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In the last couple months, Jeff was able to take this aerogel and turn it into a fiber. In doing so, was able to prove that that fiber has drastic thermal performance increases over a standard polyester fiber. What that means is we’ve just validated the potential to completely change how consumers view and wear apparel. That’s astronomical. And at the end of the day, that’s what OROS is about.
Jay Clouse 0:31
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them. Welcome to Upside.
Eric Hornung 0:59
Hello, hello, hello, and welcome to the Upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co-host, Mr. Sweater-Weather himself, Jay Clouse. Jay, how’s it going, man?
Jay Clouse 1:13
It’s good. I am naturally inclined to colder climates. And so I am welcoming back the fall.
Eric Hornung 1:20
We have the fall. And the fall in Ohio, usually such a beautiful time.
Jay Clouse 1:25
Yeah, I guess. I don’t know, I never think of weather as an aspect of Ohio that I think about or really care about, or…it’s just not, it’s just not a selling point for Ohio. And so I just barely put any thought into it. It’s more like something I have to contend with and deal with.
Eric Hornung 1:42
See, I love the fall. I think the fll is like the only good weather in Ohio.
Jay Clouse 1:47
But every season, every point of weather that you enjoy in Ohio is so short lift. It’s like, all right, this period of maybe four weeks is here, make sure you enjoy it. The beginning of summer, the fall. It’s going to get super, super cold soon. And it’s just going to be a bummer, Eric.
Eric Hornung 2:03
Well, yeah. But then you get to throw on some layers. You know, you get to kind of cuddle all up, get all warm drink, some hot cocoa. Nothing wrong with that.
Jay Clouse 2:12
I do love hoodies. I love long pants. I just don’t look good in shorts. I don’t understand how people wear shorts and shoes. I’ve never figured out how to have appropriately lengthed socks for whatever shoe is on my feet. And so I just, I enjoy long pants that cover up whatever poor sock and shoe decision that I’m making.
Eric Hornung 2:32
You got to get the no show socks, I did it. So fun backstory, I also hate shorts. But I want to Bonobos, and I got three pairs for when I went to Italy this summer. And now I’m a shorts guy because they fit really well, and I got no show socks, and I think I solved the dilemma that you’re you’re talking about here.
Jay Clouse 2:51
I think about this a lot for myself, too. I’ve become kind of frugal as an entrepreneur. But that’s, that’s also kind of bull, because I spend money on things that I shouldn’t spend money on, like I spend so much money on eating out. And that is just a very immediately consumed purchase that I put money into. And if I would just buy nicer clothes, I would look better, I would feel better, I wouldn’t hate shorts so much because, like things from Bonobos or Lululemon, I just get such sticker shock by the price of some things like Lululemon, and I don’t think about the fact that I’m going to be wearing this for years, and the per-ware cost of this is so much better than throwing an extra $5 into that lunch I had everyday last week because I was tired of Chipotle.
Eric Hornung 3:37
Yeah, I try not to buy many new clothes, but when I do, they’re generally not cheap.
Jay Clouse 3:43
Well, speaking of new clothes and speaking of colder weather, today we’re talking with Michael Markesbery, the co-founder and CEO of OROS. OROS is a digitally native direct-to-consumer brand that harnessed the power of NASA’s arrow gel, their installation breakthrough, and created something called solar-core, technology that insulates against extreme conditions of the same installation use in modern spacecraft, but putting it into your clothes to give you strong insulation without the fluff of big puffy coats.
Eric Hornung 4:15
This was one of those companies that you would see all over Twitter and the news about Cincinnati. Like, this was one of those companies that the Cincinnati ecosystem got on board with.
Jay Clouse 4:26
The first time that I came across OROS was when NCT ventures, a venture firm here in Columbus, relaunched their website. They had this video in the header of their website from one of their latest investments in OROS technology, and it was literally a man in, like, what looked like a hazmat suit spraying down — I don’t know if it was liquid nitrogen or just like a fire extinguisher — some guy wearing a coat. I was like, what is going on here? And it was a testing video of testing the installation of one of OROS’s coats. The company was founded in 2014. It’s a now based in Portland, Oregon, previously Cincinnati, moved to Portland recently, they’ve raised over $9 million to date, so a little bit later stage than what we typically do. There a Brandery alum in Cincinnati. But with technology like this, even though this is a direct-to -onsumer brand — an outerwear brand, potentially, or just a clothing brand — there’s a lot more technology going on underneath the threads than a lot of consumer brands.
Eric Hornung 5:27
I’m curious to ask about this move from Cincinnati to Portland. So we’ll definitely have to make sure we hit that in this interview, Jay. We hear a lot about companies moving from New York or Silicon Valley or Boston to lower cost areas that maybe match more with their skill sets, but we haven’t really heard about a company moving from what is a tier-two, tier-three city to another tier-two, tier-three cities. So I want to ask about that ind this interview, Jay.
Jay Clouse 5:52
Great idea. If you guys have any thoughts or questions as you go through this interview, you can tweet at us @upsidefm or email us firstname.lastname@example.org as always. And we’ll get into that interview with Michael right after this.
Jay Clouse 6:06
Michael, welcome to the show.
Michael Markesbery 6:08
Thanks for having me.
Eric Hornung 6:09
On Upside, we like to start with a background of the founder. Can you tell us about the history of Michael?
Michael Markesbery 6:15
Yeah, of course. My story is pretty, pretty simple. I’m from the Midwest. I grew up in Cincinnati. And I went to a small liberal arts college in Oxford, Ohio, called Miami University. And my sophomore year of college, I went backpacking across Europe. Did a lot of cool things, ran with the bulls and Spain, which was an absolute blast. But the coolest thing I did is I climbed the tallest mountain in the northeast Swiss Alps. Incredible experience, except for one thing. Have either of you two seen the movie “A Christmas Story”? Remember the scene where Ralphie’s younger brother, Randy, gets dressed up by his mom? Comes out in that big, red, puffy coat, right? “Just can’t put my arms down.” That is dead on what I looked on top of this mountain.
Jay Clouse 7:06
I’m glad it was that and not that you shot your eye out.
Michael Markesbery 7:08
Right? Dead on what I looked like on top of this mountain. I just remember thinking, like, you know, there had to be this way to cut the bulk and cut the layers and still stay warm. It didn’t make sense to me that, you know, like in the last 400 years, there’s been all this innovation in the world. We landed a space shuttle on the moon, we created Wi-Fi. But we’re still doing the same thing with outerwear, where we’re just we’re taking animal by products, like goose down, shoving it into a jacket and hoping for the best. Didn’t make sense. So, I came back to the US, and in college, I was a science geek. I was pre-med. And when you’re pre-med to get into med school, you got to join a research lab and get publications on whatever you’re working on. And so, that’s what I did. And I got incredibly lucky. And through those publications, I ended up getting this scholarship that was created by the Mercury 7 Astronauts called the Astronauts Scholarship. And through this astronaut scholarship, I learned about this NASA technology called aerogel. NASA said that aerogel was the lowest, thermal, conductive solid in existence. Bunch of fancy words meaning that it’s the best installation in the universe. Like, so good. NASA was taking this stuff and using it to insulate, like, the Mars rovers and all this stuff in space. So, I’m thinking, like, wait a minute, space is -455 degrees Fahrenheit, like the coldest temperature in the universe. And here’s what NASA is using to insulate these things in space. Like, how come this stuff isn’t being used in a parallel? Back to when I looked like Ralphie’s younger brother on top of this mountain, it was just like a beautiful solution wrapped in a silver bell. So I pitched the idea to a really good friend of mine, a guy named Rhithic Venna, fellow science geek, right in King Library, Miami University’s big library on campus, right before an inorganic chemistry exam. And I said, hey, Rhith, what if we took this NASA Space Shuttle installation, this aerogel stuff, and just put it in a parallel? So you got a really thin gear that actually keeps you warm. Rhith’s like, yeah, I hate being cold. And so I’m like, yeah, me too. So we ended up taking the 10 grand and whatever other money we had and started dumping it into working with aerogel manufacturers. And we found out pretty quick why no one was taking aerogel and putting it into apparel. Turns out, and you know, the next time we’re in person, I’ll show you some, but if you type aerogel into Google and press images, you’re going to see this light blue, translucent looking material. Looks super cool. But even though it’s the best insulation in the universe, turns out, it’s incredibly brittle. If you poke it, it just shatters into 1,000 little pieces. So really bad news bearers for apparel. So our passion project became trying to figure out a way to take the best installation in the universe and just make it flexible and durable enough for apparel. Spent two years working on it, became like an obsession. School went to the wayside, blew through that 10 grand super quick. But we figured out a way by our senior years of college to create the first ever, flexible, non-shedding aerogel composite in the world. And that’s called SolarCore. And that’s what’s in all of our gear today.
Eric Hornung 10:41
Was this astronaut scholarship meant to train you to be an astronaut, or it just had a cool title?
Michael Markesbery 10:45
It just had a really, really cool title. So the astronauts scholarship, I believe, is the largest award given to STEM students. And its mission is to continue to keep the United States on the forefront of STEM. So they basically empower, you know, young STEM minds. And I was fortunate enough to get the scholarship. So nothing directly having to do with astronauts, other than it was created by the Mercury 7 Astronauts, run by the Astronauts Scholarship Foundation and a couple cool ties to NASA here and there.
Jay Clouse 11:17
Were you thinking as an engineer or as an entrepreneur when you started having this idea?
Michael Markesbery 11:22
You know, I don’t, I don’t know if it was either. I never, you know, we never thought that we would build a business. So I don’t know if it was entrepreneurial other than the sense, like, I had this problem, right? I was on top of this mountain, and I looked like the Michelin Man. And I’m like, this sucks. And so then, I saw this solution, which as a science geek, I geeked out on, like, lowest thermal, conductive solid, NASA used it, that’s kind of cool. And then, it was, I talked with Rhith, and it was Hey, can we take this potential solution and implement it to solve this problem? So I think it was more, I guess you could say it was entrepreneurial, but it definitely wasn’t with the mindset of creating a business.
Jay Clouse 12:04
Well, as you, so as you’re starting to spend money on aerogel itself and looking at this stuff, were you thinking through a lens of, I’m going to make a good jacket for myself? Was that the goal?
Michael Markesbery 12:15
100%, right? And it’s like a stepwise process. Like, at the time, there was no, like, big overarching end goal in mind; it was, hey, here’s the solution to the problem. Let’s make the solution work. And then once the solution worked, it was well, we should probably make a jacket. And then once we made a jacket, it was, well, I wonder if anyone else is going to want this jacket. Right? So you go step by step by step. And then every once in a while you lift your head up, and you look back and you go, oh my gosh, like, how did all this happen? You know what I mean?
Eric Hornung 12:47
Why was Rhith the right guy, besides not liking being cold, to start this with?
Michael Markesbery 12:52
So OROS has seven core values. And what I love about our interview process is, there three interviews before someone gets hired at OROS. And the second interview is an interview with Rhith and me, and it is a 100% culture interview, where there’s 21 questions that go back to the seven values of what RO stands for. The reason that Rhith was a great fit is he and I are very different people, but, at the core of it, share these seven values in common. And so I think, you know, that allows a partnership to go through really good times as well as really bad times. Does that make sense?
Jay Clouse 13:35
Yeah, I’m gonna put you on the spot. Can you name off those seven core values?
Michael Markesbery 13:38
Yeah, of course. One of my favorite is Have Grit. I think it’s something that is incredibly important for any company, especially when you’re starting out. Our first one, though, is Take the Moonshot. And so for us, this is the passion to go where no one else has been. It was when Ruth and I started to mess around with aerogel and to kind of create the warmest jacket in the world this, that was the first step, is taking the moonshot. Where Have Grit comes in is, you know, once you get past that honeymoon phase of having started a brand or a company, it takes a lot of motivation and stamina to keep chasing that larger vision. And so Have Grit is something that’s incredibly important, and something that Rhith has in spades. The third for us is Be Agile. This is something that has been proven to be important throughout the entirety of existence on this planet, right? The ability to change and thrive in unexpected conditions, whether from an evolutionary standpoint or a business standpoint, agility, at the end of the day, is is what wins. In college, I had this really impactful book that was given to me by a professor called “The Question Behind the Question,” or “QBQ” for short. And at its core, it was all about demonstrating personal accountability and pride in your work and everything you do. And like, when you take the essence of that, for me, that’s Take Ownership. And that’s my favorite quality to find in someone. that’s also OROS’s fourth value. The last ones are Be Conscious, Constantly Innovate, and then our final, you know…those first six are all something that you exhibit personally. And so, it was also really important for us to have a value that exhibited how you interact with others. And what a lot of people don’t know is that there were over 40,000 engineers that worked on the Apollo missions to create this, this, this literal moonshot. And so OROS, it’s incredibly important, even though we don’t have 40,000 people, for everyone to work well together to create our own moonshot. And so Be Collaborative is the final set of values. And those are the seven values of OROS.
Jay Clouse 15:49
Really love that you can rehearse all of those off the top of your head, really resonate with all of them. I want to dive back into the OROS story, origin story a little bit here where you started messaging around with composites, it sounds like, to get the SolarCore, you said SolarCore is a composite. So how did you learn…I’m interested in the literal steps of acquiring aerogel and playing with it, and what that looks like and how expensive that is, and then, two, how you started making composites out of this. It all sounds like something that would be very inaccessible to somebody that doesn’t have any roots in manufacturing or chemical engineering,
Michael Markesbery 16:24
Honestly, getting back to Have Grit. Like, that’s, that’s where this came in key. You’re absolutely right. Rhith and I knew nothing about how you make aerogel, where you find aerogel, how you make composites. And so it was, candidly, just a lot of trial and error, an incredible learning along the way. So for the aerogel, the original aerogel, that light blue era gel, the same stuff NASA uses is now in the public domain. So anyone can manufacture and produce it. And so, there are several suppliers around the world. And what we noticed really quickly is no one was responding to our university email addresses, right? If you get an email from a student at you know, Michael@MiamiOX.edu, not many people are going to get behind the student project. So we quickly incorporated lots of domains and, you know, on behalf of our company, OROS, we would love if you would, yeah. And so very quickly, I started learning some lessons along the way. And that allowed us to get samples. And then once we got samples we started messing around with how do you make aerogel flexible. And our first thought was, well, aerogel’s never going to be flexible, at least in this state. So you need to embed it within something that is flexible. And so then, the question was, well, what can that something be? And so we played around for a year and a half to find something that was strong enough to hold aerogel, but also be flexible under.
Eric Hornung 17:52
So your sophomore year, you’re pre-med, and you’re senior year, do you still graduate pre-med? Or, like, what happened those two years? You said school went by the wayside, and most pre-med people I know don’t use that phrasing.
Michael Markesbery 18:06
So yeah, we still graduated. Backup for a quick second. So you know, we had SolarCore by our senior years of college. And the next question for me was, would anyone want to buy this stuff? So the first thing we did is contacted a couple of factories and made a prototype jacket. It’s called the Lukla jacket, candidly designed by two science geeks in a college dorm room. Definitely not the best design jacket in the world. But it was good enough. And so we took that jacket, and we launched it on — are you familiar with Kickstarter?
Eric Hornung 18:41
Michael Markesbery 18:42
Awesome. Launched it on Kickstarter our senior years. And the goal was $100,000. We knew at $100,000 we’d try this whole OROS thing. Otherwise, plan B, med school. So, launched the Kickstarter, and in the first 36 hours, ended up hitting 125K, like more money than two college kids from the Midwest have ever seen before in our lives. Closed the Kickstarter campaign at 320, no 360 something. Anyway, massive amount of money for us at the time. And that was the start of OROS our senior years of college.
Eric Hornung 19:18
So once you have that Kickstarter backing, I’m sure it’s a lot easier to go to people and say, oh yeah, we raised a successful Kickstarter, so we’re going to go try this jacket thing. But when you were a pre-med student, what was it like telling your parents and friends, hey, I’m kicking around the idea of not going and saving lives and being a doctor, but selling jackets.
Michael Markesbery 19:38
You know, a lot of people do Kickstarter to get validation, to go raise capital. Rhith and I definitely did Kickstarter to get validation to show our parents like, hey, look, there’s, yeah, this is a worthwhile opportunity for us. So you’re absolutely right.
Jay Clouse 19:55
I also hear some Kickstarter horror stories of campaigns that look like they did really well, that didn’t understand timelines and unit economics, and it became a nightmare to actually fulfill. How did that look for you guys?
Michael Markesbery 20:07
We learned a lot about a lot of those failures prior to launching. And so, we made absolutely sure that the entire supply chain was in order, that our unit economics were in order, that we had sufficient prototypes, and we were ready to go to production. And so we delivered, I think, two months early. Now, I will also say, you know, at the time we were shipping out of my parents basement. So was not a complex supply chain by any means. We’re not doing that today anymore. We have great partners. But it was definitely a lot more groundwork back then.
Jay Clouse 20:39
So at some point here, you have the Kickstarter successful, you’re shipping out orders, it sounds like you’re pretty much bound and it, okay, we’re making a company out of this. When did you start to think about the fact that not only did you have to learn how to create a jacket, but now you have to think about how to create a direct-to-consumers, what it turned into, but a consumer brand that has units and, you know, that’s that’s a second component to this entire thing that most people also don’t have any experience with.
Michael Markesbery 21:06
Yeah, and Rhith and I didn’t have much experience there either. I think one of the incredible things about not having experience in different areas of your business when you start is it becomes much easier to admit both inwardly and outwardly that you don’t have experience in those areas. And I think the first step to building a solid business foundation is being able to admit when you don’t know something. And so, one of the first things we did is we built a group of advisors, many of whom are now board members or investors in the company who were able to guide Rhith and I in the early days. Some of those advisors are, there’s a man named Joe Flannery. Joe has been advising OROS since day one. Joe is the global president of Marmont, which is the fourth largest outerwear brand in the world. And prior to that, he was the CMO at The North Face. And so, in the last financing, Joe became an investor in the company and a board member. So I think, you know, having surrounded ourselves with these really talented individuals was a great way for us to understand early on what we needed to focus on to really grow the company.
Eric Hornung 22:23
How did you connect with Joe Flannery? That’s a pretty…Marmont, North Face. That’s exactly where you want to be. How did you get him as an advisor?
Michael Markesbery 22:30
Yeah, two ways. One, many of the advisors, from day one, somehow had a connection to where Rhith and I were going to school, right, somehow had a connection to Miami University. Joe, Miami alum. And so that was kind of our way in, our connection point. And so once we got connected, which, by the way, was a slew of emails saying, hey, you know, just take a 30 minute call, see if you like us type thing. And then, once we took that 30 minute call, I think there’s this thing where incredibly successful people, many like to give back, and I think — I hope — they look at Rhith and me and see, you know, them in a younger form, someone who’s willing to give something 110%. I think that helps them or makes them want to kind of, you know, help us out a little bit.
Jay Clouse 23:18
Is the technology that you guys made, SolarCore, is that protectable? Is their an IP around that?
Michael Markesbery 23:24
So we have three patents to date. And we’ll have a fourth in a month.
Jay Clouse 23:28
And do you find that companies like The North Face or Patagonia or Canada Goose, do you find that they are trying to mimic this now?
Michael Markesbery 23:37
No. So, one of our first hires was a man named Jeff Nash. And Jeff is OROS’s is Chief Technology Officer and VP of Product. Prior to working with OROS, Jeff ran the Innovation and Materials Teams at The North Face, at the same time that Joe was cmo, which is actually how we got connected to Jeff. Later on, we’ll talk about next generations of aerogel tech for OROS what that means. When we explained to Joe what we were trying to do, he said there’s only one man that I know of that could help you out here, and it’s Jeff. And so, we got connected to Jeff and brought him on. The point I’m making is, if Jeff were on the call, what he’d tell you is that brands in this space don’t create new materials from the chemical level up. What they do is they rely on fabric mills or suppliers to create new materials. And then the Innovation Teams that these brands act as scouts, and scout these new technologies to see how they can then be incorporated into the next season’s product lines. So one of the things that makes OROS incredibly unique is we’re creating new materials from the chemical level up to address our consumers problems. Does that make sense?
Jay Clouse 24:51
Yeah, totally. And if they see you guys getting a foothold, do they not try to spin that flywheel faster and try to innovate faster? I mean, what, what prevents them from going to the supplier or the fabric mills themselves and saying, we want you to come up with a solution for this?
Michael Markesbery 25:09
Yeah. So for us, it’s a couple things. Outside of that business model difference, it’s the intellectual property, more specifically the patents that we have on creating SolarCore and our next gen of technology around aerogel. Alongside that, with all of our suppliers and vendors, we mandate exclusivity agreements to make sure no one else can produce what we’re producing for other suppliers.
Eric Hornung 25:33
How much warmer is this material? Like I’m imagining this Columbia commercial where you have that guy like buried in the snow in a mountain, like tested tough, super warm out here, Columbia jackets, they’re great. But how much warmer is your product than kind of what’s on the market now?
Michael Markesbery 25:50
So when we first made SolarCore, we were pretty astounded, because it actually worked, right? So SolarCore has two benefit over every other installation in the market. And the first, to your point, is just warmth. We’ve tested SolarCore against over 250 other installations. Every goose down, every synthetic, every closed cell foam. Test method is a standard industries test method. It’s ASTM C518 thermal conductivity test method. And have yet to find another installation that beats it on a thermal performance standpoint. And so that’s, that’s great. It’s warmer. But the reason we’re all excited about SolarCore gets back to the challenge that I had on top of that mountain, when I looked like the Michelin Man. It’s the same challenge the industry’s had since day one. And the challenge is called loft. L-O-F-T, where every installation in the world needs loft to work. So take goose down. The way goose down works, just like every other insulation, is goose down traps air. The more air it traps, the more insulation it provides. The problem is air takes volume or space. So the more air you funnel in there, the puffier and puffier or your jacket gets. That’s why a big puffy jacket keeps you so warm, right, is it has all this airspace, this volume, this bulk or, technical term, this loft to keep you warm. You compress it, you lose all that airspace, you lose the ability to stay warm. That’s not true with SolarCore. So SolarCore under compression at 15 psi, a lot of pressure, maintains 97% of its thermal performance. And so what that means is for the first time in history, you can have a thin amount of insulation, put it into a product, and actually maintain significant thermal value. You can have something that looks like a quarter zip that can keep you as warm as a typical winter jacket. And you can have something that looks like a typical winter jacket that you can wear to the summit of Everest and back with a t-shirt underneath. And that’s actually been done. Our warmest jacket, the Orion parka, what Forbes called the warmest jacket in the world, has been to the top of never before some of the mountains in Nepal with a t-shirt underneath. So, I guess the point I’m making is, for the first time in history, you don’t have to like the Mitchellin Man to stay warm.
Eric Hornung 28:09
Is this too warm to, like, wear just around? Is it just, am I gonna be sweating if I wear this around Cincinnati in the winter?
Michael Markesbery 28:16
Beautiful question. So what you’re getting after is something called breathability. And when you consider breathability and a garment, there’s two things you need to consider. You need to consider the breathability of the installation, and then the breathability of the fabrics around the installation. Most installations — goose down, most synthetics, SolarCore included — are actually decently breathable. SolarCores rating is 40 CFM, making it a really great active, breathable installation. Where a lot of other installations run into challenges is the restrictions based on the fabrics around the installation. So back to goose down. Have you ever had a goose down jacket where the feathers started poking through the jacket?
Jay Clouse 28:59
I’ve never had a goose down jacket because I am not a man of means.
Eric Hornung 29:05
I have worn other people’s goose down jackets, but I’ve never had one either.
Michael Markesbery 29:09
Eric Hornung 29:10
So I’ll take your word for it.
Michael Markesbery 29:11
Cool. If you own a goose down jacket, feathers start poking through the jacket at some time. And that happens because of the degradation of the garment over time. You get a really high quality down jacket, would never happen in the first year. And the reason why is these high quality brands for goose down are using what’s called down-proof fabrics around the goose down. Down-proof fabrics work because the fibers within those fabrics are really tightly interwoven. So, none of the goose down feathers can poke through, right? The problem is the fibers are so tightly interwoven that it also restricts your air flow or your breathability. That’s why whenever you’re in a goose down jacket, you kind of start moving, you’re gonna start sweating your butt off. OROS or air SolarCore has none of those restrictions of what’s called migration, or feathers poking through. So we’re actually able to use the most breathable fabrics around SolarCore. So if you flip open any of our jackets and you look at the inner liner, it’s just a sports mesh. It doesn’t get any more breathable than that. And so what that allows you to do is have immense versatility, both from a temperature range perspective, whether it’s 70 degrees, or 60 degrees inside, or from an active use case standpoint. You’re meant to use these things outside not just when you’re walking your dog. And so, immense versatility from a breathability standpoint.
Jay Clouse 30:27
Who is this jacket not for?
Michael Markesbery 30:29
Our target consumer is what we call the modern urbanite. They’re someone who lives in the city but likes spending a lot of time outdoors and outside. What’s really interesting, though, is a big portion of our consumer base is also, or rather our secondary consumer, is someone who still likes spending a lot of time in the city, generally a little bit older than our target consumer, but instead of going outside and doing these multiple activities on the weekend outdoors, they just want to stay warm, like they’ll walk their dog on a cold Chicago winter day, which is great. But it’s definitely not our target consumer, but it’s someone we’re more than happy to cater to 100%.
Eric Hornung 31:10
Do you ever worry about who might latch on to your brand compared to…So I’m thinking Patagonia vest with VCs, or white girls in the Midwest with Canada Goose, like, it kind of established the brand for them, even though that’s maybe not what they were going for.
Michael Markesbery 31:26
So, I think the…Who I really love seeing where our gear is kind of like a micro-niche, but it’s it’s people who resonate really well with the brand. And this micro-niche is diving a little bit deeper than just modern urbanite. It’s this science loving, space loving, hacker mentality person who likes the newest tech and the newest gadgets, and seeing those people wear our gear I think is incredibly impactful. But I don’t worry if someone you know, doesn’t fit that mold. I think it’s an incredible value add to the brand.
Eric Hornung 32:02
What is OROS today?
Michael Markesbery 32:04
From what perspective?
Eric Hornung 32:06
When you think about OROS as a company, what does it stand for? What is it?
Michael Markesbery 32:10
OROS’s goal from inception has been incredibly simple. When Rhith and I started OROS, our goal was to create a long sleeve shirt that you can wear sub-freezing and still stay warm. Not just thinner or warmer outerwear, but getting rid of the necessity for outerwear entirely. So all you need is this long sleeve shirt to stay warm. To do that, Rhith and I needed someone smarter than the two of us to lead this technology initiative. And so we hired Jeff. Jeff, again, is our Chief Technology Officer, VP of Product. And we’ve been, for reasons that we don’t have time to dive into right now, there’s only one type of aerogel in the world that makes this long sleeve shirt physically possible. It’s a newer type of aerogel, NASA created it three years ago. What’s really cool is OROS was given exclusive licenses on this new type of aerogel. So that’s great. We’ve been working with this aerogel for three years, and in the last couple months, Jeff was able to take this aerogel and turn it into a fiber. In doing so, was able to prove that that fiber has drastic thermal performance increases over a standard polyester fiber. What that means is we’ve just validated the potential to completely change how consumers view and wear apparel. That’s astronomical. And at the end of the day, that’s what OROS is about. Our goal is to completely change the way people view and wear a pair.
Jay Clouse 33:47
Okay, so I have two questions, and I want you to answer them in the order that you think makes the most sense, because I’m not sure. Sometimes when I don’t know if I’m doing the best job as an interviewer, I let the guest decide. First question being, I want to know the suite of products that you have available right now. And the second being, with the goal that you just stated, this astronomical goal of changing how people view outerwear, do you want to license this technology, or do you want to become like an Under Armour that just makes all kinds of skews?
Michael Markesbery 34:15
Other than working with select groups in the US military and the Department of Defense, OROS will not be licensing or distributing our technology. For us, again, our goal is to take the moonshot and revolutionize the way that we gear up for adventures on earth and beyond. And being the technology inside for another brand isn’t the right way to do that. Our product selection today are a couple of different products. You have our outerwear, which is made up of two jackets. You have the Orion parka; this is what Forbes called the warmest jacket in the world. Then you have our Endeavor jacket. The endeavor jacket’s still incredibly warm. This is your snow sport piece. So if you’re skiing, if you’re snowboarding, if you’re snowmobiling, this is what you wear. It’s your, it’s your snow pass for all adventures. That’s our outerwear. Our sportswear is made up of a couple pieces. You have our Quarter zip. This is what Runner’s World called Gear of the Year and Men’s Health said is the best running piece for men. It’s my favorite product that we own. It looks and feels like a Quarter Zip, but it will keep us warm as a typical winter jacket. It’s insane. Then you have our women’s insulated leggings, which are our second best selling product by units. And then you have our Hybrid jacket as well. That’s our sportswear collection. And then we also have accessories, think gloves, beanies, and the like.
Eric Hornung 35:35
How did you make the decision to go into accessories? Why not just kind of stick with the core products?
Michael Markesbery 35:41
So accessories are really great for a couple reasons. One, not every consumer can afford a $400 jacket. And so having accessories, take our beanie, for example, at $35 is a great entryway into the brand for a lot of consumers and a great way to test our products out. And then also accessories are products that a lot of consumers need, whether it’s gloves or beanies. I can’t tell you how many times people say, oh my gosh, Michael, you need to make gloves. And then I say, well, luckily for you, we do. So those are the two reasons.
Eric Hornung 36:14
When you’re looking at your company, what are the financial KPIs that you look at to see, okay, how are we doing, how are we growing, how healthy are we?
Michael Markesbery 36:23
Every single year since inception — and you know, we started in 2015 — the brand has at least doubled its revenue. Hundred percent direct to consumer via our own e-com platform. And that’s, that’s great. What we noticed at the end of 2017 is we were doing a really great job of selling product, but we needed to do a really great job of building a brand. So we did two things. The first is we raised a small amount, a small round of capital, $4.5 million from a couple select VCs and individuals that knew how to build consumer brands. So, the round was led by a firm out of Chicago called Listen Ventures. Listen only invest in consumer brands. And what makes them great is they have a back office full of creatives that help with any brand activation or content play we’re doing. Another investor is a man we spoke about earlier, a man named Joe Flannery. Absolutely great industry expertise. And then other investors like Eric Dobkin, Eric’s known as the father of the modern day IPO. He created the global equity capital markets at Goldman, took Microsoft public, really great financial wiz. And then, we also wanted a consumer products entrepreneur that has started, scaled, and sold a consumer business. So we took on investment from a man named Sonny Vu. Sonny started a company in 2012 called Misfit Wearables, sold it three years later in 2015 to Fossil group, the watch brand, for around 260 million. So essentially assembled this great group of consumer investors that knew how build and scale consumer brands. Step two was we partnered with a branding firm, we partner with a firm called Gin Lane. I don’t know if you’re familiar, but Gin Lane’s done all the work for Harry’s, which just sold for like, I don’t know, 1.2 billion, I may be wrong, but Him’s, Her’s, Smile Direct Club, Sweetgreen, series of other really great brands. And we spent eight months working with them on our brand ethos and how that relates itself across all of our digital channels. And between the consumer invest around it and this work with Gin Lane, all of that manifested itself into our 2018 season. And we doubled revenue, which is great. But more importantly, what happened is we became significantly profitable on a unit economics basis, on a first purchase basis, more specifically. A lot of consumer brands rely on lifetime value of the consumer to reach profitability from a unit economic standpoint. What was really cool to see last year is we reached profitability on a first purchase basis.
Jay Clouse 38:57
And is that because you built such a desirable brand that more consumers justify the cost themselves or the cost change?
Michael Markesbery 39:05
So our AOV, our average order value, went way up to $289. Our blended CAC went way down. That’s, to your point, the justification of consumers, the justifying the purchase more easily. And then, for reasons unrelated to all the brand work and the consumer investors, our gross margin also went up a little bit. And so it was a combination of those three things that allowed for that profitability on a unit economics basis.
Jay Clouse 39:32
So since you have this, this goal of changing the way people think about outerwear, how do you think about the market potential for OROS?
Michael Markesbery 39:39
The way I kind of think about it is OROS is playing in the outerwear market, the sportswear market, and that’s great. But more importantly — and this starts to come to life when you look at pieces like our quarter zips and our leggings — OROS is creating an entirely new product that has never been made before, where we’re taking pieces that are never before insulated and essentially insulating them and creating something that looks like a sportswear piece, but insulates you like a jacket. And then eventually, couple years down the road, getting rid of the necessity of outerwear entirely. And so the market potential is incredibly great. But I think, along with that, understanding that we are also creating our own market is an incredibly important takeaway.
Jay Clouse 40:26
To that point, then, how do you think about the size of this new market, since you don’t necessarily have a direct comparable for it?
Michael Markesbery 40:34
I think a lot of it comes from market comps of comparable industries. So you’ll think you can look at the sportswear and you can look at the outerwear, because essentially, we’re addressing problems that those industries address as well. So even though we’re creating a product that solves that problem instrumentally better, we’re still solving very similar problems at the end of the day.
Eric Hornung 40:54
I feel like in this space, there’s these huge boom periods for brands that kind of sustained them going forward as a brand and kind of mark them. Like, when I played sports in high school, all of a sudden Under Armour showed up and then no one had it one season. The next season every single person was wearing it. Or when I was working in Chicago in 2014, not a single person wore Canada Goose, but then in 2015, every single person in my office had a Canada Goose jacket. So what capacity do you guys have to handle, like, say a 10x increase in order volume, if that were to happen this, this fall?
Michael Markesbery 41:31
There’s tons of work that goes into making handling capacity possible. And a lot of it is the backend supply chain. You know, how do you chase consumer demand? Do your…Can your factories handle that level of production? We’re incredibly fortunate, where we have an incredible team leading our supply chain and our operations initiative. So we are prepared to chase consumer demand, which is an incredible feat that has taken a lot of work to get there for sure.
Eric Hornung 42:04
And I think the last topic we kind of have time for is something that we’re curious on in terms of geography. So you’re from Cincinnati, you went to Miami, you started the company, it moved down to Cincinnati, went through the Brandery, I believe, and now you just made the move out to Portland. Talk to us about that decision.
Michael Markesbery 42:26
OROS, six weeks ago, relocated to Portland, Oregon. We’re incredibly excited. The team’s stoked. After our first week in office, we took the whole team whitewater rafting up in White Salmon. Tons of fun?
Eric Hornung 42:39
Little White Salmon River?
Michael Markesbery 42:41
Eric Hornung 42:41
Did you do the 16 foot waterfall at the end?
Michael Markesbery 42:43
Yes. How did you know?
Eric Hornung 42:45
I’ve done it. It’s great.
Michael Markesbery 42:48
That’s awesome. Yeah, literally the same one. Absolute blast. And so we relocated to Portland for two reasons. The first has just now become incredibly obvious: access to the outdoor, right, something that’s incredibly important for our brand. And then number two is access to talent. Portland is the technical apparel capital of the world. It’s the headquarters of Nike. It’s the headquarters of Columbia. It’s the North American headquarters of Adidas, and a bunch of other great brands have presences in Portland. And so, as OROS continues to expand at this rate, having that access to talent is incredibly crucial as something that has already started to pay massive dividends.
Jay Clouse 43:29
Let’s say it’s ten years from now. I’m talking with Joe Flannery, and I say, hey, I remember, a long time ago, you invest in a company called OROS, what happened to them, and you guys didn’t exist. What would have happened, where you guys don’t exist ten years from now?
Michael Markesbery 43:44
If someone finds a way to get rid of outerwear before us, I think that would be, that would be the major way. I think that’s, you know, when we think about Constantly Innovate, one of our core values, the shining light in our eyes is this idea of being able to completely revolutionize and take the moonshot and revolutionize how we view and wear apparel.
Eric Hornung 44:05
One follow up on that. If you want to completely get rid of outerwear, that means you’re gonna have to cut probably two of your highest skews right now. How do you think about cannibalizing your own skews when the industry probably will still have parkas and ski jackets?
Michael Markesbery 44:21
When we think about getting rid of outerwear and its entirety, there are going to be select cases where you might still need outerwear. If you’re planning on summiting Everest, sure, you might want a jacket. But for your everyday Chicago winter — and when we think about our target consumer, the modern urbanite, we want them to no longer be using outerwear. So some of our products we’ll still live on, but it would definitely be in reduction. And candidly, with the commercialization of this long sleeve shirt, I think we’d be totally comfortable losing out on sales on some of these other products.
Jay Clouse 44:56
This is awesome, Michael, I have a lot of questions, but we’re out of time, and maybe we’ll we’ll do a part two someday. If people want to learn more about you or OROS after the show, where should they go?
Michael Markesbery 45:05
OROSapparel.com is the best place? Otherwise, drop customer service and note, and let us know how we can help.
Jay Clouse 45:15
All right, Eric, we just spoke with Michael markesbery of OROS. What stood out to you about this interview, and where would you like to start today?
Eric Hornung 45:23
I love when we interview someone, and then I instantly go to their website to go buy their product.
Jay Clouse 45:28
Did you buy something?
Eric Hornung 45:29
Not yet, but I’m going to.
Jay Clouse 45:31
What are you going to buy?
Eric Hornung 45:31
I think I’m gonna buy the mid layer. I think it’s perfect for — if it works is advertised, and it is as warm as they say, and it is very breathable — then, I think it’ll be perfect for a Cincinnati winter, where you don’t need much in the way of, you don’t need like a huge Chicago sized coat in Cincinnati. But you do need something to keep you warm.
Jay Clouse 45:52
I like it. I like it. Well, you have to come back on here and give us a product review. So you, you’re obviously interested in their product, let’s talk a little bit more about the products and the company or the vision for the company.
Eric Hornung 46:05
I hate being cold.
Eric Hornung 46:06
I hate it so much. And one of my least favorite things about going to football games or going skiing or snowboarding is just being cold. So if they have something that keeps me not cold, and looks good, and feels comfortable, I’m in.
Michael Markesbery 46:06
Jay Clouse 46:23
I’ve definitely been to a Browns game off of Lake Erie. And it was so cold. So cold. So I can see where this could play, play a role there for you, Eric.
Eric Hornung 46:33
Yeah, I would like to go to a couple Browns games this year, maybe this December.
Jay Clouse 46:36
You asked a very astute question, I thought, which is if your vision for the company and your stated goal is to destroy outerwear as a necessary category, what do you think about cannibalizing your own sales? I thought that was a very thoughtful question. And I’ve been thinking about it ever since we did this interview, because they’re not going to destroy outerwear as a category for everybody. And so to take themselves out of that category and say, this is what you wear if you’re with us, is a bold, courageous move that they will probably make someday.
Jay Clouse 47:12
They’ll have to. I mean, their top priced piece of clothing right now is their outerwear. So, they’re going to have to take that outerwear and say, we are no longer doing this because we are an outerwear-less company. And you don’t need all of this material. You don’t need all of this outerwear. So I think that’s, that’s a really tough position to be in when everyone in the history of the world has always been putting on outerwear when it gets cold. Like cavemen, animal pelts. Beaver skins and beaver pelts were literally what made the North East in America. We killed all of the beavers in the entire New England colonies just to, like, make sure that women and men in London were warm. So, this is, like, something that is so ingrained in humanity that, if you could change it, that’s incredible.
Jay Clouse 48:04
A lot of what Michael said just seemed so good. Like he was saying every year the brand has doubled revenue. AOV went way up to $289 after the rebrand, their average order volume, their customer acquisition cost went down, their margin went up a little bit. The technology’s gotten better; they’ve just launched this new version of the technology from their CTO, Jeff, turning it into a fiber. It seems like everything is on the up and up for OROS. And, as we said in past interviews, my only real shadow here…I guess there’s two. The first is that, everything just seems so good, and it seems like well, why wouldn’t they just continue down this path? They’ve got exclusive deals with some of the suppliers; they’re the only people who have this patented technology; they’re innovating faster than the incumbent businesses can innovate, and even if they did, again, they have exclusive licenses and some of the stuff…It all seems so good.
Eric Hornung 48:58
So, we need a, we need a term, an Upside term for that something, like…It’s almost like a transparent shadow. Like, everything looks so good, but there’s still kind of a shadow there. That’s a terrible term for it. But you’ll come up with something better. I know it.
Jay Clouse 49:13
Oh, is this a challenge? Let me think. Hmm, hmm, hmm.
Eric Hornung 49:16
All right, we’ll run with transparent shadow for now. But listeners, if you guys have anything that you think kind of fits this idea of, everything looks really good, and that is in itself a shadow, help us out, give us a Upside phraseology.
Jay Clouse 49:32
Because my other shadow is just, if this is clothing to keep you warm, that’s cutting down on the skews of clothing that people buy. There’re categories that people buy. So how big is this market, really? But nothing’s stopping OROS from building clothing in those categories as well. They just don’t have to put SolarCore into it, you know? It just seems like, if they are creating a new category, they are the category defining brand in this non-outerwear warm-wear. And they provide clothes that are adjacent to that, the hats, the clothes, the beanies, just like the quarter zip. It seems like there’s a huge opportunity here, and they’re super well positioned to take it on. And you know, I have nothing but good things to say about the opportunity in front of us.
Eric Hornung 50:15
What do you think about their audience, their targeted audience? Like the semi-nerdy, semi-geeky outdoorsman?
Jay Clouse 50:23
I did cringe a little bit at this because he described the user of early Google Glass, the glass-holes. But it does have a different vibe, you know? It seems like it’s more of a subtle nod to other people in that community, you know? Like, the nerds are going to see other nerds wearing this and just kind of tip their hat and say like, I know what that is, I see that logo, and I know what that means. Whereas the glass-holes are wearing this very conspicuously on their face to show like, look what I have, whereas this is just going to blend in with their clothing, it’s going to look like nice clothing that just may have an OROS logo on it. That may be a point of pride for people who are in that community to know that they’re in that community.
Eric Hornung 51:04
Should they make a limited edition venture — venture capitalist, like Patagonia competitor?
Jay Clouse 51:11
Oh man, I don’t know. I don’t know if that’s a good move.
Eric Hornung 51:15
What I like about this model specifically is that it’s been done before in terms of, hey, we’re going to make really nice, high priced outerwear and clothes that keep you warm. I mean, there are so many companies here that have become massive companies just on the back of that promise alone. You have Moncler, and you have Canada Goose, you have the North Face, who they have a great hire from. You also have Under Armour, which, like, kind of gives the other side of their brand, which is recreating sportswear. So Under Armour and Lululemon, they did something new with materials. So when you kind of look at all of those together, you see what OROS could be. They could recreate outerwear, which they can price at a high price point because people will buy it, and do something new and innovative to establish themselves as a brand, because when you buy an Under Armour knockoff now, it’s still Under Armour. Like it’s still, this feels like the same technology to most people.
Jay Clouse 52:15
Yeah, and a lot of people even refer to it as Under Armour, which is an amazing brand. So I thought about Under Armour a lot through this interview, I thought about Mizzen+Main a lot, because the technology in their clothing. And Mizzen+Main isn’t nearly as big of a company as Under Armour, but they are a category defining company that, at its heart, has a technological advantage. And what we’ve seen, from both Under Armour and Mizzen+Main, is the ability to capture attention and pull people in through very, very effective endorsements with visible people in those categories, whether they’re athletes or, or others. From Mizzen+Maine and Under Armour, it’s been athletes. In OROS’s case, you could have X-Games athletes, you could have other high performers, you could have Olympic athletes, things like that. It just seems like another easy or straightforward marketing play that could be really big for them.
Eric Hornung 53:03
Yeah, my biggest shadow is, I don’t know who their perfect athlete or sponsor is. Like when you think about Beats, and you had all of the football players wearing Beats to the games, or whatever case study you want on people with high net promoter scores wearing or using your product. Supreme is another good example. I think that they just need to find who is the right person for them and who’s going to be kind of the, not face, but the type of person that’s the face of their brand.
Jay Clouse 53:32
The torso of their brand.
Eric Hornung 53:33
Oh, the torso of their brand. That was good. That was nice.
Jay Clouse 53:36
So let’s move into talking about Michael as a founder, Eric. Grew up in Cincinnati, went to Miami University, is an Ohio boy. What were your hot takes…cold takes? What were your…no we’ll say hot takes, even though this is for cold weather. What were your hot takes on Michael?
Eric Hornung 53:50
Cold weather, but I’ll stay warm because I’ll be wearing my OROS that I’m going to buy.
Jay Clouse 53:53
Your OROS insulated takes?
Eric Hornung 53:57
Didn’t like being cold. Had a nice story there. I don’t know that that in and of itself gives me the founder-product fit that I would be like, oh, he has all the background, he worked at North Face, he did this he did that, right? Nothing wrong with that. It’s just, we’ve seen — and I also don’t know…Actually I’ll ask you a quick question before we dive deeper into Michael. What do you think about founder-product fit? And how important is it for starting a business?
Jay Clouse 54:25
I think about it a lot. And it comes down to this question of, well, two questions. We’ve heard this from other investors, which I’ve kind of adopted into my thinking: “Why you, why now?” I think both are very important, because if the “Wny You?” is not obvious, then the “Why now” seems like a longer shot to kind of walk into. If it’s clear why you are starting this opportunity, it seems more likely to me that you are going to be more aware of the right timing for that industry. And I think timing is more important than I had originally thought when we started this podcast. So I do look for founder-market fit in those ways. Not to say you can’t overcome that; it’s just a more likely pattern match, I think.
Eric Hornung 55:09
I would agree with that. I also would elaborate a bit in that, I think, if you have a founder who demonstrates a certain level of strategic tenacity, then you can have a founder who kind of works themselves into founder-market fit by their early employees and by their early work. So, taking that $10,000 in college and really, like, taking this idea, this gel, and figuring out a way to get it into clothes, and then once you got there, they did the Kickstarter, and that hit and then they found this advisor who has all the credentials you would need, and that helped them with a key hire early on. I think you can kind of work your way into founder-market fit. So I think it’s probably something that people in the industry, in general, maybe overemphasize; but it’s definitely, there’s multiple interpretations of it.
Jay Clouse 56:04
The “Why now” feels more clear to me, or feels like a better time for OROS now than before because there are clear innovations on the installation side that Michael had spoken to, that now they own patents on and now have exclusive relationships with suppliers on. And also this seems like the right time for this to be a direct-to-consumer brand. Seems hard for me to think of a world pre-internet where this could take off to the agree that it will take off now, given that they don’t have to worry about shelf space or, at the beginning, what seems to be a niche product that I think we’ll get to be more broad after it, you know, accomplishes its goals within a niche.
Eric Hornung 56:41
Well, I think, to our discussion with web on the Swanies episode, eventually you have to have some sort of retail presence. So it’s nice to start direct-to-consumer. But I could see places where they have a real benefit being, maybe like Breckenridge or kind of some ski villages that people are just cold and always willing to check out what’s new, what’s interesting, and are the right type of clientele. So I think a retail presence will emerge. One thing that I wanted to talk about that we got to talk a little bit about in the interview was this move from Cincinnati to Portland. What was your thought on that?
Jay Clouse 57:16
I thought it made a lot of sense. Moving to an area where the activities that people wearing your product do more, those activities are more accessible in Portland. Especially from a knowledge worker perspective, we talk about talent a lot on this podcast. Getting around people who worked at The North Face, or Patagonia, or Adidas, it seems like a better location for this type of company. It’s sad. I hate to see him leave Cincinnati because it seems like a big opportunity for Cincinnati to have a win for a company like OROS. But if I’m thinking about what’s best for the founder, what’s best for the company, I see, I see a lot of wins there.
Eric Hornung 57:53
I think one thing that we’ve discovered throughout this podcast is that when you talk to community builders, they always have somewhere between two and four areas where, like, companies just have an unfair, competitive advantage if they start in their city around that space. So in Memphis, it was logistics and home services; and in Raleigh, there was this enterprise software competitive advantage; and in Tampa, they have gaming and a couple others. And it’s just like, everywhere has their specific focuses. And I think Portland has a focus in outerwear, with all the companies you mentioned plus Colombia, plus just that natural outdoorsman space. So I don’t see anything wrong with moving your company to the place that it has the best possible chance of success. I also think, if this company was started in Portland, it might not have been successful as if it was started in Cincinnati. So that’s a really interesting dichotomy, where you have the Brandery and all of this CPG-focused influence in Cincinnati. He said that University of Miami was instrumental into getting this company up and running. So, could it have been started in Portland and been as successful as it is now? We’ll never know. But, my guess would be no.
Jay Clouse 59:09
Yeah, I mean, he grew up in Cincinnati, and so I’m sure it’s not easy for him to leave home. I’m sure, he’s doing what’s best for the company. And founders know what is best for the company. Their investors clearly are supportive of it, or at least not preventing it. I really liked how he could recall off the top of his head the seven core values that they put together for OROS. So I had a lot of good marks for Michael as a founder as well, even though this is his first major undertaking. He’s taken it in phases, he’s done the Kickstarter, he went iteration by iteration, proved to his parents that this is something he was going to do, and continues to prove that, you know, he can get investors to buy into the idea. And now he’s getting customers to buy into the idea at a higher level than before, too. So, I’m impressed with Michael as a first time founder.
Eric Hornung 59:54
All right, Jay. So what do you want to see in the next six to eighteen months?
Jay Clouse 59:57
In the next six to eighteen months, I want to see more OROS. And what I mean by that is, when we’ve talked to direct-to-consumer companies in the past, it seemed like I was just hearing more about them and seeing more about them in the news. You know, we set up alerts for our companies here on the pod. We get pinged with news stories and coverage on Somersault just about every day. And so, for a company to continue to be direct-to-consumer successful, I think they need to create more and more brand awareness for themselves. And that’s what I’m looking for from OROS. And of course, it’d be great to see that in tangible terms like revenue growth or cost of customer acquisition going down, continuing that trend. I don’t know if in six to eighteen months, they’re going to start destroying their own outerwear brand. But yeah, I’m looking for continued growth in the KPIs that Michael shared with us.
Eric Hornung 1:00:49
This is weird, because I don’t usually just agree with you on the outro here, but I want to see the same thing in terms of the brand growth. When I go to look at the best winter jacket list, for example, which I’m sure are across every single blog and publication, just doing a product review, are people mentioning OROS in line with Canada Goose, are they mentioning or is in line with Moncler, are they mentioning OROS in line with whoever the hot brand of this upcoming winner is going to be? I think those kind of spots are going to be very important. Same with the endorsement side of things. I also think that, while OROS is still small, there’s kind of some fun or limited batch-release kind of stuff they can do that would be pretty cool. Like, something with the US men’s ski team or whoever it is that would be a little bit more, like, on the Supreme side of things with small batches and higher prices to kind of get their, like, core customer some, some cool things that are a brand additive.
Jay Clouse 1:01:49
Alright guys, we’d love to hear your take on OROS. You can tweet at us @upsidefm or email us email@example.com. We’d love to hear your thoughts on this. If you’re a customer of OROS, if you’ve tried things out, we’d love to hear your take on the products themselves. You can tweet us @upsidefm or email us firstname.lastname@example.org. And we’ll talk to you next week.
Debrief begins: 45:15
Michael Markesbery is the co-founder and CEO of OROS apparel, an outdoor and sportswear company that has revolutionized the technology in outdoor clothing.
Founded in Cincinnati and now based in Portland, Oregon, OROS makes outdoor apparel using their own NASA-inspired aerogel technology called SolarCore. An online, direct-to-consumer brand, OROS offers several products with the aim of making outwear less bulky and, perhaps one day, eliminating the need for outwear at all.
Michael recounts his inspiration for the product and for the company, and how he and his partner started building the brand as pre-med students and continue to watch it grow.
- Inspiration for a less bulky yet warmer product (6:15)
- The potential of aerogel and it’s use in SolarCore (8:00)
- The start of OROS and it’s values (11:15)
- Acquiring aerogel (15:54)
- Kickstarter success (17:50)
- Flourishing of the business (22:39)
- How warm is SolarCore? (25:33)
- Target consumers (30:25)
- OROS’s goals for today and market potential (32:05)
- OROS’s products and finances (33:45)
- Move to Portland (42:04)
- Marketability of eliminating outwear (43:29)
OROS was founded in 2014 and based in Portland, Oregon.