Under The Hood: Caleb from Haven
Founder insights from Caleb of Haven Athletic: Organized Gym Bags
Welcome Caleb! When did you start Haven and what’s the growth been like since launch?
The idea came in 2016, it’s kind of a classic startup story. It was me in the gym, digging around in my bag, realizing that this sucks. Emptying it out, ripping it apart, trying to find my headphones that had slipped underneath the plastic in the very bottom of it.
That was the inciting moment when I realized that there has to be something better. And so in 2016, we started thinking about it. We did some market research and in 2017 started to go after it.
I spent about 3 years doing customer validation and then launched our first pre-sale in 2020. We did a very small pre-sale of about $10,000 to validate whether or not people will actually pay for this.
And then we did $200k in top-line rev the next year (2021) and almost $1m a year after (2022).
Sounds like you knew what you were doing. What's your background?
I got a degree in marketing. Right around the time that Gary Vaynerchuk was really starting to show folks how Facebook can be used for business.
I started following that path and that got me interested in startups.
I then ran an event for startups in the Midwest for about 4 years. And after that I worked for a couple of startups, a couple of which had an exit. I did some marketing for them. And then I started a couple of my own and ended up selling one of those / merging with a telehealth company and getting bought out by a couple partners on another one (startup) more in the SaaS space.
And so the general premise of ‘Lean startup’ has been ingrained in me in the last 10+ years of my life. And so when it came to physical goods, I was like, ‘Why would this be any different?’ You don't just build a car: you build a skateboard, you build a scooter, you build a bicycle, and then you end up with a car. It's that whole idea of ‘validate with your customer along the way.’
So initially it began with: ‘Hey, we have this problem. Do other people have it?’ ‘Okay, we think other people have it, let's start prototyping ourselves as much as we can’.
That's what we did. I took this really scrappy ripped up duct taped bag with cereal, cardboard box and a grocery sack for a shoe bag. I took that to the gym for 3 months. And it was kind of embarrassing, folks were like: “Why does Caleb have this piece of trash with all of his gear in it?” But it validated that organizing your gear actually is a nice thing.
And from there I found a factory, got a sample and showed people the sample. I had a script: “What do you think of this?” We were looking for real hard feedback, not just a bunch of friends saying “we love what you're doing, you should definitely do it”. That's a great way to end up falling on your face.
And then the final step to that was 2020: The presale. No one's ever done anything like this, so we were going to have to charge a lot of money. And back then, the very first presale we did was half the price of what we're charging - but still really expensive for a gym bag.
But it was the last line of validation we needed.
How has your ambition changed on this business? Did you know this would be your next big thing?
Great question. It has shifted. It started early on as an itch.
I like to start things. I like to be in a creative / testing mode. It's just so fun doing that initial research and whether it's coding something up or finding a way to make a product yourself. It's so fun. And early on, it was a little bit of that: “let's scratch this itch. Let's see if this is even smart to pursue”.
But throughout that period of time, as we heard more and more people agreeing with us saying “It's so obvious” “Gym bags suck” “They haven't changed” and doing baseline research on the history of the gym bag which originated from a tube that our grandparents took to war, and eventually became the classic Nike duffel bag that you see everywhere - we were like “okay, it seems like a pretty forgotten market” which makes a lot of sense.
I even learned that there's a pretty big athletic footwear company who designs all of their clothing and footwear in house, outsources their bags completely to a 3rd party. I felt that it was so indicative of the whole problem we are focusing on.
I like to compare us to ‘Yeti’. When Yeti started, people weren't like “oh, we need new coolers” - It was more like “I've got that $30 Coleman and it's probably got mold in it but it works”. But then when Yeti came along you're like “Oh my God, this is amazing. It actually solves all these problems I didn't exactly know I had” but now that I'm aware of it, I have to buy this wildly expensive cooler.
There's definitely a cohort of people who email us and they're just like “Oh my God, thank you for solving this problem. I don't know why no one has solved it until now”. But for a lot of people, it's just kind of educating them that gym bags suck and if you are a high performance athlete, whether you're a professional or whether you're just a daily athlete: All of the gear you have and your mental space is a very sacred space that you should be protecting.
It's such a simple but visceral problem.
I totally see it. And what was your approach to D2C?
Since the beginning we planned on being D2C. Everyone that I had talked to early on was saying: “use D2C as a launching point before you go to retail.
And so that's what we started with. That was really in the D2C golden years. And I don't know if that's necessarily the best way to start today. Maybe it still is. I think if you have retail partners or you can get a PO early on, that can certainly help with a wide variety of things.
But now is the point where we're starting to have conversations with retailers.
What has changed on your site since launch?
We've just started looking at improving it. We should have done this a lot earlier, but I haven't had the capacity to do so. We’re testing a handful of landing pages that are converting better and are in the midst of taking in that data and implementing learnings into the website.
We're also currently using Webflow and then using a tool called Udesly to track it over to Shopify. It’s a bad solution and I don't recommend anyone do that. We just did that early on because we understood Webflow and it saved us from hiring expensive Shopify developers. But it's actually been significantly more of a hassle to go down that path. It would have been much better to just use a really fast theme and go that route and work within the constraints of that theme until we’re ready to go full custom.
Wow That's crazy. So the website is actually built on webflow?
Yeah. I'm really curious too about what’s to happen because in the last Shopify conference, they announced that there will be a plugin or communication between Shopify and Webflow coming at some point this year. And so curious about that. I think we're still gonna move over to a baseline theme in Shopify, but maybe whatever they're working on could make it really functional.
What have been the big acquisition drivers for you?
Pretty simply, we run Facebook ads and it’s worked really well for us from the beginning.
The first ads we were running were $200 campaigns that came back at a 5x ROAS. So we kept increasing budgets up to a point of spending $15k a month while profitable.
And also in the last 2 years, we’ve been doing a fair amount of native posting on Instagram and community building (especially in the Crossfit community).
And I think the biggest driver is fairly simple: We have a really high-quality, interesting, differentiated product that people want. And the target market right now is pretty connected to what we've made.
How have you approached influencer marketing for Haven?
Early on we ran a month-long test with an influencer agency.
You learn that if you DM 100 influencers, you're probably gonna get 50 to respond back and 20-30 are going to post about it. And that held about true for us. But we couldn't keep doing that regularly. Sending 100 of our bags is very different from sending 100 bottles of olive oil - it's a really significant investment for us.
But now we focus on organic social - a lot of athletes slide into our DM’s saying “Yo, this is dope”. And then naturally my next response is usually like: “Cool, I would love to send you one”. And then we keep it pretty chill. And then usually they post something and we don't have a super formal structure right now.
Totally - so in the next 2-3 months, are you laser focused on improving your Facebook Ads performance?
Yeah 100%. I'm a big fan of listening to people who have done it before you and have done it better.
So people like Nik Sharma and Moiz Ali (I love their podcast ‘Limited Supply’) are very good to listen to.
In one of Nik's emails that he sends weekly he said something along the lines of ““get to $5k a day in profitable spend on Facebook and don't touch any other channel” “You can still build a $50m company just on Facebook”.
I've really taken that to heart. And if we can get to $5k/day profitably in Facebook spend, that puts us at $5-7m a year just using Facebook. And so that's basically the goal this year.
We work with an agency right now, Homestead and they've been really great to work with and working with us to create new content and to really dig down and be like: “How do we push and stay profitable?”
In terms of positioning: Have there been any changes at Haven since the beginning?
As far as language and how we've talked about the brand, we haven't changed a ton. But I’ve taken great learnings from a book titled ‘Play Bigger’ that talks about creating a category.
And that’s why I make it a point to always use the term ‘organized bag’. Like it's not just a bag, it's not just a gym bag, it is an ‘organized bag’. That's the category that we're owning. And if you Google it (“organized bag”) generally we're the first result, which is pretty cool.
Let’s chat operations: What have you done to make selling a bag more efficient for you guys?
There are 2 big things for us on the operational side. The first one is shipping.
Back in 2017-2020, and I heard a lot on Twitter about ShipBob. And so felt that they’d be the best 3PL to work with.
But they were absolutely awful. This is a negative review of them. It was so wildly expensive. You could literally go into a UPS store and ship the bag for significantly cheaper than the rates they were charging us. It was just bonkers.
And so then we looked at Shipmonk and they had better prices. It ended up being a very similar situation where it was just absolutely awful to work with them. They treated us poorly in a lot of ways and cost us money.
And so after that I put a post out on Twitter essentially saying “who should I work with?” And talked to a ton of people.
And where we landed was with our Lord and Savior: Chad Carleton. He works out of Springfield, Missouri. He runs a company called Everything Kitchens. They do like $40 million and are on track to ship like 1 million boxes from their 3PL that literally doesn't even have a name.
When we started talking to him, he sent over his rate sheet and my mouth dropped. I was like “how do you have these rates?”
At ShipBob, it was $80 to ship a box (one of the downsides to our product is that it does not collapse at all - so it ships in a very large box. We do this to maintain the integrity of our product). And Shipmonk was shipping it for $25.
But Chad could ship our box for $13. I was like, “where do I sign?”
But it’s not just the rate card that attracted us - we’re in a Slack channel with their team and can so easily communicate back and forth on issues. They 100% feel like our team. We’re so connected and I have a lot of trust in them.
What’s the other unlock?
The other thing is payment terms.
Along the way we started to figure things out and eventually learned about “the golden standard in direct to consumer” of the net 90 negative cash conversion cycle. This is how Gymshark built a billion dollar brand.
Our first factories initially said no, but we started pushing and getting a little bit closer. And now we have a really great partnership with our factory owner and have a ‘50% payment when it ships’ + ‘50% on net 60’.
So we don't have a full net 90 yet, but are pushing towards that.
And I think that's something that has been ingrained in our DNA since the beginning. When we first wanted to make the bag, we heard “no” for 1 year. People would not make it. But I was like “it's 2020 (back then), there has to be a way”. And we just held onto that belief for so many different things and then ultimately it worked out.
Let's go into the stack:
The stack is Shopify, Webflow, Gmail, Klaviyo, Postscript, Facebook ads, Brex (surprising), Gorgias, Triple Whale, Superfiliate, Fondue, Archive, Junip, Chad Carleton (3PL) and Shopify Capital.
How important is Shopify Capital to your business?
Massive. It's so helpful. We're on our 4th or 5th Shopify Capital round of funding.
I did read good comments online recently about how Shopify Capital and other lenders like them have semi predatory loans where the loan interest ends up being much higher than anticipated.
But when it comes down to it and you need capital but no one will give you some - when Shopify decides to provide that to you and you can simply pay it back as a small percentage of daily sales, that's actually wildly functional, even if it is kind of a crappy loan.
Final question: What’s the key to success at Haven?
It's the product. If we didn't have a product that wasn't intentional as it is and solving the problem that it does - we wouldn't be where we're at.