As COVID-19 began to spread in March, House of Woo founders Staci Woo and Mike Badt knew they had to … [+]
House of Woo
In late February, weeks before California began to lock down its population in response to the coronavirus, House of Woo founders Staci Woo and Mike Badt had been hearing from acquaintances about how, pretty soon, we’d all be wearing face masks. It seemed alarmist and unlikely at the time—the fashion designers’ kids were still in school and no one was wearing a mask—but Woo couldn’t get the image out of her head.
By the middle of March, the virus was surging in California, and it was fast becoming apparent that more Americans were likely to start wearing masks. So the couple decided to repurpose their downtown Los Angeles factory, which usually makes chic beachy dresses and bags the brand is best known for. Within days, they were offering cotton masks in stylish designs on their website and shipping donations to local hospitals. Weeks later, a business that might have shut down for good is starting to see the kind of high-volume orders that make for profitable trade in the garment industry.
Woo and Badt aren’t alone. Companies around the world are engaged in perhaps the first global business pivot since World War II in response to the pandemic. GM switched from cars to ventilators in just under a month. Distilleries are making hand sanitizer, while Uber and Lyft shifted from transporting people to delivering essential goods.
Within days, the factory had switched from making clothes and bags to producing facial coverings. … [+]
House of Woo
It’s too soon to tell when, or if, these companies will return to business as usual. But House of Woo’s story offers smart lessons for entrepreneurs that will apply long after the virus has been brought to heel.
Woo has always been thrifty. During the company’s early days, she’d hunt for cashmere fabric at the Rose Bowl flea market, Badt recalls. Leftover fabric from cutting and sewing that other brands would toss, Woo catalogued and stored, not really knowing what they might be good for. That meant her initial run of hundreds of masks didn’t cost a penny in materials since she had 22 years’ worth of high-quality scrap material saved up.
Woo and Badt didn’t have a long-range plan when they produced those first masks. They just knew they wanted to keep their business afloat while doing something to help their community at the same time. So they began by donating boxes of masks to hospitals, tucking a photocopied flier inside asking medical workers to tell their friends and snap a photo of themselves wearing Woo’s designs. The grassroots marketing campaign worked. A local TV station caught wind of the effort and produced a story, word spread on Instagram and Facebook, and orders started to pour in via the company’s website.
Woo says she and Badt had to make rapid decisions along the way, with little idea of what would stick. At first they felt uncomfortable charging enough to cover their costs while medical workers were scrambling for protective gear, and they wanted each purchase to cover several donated masks. Then they had to secure more fabric, eventually getting a supplier to donate some. Eventually, through trial and error, they found a pricing structure that satisfies demand and allows them to donate masks while ramping up production to meet orders from bigger companies that can afford to pay more than what it costs House of Woo to manufacture.
Woo and Badt may have been both lucky and smart: They run a small shop with all production happening locally, they had plenty of spare material on hand, and they’re obviously savvy about marketing. But they also have an outlook that every entrepreneur should think about emulating.
Prepare For The Worst
Being prepared is a mindset, not a shopping list. If you are ready for a shift in demand, you’ll be able to handle a major disruption better than others. Producing their clothing locally costs House of Woo more than it does competitors who source from Asia, but they make up for it by getting new designs produced in hours instead of months.
“One of the things that makes us so malleable is being small,” Woo says. “There’s no red tape to go through. You put a piece of fabric on a sewing machine and let’s see what happens.”
Initially the designers made the masks from fabric scraps Woo had saved over the last 22 years. “It … [+]
House of Woo
Be willing to experiment and learn. Those first face masks were made when the market hadn’t yet materialized. They cost less than their production bill, and the designs, prices and marketing all had to shift with a fast-changing reality as the virus spread.
“It wasn’t mulling over ‘Can we use our inventory for this?’ It was ‘Let’s try it,’” says Badt.
Anticipate The Next Hurdle
Even now, as larger orders start to make House of Woo’s mask business financially viable, Badt says he and Woo are thinking ahead to when those customers inevitably question whether paying a premium for domestically produced goods matters. It’s not a new conundrum for them.
“It felt good to keep everyone working, especially when the majority of the country was shut down,” says Woo. “In a sense, anyone that does buy masks from any number of amazing garment companies doing this right now, it’s all helping domestic production and the workforce.”