Welcome to the world of Koio, a brand where modern design meets the timeless art of Italian craftsmanship to create not just footwear, but a statement of luxurious comfort for everyday wear. Born from the vision of Johannes Quodt, Koio transcends the ordinary, merging sustainable practices with unparalleled artistry. Each pair of Koio shoes represents a journey - one that started in the bustling streets of Germany and found its heart in the artisan workshops of Florence. This story is not just about shoes; it's about a relentless quest for perfection, a commitment to sustainability, and a celebration of the meticulous skill of Italian craftsmen. Join us as we unravel the journey of Koio, a path paved with dedication, innovation, and the pursuit of excellence in footwear.
Johannes Quodt: I'm German, born in Munich, and spent the early years of my life there before my family moved closer to the Austrian border. This small village at the foot of the Alps is where I spent most of my childhood. After finishing high school, I pursued business administration and economics in Switzerland, knowing I wanted a career in business. Initially, my goal was management consulting.
Around 2007-2008, during the financial crisis, I realized the need to extend my studies and moved to London for a Master's in Accounting and Finance. Internships in banking, particularly with Morgan Stanley, led me to realize that my true interest lay in consulting rather than investment banking. This path took me to McKinsey in Zurich, where I worked for two years.
Wanting to deepen my business knowledge, I chose to do an MBA in the US, having been familiar with the American education system from a semester at Harvard during my undergrad. It was during my MBA at Wharton that the idea for Koio emerged. I've always had a keen interest in design, brand, and fashion, mainly due to my personal struggle with finding fitting clothes as a tall and lanky kid. Shoes, however, were a different story; my feet were of a normal size, allowing me to explore my passion for high-quality Italian leather sneakers.
This passion followed me to the US, where I was shocked by the high prices of European shoes. Simultaneously, I observed the rise of direct-to-consumer brands. These experiences converged in New York, where I envisioned offering high-end, direct-to-consumer shoes in America. I shared this idea with my friend Chris, also from Germany, who was enthusiastic about pursuing this entrepreneurial venture. We spent the second semester of our MBA year developing Koio, designing our first shoe, and eventually finding a factory in Italy to bring our vision to life. Our initial batch of shoes was sold to our classmates at Wharton, marking the beginning of Koio's journey.
Johannes Quodt: There are days when you're really happy about choosing entrepreneurship, and then there are days where you massively regret it. But overall, yes, it feels like the right choice. We were lucky to have had a glimpse into the finance world before our MBA. Working in professional services for a couple of years, and working with partners and other senior people at our firms, gave us a clear picture of what their life looks like. Seeing that, we thought we probably wanted something different from our lives.
Johannes Quodt: Yeah, the journey to find our manufacturers was quite an adventure. Regarding the design, we spent the summer between the first and second year of our MBA in New York, creating what was essentially our dream sneaker. We combined elements of our favorite shoes into one design – a high-top sneaker we named 'Primo.' We worked with a technical designer to translate our specific ideas into a tangible design we could present to manufacturers.
The manufacturing part was really challenging. We aimed to produce in Italy, renowned for its top-quality footwear manufacturing. However, while we were in New York, attempts to reach Italian manufacturers through emails and calls were unsuccessful. We even explored using agents, but that didn't seem right for us financially.
I took it upon myself to fly to Italy, specifically targeting Le Marche, a region famous for its shoe manufacturing. I started my quest in Chivitanova, asking around at the hotel reception. This led to a series of meetings, jumping from one factory to another across the countryside. One memorable moment was encountering a flashy guy with a pink Rolex, who connected me with the manufacturer of Common Projects. This was part of a series of fortunate meetings that also led me to the manufacturers of Louis Vuitton, among others. My pitch to them always revolved around our unique design and the concept of what we wanted to achieve.
But my main target was a specific factory that produced Chanel, Golden Goose, and Buscemi. After much searching and no leads, a chance discovery on the Buscemi website led me to the name of a leather-cutting machine manufacturer. Following this trail, I found their local headquarters and, through them, finally located the elusive manufacturer.
The next day, I was on my way to the factory with a salesperson from the leather-cutting machine company. Meeting the owner and seeing the production lines for Chanel and Buscemi was a pivotal moment. I had my pitch well-rehearsed by then and managed to convince them to produce our first batch of shoes. They became our first manufacturer, which was a critical step in bringing Koio to life.
Johannes Quodt: Yeah, the pitch to the manufacturers was quite straightforward but crucial. The first thing I always showed them was our design. That was extremely important – to convey the unique aesthetic and quality we were aiming for with Koio. Then, I elaborated on our business concept, which was about creating high-end shoes and selling them directly to consumers in the US. This direct-to-consumer model was a key part of our pitch.
Additionally, I discussed the number of shoes we intended to produce, giving them a sense of the scale we were aiming for. But really, those were the main things. It often felt like the manufacturers either immediately resonated with our vision and wanted to be a part of it, or they simply didn’t.
Thankfully, at that time, we connected with a manufacturer who had just transitioned to a new facility, and the son had taken over the business from his father. He was very open-minded and entrepreneurial, which aligned perfectly with our vision. This synergy was instrumental in forging a successful partnership with them.
Johannes Quodt: Initially, to get our first 50 customers, we heavily leveraged our network, primarily our 800 classmates. We engaged in several activities early on. For instance, we ran a sign-up campaign where sharing our launch earned people points, and the person with the most points won a free pair of shoes. We also organized pop-ups in New York, renting a space for a weekend and inviting all our friends. These efforts, along with a PR agency that helped us launch, were instrumental in attracting our first customers and garnering initial attention. Launch stories are often appealing to editors since they present something new and exciting.
As for our growth engines over the years, opening physical stores was a significant step. We quickly opened a store in New York and then expanded into Chicago, San Francisco, Los Angeles, and Miami, although we've now retained only the New York and Los Angeles stores. Digital marketing was our most substantial engine, particularly through Facebook, Google, and Instagram, and now Meta and Google continue to be major drivers. Another key element has been our collaborations and various marketing activities. Recently, we've also been focusing on YouTube, reviews, influencers, and creators, which have become an integral part of our growth strategy. A lot of our media presence has been earned through engaging and interesting marketing activities, supplemented by continued support from our PR agency.
Johannes Quodt: Yeah, raising money was a necessity for us. Coming out of business school, we didn't have significant savings and faced the pressure of making Koio work within a limited timeframe or else having to find jobs. So from day one, we focused on raising funds. What we had at that point was a clear vision of what we wanted to achieve, our product, and our combined experience in professional services and our network, which all played a role in securing our initial funding. We managed to raise a small round within our first year and continued to raise more as needed, with our story evolving from just the product and concept to include our sales trajectory, press coverage, and brand recognition.
For anyone considering raising funds, I would advise carefully considering what you need the money for and whether you need to raise at all. Raising funds means giving up some control, which is valuable to retain if possible. If you're running a consumer brand, try to work with as little funding as necessary. Even if it means slower growth initially, it can be beneficial in the long run.
The dynamics of raising funds depend on several factors, such as how much personal investment you can make, the nature of your industry, and the current funding climate. When we raised funds, direct-to-consumer (DTC) was seen as a growth-oriented tech play, and it was an excellent time to raise money due to significant interest in the field and relatively cheap financing. Now, the perception of DTC has normalized; it's seen more as a regular brand with less of a tech element, and the funding environment has become more challenging.
So, you need to consider whether it's the right time to raise funds for a consumer brand or whether it might be better to grow the business more slowly and sustainably on your own. These decisions are crucial and should be made based on current industry trends and the funding landscape.
Johannes Quodt: Yeah, it's a complex challenge. The core issue is ensuring we have the right product for the right people and effectively reaching those specific customers. Let me elaborate a bit on that.
For a long time, we experienced growth in a very favorable environment, with strong economic tailwinds making expansion relatively smooth. There was readily available financing, and customers were actively purchasing. We could venture into new product categories and marketing channels, consistently finding customers interested in our products, which led to positive growth.
However, about a year ago, this changed. The economic landscape shifted, making growth more challenging. It doesn’t come as easily as before. This means we need to be much more strategic and targeted in our approach. It’s essential now more than ever to focus on creating the exact right products and directing them to the exact right customers, rather than aiming for a broader, less specific audience.
So, our current focus is really on honing in on our core strengths and offerings, ensuring they align perfectly with our customer's needs and preferences. This targeted approach is what we believe is necessary for Koio to reach the next level in our growth trajectory.
Johannes Quodt: Well, if you're just starting, really take the time to consider if this is the business you want to be in for, say, the next ten years. It's going to consume a lot of your time, and it's easy to underestimate the length and depth of commitment required. Before diving in, think critically about all the potential startups and ideas you have. Ask yourself, is this the one I truly want to pursue? Is this where the biggest opportunity lies?
And if you've already started, constantly evaluate your progress. Assess whether your initial results align with your goals and if you're heading in the right direction. If not, don't hesitate to pivot or try something else. Starting a business is a substantial investment, not just financially but in terms of time and opportunity cost. So, make these decisions very consciously and thoughtfully.
Chris Choi: That's excellent advice. Thank you for sharing your insights and experiences.
Johannes Quodt: You're welcome, Chris. Thank you so much for having me.
