Disrupting industries from fashion to fitness, careers to rental cars
There must be a better way—a solution that’s more cost efficient, less stress inducing, more socially beneficial and less environmentally destructive.
The founders of the feisty, status quo-defying brands in Adweek’s first-ever Challenger Brands issue started with precepts like these, identifying pain points in industries as varied as home insurance, group exercise, dental health and women’s cosmetics and finding completely new answers to everyday consumer problems. Now that they have—some with nine-figure revenue to show for their efforts—all eyes are on them.
“You get pressure from the top because the big guys wake up,” says Courtney Nichols Gould, co-founder of SmartyPants Vitamins, “and there’s pressure from below because you’ve cleared the decks.”
See from these 15 examples how all that compaction created some fairly fabulous diamonds.
The footwear industry doesn’t use sugarcane, eucalyptus pulp and Merino wool—yet—and that’s where the disruption begins for Allbirds, a Silicon Valley startup with more than $100 million in sales in two years. “Our mission is to make better things in a better way,” says Julie Channing, vp, marketing. “There’s an opportunity to forget the old rules and just create things people can feel good in and good about.” Allbirds, which Time dubbed “the world’s most comfortable shoes,” hawks its minimalist sneakers direct to consumer and in two boutiques (New York and San Francisco), with plans to open eight more retail spots in 2019, the U.K. included. Partnerships with Air New Zealand, Nordstrom, Outdoor Voices and Shake Shack widened its reach, and celeb sightings (Gayle King gave Oprah a pair; Leonardo DiCaprio is an investor) have pushed it beyond its tech community roots. Copycats are welcome, Channing says, via its open-source sugarcane flip-flop ingredient that replaces petrochemicals because “we don’t win until more businesses adopt this kind of manufacturing.”
Don’t confuse Brandless with an anti-brand or its stripped-down monochromatic packages with generic products. “We are very much a brand,” says CMO Aaron Magness. “We’re just reimagining what it means to be a brand in today’s world by encouraging people to live more and brand less.” The direct-to-consumer ecommerce player, with $300 million in financing, has been called “the P&G for millennials,” selling 350-plus food, household, health and beauty items for $3 each. Debuting last summer, the company has aimed to democratize shopping for high-end goods (organic, non-GMO, cruelty-free) and cut out the “brand tax” that inflates prices at traditional retail. “We’re eliminating those inefficiencies and markups,” Magness says, while building community (#Brandlesslife) and giving back (2.5 million meals donated so far to Feeding America, one for each order placed). Its own brick and mortar could be coming, but in the meantime Brandless IRL popped up in Los Angeles in May and will repeat in New York this month, sticking to the formula that’s “more about trial and engagement and less about trying to sell things in real time.”
An ultra-fast fashion brand with price tags under $50 and knockoffs galore lands on Google’s top-searched list in 2017, alongside category heavyweights like Chanel, Gucci, Supreme and Louis Vuitton. That’s the Instagram-fueled world of Fashion Nova, where some 3,000 influencers (#NovaBabes or #NovaStars) helped propel the company to a reported 600 percent growth last year, according to its CEO, Richard Saghian, whose devotion to the social media platform means his Los Angeles–based staff posts there every 30 minutes, he told WWD. The apparel, accessories and beauty brand (direct to consumer plus a handful of Southern California mall locations) has 13.3 million young followers, mostly millennials. Building its fan base predominantly with underserved audiences and women of color, the brand has ties to celebrities like Blac Chyna, Amber Rose and Cardi B, who recently rocked Louboutins and an all-red Fashion Nova outfit on her 'gram with the caption, “I look rich ass fuck but the only expensive thing here is my shoes.”
Women of all shapes, sizes and ethnicities plus lingerie designed by hands-on brand architect Rihanna plus performance art under a biodome equals cheering crowds at the normally staid New York Fashion Week. Savage X Fenty, the latest business venture from the pop superstar, didn’t so much launch as explode onto the catwalk recently in a show The Cut called “inventive, freaky and unique.” It’s the company’s latest move to democratize fashion and beauty, just a year after the flagship Fenty dropped its industry-rattling 40 shades of foundation, added Sephora to its direct-to-consumer distribution and created the so-called Fenty Effect. (CoverGirl, Dior, MAC and Maybelline, among many others, expanded their offerings in response.) Time estimated Fenty’s first-month sales at a whopping $72 million, with Rihanna telling the magazine last fall: “I never could have anticipated the emotional connection that women are having with the products and the brand as a whole. That’s something I will never get over.”
It’s not enough to be a first mover in a category, as Freshpet was a decade ago with its revolutionary concept of all-natural, no-preservative pet food in refrigerated cases. (Freshpet Fridges are now in nearly 20,000 stores.) The brand, trying to take a bigger bite of the $22.5 billion U.S. industry, has aggressively amped up its advertising, though still dwarfed by behemoths like Mars and Nestlé Purina, committing the lion’s share of its $20 million-plus budget to the warm and fuzzy “Letters” campaign from agency Terri & Sandy. (Old dogs really do learn new tricks when they eat their meat and veggies, the ads say.) The company, whose stock price soared 314 percent in the last two years, keeps innovating, developing next-level pet chow in its R&D lab and creating custom retail programs with shoppable islands for an “immersive experience.” The latter will launch in stores in 2019, according to John Speranza, vp, marketing. “We want to elevate the environment and push the category into the next frontier,” he says.
Ditching the macho stereotypes that have ruled the category for decades, Harry’s launched a heart-tugging long-form ad this winter starring a young boy explaining manliness to an alien as part of the brand’s goal to “further the conversation around redefining what masculinity means today, with more relatable, thoughtful and authentic depictions of real guys,” says Andy Katz-Mayfield, co-founder and CEO. Expect more unconventional moves from the 5-year-old brand, whose founders bought a 100-year-old razor factory in Germany to create the only vertically integrated company in the industry and went from direct-to-consumer sales to omnichannel via retailers like Target and Walmart. Harry’s, which counts 5 million active customers and nearly half a billion dollars raised, has been investing in other startups (it’s the largest shareholder in men’s hair-loss product maker Hims). It is considering an expansion into other areas, which could mean building new brands from scratch, Katz-Mayfield says—“anything from personal care and household to health and wellness.”
Fortune 100 companies have been recruiting people of color for years but, according to Jopwell’s founders, they were often doing it wrong, not acknowledging the bottom-line success that stems from a more diverse workforce. “It came off like a charity case or a feel-good story,” says Porter Braswell, co-founder and CEO. “It hurt our ears.” He and co-founder and president Ryan Williams, former Wall Street analysts with no HR backgrounds, launched the online career platform in 2015 to match black, Latino and Native American job hunters with their next gig (or, for interns, their first). Jopwell, with nearly $12 million in funding, has worked with more than 100 clients, including American Express, BlackRock, Condé Nast, the NBA and PGA, providing them with access to proprietary profiles that go beyond typical CVs to show “who our users are as people,” Braswell says. There’s also a free stock photo service featuring people of color in office settings (3.5 million image views, 2,400 downloads since July), giving employers “the right collateral to go along with their good intentions.”
Words not often associated with insurance companies: transparent, beloved, trustworthy. Lemonade, a 2-year-old startup with $180 million in funding, wanted to attack the “flawed paradigm” that was “established in the era of the horse-drawn carriage” by creating a 21st century mobile-first brand powered by AI and bots, targeting millennial renters and homeowners and making a social impact, says co-founder and CEO Daniel Schreiber. The certified B Corp offers zero-deductible policies that pay claims in less than a day (one-third are paid within three seconds), with underwriting profits going to customer-designated charities like the ACLU, Robin Hood and Unicef. The company, which has sold $10 million in policies in 19 states, prides itself on openness, publishing hate letters on its blog when its tech failed (software upgrades now happen five times a day), and promising a complete revamp of its 40-page policy that’s filled with industry-standard “words from Middle English and Chaucer,” says Schreiber, who is authoring Policy 2.0 for 2019 as part of the brand’s mission to “fundamentally change the game.”
In the trend-conscious workout business, fads quickly come and go, but Orangetheory, which has dubbed itself “the Target of fitness,” has become one of the fastest-growing franchises in the country, nearing 1,100 studios and 1 million members. Founded eight years ago, it’s now a billion-dollar brand with its data-driven, trainer-led group classes intended to be accessible to every skill level. (FYI: You don’t need six-pack abs to go to this gym.) “We’ve taken the personal training model into a more affordable space and made it scalable,” says Kevin Keith, chief brand officer. “And we’ve created an experience that makes people successful, whatever their ability.” After mostly hypertargeted, AI-enabled local and digital marketing, the company launched its first national ad campaign this year under the tagline “More life,” emphasizing vibrancy and wellness over dress size or weight loss. A second phase, hitting this fall, focuses on the studios’ technology that includes wrist- and chest-worn heart monitors, which “bring science to an unregulated category and track progress in real time.”
Athletic wear for women, and the marketing around it, could often be described as muscular and intense when Tyler Haney launched her company four years ago. Think Adidas, Nike, Under Armour. In creating minimalist sets of high-waisted leggings and crop tops in stylish colors, the founder and CEO purposely swam against the tide with what she calls “technical apparel for recreation” aimed at “rewiring how people think about exercise.” In short, dog walking counts. By celebrating activity for the fun of it, Outdoor Voices has amassed a devoted following, the #DoingThings community, and crowdsources ideas from its fans for products, design and fabric. Its first sport-specific lines debuted this spring, while the apparel in general encourages everyday play. The brand, which has raised $56.5 million to date, will have 10 brick-and-mortar stores by the end of the year, with seven more planned for 2019 to further its nonprescriptive call to action. “We’re prioritizing frequency and consistency,” Haney says, and “stripping away the pressure to be faster or go harder.”
Fans of luxurious bedding may think that high thread counts mean better quality, but Parachute Home’s founder and CEO knows otherwise, noting those numbers are “mostly a marketing ploy,” says Ariel Kaye. “What actually matters is the caliber of the fabric.” (That’s where Parachute’s long-staple Egyptian cotton and Italian-milled linen come in.) Kaye’s young company, launched as direct-to-consumer bedding and extending into bath, gifts, décor and other lines, busts another myth—that retail is dying—planning to go from its current four stores to two dozen in the next two years, which she calls “an important part of our marketing strategy” because the locations host special events and “create sensory experiences.” The brand’s outdoor ads tap into zeitgeisty trends like wellness, design and sustainability, showing people getting their z’s under taglines like “Deadlines are social constructs” and “Sleeping in is self-love.” The approach has won over millennials wary of big-box chains and chemical-treated textiles, building repeat customers, she says, “in a category that previously had no brand loyalty.”
Brushing and flossing are “a chore and a nightmare” in many people’s minds, says Simon Enever, Quip co-founder and CEO, while a trip to the dentist can send some folks into a panic. Enter the design-driven Instagram darling Quip, a direct-to-consumer subscription service whose mission is to make oral health “more accessible, more affordable, more enjoyable,” he says. The startup, with $22 million in funding, has gone from two execs in a WeWork space to 1 million electric toothbrushes sold and a first-of-its-kind deal with Target in about three years. Dubbed “the Tesla of toothbrushes,” the simplified, stylish brushes (think Apple-level sleek) start at $25 as the entry point for Quip’s ongoing customer support and refill service. A recent acquisition of Afora puts the company in the dental plan business with a hybrid insurance coverage-membership discount model. Its TV debut bulks up marketing that’s expanded from social and digital to radio and outdoor with the streamlined, snappy message that “we all have a mouth,” Enever says, “and we all need to take care of it better.”
In a commodity business like rental cars, why bother with finesse? Because it’s a great differentiator, according to Sixt, the German powerhouse that has become the fourth-largest brand in the category stateside with its aggressive growth, concierge-level service, cheeky marketing and unique tagline: “Drive first class, pay economy.” Splashy events are part of its DNA, like its recent parade of Cadillacs through Manhattan and kamikaze-style transformation of iconic Sixth Avenue to Sixt Avenue. “We’re not your grandfather’s car rental company,” says COO Daniel Florence. Sixt, with $366 million in 2017 revenue, will be in 20 of the top 30 airports by year’s end, with locations also in busy downtown areas. More experiential marketing and heavier ad spending are on tap, touting Sixt as “a mobility company.” Chauffeurs are available now, but the future may include ride sharing, pay-per-minute models and apps that allow consumers to pick up and drop off luxury cars anywhere, answering the question, Florence says, “Why come to us?”
The founders of this premium gummy vitamin brand didn’t set out to upend the industry, but they couldn’t find high-quality, palatable, affordable all-in-one supplements for their kids. That “intimate knowledge of the problem” birthed a startup that’s gone from Amazon-only sales to nearly $100 million in revenue, says Courtney Nichols Gould, co-founder and co-CEO. “It’s an example of backing into a company, but when it came into focus, we realized we could try to move the needle on public health,” she says. SmartyPants, which now sells at Target, Walmart, Whole Foods and other chains, has expanded from kids’ products to adults and pets, initially building on word of mouth and repurposed consumer reviews. (Marketing has evolved to include micro-influencers, podcast ads, out of home and digital video.) A partnership with Vitamin Angels donates supplements to at-risk communities, while execs laser focus on a curated product line. “We won’t be making diapers or sunscreen or food,” says Nichols Gould. “We won’t get distracted from making the best supplements we possibly can.”
With a drone listed at $7 and a GoPro-style camera selling for $30, consumers might wonder if Wish’s deals are too good to be true. “They’re thinking, 'Can I trust this company?'” says Sam Jones, head of partnerships at the tech-driven mobile-first brand. “I’ve never heard of them.” The San Francisco–based ecommerce player, with $1 billion in revenue in 2017 and 400 million registered users, set about boosting that low profile with its first major marketing this summer. The TV campaign starred elite soccer stars whose teams didn’t make it to the World Cup, with Claudio Bravo, Tim Howard and other famous footballers filling the unexpected time on their hands with wacky new hobbies via Wish products. “We wanted to catch people’s eye,” Jones says, rather than talking supply-chain benefits. The move followed a January deal with the Los Angeles Lakers to be the jersey patch sponsor (before LeBron James signed on). Wish, trying to increase the 30 percent of its business that comes from the U.S., will accelerate its sports ties to tout its unbranded, manufacturer-direct products that, Jones says, “open up the market for people who don’t have endless amounts of cash in their pockets.”