoring the brand alongside of us.

24:21And the first way that they do that is by voting with their pocketbook. So when we introduce these new works of art, we know within a day or two which ones are resonating with the consumers. And so that gives us a very strong signal to do more of what's working and less of what's not working. So at the simplest level, the customer's purchase behavior on new graphics helps inform what we do next. We have now 64 art styles in rotation, but we're always trying new art styles. And if one really resonates, we sort of add it to the library. so that's one way but then we have a social community that's approaching four million people now and so we have daily interactions with those folks on all the various social platforms and we get a lot of feedback directly from consumers about things that they're looking for and those are the types of comments that come to the table in that meeting that i referenced a few minutes ago where we talk about what we should be planning for future graphic packs.

25:27So we definitely have multiple ways to hear from our customers as to what they're looking for. And creativity happens through collaborations with different brands to create food items and other products. So what are you thinking about when you're looking at partnerships? So since day one, Life is Good has focused on simple pleasures and the importance of those. And so most, if not all of our collaborations tend to accentuate simple pleasures. So whether it is partnering with Martin Guitar to create a ukulele and a guitar, we are so excited to work with them. They've been in business since 1833 and making incredible musical instruments.

26:09And of course, art is one of the most important ways to unite and inspire people. And Life is Good has a long history with music. We used to run music festivals. And so that was a partnership that we were really excited about. We did launch Life is Good ice cream last year. It's making its way across the country. Hopefully, you'll be able to find it in a grocery store near you soon. And then we also partnered with Harpoon Beer to create a summer style beer last year, and it went very well, and we're repeating that this year. So we continue to look for terrific opportunities and terrific companies with whom to collaborate so that we can mutually introduce one another's customers to the other brand.

26:56It's a really fun thing that we get to work on. And throughout all of the different chapters of scaling, Life is Good gives 10 % of profits to kids in need. How do you make sure philanthropy stays at the forefront as the company grows? Well, this comes right from Bert and John in the early days. One of the key ideas that they built the company on is that business for good is good for business. And so in their case, they identified a problem. There are a lot of kids in need. And as an example, here in the United States, the wealthiest country on earth, 30 % of children suffer from what are called adverse childhood experiences or ACEs.

27:38And if in the absence of a loving adult who's trained to help that child recover from the trauma, those kids do not end up becoming the best version of themselves when they grow up. and often they end up becoming the worst version of themselves, whether that's being addicted to drugs and alcohol, getting in trouble with the law, teenage pregnancies, et cetera. And so training early childhood educators how to help kids heal from trauma is a really important endeavor. And so Bert and John identified that as something that they were passionate about almost 30 years ago. And they partnered with the organization that's now known as the Life is Good Playmaker project.

28:20And our goal has been to fund their work so that they can focus on the social work and not have to worry about raising money every day like so many nonprofits have to do. And so they're co-located with us in our Boston office. We love working with them. They do amazing work. And as we grow as a company, we're able to expand the work that they do because it's a never-ending job. So my advice to other companies is to find something that you're passionate about out there and find an organization that's working on it and do everything you can to focus your giving and help on that particular topic because your customers will reward you for it.

29:06And I can prove it because one of the reasons why our net promoter score, which I view as the ultimate report card from our customers is a 91. And that is really kind of off the charts. This is on a scale of negative 100 to positive 100. The average score in the apparel industry is a 39. And one of the main reasons why we're able to achieve such a high net promoter score is because of the work we do to help children, because our customers tell us that's why they would recommend us to another friend. So there is no greater predictor of a company's future success or failure than their NPS score.

29:52So business for good is good for business. And I would urge other customers to early in their company's lifespan take to giving back. Yeah, it's also just so incredible to think about because it's not only just the messaging on the shirts, but it's also the way that the business model has been built. And especially for an industry that is so saturated, you know, when new aspiring founders are starting out early on their journey and they're thinking about having an element of a mission driven piece, a social impact piece to be built into their business. What's your advice to them to think about that while they're also thinking about so many other different hurdles when you're starting out?

30:41Right. So two things. Number one, simply find something, a problem that you're passionate about addressing, because that will fuel not only your energy, but it will fuel the work of the employees in the company, because everybody loves working for a company that has a higher purpose. purpose. The other thing that's really important is to figure out a concise way to communicate that to your customers, because the vast majority of people will look for a shorthand way to understand what it is you're doing to give back. So well before my time, the company landed on the phrase 10 % for kids at Life is Good.

31:25And that 10 % for kids really resonates. And that's what gets quoted back to us in our net promoter score surveys. A small percentage of our customers want to dig a little deeper and find out about the work that we do. And so, of course, we have a whole section of our website devoted to our work that we're very proud of. The people who take that extra step to learn about our work end up becoming our best lifetime customers because once they get it, they really, really get it and understand how powerful the work we do is. And that's true for so many companies as well. So identify something that's important to you and figure out how to communicate that crisply to your customers.