Herschel Supply Cofounder on Why Backpacks Are Only Part of Their Success


The Bench Team


April 1, 2019

This article is Tax Professional approved


When my brother Jamie and I quit our jobs to start Herschel Supply Company ten years ago we knew we had the opportunity to create something big. The only problem was there were a lot of gaps in our knowledge of how to build the infrastructure to support it.

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We were both working in sales for top tier brands—myself with Vans and Jamie for K2 Sports—when we identified a glaring opportunity in the market. We say every business generally starts with a problem, and ours was simple; backpacks were boring. That was the macro vision of where we started, and as we looked at categories it was the one glaringly obvious one. We knew we could do better. That’s where we started and built the foundation, solving that issue to make sure the same isn’t true today.

We’ve always let the end consumer define our business and what we do for them, but it takes a lot of rigor and a lot of robust planning to ultimately deliver that experience. That has to be solved through quality, through design, through marketing, through logistics, through finding the right customers and through visual merchandising; there’s a lot that goes into ultimately delivering on your end consumer’s needs, and we take all of that really seriously.

From a design or aesthetics point of view we had a really good idea of what we were trying to do, but on the operational, financial, logistical, global shipping aspect of making and transporting actual products, we had never done any of that before.

But we had set out to build a global brand from day one, and in order to do so we decided that we’d have to treat the front end and back end with the same level of importance. After all, if we didn’t have a foundation we’d just be building a crumbling empire on top of it. Having a well-organized and efficient backend isn’t always an easy task when you’re a start up, but we made a hard decision to over-invest in enterprise-grade technology and backend systems right from the beginning. At that stage most small businesses would just use a spreadsheet.

To help fill in the rest of our knowledge gaps in those areas our strategy was to essentially be unashamed of asking for help. If you walked around our offices in Vancouver in those early days you’d hear a lot of people on the phone with logistics folks or manufacturers saying, “Can you walk us through this?” or “Can you explain that to me?” We didn’t have time to get a formal education in those areas, so we let our partners, contractors and suppliers be our professors, and by the end of the first year it felt like we had earned our Masters.

Most in our position would leave those major hurdles and investments for a future when they have more resources, and instead focus their energy on day-to-day survival. We took a different approach, in part because we knew we didn’t want to bring in an investor or raise a round of financing to solve those problems for us down the line. As a result my two brothers and I still own 100% of the business today.

If we didn’t have a foundation, we’d just be building a crumbling empire on top of it.

In our very first season we sold products in Japan, Australia, the United States and Canada. We had come such a long way in such a short period of time that I actually had to interrupt a conversation between a contractor and an employee who was still asking for help. I had to explain that we couldn’t plead ignorance anymore, that we needed to be the professionals. If there was anything we couldn’t figure out by that point we would just have to hire the talent that could.

Like the front-end of the business, however, there really is no end point to the investments we make in innovating our backend systems. It’s not just about maintaining what we’ve built, but staying on top of new innovations, remaining nimble and always looking for ways to improve.

Ensuring that we’re well positioned to serve the customer’s needs, whether the end consumer or a retail partner, required us to be easy to do business with. But being easy to do business with is really hard. From the very beginning we’ve had to figure out things like how do you ship orders on time?

How do you make sure you’re delivering on what people need?

How do you ensure you’re using data to make the right product decisions?

How do you know if you have enough inventory?

How do you make sure that your accounting is correct, and that you’re as proud of the back end of the business as the front?

Answering those questions properly for us is the definition of a great business. We believe that’s how the world’s best companies look at it, and I’m glad we’ve focused on answering those questions from the very beginning.

I can’t imagine where we’ll be as a company in another ten years from now, but I do know that the investments we made in building a scalable infrastructure in those early days are going to keep paying off for decades to come.

Illustration by John Larigakis.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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