Rochelle Webb - Building Online Marketplace OPTIMIST MADE to Support Global Fashion Entrepreneurs and Boost Local Economies

Rochelle Webb (00:00.126)
It's a worry-free deal for them, and that they have nothing to gain but benefit, because there's enough people in the world that are just trying to make a buck and figure out how to take advantage of somebody else in order to do that, and that is not my DNA.

Anne McGinty (00:17.058)
Welcome to the 14th episode of How I Built My Small Business, the show that is dedicated to sharing the insight that entrepreneurs have about how to start and grow small businesses. Join us as we unravel the stories behind their entrepreneurial journeys. I'm Anne McGinty, your host, and today I have Rochelle Webb, a clinical assistant professor of entrepreneurship and marketing at Loyola Marymount University.

but also the visionary founder and CEO of Optimist Made, connecting global designers to the American market. With over a decade in corporate America, Rochelle's expertise in global brand marketing has earned her accolades, including media plan of the year and a grand F-E. An alumna of Columbia Business School and UC Berkeley's Haas School of Business, she brings an MBA-backed perspective to her ventures. Beyond her professional realm,

Rochelle is a dedicated board member for 1% for the Planet and Movember, as well as an advisory board member for the Make-A-Wish Foundation of Greater Los Angeles. A true leader with a heart for positive impact, Rochelle strives to leave our world better than she found it. Let's dive in to her inspiring journey. You can find a link through to her business in the episode's description.

Anne McGinty (01:42.05)
Rochelle, welcome to the show.

Rochelle Webb
Thank you so much for having me. I'm so happy to be here.

Anne McGinty
So can you tell us how the idea for Optimist Made came about?

Rochelle Webb
Absolutely. I teach some classes at a university here in Los Angeles. And so I'm always telling my students to study what's happening around them, right? Look for problems to fix when they start a company, because that's going to ensure you have product market fit. And so I was at a time in my career where I was working my way up the ladder in marketing.

big leadership positions, but I was finding what I was most alive. I was in a role that was entrepreneurial. So I was an entrepreneur with inside of a company and I was working for a company at the time and I had gotten laid off unexpectedly and I decided, okay, well, I don't have an idea yet. So I'm just going to start a consultancy doing more marketing work with startups because that will get me closer to the answer.

And it's a little like a hectic lifestyle because you can never really count on what's coming in, what's going out and you kind of live day to day. And I had just signed on my biggest client and lost unexpectedly and was in London with my mother and just gone on a gigantic shopping spree. And so I looked down and I was like, well, I was really comfortable five minutes ago before I read this email.

that said that my biggest client that just signed a two year contract is going away. And I was like, oops, daisies. But I reflected on where I was and what was happening in that moment. And most of my career has been in global marketing. So I've been traveling from different countries all over the world to do my job. And because I'm gone a lot and because I actually hate shopping, but I love fashion, I would do a lot of shopping when I was on the road. So when I would wear stuff in front of my friends, they're like, where did you get that? And I would name some random country.

And they would be like, of course you didn't get it here. Like you never get anything here that we can buy. And so I was like, well, I can fix that, right? And then I looked at the bags and I was like, well, what if I just bought more of everything I'm already buying for myself and sold it? And so I kind of pressure tested it with a few people who I trust to kind of steer me in the right direction. I call it my board of directors, my personal board of directors. And they were like, yeah, I can't see why you couldn't do that.

Rochelle Webb (04:02.046)
So I was just going to start like an Etsy site and just have it as like a little fun side hustle. But I went to bed that night and I was like, I could do this, I could do this, I could do this. I started dreaming really big. And so when I woke up the next morning, I was like, this is going to be a company. So as soon as I got home from London, I got a lawyer, I got an accountant and I set up the LLC and here we are five years later.

Anne McGinty
And at that point, I assume you didn't have any inventory yet.

Rochelle Webb
No, I didn't. But I had two trips already on the calendar.

one to go back to London and one to go to Croatia. And I was like, well, why don't I just test this out on these trips I'm already going on and see how it goes? I didn't know what I was doing. I didn't even have a website. So I went back to London and I was staying with my brother because he lived there at the time. And I just made him take me to every cool market around town. And I would just start talking to these designers inside of these markets. And I'm like,

I love your stuff and I would start doing this passion pitch of like what I wanted to build and I had to just be like, trust me. And they did. And actually the first few sourcing trips I went on were far easier in some respects than they are now because I think so many people are starting to get scammed that it's a little bit harder for people to like trust a random stranger that wants to come in. The way I do business a little bit unconventional because I take on all the risks.

the whole point is that I'm bolstering independent fashion entrepreneurs to grow and scale. Doing that, I don't want them to then carry risk by doing business with me, so I take on the risk. But a lot of them would only take money in pounds. I didn't have any pounds, so I stripped my brother of all of the money in his wallet to do some of these deals in these markets. Then I went to Croatia, and the friend that I was going to visit in Croatia actually happened to know a former model.

I had the time to do a little bit of research. And so I said, these are the brands I think would be really cool to meet. And the model was able to get me a meeting with nine out of 10 companies. And so she actually went around with me because she had some connection in to all of them. And so, yeah, so a lot of the OG designers are from London and Croatia from a trip that was already planned that I opportunistically turned into a sourcing trip.

Anne McGinty (06:26.666)
Were you still working in corporate America?

Rochelle Webb
Yes, I was still consulting and I was consulting with some big corporate companies, but the beauty of consulting is you can do it from anywhere. I only really had to meet with my client and we had a meeting set, so I was able to kind of plan things around each other. And remember, this was 2019. So I quickly ran into the pandemic within a year or a little less than a year of actually setting up shop. So we were all sheltering in place.

So I was fortunate that I was able to get enough sourcing trips under my belt before the pandemic came along and I was like, oh wow. And the other fortunate thing about that was that because I was still very early, I hadn't taken on so, so much risk yet. I had two investors I brought on, so I had their money that I had to worry about, but I wasn't sitting on a ton of inventory yet. I wasn't at a point where I would be concerned, right? And I just expected the pandemic would shut me down, but I also thought it was going to be for a couple of weeks.

So I wasn't really like, fazed by it. And so then we know what happened, you know, you know what the story looks like. And what was interesting was I saw one of my points of steepest growth during the pandemic. Because if you can remember back to that time, there was a big push to shop small, and there was a big push to shop black and to support local black businesses. So that was one thing that really drove a lot of people to start.

caring about my business more than they would have just on an ordinary day. The second thing that happened was because I work with very independent, entrepreneurial gear designers was I had to think about where are we in the world right now? What's happening around us? Where's the greatest needs that are going to get people to continue building a relationship with us? So I partnered with one of the designers I'd already brought on the site to make a sustainable mask. And so literally...

Overnight she created a mask for me and had them in the mail and they were on my doorstep in less than a week. And I immediately shot them and got them on the site. People were like, you have masks? So that brought a lot of people in and they have longer life than like having to keep buying these disposable ones. And so it was very early on before a lot of people started to do that.

Anne McGinty (08:45.25)
So how much capital did it require for you to get Optimist Made up and running?

Rochelle Webb
That's hard to put a number to, because in the very beginning, I was just, whatever money I had on hand at the time, I was putting into the business. And then also I liquidated a significant portion of my 401k to get some of the big stuff out of the way. So it was kind of a staggered approach to getting there. Any deal that I do with a designer, I...

do small batches because I'm taking on all the risk and something doesn't fly. I don't want to be sitting on a ton of that. And it's part of what's interesting about the platform. And so typically it's somewhere between a thousand to 1500 per designer. So I probably had 10 designers on the site within the first four months. So it's like, you can kind of do the math from there and then obviously all the operation costs as well.

Anne McGinty
I imagine is probably quite significant for some of these designers, depending on where you're sourcing.

Rochelle Webb
Right. So that's what helps with on the B2B side with the product market fit is that for these designers, they're living very much hand to mouth. So they are sitting at a market and whatever they're making in a market at any given day is what's putting food on their table. So I'm very unassuming and still to this day, this is how I source. I go in as a regular old tourist.

And I just start having a conversation with them and I get to know their brand from their words. And then start to ask them like, what got you into this? And I get their story very organically. And they just treat me like a regular customer. And then after we've been talking for 15 or 20 minutes, I'm like, listen, I actually want to put you on my platform. And I explain what I do. Are you open to this? And they'll usually say, yeah. So some people have cleaned them out.

and they are like, well, I guess I have to go home, you know? And they're in tears.

Anne McGinty
Oh, what a great feeling that must be.

Rochelle Webb
Yeah, and they're like, thank you for seeing in me what I didn't see in myself. I can't believe this is happening to me. And so that was always a feeling that I loved. And then fast forward now, when I go on sourcing trips, I will have to be very careful because they all talk to each other. And I do a lot of meetings. I preset meetings before I go on these trips.

Rochelle Webb (11:01.91)
So usually I have some meetings, but then I try to find time to fit in some markets as well. And then if I do a deal like that in a market, I end up getting chased out of the market by a bunch of other designers. They're like, wait, I have something you'll like too. Because now I have a, I actually have a site you can go to and see what this looks like. And so they'll look me up and start showing it to people and they're like, I want in, I want in.

Anne McGinty
So what criteria then are you taking into consideration when you make selections?

Rochelle Webb
I think like a customer.

First of all, when I go into a sourcing trip, I always shop through the eyes of somebody in my friend group or somebody in my life. I think about what would Sarah wear? And I kind of shop for Sarah. And then I'm like, well, what would my friend Jerry wear? And I go shop for Jerry. I shop through their eyes being like, what stuff would they pick out? And I have a very eclectic group of friends, all different styles. And so what ends up happening is it allows me to diversify the collection.

I do love to travel and I love fashion and I love the experience that happens when you travel. There's a little bit more strategy now because we're trying to cover the entire map but I'll think of a country that I've always been wanting to go to and make that my next sourcing trip.

Anne McGinty
Fun!

Rochelle Webb
Yeah! It's very low tech because I really want the experience on my platform to feel like you're visiting that country, stumbling upon these cool designers. You're finding them in the same way you would if you were traveling like a tourist.

Markets are a little bit easier in some respects because I can go to a market and walk around and I watch what's happening and you'll see some of the booths that these markets are swarmed with people. So that to me is already showing me they have product market fit. It's already showing me that they've made an impression on a community of people in their market that they sort of live for whatever it is they're creating. So those are the people I sort of want to go to first, the ones that are the busiest.

because they already have natural traction.

Anne McGinty
How do you approach negotiating purchases?

Rochelle Webb
It's actually not that hard and it's very vendor friendly because the goal is to invest in them so they can do more of what they do so well, that it's a worry-free deal for them and that they have nothing to gain but benefit because there's enough people in the world that are just trying to make a buck and figure out how to take advantage of somebody else in order to do that and that is not my DNA. That's why the company is called Optimists Made.

Rochelle Webb (13:29.846)
The goal is to go around the world and find people that deserve this helping hand and to give them the helping hand just because they've done the work. I'm just picking it based off what's already happening around the business that you've built and I'm rewarding you for that because I've gone through life long enough, like working really hard and not getting things I wanted to get and wondering like, why did that person get it or why did that company get that grant? So I'm just trying to shrink the amount of

that goes into deal making for the entrepreneur, so that it feels more like a happy day, a great thing that happened to them. And I know that if I give that gift to others, then I'm gonna create more optimists in the world, because they'll be like, if this person came in and believed in me, just by looking at me and seeing what I do, I'm gonna be more optimistic about the future I can create for myself, because this person believed in me. And then they will approach life that way.

And so over time, what will start to happen in all these different countries and all these different designers I'm working with, it will create a ripple effect of, and hopefully eventually they'll pass that forward to somebody else. And it is always so much easier to go after your dreams when you have support. Yeah, exactly. And they very much do become family. Even on the first trip sometimes, when I went to Guadalajara in Mexico, the first woman I made a meeting with.

She was just so lovely and sweet to this day. She's one of my most wonderful friends. She took me under her wing and I met with her first. Then she drove me all over town to all these different places. She made up a whole agenda for me of places to eat, places I need to visit, different markets I needed to go to. Her mother's the visionary behind the brand and she's been in fashion week. She's dressed some serious celebrities and so she happened to be honored.

at a fashion show that night. And she goes, do you want to come to the fashion show with me and my family? So I put on my best outfit, went to this fashion show, drove there with her and her mom, who's the guest of honor, sat in the front row. She's come to the States with her daughter and we just stay in connection. That's how deep it is once I build a relationship with these designers.

Anne McGinty
Once you're back in America, what do you do to maintain that relationship?

Rochelle Webb (15:48.554)

Part of what the investing approach is, is that
I'm also going to give you data. So I'll tell you what's selling well here, what people are loving about their collection. And hopefully that's helping inform what they're designing in the future. A lot of them have a dream of making it in the US. And they just don't have a way of getting there. So this is their way of getting there. And then also, if I'm going to bring them here, I want to give them data and information about what people are loving about their products. So I will share that with them over the course of time. And then

they're also sharing with me what's new, what are they coming out with, what's rolling off the line next. And then I'm able to get a first look at a lot of different things that they have coming up. And so it's a very symbiotic relationship and it's great because when I'm running low on inventory and I don't have a good amount of sourcing trips coming up, then I'm able to do virtual deals with them because I trust their product already at that point. And so I can look at their lookbook and then I'm able to say, okay, I want

that, and these sizes, they ship it to me and it's all good. So it's really information and it's ongoing business that they will continue to get from me if their product is selling through really well.

Anne McGinty
What is your philosophy on retail pricing and profit margin for Optimus Made since you're based in America, but your designers are overseas?

Rochelle Webb
The fact of the matter is they're selling really high quality products, but they don't have a lot of overhead. This just costs my time. So they're looking at a perspective of, I've had to put very little money into making these. So if I sell it for this much, that's a great day for me. But if you think about it as a business person or marketer, then you're like, but the willingness to pay is probably much higher. Why are you leaving all that money on the table? But they're not thinking like that.

So that's why it's so important to me to make sure that they have product market fit before I even do a deal. And then I look at what can our market bear for other products like this. And I typically sit underneath that about. So I try to like kind of undercut what the rest of the market is charging, but it still allows for a pretty wide margin on the sale of the product. And then the benefit of that is that

Rochelle Webb (17:58.454)
By me being able to sell their products with a wider margin, I'm able to reinvest more in their businesses more quickly. So it all sort of keeps coming back to them. And then another thing that we do is we donate a percentage of our sales to global nonprofits. And so we find nonprofits in their country and in their communities to donate to. And so for whatever we sell in a certain market, we donate that back to a charity in their market.

Anne McGinty
That's beautiful.

Rochelle Webb
So it's helping local...

you know, local nonprofits be able to thrive. So we try to make sure that goes around and helps everybody in the end.

Anne McGinty
It's spreading impact in these local economies around the world.

Rochelle Webb
Exactly.

Anne McGinty
Lovely.

Rochelle Webb
Yeah.

Anne McGinty
So with your marketing background, what have you found to be the most effective in launching your brand?

Rochelle Webb
So the huge benefit to having a background in marketing was I didn't have to go look for that person. I am that person. Most entrepreneurs will do the marketing on their

own and they probably should in the early days to really get to know how their company resonates with the community that they're selling to. And then to be able to pass that off to an expert that can say, okay, great, this is awesome context to help me understand how to market your company professionally at scale. And so there will come a point in time where you've reached enough growth where you can't just run marketing through the school of hard knocks anymore. You really need someone that knows what they're doing.

And I will never really reach that point, because that's what I've been doing my whole career. So it's a huge cost savings for the company. Now, do I have a team of people who are executing? Yeah, I have a team that's on social. I have a team that's on content creation. I'm driving the strategy, but they're actually creating the stuff. It's like you're the contractor and they're your subs. Exactly, exactly. So what are you doing to get in front of your customers? In the beginning, I started with the people that I know, and I focused on

doing small pop-ups at my home or just showing them different stuff that I brought back from sourcing shows, they would start sharing it. So then it would get shared more around my community. I live in Los Angeles, but I'm from Atlanta, Georgia. I went to college in Boston. So I'm able to also tap those networks and be like, check out what I'm doing. And so you usually will have a percentage of those people who are natural supporters of what you're doing because they just want to be a part of it and see you succeed.

Rochelle Webb (20:21.41)
So that helped me in the early days just to get people starting to know about it. And so that was how I started. And then as we started making money, I was able to start investing more in advertising and I will tell you it's really hard now because the landscape has changed so much and then you're competing against these huge companies with really big budgets. And so you have to ask yourself, is this really worth it? Am I putting my money into something that's actually giving me a return?

Or am I just putting money into this because I feel like I should be doing advertising so I'm doing it, but really I'm just like burning that money up into flames. And so I started testing some other things. So I started to do a lot more pop-ups. And then on the roadmap for 2024, we want to start doing more pop-ups all over the nation, not just Los Angeles.

Anne McGinty
Wow!

Rochelle Webb
Yeah, that gets more...

randomized traffic coming in. And we do some things to encourage our community to reshare the products that they've bought and tag us and all of that. That helps a lot. We have a following now on Instagram. So now we've had people that are waiting to hear from us and now everything is firing as it should be. And so we have all of those different parts of the wheel working to help purge traffic coming through.

Anne McGinty
You have the diverse perspective and knowledge base from business degrees,
corporate experience and from starting your own venture, what skills and lessons would you say that you've learned from each of those?

Rochelle Webb
Well, so business school, and I've always said this about school, it's really about networking and out of all of my investors, one of them is from where I went to undergrad for college and the rest of them are from business school. So what I got from business school was the investors that are behind the company were like-minded.

They sat in the trenches with me for two years, slugging it through business school. So they know what I'm capable of. They know my intentionality. They know the effort that I put into something. So there's already that trust and credibility there. And especially in the early days when you have a hard time convincing people to trust me and invest in my company. And now it's way harder to fundraise than it's ever been before. Cause they want to see a whole business running before they'll write a check. And so it was helpful to.

Rochelle Webb (22:38.126)
get some checks coming in without having to show any proof at all. Because it was like, really, they were investing in me. And then from corporate, I've worked for some very large companies that have to be very process-oriented because we had a team of hundreds or thousands of people that we had to rally around one strategy. And so bringing that process into the business of...

how you go to market, how to go to market planning, how do you think about road mapping, how do you think about sell through, how do you think about making sure you have a synergistic campaign running. So what you have in market is working with your promotions, which is working with what the storytelling is that you're doing on all your platforms. So thinking about how all of that works together to support one another is what I've gotten from my corporate experience. And then...

Starting a business, you just kind of have to do it to see it and experience it, but you face a lot of failure in starting a business and a lot of no and objection. And so it's very humbling. So you start to realize that it really is just a numbers game. You can't let that stuff hold you back or stifle you for too long. You have to build a strong gut and just keep going. When you started a business, you start to talk to other entrepreneurs and you start to cross share your own personal stories.

Then it starts to feel a lot less lonely. We can share what we're going through. And sometimes it's like, okay, you're going through that too, thank God. Because some of the stuff you wouldn't know from reading an article, you might read a Wall Street Journal article about inflation, but inflation at large and how it's affecting our population and how it affects small businesses, very different, right? And so having other people to go to to bounce with is really helpful as well.

Anne McGinty
Can you tell us about the biggest challenge you've faced as an entrepreneur?

Rochelle Webb
The biggest challenge has been wanting to grow very quickly, seeing the vision of where I wanted to go and knowing exactly what I needed to do, and then trying to fundraise or apply for various grants, and then realizing that, oh, they wanna see much more evidence before they write a check. Like, I thought this would be good enough. So it's just the reality.

Rochelle Webb (24:49.678)
of how hard it is to get a larger investor to give you a check that will allow you the opportunity to actually be strategic, right? So I have a lot of angel investors supporting me who write smaller checks, which I'm so forever grateful for, but they don't come in together. They come in months and years apart in some cases, right? So I can put out a fire with this one check and I can do something else with this one check, but if I had it all at one time, I could actually think about my road mapping and how I'm gonna...

that, which is a little bit harder when you don't have that big pot to take from. So that's been a big challenge. And then the landscape was changing right before our very eyes. So what people need now is in terms of burden of proof to get on board with you and put money into the company. And then I launched a marketplace at a time when marketplaces were really popular and a lot of companies were growing really fast.

investors were going into marketplaces. They love this idea of a house of brands and not putting all of their money in on one brand was very cool to investors. They saw what the margins looked like with apparel and how much money can be made when you sell an item. So that was really exciting to investors. But what they saw over time was that while the margins might be big,

Online shopping is the largest, that's where people spend the most money online. So there's a huge opportunity and a huge growing market there, which is really appealing to investors. But it also requires a lot of income to keep the operation running. So at the end of the day, the margin gets really small when you get down to the end of the line. Now, I have worked very hard to build a business to mitigate that.

Right? So small batch inventory is helpful, but investors started to see we're not exiting at the rate we thought we would with these businesses because of what it takes to actually keep them running. And so what you saw was people became very anemic about investing in marketplaces after a couple of years. So coming out of the pandemic and actually during the pandemic was rough too, because

Rochelle Webb (27:04.526)
people's investment thesis completely changed, right? So people who would have invested in D2C or commerce-based businesses or in apparel were investing in PPE and cleaning products and sanitizers from the pandemic. And they were really very much about anything that's gonna be something important during the pandemic, that's where we're putting our money because it's the safest bet. And so all of that really changed the market that I thought I was entering. So that's probably been.

my biggest challenge. But the beauty is, is that the vision had always been to start the marketplace, but I eventually had the vision of building a software that would help. Because we're very much, our whole thing is about protecting our environmental legacy. And so this software would exist to be able to help other brands and companies become more efficient. And so the pandemic allowed us to speed up the process. You know, you do a lot of pivoting.

as an entrepreneur. And so that was a really serendipitous moment.

Anne McGinty
And I think as you see interest rates go down, you may see more of that investor capital come back to the table.

Rochelle Webb
That's right.

Anne McGinty
Right now, yeah.

Rochelle Webb
Yeah, I mean, the cost of money right now is so incredibly high. And then people are very hesitant to put money into companies unless it's a sure, sure thing, as much as it can be a sure thing.

The other interesting thing that's happening right now is because of what I was just talking about and the fact that the pandemic changed a lot of the investment theses for a lot of investors. What they're now seeing is that the pandemic is over and that there isn't the need for these products that they invest in like there was at that time. It didn't sustain itself. And so now they've put a bunch of money into companies that were relevant three years ago, four years ago.

that are no longer relevant like they were at that time. And so what they're seeing is that companies are not exiting and they're not able to actually get a return on their investment like they hoped they would. And so they're like, crap, we bank on a certain amount of failures in the companies that we invest in, but we also get some big wins as well to help balance that out, but they're not seeing the big wins. And so they're just kind of like trying to continue nurturing for longer than they would like these companies they've invested in.

Rochelle Webb (29:22.798)
just to get them exited so they can start putting that money into new stuff. And so it's a really tough time right now because people are having a hard time thinking about investing in anything new right now. So a lot of people who are fundraising are struggling and you're starting to see a bit of a movement towards not taking a lot of institutional funding anymore and be willing to make less on your exit because you aren't going the institutional route and then you are just more focused on taking angel.

investment, self-funding, that sort of thing.

Anne McGinty
Are there any specific resources, whether organizations, networks, support systems, that you have found particularly beneficial as a black woman entrepreneur?

Rochelle Webb
So a lot of that comes from me just meeting people. I find that moving through life as a business person, the people that I come across in my community, that serves me far more than these networks that are out there.

Now there's several, right? So I find a lot of the grants that I applied to through Hello Alice, but we have not really been successful with the grant route. We're either, I think, too big or too small. And so that's been really tough. I think that a lot of these groups that are starting to fund grant-making entities are trying to make it easier on the business owner to apply and hopefully become successful in these grants. But.

They don't give a lot of great detail on what they're looking for in terms of the application. So you kind of feel like you're applying into a black hole. And it's hard and it's very counterintuitive actually, because when you have these entrepreneurs who are very young, what they need more than anything is feedback. I think a lot of it is these people don't really have the answers. They're just trying to make sure they put money into some business, but they don't really know what it takes. But as an entrepreneur, you feel like...

you're looking for a helping hand and sometimes that can be hard to find. Then there's a bunch of venture groups that are very focused on black women. So Black Girl Ventures, you know, there's a lot of them like that out there. But it's been very disheartening because in the past six months or so, what you started to see is shortly after they overturned affirmative action, black girl ventures actually went through a huge lawsuit and they came out successful. But

Rochelle Webb (31:45.518)
that created a ripple effect. So it's a really sad commentary on sort of where we are as a nation and it's already hard enough. And so it's really exciting when you see a lot of these venture groups coming out with such a focused investment thesis for people that look like you, but then stuff like this happens and you're just like, man, here we go again. And then another person that I have followed for a very long time from afar and admired her work is Arlan Hamilton.

And she also has her own venture group as well. And I recently was connected to her and we've now met personally. And so she's someone who I have direct communication with now. And so we're trying to figure out something we could potentially do together. And I just love the way that she approaches business people. And it's really nice to be able to connect with someone one on one at her stature that has been at this. And she really rose up. I mean, she was homeless.

when she started her venture group and she's risen up and built something really big and Backstage Capital is the name of her venture group and she gets it, right? You know, sometimes you just feel like, oh, it's like there's these privileged people that are starting these venture groups and then they say they wanna help, but what does help look like? Whereas her, it's very crystal clear what her mission is and she's lived it, she gets it. And so I think she approaches the way that she does deals in a little bit of a different way, which is really refreshing.

So yeah, so it's just in community, I think, is where I find the greatest benefit. Yeah, connections.

Anne McGinty
On the flip side, who would you say are your biggest competitors and how do you differentiate yourself?

Rochelle Webb
So we are a shopping platform that for a long time was for women 34 to 65 was probably a sweet spot. And then within that probably 35 to 50 being our most active demographic within that group.

So these are women that can afford to buy nice things. So we have a lot of competitors. So we have multi-brand retailers like Bloomingdale's, Nordstrom that are very accessible, but they can go in, they can try it on, they can physically touch and feel the product. But they don't really have the storytelling and the excitement around like these came from all these different countries, from local entrepreneurs, and you can shop the world without leaving your couch. So there's not really that element built into.

Rochelle Webb (34:09.518)
they're offering. There's a company called Novica that ended up getting acquired not too long ago, but they came along and they were doing something similar, but it was really more focused on household goods, which we do a bit of, but we're more focused on apparel and jewelry. Now we've launched menswear three months ago, which is really exciting. Yeah. So that opens the aperture a bit. Anthropology is probably another one too. I know that

is where people are spending their money and time, when they're not spending it with us. And so we need to get people to change that conventional mind instead of you don't have to go shop with the people that have storefronts all over the world. You can find people like us and actually do good with the money that you're investing. And then there's also a bunch of other smaller players that are trying to figure this thing out too. There's also a big movement of this conversation around greenwashing and how horrible fashion is for our environment.

very much environmentally friendly. So we source our designers based off of people who responsibly manufacture and who are ethically producing their products. And that's who we represent on our platform. So we could say with confidence that our full offering is ethically produced and sustainably produced. And then we also put money back into nonprofits that are focused on fixing those problems as well. So end to end, we are doing the work, whereas you'll see

You know, Zara right now is majorly under fire. She and there's a whole Nightline episode on their unboxing. For fast fashion. Yeah, for fast fashion, yeah. They're producing tons of items, low cost, that are horrible. You see what it's causing and what it's doing to our environment. It's like, oh my gosh, so people are becoming more aware of that. So I think that's going to be something in the future that starts to help us is that we are so thoughtful from a sustainability standpoint how we go to market.

This new generation that's coming up, millennials and gen Zs, they really care about the people who are behind the company and the mission. What is this company living to accomplish, right? They really do care about that, which I find amazing. I love that. And so it's more important than ever that you have a very clear explanation of what your why or your purposes and that people see that very clearly coming through in how you do business.

Anne McGinty
That it's authentic.

Rochelle Webb
Yeah.

Anne McGinty  (36:35.694)
So going into the behind the scenes finances.
Is your business currently profitable?

Rochelle Webb
We became profitable fairly quickly because the margin that we have on our product is very high. We are very low overhead, and I've worked very hard to maintain that in terms of how we've grown and scaled as a business. But that also allowed us to do some new stuff. We launched a private label. We're launching menswear. We've grown the team, and we're starting to do a lot more traveling pop-ups. And so.

All of that costs money, but it's all going to help for growth in the future.

Anne McGinty
So you're reinvesting as much as you can.

Rochelle Webb
Yeah. So I'm reinvesting into new activities that will get us to greater profitability in the future.

Anne McGinty
So you've mentioned a few times that margins for apparel are high. What is typical for the industry?

Rochelle Webb
When you're doing business in the apparel industry is you can double the price of the product from wholesale to retail. It's usually two to two and a half times markup is what you traditionally see.

Anne McGinty
Wow.

Rochelle Webb
Yeah.

Anne McGinty
And how many items do you carry in stock at any one time?

Rochelle Webb
So many, like thousands, because again, we do small batch inventory. So we don't buy, like even if you go to the platform, it will actually tell you how many people in the US will own this product. And it's usually you're one of three people to own this. You're one of five people to own this. So

We have a larger range in terms of our offering, which means we have a lot of different types of products, but we don't carry a lot of any one thing. We've had a couple runaway stars, like one of the first dresses we ever carried on the platform was called the Pata Pata dress. What was cool about it was you could wear it like 27 different ways. And the dress was made out of products that were sourced from South Africa. It gave it a cool factor because of the textiles and how they looked.

This dress has just been flying off the shelves and it's the same designer that we worked with to do the mask during the pandemic and so there's products like that that are fun that we've then gone back and said can you make more of these for us so we actually did replant and make a bunch more of those dresses because they were doing so well. That doesn't always happen, you know, you're always going to see a fresh product on the platform.

Rochelle Webb (38:55.15)
Part of the magic in the experience is if you see something, you better buy it when you see it because you probably won't see it again.

Anne McGinty
It's not mass produced.

Rochelle Webb
Yeah.

Anne McGinty
Do you have an idea of how many items you are selling per year?

Rochelle Webb
We don't really look at it from a how many pieces are we selling it. We look from a revenue standpoint, did we make more than we did the year before or the quarter before or whatnot? So we don't really count based on pieces and that's mainly because there's such a variance of price points as well.

from piece to piece and like the margin is very different on one piece versus another. So we do have some more established designers that are higher end. So the more luxury you get, the smaller the margin gets. And there's only so far we can go with the top end of what we can charge because we have a certain type of customer that's attracted to our site. And then if you get over a certain price point, it's too expensive for them, right? Because they're buying designers they've never heard of before.

People are very brand loving and they love to say, well, this is from so-and-so. So when you can't just name drop a brand name, it sort of becomes more of a, do I want to spend this much money on someone that no one's ever heard of?

Anne McGinty
That makes sense. You have to get buy-in first.

Rochelle Webb
Yeah.

Anne McGinty
So with thousands of items in inventory, how do you handle the logistics?

Rochelle Webb
So the good thing was is that I created the process from the very beginning for logistics. If you had

just a handful of products and you had a lot of those five things that you're selling, you can go to a 3PL and just have them stock it for you. Because we have so many, it does require a massive amount of organization. Also, we pride ourselves on the unboxing experience. I believe that if you're going to spend your hard-earned money on buying something for yourself, you should feel like you're opening a gift to yourself. So regardless...

of if it's for a special occasion or not, it will always feel like you're receiving a gift to yourself when you buy something from Optimist Made. And so that also makes it very hard for us to go the 3PL route because we do have a very complex supply chain and the way that we package products is pretty sophisticated and unique to us. And so we first keep things organized by the market that it's from, and then we have it organized by the type of product.

Rochelle Webb (41:12.59)
and then the warehouse is organized in that way.

Anne McGinty
Supply chain can be so intricate and vary drastically from one business to another. Shifting gears a bit, imagine you're sitting next to the person that you love the most and you want them to succeed in whatever they do. What advice would you give them?

Rochelle Webb
Don't give up. Do whatever it takes, no matter how hard the days are, don't give up.

There are so many people out there with great ideas and there's so many people out there with great ideas that start those companies, but a lot of them flame out because they just can't take the hard work. It's very hard. But if you just stick to it, you can become that small percentage of entrepreneurs that actually makes it. And you burst through that hard period of running a business and you'll start to realize there's very few of you up there at the top if you can just survive. So don't give up.

Anne McGinty
I love it.
Those are words that you and I and everyone should remember. For a closing question, what advice would you give to your younger self?

Rochelle Webb
Try not to take things too personally. Just look for the lesson in everything that you do and don't take things too personally.

Anne McGinty
I think that's great advice for everyone. Thank you so much for being here today and sharing your story with us.

Rochelle Webb
Thanks for having me.

Anne McGinty
If you've made it this far,
As always, thanks for being here. 

Today's key takeaways. 

Look for problems to fix when you start a company because that will ensure you have product market fit. In other words, what you're building is what people want. 

Pay attention to the brands and products that are already working well in other countries and look for a win-win opportunity. You may be able to support another small business entrepreneur and create a positive ripple effect for you and them.

The definition of a successful business does not have to be solely driven by profits. Rochelle is able to travel and explore, build family-like connections around the world, and support local economies while building a brand and profits for Optimist Made. 

Advertising budgets for small retailers is really tough because you are competing against large companies with really big budgets. So check to make sure any advertising dollars you spend are actually giving you a return. 

Business school is about networking. You don't need to go to business school, but you may make key connections and meet future partners and investors there. 

In starting a business, you're going to face failure and no's and objection, and the experience is humbling, and you can't let those setbacks stifle you for too long. 

When interest rates are high, the amount of investment capital available for small businesses can drop significantly. So if your operations are dependent on outside investment, keep this in mind. 

Don't give up. When times get tough, don't give up. 

And don't take things too personally. 

If you enjoyed today's show, please rate and review and share it with a friend. I release episodes once a week, so come back and check it out.