“What is brand?” Canadian apparel entrepreneur Chip Wilson asked 17 year old podcaster Matthew Nelson (that’s me) in a recent interview. “The definition of brand is that you're different from somebody else--a total contradiction to the social media world that we are in right now, where everyone’s supposed to be equal.” [This interview has been lightly edited for brevity]
Wilson founded athletic wear giant Lululemon in 1998 after spotting an opportunity in the Yoga apparel industry. Today the company has over 460 stories and a market value of US $49 billion. Wilson personally is estimated to be worth US $6 billion according to Forbes.
Within one week in 1998 Wilson spotted three signals supporting the Yoga apparel opportunity. These were overhearing women enthusiastically discussing Yoga, then seeing an article about Yoga in the newspaper, then passing by a telephone post with a flyer on it for a Yoga class. He looked deeper and learned that a majority of university graduates were now women with greater disposable incomes. Wilson had been in the apparel industry for nearly two decades at this point and saw his opportunity. With these signals, perfect timing and luck, Lululemon caught wind.
“So I think there is a certain amount of luck in developing a product that the entrepreneur wants just before the world wants it,” Wilson said. “If you’re going to come in late to a market, then you’ve got to have a lot of money behind you in order to market yourself but if you’re too early there’s nobody to sell to.”
“There’s always the saying that goes that if an entrepreneur has enough statistics to prove that their concept is going to work, it’s already too late.”
“I think people couldn’t really compete against Lululemon because we developed a new business model, we were non-wholesale and we were making a superior product that nobody else could afford to make because of our superior business model.”
(Matthew) “Was going non-wholesale a huge part of your guys success?”
“I think it was “the success” because then without a middle-man we made much larger margins and we had control of our brand and we could make a superior quality product at a better price than the wholesalers, which allowed us to take market share away from Nike and Adidas.”
Similar to fellow Canadian billionaire Tom Gaglardi of Northland Properties (Read our interview with Tom), Lululemon was vertically integrated. While operating in different fields both entrepreneurs stressed the need for a competitive advantage.
“How are you going to win?,” Wilson asks. “There’s a whole bunch of different ways of winning… There’s no point in going into a crowded marketplace unless you have a new idea that nobody else has.”
How To Be A Successful Entrepreneur
“You have to be able to think about what you’re doing 24/7 in order to just beat the competition. So I would say the passion has to be there.”
“The brain, especially at night time has eight or more hours of subconscious thinking and if you’re passionate about what your doing then the brain will spend time figuring out how to do whatever you’re doing better because that’s exciting and if you’re thinking more about how to become successful or how to be better at your job or a better person than I think ultimately in the world of competition, that person will win.”
Wilson took incredible personal risk to make Lululemon a success, remortgaging his house two times in the company’s early days. When he failed to get a third loan Wilson had to go back to work at his former startup Westbeach to keep income coming in while building Lululemon at night. When Westbeach was acquired Wilson secured a severance package which financed Lululemon through to the Christmas season when 30% of the company’s sales happened. This kind of risk taking is not for everyone.
“I think it’s different for an entrepreneur vs an employee. For an entrepreneur, it means that you would do what you’re doing for nothing because whatever you’re creating totally fulfills the need to fulfill an idea that you had and you’re not willing to let go of. I think passion for an employee is someone who is not willing to risk everything but loves the vision, the brand, the values of the company that aligns with theirs and they can see being fulfilled within that company.”
“If you’re below the age of 40 or maybe don’t have children yet, your propensity to risk should be 100%,” Wilson says.
Traits he looks for
“Number one is giving without the expectation of return.”
“I believe in the law of attraction, you attract the type of person you are. So if you're optimistic, you're also going to attract optimistic people who are probably more willing to work and be part of projects that there’s no real proof that there’s going to be success at the other end.”
“You don’t want to be sitting on your deathbed thinking I only gave it 80% because I wanted to be 20% safe. I wonder if I had given it 100%, it might’ve actually worked because so much of being an entrepreneur and making an idea work is giving it your all.”
We are very grateful to Mr. Wilson for the opportunity to learn about his journey. You can learn more about Chip at his web site: http://chipwilson.com/
Matthew Nelson is a 17 year old entrepreneur with no credentials just trying to learn the same things as his audience. He’d love your continued support!