How I Made $1 Million In 1Hour After Our Worst Year In Business

0:00We did a million dollars in an hour. It was really exciting, but little do people know that that drop had a lot of production issues.

0:11Even seven years into business, there are many hard lessons to learn. I'm Serena Smith, and today on Shopify Masters, we're talking to Lindsay Carter, founder of Set Active, the athletic wear brand that's redefined what a matching set can look like for the everyday girl. From celebrities like Hailey Bieber to Kendall Jenner, Lindsay's brand has become a must-have in the It Girls wardrobe. rope, but behind the scenes, it's been anything but glamorous. After hitting the first down year in 2023, giving birth to her second baby and skipping both maternity leaves, we'll talk about that, Set Active was nearly drowning.

0:41I lost myself and because I lost myself, I lost my brand. We got to turn things around and we asked for help. Instead of giving up, Lindsay used what felt like her rock bottom to uncover the playbook Set Active needed. She grew from crisis to bringing in a million dollars in revenue in just under an hour. Now the company is on track to surpass $20 million in annual revenue. Lindsay, thanks for coming back on the show. I'm so happy to be here. Did you always know you wanted to be an entrepreneur? I think my dad always knew I wanted to be an entrepreneur and I didn't really understand what that meant growing up.

1:16But looking back, I was coming up with ideas left and right. My very first idea was like a hair salon because I love hair and makeup or I love doing it for other people. Back then when no one was doing coffee and play areas for moms, I wanted to do something in Beverly Hills called Nanny 210. I've always been someone to come up with ideas all the time, but I didn't really realize that obviously the work comes from the execution. You can be an idea person, but the execution part is the hardest part. And when my dad, you know, my whole life said, you're going to be an entrepreneur. You're going to have your own business one day.

1:51I think that kind of put pressure on me to not want to do that. So I went to school to be a kindergarten teacher. Wow. Vastly different. Vastly different. He was right. I mean, it was always innately within me to want to be an entrepreneur. And I think I had to understand what that meant before becoming one. And you feel like you got to a place of understanding what it meant to be one before actually taking the leap? Yeah, because I worked so many different jobs and I realized the first step was one, I don't do well working for other people. Not that it was like certain people. It was just, I like to do things my way and that wasn't going to happen by doing it for other people.

2:32And I started my own social media agency called LA Social, which was my first real look into being an entrepreneur where I was responsible for other clients and brands. But before that, I started my own summer camp. It was called Lindsay Camp. And I took in like all the kids who didn't have anything planned for the summer and did itineraries and hired counselors and the whole nine yards. But LA Social was like my first look into being an entrepreneur where I had to come up with contracts. I had to land clients. If a client contract was running out. I had to figure out how the next wave of revenue was going to come in so that I could keep the business afloat.

3:12And that's when I felt the like fire ignited. But ultimately, LA Social was not the thing for you. And you understood that you wanted to parlay it into something else. What was it that you wanted that was different from what you were doing? I think in a service-based business, there's always going to be a ceiling. And you can't recreate yourself in someone else. So your ideas, the way you think, the way that you systematically do things, it can't be really taught. You can't clone yourself. And trying to get other people to understand the way my brain thinks in the world of social media strategy and marketing was proving to be very difficult.

3:51And it was frustrating. Then on top of that, I was landing clients left and right. And then I land this sock brand. And I was like, what am I doing? I'm flying out to Arizona. I'm not passionate about this product. I'm expected to come up with all these marketing ideas and social media strategy. I don't even use the product. And that's what really started to make me ask the questions to myself, is this what I want to be doing? I love social media. I love marketing. And I was sitting in a coffee shop on Melrose Place and I was watching all these girls walk in and out to get their coffee in like mismatched active wear, but that's what everyone was in.

4:31And I was like, there has to be something out there that takes the like guessing out of getting dressed in the morning. And it was that day that I was like, I felt like the social network where like all of a sudden the adrenaline's pumping through your veins, you're going home, you're writing things down, you're going to do market research. Like it was just like this electric feeling that I was like, wow, this is what I want to do. Amazing. Yeah. What was the timeline between that like lightning strike moment of Genesis and actually launching the company? About a year. Wow. Yeah. It took about a year, a year to a year and a half of execution.

5:07I had to do so much work beforehand and I had a lot of really hard conversations. I remember calling my dad saying, I want to start a company. And he was like, great, what is it? And then I told him and he was like, okay, and how is that different from Lululemon? And I was like, well, there's no one in the D2C space who's doing matching active wear sets. And he was like, okay. And I was like, and I need an investor. And he was like, okay, how much do you need? And I was like, I don't know. And he was like, well, I can give you the number to an investor. His name is Chet. You can give him a call and let me know how it goes.

5:42And I was like, okay, great. So I called Chet. I was in my room. I'll never forget. And I was like laying like a teenage girl, even though I wasn't a teenager with my feet in the air on my stomach, like twirling my hair, waiting for Chet to pick up the phone. I'm envisioning you not on a cell phone either. Like envisioning you with like the cord. Yeah. And I'm laying there and Chet picks up and he was asking me all these questions. He's like, well, what's your EBITDA? What's your CAC? And I was like, huh? I had no idea what he was talking about. And I remember getting off the phone and just like in tears.

6:13Like I was like, there's just no way that I'm cut out for this. And after a couple hours of like sitting with that, I was like, you know what? No, I'm not going to let this stop me. And I just kept going. and to this day I'm still bootstrapped so. Wow. Yeah. Incredible. Yeah. There's something to be said for things that feel like either mistakes or misses that end up being blessings. You sometimes can't see that until you're like it's well in the rear view. Yeah. Yeah. I mean you did not take a linear path to get to founding Set. You tried many other things prior and Set Active of course has not followed a linear path either.

6:53No startup does. But like, can you talk to me over the last seven years about like the trajectory of the company? Right out of the gates, it was, you know, I built the hype. I was showing the BTS on my personal social media. And that was a time where like no one was building in public. And I don't think anyone was building in public then. I was selling samples left and right. I was, you know, getting texts from friends of reviews and then posting them on my Instagram story. I was going to the factory and showing everyone what I was up to. And it really out of the gates took off and people were so excited.

7:26I also had a black book of influencers that I was managing and connections and from LA Social where they were happy to support from the day that I started the company. I always told myself, what's the worst that could happen that you're going to get a no? And I would spend all day DMing influencers left and right. And one time, I did get an influencer respond, doesn't matter who. And they said, yeah, for a check, and I'll never forget it. And I was like, okay, this isn't going to work. I don't have a check. But for every no, I got like 20 yeses from influencers and celebrities who were just happy to try the product.

8:00And it really started to take off. And then COVID happened and it just skyrocketed because everyone was lounging at home. And it was great for the brand. And then - It's interesting because it's like people weren't really out. Yeah. But there's still this desire to be engaging in some kind of luxury without wearing hard pants. It was when the big boom of TikTok was happening and Charli D 'Amelio and all these people were filming themselves on camera and, you know, they wanted to be put together, but also know that you're lounging at home because it's COVID and you're locked inside your house. And then 2023 was the year that I think I lost myself.

8:45And because I lost myself, I lost my brand. And it was our first down year that set ever had. But it's important that we had it. I think every brand and company goes through a down year. It's if you make it out alive after that, that sets you apart. And we did. We made it out alive. And we stabilized last year. And we're up 49 % this year. so far. I think we're actually going to beat 30 million. I know you said 20 million, but It's a good correction. Yes. I was like, I'm going to have to throw that in at some point because it's what we're doing it and we're killing it this year. And it's something I'm really proud of.

9:23That's amazing. Congratulations. First of all, that's huge. And I can imagine like given the roller coaster that running your own company is, it can be hard in those moments of success even to be able to take a breath and say, okay, I'm okay. Like, are you able to take a breath right now and say things are okay, I feel okay? Yes and no. I think that I always wanna do more and I always wanna do better. And I was listening to a podcast actually on the way here with Emma Green and Mark Cuban and the learning never stops. Like, it's not like you hit success and all of a sudden you have it figured out.

10:02Something new is gonna be coming out all the time. And if you're not moving with the times, then you're not going to keep up as a company or a brand. And I think that's what gets me so excited is that the learning never does stop. And there's always more to do. And there's always more to level up. And that's what gets me excited. The learning doesn't stop, but the learning does change, right? The things that you were learning when you didn't know what CAC was or EBITDA in the very beginning, those are not the things that you're learning today. What are your core challenges seven years in? I would say my core challenge is seven years in is managing employees.

10:38It's really hard to understand how each person is motivated because someone who is motivated by title is not the same person who's motivated by money. Everybody wants different things. And making sure that you have the best talent and the right seat to execute on a vision is so crucial to be able to get to the end goal of what you want to do creatively as a brand that you have to really, really make sure that you're hiring for the right person in the right position and not hiring out of desperation. That's something that I wish someone had told me when starting a business is, one, you're going to grow a lot as a human because at 26, when I first started the brand, I wasn't even an adult.

11:20Like, I'm still not an adult. I wasn't an adult then, and I'm still not one now. And there's always going to be mistakes that you're going to make as a leader because, you know, at the end of the day, you're leading this company as the founder. But also just understanding how to find the right talent for the right positions, I think is very crucial when you're growing a brand. And what is your wisdom on that front, you know, and maybe that comes from early mistakes that you made and then lessons learned. I did hire out of desperation. I've hired friends before, which, you know, was a big mistake that I made and it cost me losing friendships.

11:56I think that people need to know when they're working for a brand, especially a founder-led brand, that you are going to be working for a founder-led brand and that it's the founder's vision that you're going to have to execute on. And of course, I welcome ideas left and right. I mean, I have some of the most talented creatives that sit on the set team now, but they all understand that at the end of the day, it is my creative vision that I'm going to want to execute. And I think that's really hard for people when they don't realize what they're signing up for when you go work for a founder-led brand.

12:29How do you get people to buy into that vision when fundamentally they don't have the same skin in the game that you do? I think just understanding the walls that you're breaking down. When people come in for interviews, they say all the time, this is where I want to be. I love what you're building. I love your vision. I love what you're doing. And they're watching a brand build publicly on social media. And I think to be able to have a hand in doing just really epic, creative campaigns and marketing and have people talk about the brand, they want to feel a part of that. They want to be able to say like, oh, I did that.

13:09Or I was a part of your wholesale expansion on the operations side. They want to feel like they had a hand in it. And they do if you have the right person. And it's really exciting. We have an employee who was our creative manager just seven months ago. And she left us to go work at a different brand, not a D2C brand, but more high fashion. And she said, I owe it to myself to go try high fashion. I've always been in, you know, the creative D2C space and I want to see what it's like. And she's coming back as our senior brand manager. I'm really excited. And I love a good boomerang. I'm excited to see like her come back.

13:47She feels really, you know, equipped to have her hand involved in things that, you know, she didn't have her hand involved with before. And she's learned a lot being at the other brand and we've all seen it. And now she's coming back and she's excited to build this, you know, next generation of set that we're about to dive into. That's amazing. And that's a testament to you too, to be willing to let her go. Oh, I fought for her. I said, you can't leave. I said, no, no, you stay right where you are. And she was like, I have to do this. I tried to fight, but I mean, everything works out the way it's supposed to because she's coming back.

14:23All the better. You don't want to be somebody who stays and then builds resentment and is operating from like a what if mentality. You know, she went, She did it. She understood. She said maybe the grass is greener. It's set active. I'll come back. Yeah. She's coming back. Can't wait. Okay. 2023 was the last time you were on the show. That was set active. That was our bad year. That was the down year. And you said that it happened because you lost yourself. What was going on outside the company that was bleeding into it? I had a baby in October of 2022 and I was in postpartum. I didn't take maternity leave.

14:58I didn't take maternity leave with my first either. And it's my biggest regret. You're so not aware of the hormones that are like pumping throughout your body and you're not making smart decisions and being able to be out on the other side and look back. Like I feel like it's a that's so Raven moment where like I'm able to like stop and take a second and look back and I'm like, whoa, like who was that? I was unhealthy. I wasn't exercising. I wasn't eating right. I was sleep deprived. I mean, it was the perfect recipe for being the worst possible leader and just also like a bad wife, a bad friend.

15:38I just, everything was falling apart that year. It took a couple like interventions from my COO and someone who's been in my life since the start of set. And then someone who does like brand strategy for us. And she's been in my life since I was born for them to like sit me down. And they kind of like, we're like, you need to wake up a little bit. Like we got to turn things around. And that got me to wake up. Okay. So you wake up and that's what's happening from sort of an emotional perspective. From a practical perspective, what did you do to then get the company back on the rails? It wasn't like I snapped my fingers and then everything magically turned around.

16:16It was a long road of just identifying what's the first step. And the first step was we need to be operating less than what we're making if we want to keep going. And so we had to do our first round of playoffs. And it was the first time that I had to sit people that I cared about down and say, we're eliminating your position because we just, we had to operate at less than what we were making if we wanted to continue. And that was the first step. And that was really hard. I still get flashbacks walking into the conference room of our office being like, oh God, so many hard conversations happened in this room.

16:56And then I think from there, it was, we were going into, it was like holiday season. We were going into Black Friday. Black Friday always does well for us. Even on the down year, it did well for us. And it was me and Allie. We were sitting on the floor of my bedroom and we were like, we got to turn things around? What does that look like for us? And we asked for help. That's a lever you have to pull. And it's really hard to kind of put your ego aside after building something for five and a half years. You're supposed to, as a founder, look like you have it all together. You have all the answers.

17:30You know what to do. And I didn't. And so I picked up the phone and I called a couple people in the industry that I really trusted and said, I need help. Do you have advice? And they were able to help. And it was the first time that we were able to be like, this is working. And Black Friday did really well. We turned it around and it gave us a nice boost into stabilizing the next year. Do you remember some of that advice specifically? I think at the time, one of them was to hire on this company called Black Crow AI. And it was the first time we dabbled with AI. And it was a way to optimize your email flows.

18:08AI would tell you like what works and what doesn't, that really helped. We also were able to hire this other brand who was able to kind of go through and do an audit of all of our like marketing playbooks and our email flows and optimizations and like what we're doing wrong in our segmentation and was able to kind of clean it up a little bit. I mean, it was a crazy Slack channel. I'll never forget. It was like, this is how you guys have been doing your segmentation and this is your unsubscribe rate and all of this other crazy stuff that we were able to uncover. And she was able to fix it all up for us.

18:41And she was a connection from someone else who was able to make some phone calls. And we were like, we can't afford this. And I remember sitting on the floor of my bedroom and she's like, okay, it's going to be$10 ,000 to do this audit and like give you the strategy to like get back on track. And I remember looking at Allie and saying like, I think this is a risk we have to take. And we obviously made that 10K back in no time because her strategy worked. But we wouldn't have been connected to these people if we didn't raise our hand and say, hi, we need help. And I think that's what a lot of founders, they are scared to ask for help because you don't want to come off as weak.

19:19But I think it actually makes you stronger when you ask for help. And it's a good thing. And it totally helped us turn things around. Yeah. I mean, it certainly shows a certain kind of humility, which I think actually like really commands a lot of respect from people, you know? Yeah. The willingness to know what you don't know. And I think fundamentally people like to help, you know? Totally. There's something that's like sort of self-serving for the person who's doing the giving of the help also, you know? Yeah, 100%. Okay, so now fast forward to this year and just a few months ago you did this resort drop that made a million dollars an hour, which is just like an astonishing number and pretty much entirely via social.

19:59Can you talk about like what went into the planning of that behind the scenes and if you were projecting numbers that high? We always are able to kind of project what's going to happen on a drop day. We always have drop day goals and we always have potential revenue that the whole drop could potentially make. It definitely beat our drop day goal on, you know, normally we hit drop day goal, which means the person who's doing our data analyzing is spot on. And she's always spot on because every drop this year, we've either hit it on the nose or made a little bit more. But with resort, obviously it like blew it out of the water.

20:36I had this vision for resort. I was like, no one's really focusing on active wear for resort. Like, what does that mean? And I go to Cabo every year with my family. And every December, I've been doing it since I was a little girl. And now I adopted that tradition with my own family. And I remember being in Cabo one year and I was going to the gym or walking into the spa area and they had an active wear like set up in there, but it was all like black and dark colors. And I was just like, they can get this anywhere. And I remember all the like ladies walking in to the gym wearing black. And I was like, there's got to be something more exciting for resort.

21:17And that's really where the idea was born. I want to do fun, bright colors that remind you a vacation, but still functional and easy to wear out and kind of is attention grabbing, but still simple. And that's kind of how it started. And then our creative manager at the time, the one who's coming back to be our brand manager, was like, if we're going to do this, we have to shoot it not in LA. Like we can't fake this. We have to go on location. Convenient. And I was like, great. You guys go and enjoy. They found this really small hotel. I don't know the name of it in Mexico that was like bright colors, complimented our color as well, and just like really told that story of resort activewear.

21:58And I think because everything was just so cohesive from the start of the vision to the execution that people really bought into it. And it totally, totally obviously crushed. We did a million dollars in an hour. It was really exciting, but little do people know that that drop had a lot of production issues. And I remember in January, like we're writing POs right now for Q3 of next year. And I remember this January, we had a problem with one of our fabric families. And I was like, I'm just going to pick Pantones. We don't need a lab dip. I'm just going to, instead of this one, which isn't working, it's having dye issues.

22:35Send these two Pantones. We're going to take the risk and it needs to be delivered by April. I don't know how we pulled it off, but we did. And it was one of the best selling colors of the drop, which was really exciting. But every drop kind of after resort really has crushed it. I mean, we just had to drop our community collection last week and we beat our goal. We introduced our first seasonal shop, the drop before that, and we also beat our goal. And so it's just been really, really, really exciting to see that momentum this year. I think momentum is, you know, can make or break a brand. And if you don't have the momentum, it could kill your brand.

23:11And I think that we've just been riding the momentum with bigger and better drops since then and going to be that next year too. Next year is insane. It's one of some of the best product we've ever done. Is there anything you can tease for what's coming up? We are doing a resort drop again in collaboration with the Four Seasons in Hawaii. So I'm very excited for that. I just approved the merch artwork for it before coming here. So I'm really excited because it's really, really creative and really chic. And it reminds you of like the really vintage, embroidered, simple sweatshirts you'd get on vacation that weren't too in your face with active wear, of course, to match.

23:52And we've pulled colors that inspired us from both locations of the Four Seasons in Hawaii. So we're really excited. Our spring shop is really good. It's inspired by like 90s vintage worn in pieces, faded colors, heathered grays, just like simple pieces you want to live in in the spring when you're like not ready to make that transition into summer. We have our first Gorpcore drop in January. Gorpcore is trending next year. So it's like outdoor, but for the everyday girl, like not necessarily the person who wants to go on a 10 mile hike, but someone who wants to hike to go get coffee, like it's going to cover all bases.