Outdoor Voices’ strength was its community. Founder Ty Haney thinks she can replicate that success through Web3
Good morning, Broadsheet readers! Betsy DeVos pursues school choice in Michigan, Britney Spears is pregnant, and the future of brand loyalty is on the blockchain. Have a lovely Tuesday.
Loyalty rewards. Through all of Outdoor Voices’ ups and downs, the activewear startup founded by Ty Haney in 2012 had one undeniable advantage. “Our number one strength was community,” Haney, who stepped down as CEO in early 2020 and left the brand in January 2021, says now. “It became core to our growth strategy.”
Within an eight-year time span, the athletic apparel company raised $100 million in VC funding, according to Pitchbook, quickly becoming the de rigueur startup darling.
Even as the clothing brand, which brought on retail veterans like former J. Crew CEO Mickey Drexler, stumbled spectacularly on retail strategy and developing multigenerational leadership, its customer base of passionate brand ambassadors remained loyal to the brand, attending events, wearing special merchandise, and promoting the Outdoor Voices recreation-driven lifestyle.
For her next venture, Haney is sticking with what she knows best—but with a twist. The founder is now behind the new startup Try Your Best, a blockchain-based platform for brand loyalty and rewards. Or as Haney characterizes it: brand loyalty and community built for Web3.
At Outdoor Voices, the company found that customers who encountered the brand through a community engagement tactic like word-of-mouth or IRL marketing were four times more valuable than customers reached through targeted Facebook or Instagram ads. “Tying activation or experience to product was something that we found really created that bond and stickiness with the customer,” she says. Haney thinks that those same strategies apply to Web3, through tools like NFT rewards and collectibles.
“The collectible becomes the new activation unit,” Haney explains. The startup tested the waters last month with an NFT for the CBD company Joggy, and eventually plans to create a marketplace of Try Your Best-backed loyalty programs, where consumers can keep track of company rewards in one wallet.
The startup raised a $2 million pre-seed round led by blockchain-focused firm Castle Island Ventures in October (“Raising just the amount that we need” is top of mind for Haney after experiencing the pressures brought on by Outdoor Voices’ mountain of venture capital money). But it’s not the only one applying blockchain technology to brand loyalty.
Glow Labs, a Web3 software platform for customer rewards, announced a $4.15 million seed round this morning. Founded by two former JPMorgan Chase engineers, Annie Reardon and Renee Russo, the company strives to be the loyalty infrastructure for native Web3 brands, rewarding customers for repeat NFT purchases, for example. Compare that strategy to Try Your Best’s, which is mainly bringing Web3 tools to brands outside of the industry, including many in activewear. Outdoor Voices alumni comprise 60% of the roughly 20-person startup.
Glow Labs is backed by Anu Duggal’s Female Founders Fund and Kirsten Green’s Forerunner Ventures—an early Outdoor Voices investor. “We believe there is an exciting future around how brands engage with their consumers leveraging the blockchain,” says Duggal.
Green did not invest in Haney’s Try Your Best, and declined to comment on either company.
All three founders see a white space for brands in Web3. Haney’s interest in crypto began about a year-and-a-half ago, while Russo and Reardon started buying crypto and applying to blockchain-related jobs in 2016 (Russo even appeared for our interview wearing a “Just DAO it” hat, a play on the phrase decentralized autonomous organization.)
They appear to have found a promising niche. So much of Web3, after all, is about ownership, and brands want that sense of ownership to translate to greater loyalty to their businesses. From either perspective, it’s clear that companies are eager to understand how to leverage Web3 tools for business growth. “This shift is taking place right now,” Haney says. “It’s no longer about the [customer acquisition cost]. It’s all about retention, loyalty, and [lifetime value].”
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