How To Turn Your Biggest Insecurity Into a Million-Dollar Business (Even Without Industry Experience)

0:00When you're starting a business, it's better to not know everything that's coming. Otherwise, none of us would probably do it.

0:09Hey, everyone. I'm your host, Serena Smith, and this is Shopify Masters, your companion for starting and building a business. Sometimes your biggest insecurities can lead to the greatest opportunities and millions in revenue. Michelle Schemmel was tired of sweating through her expensive silk tops at work, and so she decided to do something about it. If you're waiting for everything to be perfect, like you're never going to launch. That's something that pulls a lot of people back. She launched NuMe over a decade ago, creating its one-of-a-kind sweat-proof technology that sparked a brand new clothing category, proving that others needed her designs too.

0:42What is your superpower? What's your niche? What is that specific problem? Because if you're talking to everybody, you're talking to nobody. Today, Michelle will break down how she turned a pain point into a thriving business. Michelle, thanks for being here. Thank you for having me. You are not originally from the world of apparel and manufacturing. Not at all. No, my first job out of university, I was a trader at a bank here in Canada at RBC and history major by background as well. So really have no experience in retail or fashion. I actually didn't even know another entrepreneur before launching NuMe.

1:18You're working in finance, which is a vastly different world. What was the genesis for this idea? So when I was working in finance, I obviously had to purchase a whole new wardrobe for my new professional career. And one day I realized I was never wearing my favorite clothes because they were either really expensive to dry clean or they were prone to embarrassing sweat stains like a beautiful silk blouse or even my sweaters. You know, if you get a little deodorant on it, it's dirty and you're not going to want to wear it again. And I realized there'd be like an average Tuesday and I'd reach for my favorite top and then I would hesitate wearing it because I didn't want, you know, the cost or the inconvenience.

1:55And, you know, what if nothing fun happened that day. And I realized that the clothes we wear really impacts how we feel. And this was silly, like, why can't I just wear my favorite pieces every day and feel confident doing so? And when I looked on the market for some sort of solution that I could wear under my clothes that would be invisible, comfortable, and solve this problem, I realized that there was nothing available. So within Women's Intimates, it tended to be more tank tops and camisoles, which were a great layering piece, but they didn't help keep your clothes clean longer or prevent sweat stains.

2:26And then when I looked towards more technical fabrics, it was all within the athletic market. And so you maybe would get that performance, but it was going to be bulky and kind of show through either the neckline or maybe on the sleeve. And it wasn't designed to be discreet and invisible under women's clothing. And that's when I realized that there was an opportunity here to develop an undershirt for women, which, you know, men have had for years and years, and there wasn't really a comparable solution for women. So I really jumped in the deep end and decided to create one myself. Many of us, and certainly many of the people watching have had that moment of like, oh damn, this thing doesn't exist and it should, but there is daylight between recognition of that idea and making the decision to actually make it a reality.

3:09So what was that process like for you, especially given that you were in a world that was completely unrelated? Yeah, I definitely think the best businesses is start with a pain point. And I think as a founder as well, if you are your consumer, then that helps a lot along the way too, because it's truly a pain point for you. So you can understand, you know, the mindset of your consumer from the get-go and really develop a unique product that will solve that problem. And you believe in it. And you believe in it, exactly. Like, you know, and I truly believe, like, whatever it is, there's never only one person that has that problem.

3:41And in fact, the more niche you are to start, I think the better, because it's a very loud and crowded world out there. So the more niche your product, the more specific you can be about the solution you're solving, I think is best starting point for a new business as well. So for me, I was actually, I'd left trading and I was interviewing to join what's called the buy side. So work at a hedge fund or a company like that. And at the same time, I was down in New York and I thought, you know what? I have some time on my hands. I wonder what it would take just to get this product, to get a sample of it.

4:13And so I did a very in-depth Google search and I found the names of factories in New York. Most of them I would show up and they're like, what company are you from? I'd say, I don't have a company. I'm just curious. Like what would someone do who wanted to create this product? I got a lot of no's. And then finally I found a partner who helped me design our first prototype and did our first production run that we launched through a crowdfunding campaign. Okay. Right. Now you're using words like prototype and production run and it's like old hat for you. Yes. You've been in this for a while. It is.

4:47I would imagine like you kind of didn't know what you didn't know. Totally. What can you talk me through? You found this. Yeah. This partner at a factory. Like what were those initial learning curves? So, yeah. So when I found the partner at first, they're like, can you show me an example? Like they just bring because in apparel, there's a lot of closely inspired by like they bring a shirt. I want this shirt. Change this. but there was nothing like what I wanted. So I literally went, I got a Lululemon shirt, I brought it in and I'm like, like this, but not like this at all. It's like, you told me to bring you a shirt.

5:21So here's a shirt, but let's start from scratch because the neckline needs to be like this. The sleeve needs to be flat against the arm. There's all these small details. And I would say the number one thing was asking a lot of questions and not being afraid to say, I don't know what a prototype is. Can you explain that? I don't know what a tech pack is. Can you explain like, what do you need from me? Okay, you need hang tags. Do you know a supplier? And so I really built our supply chain as well through asking questions and getting, you know, referrals to other suppliers and slowly building my network.

5:52And then I started working with consultants who had deep experience in supply chain and product design. And if I was to start again, I would find that person first because they can, you know, cut years and a lot of dollars off your learning curve. And it doesn't need to be a full-time basis. Like there's a lot of contractors out there who you can hire on small project basis to help you get your idea off the ground. And they'll know all of the smaller things that you need to get in line and help you answer those questions. There is so much that is unique about each founder's journey. And then there are these sort of overlapping themes.

6:26And one of them seems to be sort of like, you don't know what you don't know. And you were coming from a world where you had developed a degree of mastery. And then you're entering a world where you're a beginner on like a psychological and personal level. What was that transition like for you? And how did you navigate it? I think you're spot on that when you're starting a business, it's better to not know everything that's coming. Otherwise, none of us would probably do it. You kind of have to get used to the fact that there's fires and problems. Like that's part of every day. Like you can't be set back by that.

6:58It has to be it has to energize you. And I think that, you know, at least one of my strengths and most entrepreneurs strengths, I think, is problem solving and figuring out, OK, nothing is insurmountable. Every, you know, every day there's going to be a problem of source. And that's OK. That's what makes us better. That's what makes us stronger. that's probably going to lead us to somewhere better, you know, afterwards, once we work our way through it, that's part of the journey. And no, so if you knew everything ahead of times, it would probably feel a little bit daunting. But really, I think you you take what's the next step I can do.

7:29And so who's that supplier I can contact or reach out to someone on like LinkedIn's amazing for that you can find a consultant or a contractor, you know, who's been there before and done it before. And I think the environment we're in now, too, there's a lot more people out there who are, you know, working remotely and kind of more open to contracting roles. So that's a great resource to lean into if you're to be starting from scratch today. And it's just always thinking, okay, what's that next step I can do today? You don't have to figure everything out for the next 10 years today. You just need to figure out what's going to take me one step closer to launching and one step closer to solving the problem that I'm facing.

8:05It's such a great point because it's like, if you wait for all of your ducks to be in a row, then invariably like the thing might never come to fruition, right? I think that's where a lot of people get stuck or why you don't start a business. Exactly. Is you think you have to have everything figured out from the get go? Or there's this concept of the gap that I always think about. It's kind of where you are now and where you want to be. And there's always going to be a gap there. And the more you're learning and developing, the better you're going to become. And so for me with a product, let's say when you're ready to ship your product, the one you have in hand today, it might not be the best, the best, the best that you know you could make because you've learned along the way.

8:48But you still need to get that in market because it's still probably like 99 % good. And that's part of the journey. And you can evolve. And if you're waiting for everything to be perfect, like you're never going to launch. And I think that that's something that holds a lot of people back. That's such an important lesson. And also an interesting thing to like hold in your mind, these two truths, like, oh, I've already sort of evolved beyond this point, but I've got to get this thing out in the market in this moment. So, for example, with us, like the product we launched on our crowdfunding campaign, it didn't have any technical fabric in it.

9:23It was just a really well-fitting, beautiful fabric undergarment that had a second layer of fabric to absorb moisture in the eodorant, but it didn't have a technical fabric. And by the time we shipped that, it was hard. I was like, oh, but I know this isn't the best, but it still solved that problem. It still added a lot of value to the consumer and to our customers. And in that time, we learned and we made the product better. And then you launch that. And I think that's part of any brand you see. I always look to my Northstar brands. They're always doing that. They're always launching version two or three.

9:56They're always iterating because the world gets better. The materials we use, get better. And that's okay. And I think it's kind of a fear response a little bit when you're always searching perfection before starting. Yeah, we have this idea, I think, internally as humans that we need to be fully actualized. But you bring up such a great point, like within the companies and the brands that we love, we've seen their evolution, we accept it, right? That there's going to be growth, things are going to change and get better over time. Exactly. And from a business perspective, it's also good. It gives a new purchase occasion for your customer because you've given them a product that was the best you could do at that time.

10:31And now you've taken their feedback into account. You've made it even better and a new reason for them to come back and shop with you again. But across the board, every business is always evolving and it's really important. How did you get the word out for that first production run, especially given that you were launching something that didn't really exist in the space prior? I did my own PR. And I think you still can. I think when you're starting out, being really scrappy is your superpower. And as a small business, I think it will always be your superpower that you can respond really quickly and be very agile.

11:07So I, you know, researched a lot of reporters or journalists who had written on similar topics, whether that was, you know, fabric technologies or women's intimates, and reached out to them to share my story and what I was building. And, you know, I think, again, like with the fear, people think, oh, are they going to want to write about me? But reporters and journalists and, you know, consumers, they want to learn about cool new things. And if you're building something that's cool and new, you know, it adds value to everyone. So I did the PR outreach on my own and friends and family helped spread the word as well.

11:40I think one of the cool things with crowdfunding, even to this day as well, is that it enables you to share your journey. And so if you are starting out, you can start to build that momentum with your consumer by sharing, hey, this is what I'm doing. This is what I'm building. This is what, you know, where I'm at. And it can kind of build a deeper affinity to your story and your brand as well prior to launching. How big do you think that personal connection to the brand is for the consumer when it comes to Numi? Richard Branson actually talks about this as a lot as well of having a face of the brand is really important.

12:13And I think now more than ever in our current very loud, very AI driven world, having a personal connection can be your strength as a small business. And when you share your story, it allows someone to connect with you and what you're doing. And so for example, with what we're doing, like a lot of women don't want to talk about sweat. And so I see it on their face. You know, I used to explain it like, you know, when you're sweating or if you're have a big meeting and the first reaction, because there's a bit of social stigma around it was like, no, that doesn't happen to me. So then I would always start with, well, I had this problem.

12:46And then as soon as you say, I have this problem, then the other person's like, okay, yes, that happens to me too. Because you kind of open the door to community and to a shared experience and take down that barrier of like there's something wrong with you. It's like, no, this is totally normal. We all face it. And here's, you know, something we can do to help solve it. Yeah. Vulnerability begets vulnerability. Exactly. Did you have any reticence to talk about it? No. When I was working in finance, I had a few very good friends who were some clients and colleagues. And we talked about these things all the time.

13:20So I knew it was a common pain point for a lot of women. So when launching this, I was just comfortable. I mean, I had to be too, because this is like the core tenant of the problem we're solving. And I think, you know, raising awareness and shedding some light on it takes the stigma away from everyone as well. Do you remember, was there a moment where you thought like, oh, I'm kind of getting the hang of this? Yes and no. I think where I'm more comfortable is just in the unknown. And so, no, I don't think you're ever getting the hang of it because the world is changing so fast. There's always new things that are coming up.

13:54But the one thing I've gotten more comfortable in is that I will figure it out. And so every business, you know, whether it's cash flow problems or production problems, or I've seen them all now so many times that even though it's always scary and it brings up that fear and you're like, OK, how is this happening? I know that I'll get through it because I've gotten through it before and I trust in my team. I trust in myself. And, you know, as I said, I think every problem is surmountable. And so it's just a matter of breaking it down and taking that, okay, what's that one step I can do today? Yeah, there is something to be said for, I think what I would call like the contagion of courage.

14:30It's like once you do something really courageous and step outside of your comfort zone and show yourself what you can do, then having to do it the next time and the next time, it feels like gets a little bit easier. Yeah. Does that feel right? I think you build trust in yourself and trust that you can figure it out and that, yes, it's scary. There's definitely a big emotional journey, I think, of being an entrepreneur because everything is on your shoulders. And so you need to really learn how to like presence yourself and not get caught up in that story and that fear, which, you know, is going to come.

15:05And it's kind of separating, OK, this is the story I have about what's happening. What's like the reality of what's happening and what can I what can I do today? And the best way to move through fear is through taking action. You want to do your research, but you don't want to get stuck in the planning phase for too long. Of course. Like, you know, I've met other blooming entrepreneurs and they're working on a 100-page business plan. And it's like you don't need to spend three years on your business plan. Like, your best business plan is going to be, you know, understanding, of course, your niche and your, you know, unique selling points and your strategy.

15:40But getting in market and learning and iterating is going to be the most important thing because you can get stuck in that planning phase and then you're never going to take action. Your core value proposition is with these garments that help keep women sweat free and in their nice clothing so that it's not just hanging in the closet. Yes. What have like your iterations been over the course of the business? We want to inspire women to feel comfortable and confident in whatever their day faces. And so we really believe that, you know, you are the star of your own show. We all know that, you know, what we wear really impacts how we feel.

16:19So we've created a product that's going to make you feel more comfortable, more confident in your clothes. You can focus on, you know, the things that really matter, whether that's, you know, a big meeting, a presentation, a soccer game with your kids. If you're having to worry about, you know, being finicky with your clothes, it's distracting you from being present. So we've built this product and product line. And as it's expanded, we've launched new styles, new colors. So again, trying to address what are all the different pieces in a woman's wardrobe and how can we create an undershirt that would fit seamlessly and visibly underneath that.

16:53Some of our shirts now women will wear, you know, on their own as well. We have a great crew neck that you can wear just as a t-shirt. It's kind of a better tee. Are there directions that you have explored that have not panned out and you've had to abandon ship. Yeah. So as you're building a business, it's always, you know, always thinking, okay, what's next? What's that new purchase occasion that I can bring to my current customer base? And my bigger kind of thesis that I see an opportunity is identifying these pain points in a woman's wardrobe and how can we solve them using beautiful design and technical fabrics.

17:27So we launched a line of silk blouses that were all sustainable and machine washable. They're beautiful blouses. I still love them. The thesis was that this was an upsell or kind of a cross sell to our undershirts. What we saw was it kind of created its own cult consumer to that. And then I realized we had almost two brands that I was trying to build and two unique products. And they were almost competing against each other versus supporting each other. So we've phased out the silks for now to really lean in on our core competency and where I see the bigger category opportunity, which is the women's undershirts.

18:01And that's really where we are, the leader in the market, probably the only, maybe there's a few other smaller competitors, but the only solution for this particular pain point. And I think that that's the best opportunity for the business. What is your relationship with that competition? Given that you were the first in this category, and now you've seen some other competitors spring up, like, does it conjure anxiety? Or do you see it as a compliment? What's your relationship with it? You know what, when competitors come in, it actually helps us in a way because it's a new category. We need to educate on what this is before I even talk about new me and what makes us different.

18:37We're always have to explain, okay, here's your problem. You know, maybe you get sweat stains, maybe it's dry cleaning, maybe you just don't want to wash your clothes all the time. Here's the solution, wear an undershirt. This is how it will integrate into your wardrobe. So there's a lot of education that we have to educate our consumer on, on the category. So when competitors come out, it actually helps us because it helps broaden the category. And women will often try different products if they find something they like. And I mean, we know from our customer experience, we have a beautiful product.

19:05Our shield doesn't crinkle. So a lot of other undershirts out there, there's like a plastic layer in it that makes it crinkly kind of bulky sound. So I'm quite confident we have the best product on the market. So when competitors come in, it actually helps broaden and educate the consumer. And what we've seen is though them will try different brands, or maybe they'll try a cheaper brand because it's cheaper and then realize or see the value that they get with our product. You spoke a little bit earlier to the crowdfunding component. Was that how you financed the business? Can you take me into the texture of that?

19:37Yeah. Yeah. So that helped our first production run. And then we did bootstrap the business for, gosh, the first about seven years. Then we did a small friends and family round, which helped with our growth. We have access to other inventory financing. So we've used Shopify Capital a few times. And that's kind of where we're at now is we will use whether it's a line of credit or Shopify Capital to help with our inventory buy, especially in our industry. We need to purchase obviously ahead of time, all of our inventory. And you can only, if you have a product-based business, you can only grow as much as you have product to sell.

20:12But our seasonality, you know, we're needing to buy all of our clothing for Q4, which is our biggest quarter in Q2, Q3, which tends to be our slowest season. So you do need some financing mechanisms in place to help that. Otherwise, we are trying to focus again on just growing a bootstrap like organic business. That decision to do a friends and family round or to try to raise outside capital is so specific. Why was that the moment for you? That was at a point we were growing really, really quickly and we needed additional financing in the business. Did you begin the business in direct to consumer or elsewhere?

20:49No. So when I first started, we went with a traditional wholesale model. So we were in a few hundred boutiques across Canada and the US. I would literally like pack up my sample bag, like drive around the US, go to all these independent doors and introduce the product to them, sell the product, sell them our line, and then get back in the car and go to the next boutique because, you know, nobody picks up the phone. We had our online store, but it wasn't a huge focus of mine. And then in around 2017, 2018, I realized that I'm spending all this time and effort trying to open this wholesale channel, but it was a classic 80-20.

21:2680 % of my effort was over here, but 80 % of our revenue was coming direct to consumer. And so we decided to make the shift and we went exclusively online direct to consumer. We started investing in meta ads. That year we saw over 300 % growth, almost 400 % growth actually, when we went exclusively online and started investing in the paid media channels. And I think still to this day, if you want to reach people at scale, meta ads is still the best avenue, I would say. It's changed a lot. It is definitely a lot more complicated, but you can still see a lot of success, especially if you have a clear problem solution.

22:02So again, for us, another reason we saw success on that channel was on the wholesale floor, we were then relying on the salesperson to explain what is this undershirt? Why do they need the undershirt? How do they style it? Again, you're facing what we talked about before, the social stigma. So if a salesperson comes up to you, starts talking about sweating, you might be like, no, it's not me. I don't want to talk about it with you. I don't know you. Whereas online, if someone's on there scrolling through their phone, you see an ad about sweat stains, you're like, yep, that's me. There's no one judging you.