How Purpose and Strategy Powered Actively Black’s Rise to $2 Million in 12 Months

0:00The inventory that I bought for the launch of Actively Black I thought would last me the first three months. It sold out in the first three weeks.

0:10Lanny Smith grew up chasing a career of becoming an NBA basketball player until an injury cut his NBA career short almost overnight. So he drew up a new game plan and launched Actively Black, an athleisure brand built to inspire fitness and uplift the black community. Everybody told me that this would not work. But I had an undeniable faith and belief in this vision that it didn't matter what anybody said. He rallied thousands of followers around one mission before even a single product dropped. Those early believers helped drive$2.3 million in first-year sales and paved the way for what is now an eight-figure brand.

0:46Do you know how many shirts and hoodies you have to sell to do a million dollars in revenue? And that's not profit, by the way. That's just the top line. Lanny Smith joins me now to share more on how he's brought his career to new heights by securing millions in funding and partnering with outstanding manufacturing partners. I'm Adam Leventer and this is Shopify Masters. Lanny, welcome to the show. Thank you for having me. You were talking about this playbook of going demand first, product second, right? Building that audience before you've got something. Walk me through that. Yeah, the first brand I actually launched after my NBA career ended in 33 days.

1:23It's called Active Faith. It's a faith-based sports apparel brand. My partners in that, Anthony Tolliver and Stephen Curry, who continued to play basketball while I was building the business out of my mom's home. But one of the things that I learned with that brand was the power of community and building an audience. And so going into launching Actively Black, before we had a single product available on the website, the first thing I did was utilizing the power of social media, just really get the idea out there of the concept and the mission and the message of what we were trying to do with Actively Black.

1:56And it was really through that process, I think we had 10 ,000 followers on Instagram around that same amount. of subscribers to our email list. I think about 3 ,000 subscribers on our text message list. So on launch day, it made it a very successful Black Friday. We actually launched on Black Friday 2020. And when I think about the differences in the brands, Active Faith, we did about 100 ,000 in revenue the first year. And with Actively Black, we did 55 ,000 the first day of Actively Black. And I know part of that difference is because just learning how to build that audience, have them engaged and ready for that drop before we even had the product.

2:34But a lot of founders make that mistake of going product or service first and then audience or community second. Yeah. I get a lot of people hit me up and they're like, man, I got this great idea for a brand and I want to launch this. And the first thing I tell them is, you know, have you really sat down and think about your audience? Have you built an audience first? Because really what we did was reverse engineer this thing instead of, you know, most entrepreneurs will build the product or they'll build the brand and then they'll go try to find somebody to sell it to. We built the audience first and then built product that super served that audience and it's worked out well for us.

3:07You sort of glossed over these numbers though, 10 ,000 emails, you know, a few thousand texts. You had that before a single product is even sold. How does one go about generating, you know, 10 ,000 email records to market to, for example? I think part of it is also related to the messaging and the mission and the purpose for what our brand is about, right? It's bigger than the product. It's bigger than just, you know, the world doesn't need another apparel brand, to be honest with you. There's enough out there. So what is it about your brand that is going to speak to your audience in a way where there's a emotional connection?

3:43There's something where they feel like I need to be a part of this. And so for Actively Black, it was creating something in a space that lacked any Black ownership. I come from the athletic world. I used to be a professional athlete. Even growing up, I played for the AAU, the Nike teams, the Adidas teams. These are brands that historically have profited billions of dollars and have been able to do so off the backs of Black talent, Black consumerism, Black culture, but there is no Black ownership in that space. And so I think, you know, for us serving this niche audience that had never seen ownership in this space was something that spoke to them, representing Black culture and Black history and championing Black culture, I think is something that I know it hadn't existed in the athleisure sports apparel lane.

4:32So when my audience was seeing this, it resonated with them in a way where they were like, no, I got to sign up. I need to know when they're launching. I need to know when this product is ready. One of the pivots that we made that has actually turned into one of our most meaningful and purposeful collections is our 100 % cotton collection. Due to a lot of different economic changes, the global supply chain, all the different things, you know, we made a conscious decision to reshore some of our manufacturing for our 100 % cotton collection that is all made from cotton that is grown from Black farmers.

5:05So we partnered with Black farmers and it's made in America. It's 100 % cotton. And essentially we're building a Black-owned supply chain, like literally from the cotton coming out of the ground to it being processed into the fabric, to being cut and sewn, to us creating the product that I'm wearing one right now that people wear. And it's actually turned into one of our best selling collections of all time, partly because of the messaging, the purpose, the meaning behind it. Black Americans have had a painful history with cotton for obvious reasons because of the history of slavery in America.

5:40But a lot of people don't know that in today's value, there were trillions of dollars of wealth that were generated off of cotton during that time that we were not able to participate in the wealth generation that happened. And so we're looking at this like this isn't reparations. This is reclamation. So you've got these black farmers who own this land. In fact, Bridgeforth Farms is one of the farms we're working with. They've owned their land for 150 years. They literally can trace back their lineage to Troy Bridgeforth's great, great, great, great grandfather was a slave. And after he was able to obtain his freedom, he bought this land and his family has owned it since then.

6:21And so this cotton that's coming from this land that they used to have to pick as slaves, they were forced to and they could not profit from it. They now own it and we get to support these farmers with this collection and they own it and they get to profit from it. You know what I mean? It's just a powerful story of reclamation that we're able to do through this brand. And our audience has resonated with it in a very powerful way. How long was that process of generating demand, building that audience? And in the background, were you working on, say, your first line of SKUs? Yeah. I mean, my first brand, Active Faith, is very similar in that it's the same product.

7:01It's just a different audience and different messaging and different purpose. so I already had my manufacturing partner. I was already working on what those SKUs would be. I just hadn't launched it yet. I hadn't invested into the inventory of that yet. I really wanted to see what touched my audience, what moved my audience, and they really kind of helped inform me on this should be the first collection that we drop. And even with that, those learnings that I had from building the first brand, I knew that it was much cheaper to sell to an existing customer than to acquire a new customer. So the inventory that I bought for the launch of Actively Black I thought would last me the first three months.

7:38It sold out in the first three weeks. And instead of just restocking that existing collection, I kind of split that and I restocked some of that, but then I also brought in a new collection because everybody who bought the first collection then came and bought the next one. Those existing customers that had bought that product and were happy with it, I earned their trust already. So when I dropped the next collection, I didn't have to even advertise that. As soon as I sent that email blast out or that text message blast out, they came for the next collection. They just had to wait a little bit longer.

8:07Yeah, yeah, of course. Right. So you've said in the past fast growth can kill you just like no growth. So$55 ,000 in top line revenue in one day is insane. What did that first year look like? I think we did$2.1 million the first 12 months of Actively Black being in existence. But we were probably sold out six months out of that 12 months. So there's no telling what we could have done if, you know, I had the inventory to meet the demand. The other side of creating that demand is, is can you supply it? You know what I mean? And I've been behind on demand since day one. And to this day, as I'm talking to you, I'm still behind and I still have not caught up to demand.

8:47It's a great problem to have, but it's a problem nonetheless that I'm trying to solve for. What have you learned from those operational challenges? Is it, you know, better manufacturing partners? Is it shorter lead times? Is it on-shoring manufacturing? What is the answer? I mean, it's a combination of things. I think, you know, for our product, we make premium athleisure wear products. So the same thing that you'll go see at a Nike or Adidas or a Lululemon or Aloe, we're making that from scratch. Like, I'm not buying pre-made blanks that we're just throwing our logo on. We're sourcing the best athleisure wear materials that all the rest of the top companies are using.

9:22and to cut and sew, to create that inventory, it takes 30 to 45 days just to make the inventory. That's before you put it on the boat, which may take another 30 to 45 days. Even trying to do the demand planning, we're in such a fast growth phase where our historical data becomes obsolete. The moment I place that inventory order, there's so many people finding out about Actively Black every single day that by the time that actually gets to me two to three months later, those numbers are obsolete you know what I mean and it's hard to pinpoint how much we we actually need to order and then we've been blessed with so many incredible partnerships that I think have multiplied that brand awareness so when you're talking about partnerships with Disney and Marvel and Star Wars and the Muhammad Ali estate and the Tupac estate and Malcolm X estate the Martin Luther King estate and the Bob Marley estate we've had collaborations with all of these different people those things have just multiplied the demand to where we're still trying to catch up to it so talk to me about that partnership side of the business so how do these partnerships happen who was the first big partnership that you landed the collab for marvel wakanda forever black panther wakanda forever was the first major one which is a huge full circle moment for me because the first black panther movie was even part of the inspiration behind creating actively black For me, like seeing that first movie, seeing a black superhero with hair like mine, with skin like mine, it was like the power of representation in seeing this positive image of a black male as a superhero that I got to see even as a grown man.

10:59It really impacted me in an incredible way. And I remember walking out of the theater and saying, man, I want to create a brand that makes my people feel the way that movie made us feel. So that's 2018 when that movie came out. fast forward to after launching actively black damon john uh famous you know shark tank now but founder of fubu which was a brand that i was just obsessed with growing up he reached out and wanted to do a fubu actively black collab wow and i'll never forget he had a meeting here in los angeles and he walks into the meeting and he's wearing an actively black hoodie i was trying to keep my cool in the meeting you know i mean i'm sure but inside i was like yo i was obsessed with fubu growing up Like I used to beg my mother to buy me a piece of FUBU and the guy who created FUBU was wearing my hoodie.

11:43And I was just insane. And we're in the meeting and he asked me, what else are you working on? And I showed him this deck of what an actively black Black Panther collab would look like. Just because I was so inspired by the first movie, I had this deck designed and he looked at it. And in the middle of the meeting, he picked up the phone. He called the head of licensing for Marvel and Disney. and said, you need to see what I just saw just now. Three days later, I'm in a pitch meeting with the head of licensing for Marvel and Disney, and they loved what I put together. And when the sequel movie was coming out, we got the official collaboration.

12:19And so that was huge for us. I mean, it really, the brand awareness, the legitimacy that it gave our brand really opened the doors. And I believe it was Lani Ali, Muhammad Ali's wife, who found out about us because of that collaboration and reached out. Yeah, I mean, I would think there'd be like some sort of cascading effect, right? Somebody goes first and then you have all this other interest that sort of bubbles up as a result of that. Do you feel like when these partnerships come together that you have to check to make sure that they're aligned with your vision, with what you see for the brand?

12:53Yeah. I mean, Actively Black is a very purpose-driven brand. It's something that I'll never compromise on. You know, I really wanted to build something that was Black-owned that could uplift the Black community and have these messages that are positive, you know what I mean, for our people. And so any partnership we do has to align with the actively black brand is about, you know what I mean? But when I think about what we've been blessed to be a part of, Wakanda Forever, you know, Muhammad Ali and what he stood for in and outside of the ring, you know, me and his wife had an incredible conversation where it was like if Muhammad Ali was alive today and he was having to choose a sports apparel brand to sign with, it would be actively black.

13:33You know what I mean? The Malcolm X estate, the Martin Luther King estate, these partnerships are ones that align with our brand so perfectly that it only makes sense. Do you feel like this is the same for taking on venture capital, like ensuring that whoever is investing in your company, in your brand has the same vision? One thousand percent. One thousand percent. I mean, and you've raised right north of seven million dollars. Yeah. Yeah. Kwame Anku from Blackstar Fund and Rich Lou Dennis from New York. Voices Fund invested in Actively Black. And there are two funds that specifically try to invest in underrepresented founders.

14:12You know what I mean? Black founders receive less than 0.3 % of all venture capital funding and their funds are trying to correct for that. So I was blessed to be one of those who they invested in. They saw the vision and what I was building. And when you're taking on an investor, it's a marriage. You know what I mean? It's a relationship that is a long-term thing that you have to be aligned in order for it to work. And making sure that they understand your vision and where you're trying to take this thing and where you're trying to go. If you want that relationship to be a fruitful one, I think you have to make sure that before you take any money from somebody who wants to invest in the company.

14:49Yeah, I think that's sound advice. Harder for founders when they really need that capital. And that's when they start to make those sacrifices and those relationships go awry. They've taken on that venture money, but there's misalignment right from the beginning. And that's where things go astray. Yeah. But it sounds like you're quite principled in that regard. Yeah, I was blessed to find some investors who have the same vision and the same principles in what we're trying to build. So 33 days into your NBA career, you have this injury? Yeah, yeah. Career ending? I mean, devastating. You know what I mean?

15:25I had no plan B. To make it to the NBA was a dream that I had since I was four years ago. old there was nothing else that I wanted to do in my life I don't think a lot of people understand there's only 450 slots in the NBA there's a million kids that want to be playing everybody wants to play in the NBA there's only 450 slots and all 450 slots are not open every year and there's 60 guys that get drafted every year trying to take whatever you know slots there are so you're talking less than lottery ticket chances to actually make it to the NBA and to be blessed and fortunate to sign that contract was just, I mean, it was the highest of highs.

16:02You know what I mean? To think of something that you want to do since you were four years old and to actually be able to walk into an NBA locker room and put on a jersey and it's got your name on the back was an unbelievable feeling. And then, you know, 33 days after that to, you know, have the knee injury that I had and then have two microfracture surgeries and it's all over with.

16:26I'm going to make sure I do not get emotional on this one. I get emotional whenever I tell the story. But I went through the depression. I went through the identity crisis, you know, my whole life. It was, you know, that's Landy the basketball player. Everybody knew me. That's who I was. That became my identity. And now this basketball is taken away. And it's like, well, who am I without this basketball? You know what I mean? And so honestly, I think entrepreneurship was something that also kind of saved me and kind of helped bring me out of that dark place. I was able to channel all of that energy, all of that passion, every, you know, that work ethic, the things that I don't think people understand that entrepreneurs have to go through to take a dream out of your head and actually make it to be a reality.

17:12There's a level of sacrifice that I don't think people really understand. And I understood that because of the sacrifice that I made to make it to the NBA. You know what I mean? Those nights where I had to tell my friends, yo, I can't go to the party because I got to go back to the gym to get these extra shots up. You know what I mean? Like, it's the same thing now. There's times where, you know, my friends want to go hang out. It's like, man, I got to be up with my manufacturer tonight till three or four o 'clock in the morning. And that's just what I have to do. It's taken everything that I was doing to make it to the league.

17:41And it's transferred into this lane that I'm in now. What are those character traits that one has to have to become the best of the best in the NBA or to become an entrepreneur who is scaling a successful business? There must be some character traits that you've identified to carry through. I'd say one, got to be delusional. You have to have this undeniable belief in whatever your dream, whatever your vision is, that nothing can deter that. And you have to be delusional. But your work ethic has to match that level of delusion. There's a lot of people who talk about like manifestation and all those things.

18:24And it's not your Instagram post. It's not your vision board. Are you willing to sacrifice everything that it takes to make this thing happen? A lot of people will talk that, but the action behind it has to follow. So I think it's delusion because in the same way that there's a lottery ticket chance of making it to the NBA, I'm in apparel. It's like one of the worst. I would never, ever tell anybody to get into the apparel business. I'm serious. You never advise someone to jump into the apparel business. Ever. So many people hit me up. Man, I got this cool saying. I got this cool idea. Put it on a shirt and hoodie.

19:00It's going to make a million dollars. I'm like, man, if you only knew it doesn't work that way. Do you know how many shirts and hoodies you have to sell to do a million dollars in revenue? And that's not profit, by the way. That's just the top line. You know what I'm saying? And like nobody ever really thinks like, man, how many shirts and hoodies do I actually have to sell just to do 1 million in revenue? You know what I mean? And the failure rate is extremely high. I think for most startups, I think it's like, what is it? Like 80 % fail within the first 24 months or something like that. Less than 4 % get to a million in revenue.

19:31There you go. You know what I'm saying? Those are the ones that launch and do some revenue. I'm saying have some product market fit. It gives you an idea. I mean, there's that whole cohort of startups that never generate a dollar. Yeah, yeah. So it's lottery ticket chances, you know what I mean? And so when you ask about those characteristics, I think anybody who plays professional sports is a little crazy. You have to be to think that I can actually be one of those 450 or however many there is in the NFL or Major League Baseball, knowing that there's millions of people trying to get these limited amount of spots.

20:04You've got to be a little crazy, you know what I mean? And I even tell people when they hit me up and ask me about starting something, I said, don't do it. I'm telling you right now, don't do it. And the ones that listen to me and don't do it, you didn't have what it was going to take to do it anyway. Because you're going to face so many no's, so many rejections, so many people telling you it's not going to work. That if me telling you don't do it was enough to get you to not do it, then you actually don't have what it's going to take to do it. You know what I mean? Everybody told me I was crazy launching this.

20:34Everybody told me that this would not work. But I had this, I had an undeniable faith and belief in this vision that it didn't matter what anybody said. Well, it only took you a day to prove them wrong with$55 ,000 in revenue the first day. I wouldn't consider that success. I'm blessed and fortunate. I know that's not the norm, but there were years that led into that one day. I'll just put it like that. It wasn't that one day. It was years. It was tears. It was rejection. It was a lot that led to that one day to start. And there's been the rejections and the tears and the failures since that first day.

21:09You know what I mean? Like, that's another thing is like, it don't stop. That's another trait with a lot of professional athletes is you can never be satisfied even with whatever level of success that you have. You know, Kobe Bryant added something new to his game every offseason. Michael Jordan added something to his game every offseason. They're never satisfied. And once you get to the point where you're like, yeah, I made it, that's dangerous times for you. What happened after the injury? How long does it take for you to find entrepreneurship? or does entrepreneurship find you? How does this happen?

21:41Man, I feel like my life has been one of those where I haven't just experienced certain things. I've been collecting experiences that all have led to these different moments in my life. So in 2008, while I was still playing, I was invited to go on the NBA Asia tour and we played in exhibition games in the Philippines, South Korea, and in China. And we were in China. We actually got to go on a tour of a factory and I didn't know this was going to be in my future, but I was just intrigued by the way these things worked and I was talking to the tour guide and asking different questions and I was just very inquisitive.

22:20And at the end of the tour, he was like, man, thank you for paying attention to, you know, most people don't really pay attention like that. I think we befriended each other on Facebook at the time and fast forward, I get hurt, my career's over with, I decide I want to start Active Faith And I was like, man, I don't want to just do T-shirts and hoodies. I want to do like real moisture wicking fabrics and athleisure wear. I need a real manufacturer for this. I was able to go back to that Facebook message and hit that guy up from, you know, a few years earlier. And he pointed me in a direction to find him, you know, my first manufacturer.

22:53And so I think that I'm walking in a purpose for my life and all these different things have kind of like just added a tool to my toolbox that I'm now using for what I'm doing. You know what I mean? So I don't know if that answers the question, but, you know, that's a great question. Did I find entrepreneurship? Did entrepreneurship find me? I think it was whatever this is that I'm walking in was part of whatever the plan for my life is. Do you lament the injury same way you did after it first happened? I mean, the way that I think about it is you still reached your dream. You made that happen.

23:27Yeah. Right. You still made it to the NBA. Yeah. Everyone's career ends at a certain point. Your career happens to end after 33 days. Some people's career, you know, ends after 10 years and they still have trouble figuring out what they want to do, you know, post career, whether it's NBA, you know, NFL, NHL, whatever. So in all the work that you've done over the past decade plus, or how long has it been since you were hurt? I mean, that was 2009, so I don't even know. What is it? Have you reframed it in a certain way that you think, oh, you know what? Maybe I was meant to do this. Maybe I was meant to be a founder.

24:04I have accepted that I believe that was a necessary part of my journey for me to walk in the purpose that I'm walking now. But I still have my moments. It could be late at night. It could be watching an NBA game. It could be being in the gym where that what if was still like in the back of my mind. Like, what if you didn't get hurt? Where would you be or what would have, how would your dream have unfolded if you did not get hurt? And there's still pain there. There are times where I'm still mourning the death of that dream. You know what I'm saying? And I get invited. I've been speaking at rookie transition program and NBA brings me back.