The Outdoor Voices founder has a new venture that aims to reward customers with blockchain-based assets. But do brand loyalists really want NFTs?
Anna P. Kambhampaty and
It would probably be a stretch to say that Ty Haney changed the way we work out. She didn’t start a boutique fitness craze; she’s not Jane Fonda. But Outdoor Voices, the athleisure company she founded in 2014, helped to popularize a fitness paradigm that has more to do with everyday movement than the body-stressing athleticism advertised by brands like Nike.
Outdoor Voices built a following with color-blocked compression leggings and all-in-one exercise dresses that could easily transition from gym to brunch. On social media, fans boasted about buying items in every shade and posted pictures of themselves #DoingThings in scenic locales while wearing matching sets. They also shared feedback on new styles and colorways in online forums. It was a customer-loyalty fairy tale.
Though she is no longer with Outdoor Voices, Ms. Haney, 33, is hoping to bring its tenets of community building and consumer engagement into a new sphere: the blockchain-based future of the internet known as web3. She’s betting that in the next phase of online retail, “minting things” will be the new “doing things.”
Her latest venture, a platform called Try Your Best, will enable brands to collect input from customers in exchange for rewards such as digital collectibles (NFTs) and brand coins that can be used for bragging rights or toward purchases. These are assets, Ms. Haney said, that could potentially have lasting value, as opposed to the one-time discount codes and fleeting perks most companies offer loyalists.
“The idea is that brands and fans build together, and the concept is to share value with those who create it,” Ms. Haney said in an interview.
Direct-to-consumer brands have typically relied on disparate sources to solicit feedback from their most engaged customers: Google Docs, Slack bases, DMs. Try Your Best aims to streamline that process, and to route marketing dollars away from Facebook and Instagram, where Ms. Haney said that soaring costs have made it harder for emerging brands to grow.
So far, 10 brands have signed up for Try Your Best’s pilot program, the company said, including Hill House Home, whose “nap dresses” became the height of pandemic loungewear, and Vada, a jewelry and eyewear company. But at the start, the only brand on the platform will be Joggy, a new brand led by Ms. Haney that sells products containing CBD and THCV.
She said that Try Your Best hopes to reach “the Parade customer, the JuneShine customer, the Glossier customer — these millennial, Gen Z-type audiences.”
The target users are “the people who buy a brand because they love it and post about it on Instagram,” said Sean Judge, a general partner at Castle Island Ventures, which specializes in blockchain-related investments and put $2 million into Try Your Best — a modest figure compared with Outdoor Voices’ fund-raising. “This is a way for them to connect with others in that community and also have a direct relationship with brands to provide real-time feedback around new product ideas and where the brand should head.”
Ms. Haney said that involving consumers in design decisions helped drive the success behind some of Outdoor Voices’s most popular products. “The way that we got people to buy every color — 25 colors — of the exercise dress was by bringing them upstream in the product creation process,” she said, but “there was really no centralized tool for this type of interaction.”
Casey Lewis, a trend researcher who writes about youth culture in her Substack newsletter, After School, was intrigued by the idea of brands rethinking customer loyalty but circumspect about the appeal of digital assets.
“Any time a brand can successfully build a community, it’s a huge win for them. But it’s so, so hard to manufacture or force that success,” Ms. Lewis said. “The biggest question is: Do people care about NFTs, and will that be enough to get them involved and excited?”
Web3 has been billed, often in vague and utopian terms, as an online ecosystem where users will wrest power from the tech behemoths that dominate the current phase of the internet, Web 2.0.
Kevin Werbach, a professor at the Wharton School of the University of Pennsylvania and the author of “The Blockchain and the New Architecture of Trust,” said that while “granting strong ownership rights directly to users” could potentially shift the balance of power, none of web3’s promises are guaranteed.
“There’s a web3 that’s out there which is wonderful and trying to make the world a better place, but just by labeling something web3, it doesn’t mean power dynamics will magically reverse,” Professor Werbach said.
Ms. Haney is especially interested in bringing women into web3. “We’re seeing a predominantly male demo on Reddit and in Discords, telling each other about all of these opportunities,” she said. “By bringing brands that do have a large female audience base into crypto, that’s a really big opportunity.”
Try Your Best runs on the Avalanche blockchain, which Ms. Haney said she chose in part because its transactions use significantly less energy than, say, Bitcoin or Ethereum. (Even supposedly “green” mining operations, however, are much more energy intensive than other financial transactions.)
Try Your Best plans to make money by collecting a monthly fee from brands and potentially sharing in revenue when tokens were used to drive sales.
Mr. Judge, the investor, previously worked with a range of direct-to-consumer companies, and heard constant frustration from them about the escalating costs of advertising to customers on Facebook and Instagram. Ms. Haney “experienced these pain points firsthand,” he said.
Outdoor Voices was a huge success. Ms. Haney and the company were the subject of a glowing feature in The New Yorker that compared Outdoor Voices to Lululemon, and it raised more than $50 million in venture capital. It also attracted the attention of Mickey Drexler, the retail legend who led transformations at Gap and J. Crew. He became chairman of the board and drew investors to the brand.
A glossary. Cryptocurrencies have gone from a curiosity to a viable investment, making them almost impossible to ignore. If you are struggling with the terminology, let us help:
Bitcoin. A Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world. Bitcoin is also the name of the payment network on which this form of digital currency is stored and moved.
Blockchain. A blockchain is a database maintained communally, that reliably stores digital information. The original blockchain was the database on which all Bitcoin transactions were stored, but non-currency-based companies and governments are also trying to use blockchain technology to store their data.
Cryptocurrencies. Since Bitcoin was first conceived in 2008, thousands of other virtual currencies, known as cryptocurrencies, have been developed. Among them are Ether, Dogecoin and Tether.
Coinbase. The first major cryptocurrency company to list its shares on a U.S. stock exchange, Coinbase is a platform that allows people and companies to buy and sell various digital currencies, including Bitcoin, for a transaction fee.
Crypto finance. The development of cryptocurrencies spawned a parallel universe of alternative financial services, known as Decentralized Finance, or DeFi, allowing crypto businesses to move into traditional banking territory, including lending and borrowing.
NFTs. A “nonfungible token,” or NFT, is an asset verified using blockchain technology, in which a network of computers records transactions and gives buyers proof of authenticity and ownership. NFTs make digital artworks unique, and therefore sellable.
But just before the pandemic hit the United States, Ms. Haney’s successful run at Outdoor Voices came to a screeching halt as investors questioned her leadership. A schism had opened between the young founder and Mr. Drexler, costly store openings were delayed, and a string of experienced retail executives left the company, which struggled with a relocation to Austin, Texas, from New York. The internal troubles were detailed in articles in The New York Times and BuzzFeed News.
Ms. Haney recalled thinking at the time, “My life is going to be over.”
But as the news cycle moved on, so did she. “It sucked but it didn’t kill me, and it gave me that much more energy to go build again and show I can set vision and execute against it,” she said. “It feels good to take full accountability.”
Ms. Haney resigned from the brand in the investor tumult in February 2020 and then rejoined two months later with the title founder. In January 2021, she left the company and the board to pursue projects including Try Your Best. She still retains a stake in Outdoor Voices.
Mr. Judge was not concerned with Ms. Haney’s tussle with investors at Outdoor Voices, and viewed it as a vote of confidence that several former employees of the firm have since joined her at Try Your Best.
“There’s challenges with every type of business, and some are more public than others,” Mr. Judge said. “I think Ty learned an incredible amount about building a business.”
Ms. Haney said that her start-up is arriving at a time when the traditional direct-to-consumer model — which has built businesses like Warby Parker, Everlane and Glossier — is “broken” after years of overreliance on social marketing.
At one point, she said, Outdoor Voices was devoting about 30 percent of its total funding to acquiring customers on Facebook and Instagram. She’s hoping Try Your Best can help brands lower those costs.
Separately, as younger people may be less willing to hand over their thoughts and time for free, Try Your Best offers an answer to the question of how to pay them back.
“One thing with Gen Z is they want to be rewarded for their input and advice,” Ms. Lewis said. “This is not a generation who is willing to do things just for the heck of it.”
Outdoor Voices Founder Ty Haney Starts New Company in NFT Space – The New York Times