American Giant and the greatest Hoodie ever made

American Giant HoodieAmerican Giant was founded by entrepreneur Bayard Winthrop on a simple idea, to create the greatest Hoodie ever made. The product was so successful it almost bust the company in its start-up year

This is how the story hit the headlines this week [Match 2013]:

After only eight months in business, everything at online fashion company American Giant was going according to plan last year. The San Francisco-based business was enjoying “slow but steady growth”, says founder Bayard Winthrop. Then American Giant got the type of positive publicity many companies can only dream off. Orders rocketed, and the firm was sent into emergency mode. “Four days later we had nothing left,” says Mr Winthrop. “We were down to the sticks in our warehouse.”

Since it is an online-only retailer, customers cannot try on the clothing before buying. And reliant upon word-of-mouth marketing, Mr Winthrop estimated it would take two years for American Giant to really take off. Then the online magazine Slate ran an article that named American Giant’s hooded sweatshirt “the greatest Hoodie ever made”. It triggered half a million dollars of new orders in less than two days, clearing out American Giant’s inventory.

The nature of web-based success

We have become accustomed to the unpredictable explosion of growth as a business idea goes viral. Typically, a simple concept captures the imagination and attracts the attention of millions of people often in the time cycle of twenty four hours as the news spreads around the world.

The precise ingredients for success remain unclear. A few years ago Facebook and then Twitter burst on the scene. Twitter had two factors going for it. It’s brilliant idea was easy to explain: Anything worth saying can be captured in 140 characters or less. The second element was the speed of take up of the idea which becomes part of its success. In other words Twitter became famous for becoming famous.

The New Darwinism of the Web

In the New Darwinism of the Web, there is room for only one species at the top of the food chain. This not a new idea, but it certainly applies in web-based markets, where dominance by one ‘species’ is common.

Which brings us back to American Giant

The story is a sure-fire candidate for study as a Business School case. If it isn’t already, [March 2013] it’s because case writers can’t be as agile as their business heroes.

The greatest Hoodie in the world

The idea of producing the greatest Hoodie in the world has another old-fashioned virtue, the wow factor, which is often accompanied by the famous words “Why didn’t I think of that?”

Not such a simple idea

Part of the answer to the question is that the monstrously successful business idea has to be ‘financialized’. Sometimes deliberately with foresight, sometimes by ‘stumbling upon it, the entrepreneur had to see not just what such a product might look like, but how the idea could be protected and commercialized.

A leadership challenge

If you haven’t come across the history of American Giant, here’s my challenge. If you had the idea of “the greatest Hoodie in the world” how would you turn it into a world-beater.

I’ll offer a few ideas, but you will need to keep a look out for them in future amendments to this post. And I’ll welcome suggestions from LWD subscribers.

To be continued…

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