Taylor Stitch, a 10-year-old, San Francisco-based clothing company, is opening an office in Portland, drawn by the city’s growing reputation as a trendy place to live and work—and its affordability compared to the Bay Area.
The company, which sells its custom-designed clothing in its own brick-and-mortar stores, as well as on an innovative online crowdfunding platform, has already begun hiring members in Portland for its “customer-success team,” as well as some finance positions, according to Co-Founder Michael Maher. He expects they’ll begin to add digital marketing positions in Portland, as well.
Maher expects to have five employees in the Portland office by the end of the year, and said he could see that number growing as high as 20 by the end of next year. The company’s total headcount right now is at around 25, he said.
Taylor Stitch is the second San Francisco e-commerce company to recently select Portland for an East Coast office. Grove Collaborative opened a Portland office last month and has already hired 40 people in customer service and sales roles.
Maher said he was drawn to Maine because of the reputation Portland has fostered the last few years as a place with a strong cultural scene and a startup community that embraces innovation. He began looking for a new office location because San Francisco is a challenging place to operate a business, with the high costs and constant battle over keeping and finding talent take their toll, he said.
“It’s the changing face of tech; there’s always a new startup that’s raised $10 million,” Maher said, referring to the constant risk that employees will be tempted away by the promise of getting in on the ground floor of the next Facebook or Uber.
An added challenge, though one Maher and Armenta have embraced, is that they’re mostly self-funded. In a place like the Bay Area where tech startups are raising monster amounts of capital before even turning a profit, Taylor Stitch stands out for having stayed away from venture capital. Total funding remains below $2 million, Maher said.
“We’re proud we’ve been able to fight the good fight, and it goes back to the idea of doing it on our own terms and not being beholden to a lot VC and the downward pressure that can create and which can be incredibly harmful to a business like ours,” he said.
An example of having the freedom to make business decisions with a focus on the long-term (rather than one that needs to consider a seven to 10 year window by which time VCs want a liquidity event) is the opening of the Portland office.
“I’m much more interested in how to build a business that has a strong culture, a strong community,” Maher said. “That’s important to me. We sell a product that lasts and we want people to remain with the company for a long time.”
“I think our brand really fits well with the Maine ideal,” he said.
Maine ties
Maher and Armenta were also drawn to Maine for another reason—it’s where they both grew up.
Maher was raised in Cumberland and graduated from Greely High School in 2003, while Armenta grew up in Kennebunk and graduated from Berwick Academy in 2004. The pair met in Boston while both were at college—Maher at Babson and Armenta at The Art Institute of Boston. After graduating, they both found their way to San Francisco and eventually founded Taylor Stitch in 2008.
“Having grown up close to L.L.Bean, I’ve always wanted to figure out how to build a new-age retail business that could be around for the next 100 years or more and continue to develop, continue to push on technology, continue to push on how to deliver product to the customer, continue to build a culture and place where people can come and work for a long time,” Maher said.
Taylor Stitch didn’t begin with e-commerce in mind. Maher, who studied entrepreneurship, and Armenta, who studied industrial and graphic design, originally sold custom-tailored shirts door-to-door and at pop-up shops around the city, Maher said. They eventually opened a brick-and-mortar store, and now operate three physical clothing stores: two in San Francisco and one in Japan, where they have a relationship with an investor and strategic partner.
Once it gets settled in Portland, Maher said it’s likely Taylor Stitch will open a retail showroom downtown to help grow its name and brand recognition within the local community.
The company hit an inflection point in 2015 when it began to invest in its e-commerce capabilities. In trying to come up with a model that would allow the company to grow revenue while keeping production costs at a reasonable level—and leverage the increasing movement of customers to purchase items online—they came up with a crowdfunding concept where the company would design and release new products and get customer commitments before putting the clothing items into full production.
“It’s allowed us to really engage the consumer in the conversation and make them part of that. It’s been really interesting for us and them,” Maher said. “Also, it’s a good model for the earth because we‘re not creating a bunch of excess product.”
The Workshop, as its crowdfunding platform is called, now provides approximately 30% of the company’s revenue, which Maher declined to disclose. He said revenue was “north of eight digits” and that the company was “just profitable.” He expects total 2018 revenue to come in roughly 30% over last year’s total.
“The growth we do have I would attribute to steadiness in what we do,” Maher said. “We have a saying: Get 1% better every day. Try things, see how they work and double down when they do.”
One of those new things they’re trying is to improve on the classic customer-service department by growing and investing in a “customer success team.” Whereas the company previously outsourced the customer service function, Maher said the company is now bringing them inside the company and investing in the team in an effort to bring some of the in-store feeling a customer gets speaking with a sales person to the online environment.
“In a world where others try to automate services I’m trying to do the opposite,” Maher said. “I want to have intelligent life on the other end of the chat, phone, or email who are invested in your happiness as a customer. I want to turn [customer service] into a profit center rather than a loss center.”
He’s confident he’ll find the right people in Portland to do that.
Maher and Armenta have no plans as of now to move back to Maine themselves, but they’ve hired an experienced e-commerce manager, Michael Laniak, as director of customer experience and retention. Laniak recently moved from New York to Maine to lead the Portland office.
“We’re looking for the right crew of people who want to be engaged with startups, who want to be in an entrepreneurial environment,” Maher said “We want to hire dreamers who do. That’s the sort of team I look for, people who when they have a great idea are willing to take the chance to go execute on it.”
hello, ‘rolls’ s/b ‘roles’