Great Idea for a Business, But No Experience? These Founders Prove It Can Be Done. The entrepreneurs behind footwear startup Jack Erwin had no experience in shoes. Now, they're steering a million-dollar shoe brand.
By Nina Zipkin
Sometimes when you're starting a new company, your confidence wavers and you need a sign you're heading in the right direction. Hard work and a sign that came in the form of a trip to the barber shop helped propel Ariel Nelson and Lane Gerson toward the launch of Jack Erwin, a year-old men's footwear company that just raised $9 million in new funding.
The lesson that Jack Erwin's founders learned is one that aspiring entrepreneurs should never forget: Don't let your great idea be stalled by your own lack of experience.
Nelson and Gerson's story starts like this: One afternoon in May 2012, the longtime friends found themselves wandering around Manhattan. Nelson, 31, needed a decent pair of shoes for a wedding, but kept coming across choices that were too trendy, overly styled and or just way out of his price range. His frustration got them talking, and spurred an idea: what if they made a classic, simple, and high-quality shoe for $100, and sold it for $200?
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The pair, tired of feeling priced out of everything, knew that they would buy them and thought other guys might too -- but first they had to figure out how to make shoes.
Gerson, 32, worked in accounting and finance and Nelson's background was in food and beverage distribution. In other words, when it came to shoes, they knew what they would pay for and what they liked, but not much else.
After a summer of industry research and a few leads, they thought they might be onto something, but were still entrenched in their day jobs. Nelson says his work days had him in the office as early as 5 a.m. and were leaving him exhausted and strapped for time. "I loved the concept and I wanted to push the needle forward, but I was pushing it all onto [Gerson]," he says.
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One day, Nelson went to get a haircut. But instead of going to his regular place, he decided to pop into a two-seat, $10 shop on his block.
That decision would change everything.
"There's a French guy sitting in the chair next to me, talking to his barber like he's his therapist," he recalls. "He was saying how he's been in the shoe industry for 20 some odd years, he's built collections for billion-dollar brands, but he's never felt any ownership of his own. He always passed it on to someone else and it never felt like it was his. And I was like, I'm pretty sure this is the moment where I'm supposed to say something."
Nelson interjected, explaining his business idea and asking if they could meet for dinner or drinks. "He said yes, and he's actually sitting over there now," Nelson says, gesturing to the office space portion of the company's Lower Manhattan headquarters, an airy third floor space that doubles as the showroom and the founders' living space.
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Nelson's fellow barbershop patron was Bertrand Guillaume, now the company's VP of product. Guillaume was previously a head buyer for Ralph Lauren's luxury Purple Label and Saks Fifth Avenue's senior director of merchandising.
With a mentor to guide them, Gerson and Nelson continued to learn about their business, exploring everything from how to source factories and tanneries to how to raise money. Most of their learning came through doing.
"All the research in the world will lead you in one direction, but until you start making decisions and seeing the ramifications of those decisions, that's when you start learning," said Gerson.
Jack Erwin today
Jack Erwin – an amalgam of Nelson and Gerson's fathers' names – officially launched as an online-only store with an appointment-only showroom in October of 2013. A year and three collections later, the company has raised $9 million in Series B funding on top of $2.8 million in previous funding. The round was led by Brown Shoe Company, with additional investments from CrossLink Capital, Shasta Ventures, and FundersGuild. Previous investors included Prolific Venture Capital and Menlo Ventures.
Two months after their launch, Gerson and Nelson had sold out the 3,000 pairs of shoes they had made and in the next month and a half they had a waiting list of 4,000 customers. They say they're on track to take in "a few million in sales this year."
Gerson and Nelson say they are able to keep their prices competitive by selling direct to consumers and cutting middleman markups out of the equation. "The same shoe in the traditional wholesale model would be sold at a 2-2.5x markup to the retailer, like a Saks, Barneys, Bergdorf Goodman, who in turn would add an additional 2.5x markup, which would make that original pair -- one that cost $100 or so to make -- hit retail shelves for more than $500. We sell direct to you at a price that's closer to $195," the pair explained.
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To that end, the shoes in the company's Foster, Wright and most recently released Sullivan collections range from $95 driving loafers to $220 wingtip combat boots. The majority of the products are priced in the $195 range. The pair says its aim is to have each collection and product be distinctive but also versatile and complementary with the others.
The shoes are manufactured in Spain from four different factories. The company now has a staff of six, including Gerson, Nelson and Guillaume, which takes in operations, design and development and customer service. Everyone who joins the Jack Erwin team starts in a customer service role.
Jack Erwin's appeal is in its simplicity, its founders say. Clothes change every season, but Gerson and Nelson think shoes can be a constant, and they want to be a brand that customers can latch onto. "It's an ode to our parents and the clothes that they wore. Our parents never bought the most expensive clothes in the world, so it's like what our parents would wear at a price they would almost pay," Gerson said with a laugh.
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Over time, the pair would like to explore the men's leather goods and accessories space, but don't foresee going into apparel. They say they are happy taking a slow and methodical approach, because, like the shoes they make, they want to be a brand that lasts.
So, jumping into a new industry and new company, did they ever want to just throw in the towel? Absolutely, but they said that relationships they had cultivated with people who were relying on them compelled them stick with it. "There are lots of times we could've stopped, thinking this makes no sense, and we're not shoe guys. But we said screw it, we're doing this, we'll just keep pushing forward and figure it out," said Nelson.
