Business Reflections Podcast Episode #26 - Product Development with Ally Shoes

Episode Transcript

Meredith Matics: Welcome to Business Reflections with your host Meredith Matics, and we are here to reflect on the business topics that are affecting you today and how you can better run your business. Today, I have Samantha Dong, Founder and CEO of Ally Shoes. I'm really excited about having you, Samantha, cause I was taking a look at your website. And as I told you, I don't believe that there's really heals that are comfortable, but you seem to have invented some. Yeah. So,  

Samantha Dong: Yeah, we sure hope so. Thanks for having me.  

Meredith Matics: We're really excited to talk to you about Ally Shoes. So let's get started with what inspired you to start Ally Shoes.  

Samantha Dong: Yeah. So I'm sure as you can relate, and as you sort of alluded to I think heel pain has been sort of this long lasting, literal pain point for almost all women. 

I, myself, I didn't come from a fashion background. I actually started my career in management consulting. I was traveling a lot and often. We were business casual or business formal.  I had a lot of vivid experiences of heel pain and kind of walking around the airport or office buildings all day. And it's really an issue for a lot of people.  

But I would say that sort of aha! moment didn't come until I actually suffered from a foot injury myself. I was in business school at the time and went on this big hiking trip in Tanzania. I went to climb Mount Kilimanjaro, which was one of those things I just really wanted to do. 

And it was a great experience, but on the way down, I actually was wearing too many layers of socks and ended up swelling my feet. I fell a couple of times and I injured both of my big toes. After that, I actually couldn't get into closed toe shoes for half a year. I had to start wearing inserts and orthotics. 

During that experience, shoes are already pretty challenging even as just regular shoes so heels was out of the question for me and that really kind of struck me. And in asking myself, why do heels have to hurt in the first place? Right? Why is there this notorious category in footwear? 

Where we as women just accept, they're supposed to hurt. It just doesn't quite make sense.  It seems ridiculous that they've been around for a long time and no one seemed to have figured it out so that's when it kind of triggered me into looking into this problem.  

Meredith Matics: I like how you said you had a foot injury and I just assumed it was going to be something like, and I was walking and I tripped, not like I went on this great adventure and was doing this amazing thing that no one really gets to do in the world. 

So kudos to you for that but unfortunately, yes. I understand having had ankle injuries in the past that yeah, your shoe choices become limited. We're just expected as women to dress our feet a certain way when we're in business public. I even remember one time I did a trade show and I was expected to be on the floor of the trade show for eight hours but also be not in tennis shoes. 

And I went into Kohl's and I was like, what is your most comfortable heel? They were like the flattest you can find.  

Samantha Dong: Yeah. I think that's also another extreme is when we think about comfortable heels one, it didn't really seem like it existed. Two, then your mental image is this very clunky looking shoe that's maybe round toe, very well padded, low, and doesn't look as sleek as the pointed toe stiletto. That's another thing as I was talking to women around me about this idea, it seems as if we had to choose between these two options, right? You either want comfort and sacrifice style, or you choose style and forget about comfort. 

I wanted to see if we can have both because women are already doing a lot of things. Why do we still have to compromise on something as simple as our footwear choice?  

Meredith Matics: Yeah, true that sister. So before starting Ally Shoes, you hadn't even worked in like footwear fashion or fashion in general is my understanding. What was your experience starting a company as an industry outsider?  

Samantha Dong: Yeah, so there was a lot of exploration, reading, asking a lot of dumb questions to anyone in kind of different adjacent areas who would talk to me. So a few examples, I was in California at the time, and I remember during spring break, I just flew to Brooklyn to take a shoemaking class. 

And that was because I really wanted to understand how the entire process works. And I thought, even though I'm not going to be personally making those shoes in the future, it would be helpful for me to understand how things are getting done right now, understanding the terminologies, and what are the thinking behind each step. 

Obviously I became that very annoying student who just wouldn't leave the teacher alone during break and kept asking her, how about this? How about that? Why don't you do this? Another thing is I remember stalking a Doctor at Stanford Medical Center, where she was one of the few foot doctors I could find and just Googled her and caught her office and asked her if she would talk to me for 15 minutes. 

Obviously she was very busy and always in surgeries, but I just wouldn't let her go and kind of just asked her things around arch support and why does it seem that in dress shoes, there's so many issues with discomfort. Because I didn't have any experience, I just wanted to know everything. 

And at first it was a little bit chaotic, but it was okay. I almost felt like it was a little bit like painting a picture where at first it was very vague. You didn't have a lot of lines. And then it started to become a little bit more clear as I start to learn those things. But I would say that was just at the beginning of me doing my own research. 

When I finally started the company full time, when I moved back to New York, I was very keen on finding industry experts who can really teach me and help me think through this problem. Did a lot of time sort of searching for people on LinkedIn and reaching out.  

Meredith Matics: What were the biggest challenges would you say of coming in with no experience, even though you did your research and you were ready to go, what was the biggest challenge? 

Samantha Dong: I think it's still is that there are a lot of things, whether it's industry best practices or that's just the way things are done, that for me, I had to learn from scratch. It definitely took me longer to make certain decisions. I also made a lot of bad decisions. I remember when we were thinking about a shoe box, I was very adamant about making this really great triangle box that looks amazing. I still remember everyone on the team who came from industry was like, Sam, this is a really bad idea. Don't do it. And I still went and made a prototype because in my head, it looked so great. Of course, when it arrived, it was way too big and not functional at all. 

From that I learned, I really should listen to the expert I gathered around me. But conversely, because I didn't come from industry experience, it also freed me to kind of think about doing things very differently. And I think part of that definitely drove our product to be very different from what's existing in the market. 

Meredith Matics: Yeah. So let's talk about product development. Tell me, what was your experience with product development from creating the product in your head to actually making it like a physical product? Does it work out the way you think it's going to, or is it always going the other way? Tell me about that process. 

Samantha Dong: Yeah. So it was a very sort of iterative and feedback driven process. I think we, at the time had a lot of different ideas we wanted to test out and it was helpful that from day one, it was very important to me that we should listen to the customer. I thought that was one of the main things that other shoe brands or just fashion brands in general are not doing which is listening to your customers. 

We had all those ideas and we order samples to be made from the very first version of the sample, we would gather this group of professional women. We called them the Ally Circle. We would ask them to test out those product and give us feedback. Even prior to developing the product, before we had the prototype, it was asking them about their pain points and getting those complaints and feedback about what's not working right now. That also informed us into our creative process. So after that, every round of prototypes, we would bring them back and give us feedback on those.  

And when it's closer to the final prototype, then we would even actually give them the shoes to test out just to wear for an entire day and let us know what happens at the end of the day. 

It was very important to us that we want to create a pair of heels that you can walk in all day and you don't want to take them off. 

Meredith Matics: And how have you incorporated listening to your customers as your designs have changed and progressed and become what they are now? 

Samantha Dong: Yeah. One example is actually this concept of an inclusive sizing. That's something that initially wasn't part of the focus of our product. Initially, we're very focused on changing the kind of engineering side and weight distribution side of the internal structure. But as we're talking to our feedback group, one of the things that keep coming up is I can't find a pair that fits me because I have bunions, because I have very narrow feet. 

I've size 11. I can never find something that fits me. It became very clear to us that sizing is. A very integral part to creating this better product as well. And a lot of times, if someone has wider feet in the front, they might just size up to get more room in the front, but then they end up wearing something that's too long for them and that creates discomfort.  

I think just in doing that we allowed our customer group to cover our blind spot in a way. They emerged this big topic for us that we weren't thinking before. And that was really helpful.  

Meredith Matics: So when you say inclusive sizing, what does that mean for a customer? 

Samantha Dong: We have a granular sizing option where right now we have four different width and we run from U.S. size four through twelve in a half sizes, and in some cases, quarter sizes. There's still occasionally a feet that we can't fit, but I want to say most of the time we can find your fit. 

Meredith Matics: Interesting. Wow. So going back to product development, what was the most challenging stage of developing your product?  

Samantha Dong: So I want to say probably actually making the product and that was also surprising to me because initially I thought the innovation part would be the most difficult.  

But the problem with the realization of those design is we have basically no volume at the time. The way our business model works is we have a very focused silhouette of the product and we diversify on sizes, but we also wanted to find a very flexible factory that can do things quickly and doesn't need us to order like 5,000 pairs of shoes with the first run. That kind of makes it very difficult to source the factory already. And then we're very fortunate that we found a very high quality bespoke factory. They have very good quality when it comes to the handmade shoes. 

And so they're very flexible, very experienced. The quality is great. But at the same time, everything is made by hand. They're not a industrial level Nike factory, so there will be time when we told them, hey, we have this great idea and then they'll say we can't do it. That happens a lot.  

That's something that is a little bit frustrating, but it also kind of pushed us to figure out creative solutions of doing it differently or sometimes we have to put certain ideas on hold.  

Meredith Matics: Yeah. Well, I noticed that on your website, you say that each pair is custom made and they'll receive it like in two weeks and I was wondering about that. Do you guys have to order, make, or produce each shoe individually after it's ordered or are there just hounds of it standing around?  

Samantha Dong: Yeah, so we actually look at this in a more data-driven way. Every time we launch a new product that they are all made to order, but it became very obvious, very quickly, which ones are the popular styles and the popular sizes. Once we have that data, we would start to stock the ones that are more popular and then with some popular sizes, we would keep a light inventory. 

So even if you cannot get the actual shoe in the the color you want, we will at least send you the size so you can confirm your fit before we make it. I call it a semi-made to order model where we would keep a light inventory. But everything can be put on a made to order process, which is usually takes two to three weeks. 

Meredith Matics: Has that been a benefit or a deterrent to have? I mean, traditional thought of a product is that you make a product, you find the cheapest way to make it, in the sense that you want to produce it a lot of it fast, and then you hope it sells. Because you figured out how to create it at 10 cents a product versus 50 cents or whatever. What has been the benefits and what has been the deterrence of having this other model of making it not on the mass scale? 

Samantha Dong: Yeah, and that's why most of the industry is still doing this traditional model,  because it's really economy of scale. It makes a lot more sense for the factory and for the retailer to make things at mass, but a big assumption there is we know what customers want. 

We create something and we know people are going to buy it, which I think is, is not often the case. The sort of result of that is fashion is the second biggest polluting industry, after oil and gas. There's a ton of things that go into landfill or get burnt every year because some buyer or some manufacturer thought wrong. 

That's another thing we want to do differently when we created this brand is I don't want to just make a product and hope people are going to buy. I'm hoping to also change the way people buy things and change the way shoes are being made and sold at the same time. 

With shoes, we have this added complication of sizing. If it's a standard product like perfume or bag you could argue that I can have a little bit of inventory there. With shoes, sizing is another added layer of uncertainty. I think that's also why a lot of shoe brands don't want to offer so many sizes. The benefit is we have a very inventory, light business model, and I don't have to take on a ton of inventory risk. It also allows me to offer so many sizes without going bankrupt. 

But the deterrent of that is our unit cost is much higher. I don't have a wholesale margin. I can't put things on like 50% off sale during holiday season. I cannot do that. It's very expensive for us to make a pair of shoes. We're hoping that with a little bit more volume because we do now have the benefit of batching orders because we have a little bit more consistent order flow.  

As we grow, our unit costs will come down, but I'm never going to get to a point where we are ordering thousands and tens of thousands of shoes for each new launch.  

Meredith Matics: Right. With a product that has a smaller margin, how has it been selling that product online? 

Samantha Dong: For brands these days, the biggest cost is still customer acquisition. We have a very robust referral network and brand ambassador network. And it's really, this group of women who are, who love our product and love us so much that they want to tell their friends. 

That has been a really great way for us to get the word out there and acquire new customers without paying really high Facebook or Google ads to acquire a new customer. We also generate a lot of organic content on our blog and occasionally press as well. Most of our customers find us through organic SEO.  

Like you mentioned, we don't have the margin to spend so much on marketing. We don't have the margin to rely on a wholesale channel to kind of get the word out there. 

So really trying to be scrappy and think about ways to grow organically.  

Meredith Matics: And we like that. We like scrappy because the best small businesses come from it because they have heart and they know what it's like to be in the thick of it. So Samantha, as we close, I want to ask you, what is one piece of advice that you've received that you want to share with our business owners that are listening? 

Samantha Dong: One thing that before starting a business, a lot of people told me, but I didn't appreciate it until later is your startup is your people. And it's really important to find the right people to go on this journey with you. A lot of times it's also being able to find really people who are smarter than you, people who can do things you cannot. 

I can't imagine how it would have been able to do this without my team. As entrepreneurs, a lot of us are very Type A and we're hardworking. We think we can do everything, doesn't work so it takes a village to build something great. 

Meredith Matics: That's true. That's so true. And Samantha tell our listeners where they're going to find out more about you, because I'm sure they're going to want to check you out, especially those of us that have to wear heels.  

Samantha Dong: Yeah, so you can go to our website, which is ally.nyc or our Instagram handle is just @allyshoes. 

Meredith Matics: Wonderful. And Samantha, we didn't really get to touch on it in our general topic, but I do really appreciate the way that you guys, when I was taking a look at your website, I have to say, I liked how I could tell that you were being efficient with your usage of materials, by the sense that you have, like, let's say one silhouette of like a shoe, and then you have so many styles of it, but then you could also get that same fabric, or material in a different silhouette. And so it was clear how they cross use and I was just thinking that was so innovative and useful in both the sense of being resourceful with what materials you have. I could see how that would probably help keep those costs at a reasonable sense without having to buy the masses. 

And so that was something I noticed, and I really appreciated because from a business perspective, it seemed very wise.  

Samantha Dong: Yeah. From the consumer standpoint also makes things really fun that you can really pick and choose, what material you want, and then what style you want. 

That's how I remember my mom used to just buy fabric and get her dress made. With fast fashion, it in a way cheapens, the way we buy fashion. It cheapens our appreciation for craftsmanship and the processes, making things we wear. 

And hopefully, we can bring some of that craftsmanship and appreciation back.  

Meredith Matics: Yeah. I think you bring a definitely a unique aspect to it.  

Samantha Dong: Well, thanks again. This is so much fun. 

Business Reflections Closing: Please note that these are thoughts and opinions alone. For tax advice, please see your CPA or tax advisor, tax professional for business advice and legal entities. Please see your local business, lawyer, or attorney for advice. And if you'd like to reach out to us for any topics or questions about. Any subject, any episode you can reach us podcast@maticsbilling.com. That's podcast@maticsbilling.com.    

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