👋Hello lovely people of the D2C Community! This is your host Berkay writing.
In the 12th episode of the D2CVille Podcast, we had a very fun conversation with Alex Bortoluzzi , founder of the men’s underwear D2C brand Krakatoa Underwear .
After spending many years in the gaming industry and working in hgue projects like Call of Duty, Alex wanted to switch to a more physical product business.
And with almost zero experience in anything D2C, he built Krakatoa from scratch by himself!
Without further ado, let me leave you with Isobel’s great entrepreneurial story. Sit back, relax, and enjoy!
🏴☠️ Alex started his digital career when computers were illegal in Brazil Alex became an entrepreneur in the 1980s while still in college, driven by a deep passion for computer graphics. Residing in Brazil during an era when computers were outlawed, Alex had to resort to smuggling one in to pursue this fascination. This unconventional journey led to involvement in various computer graphics and advertising projects, ultimately paving the way for a career in the gaming industry based in Los Angeles.
Following contributions to renowned gaming franchises, Alex ventured into establishing their own gaming studio, producing successful 3D mobile games like "Zombie Wonderland." A pivotal encounter with the minds behind Angry Birds provided invaluable insights into the path to success. Later on, Alex made the transition back to publishing and worked with Activision. Nonetheless, the passage of time and personal considerations prompted Alex to contemplate a change in direction.
🩲 Krakatoa Underwear Shifting focus from product creation to problem-solving, Alex directed their attention to a specific issue, notably the discomfort of underwear. Struggling to locate a suitable solution, Alex resolved to create one from scratch. Despite encountering rejection and mockery from numerous factories, they persevered until they discovered one willing to collaborate, despite their lack of prior experience in garment production.
Drawing from previous experience with outsourcing for Activision, Alex adeptly communicated with international teams throughout this transition. The journey from the gaming industry to the realm of manufacturing was fraught with trial and error but eventually culminated in the birth of Krakatoa Underwear. Now, in their fifties, Alex takes immense pride in this newfound venture.
Better living through better underwear Alex emphasizes that Krakatoa is more than just underwear; it's about improving everyday comfort, which they fondly refer to as "better living through better underwear. " Despite the fact that this garment is worn 24/7 by many, often the crucial elements like stitching, exposed seams, and fit are disregarded. Alex made the choice to revamp the men's underwear experience, embarking on a challenging journey from concept to a well-received physical product. Although not without its difficulties, Alex is immensely satisfied with the result.
Krakatoa Underwear - Product line & competition Driven by dissatisfaction with the existing market offerings, Alex aimed to create something entirely new. Many underwear brands seemed to overlook the individuality of consumers, assuming a one-size-fits-all approach. In stark contrast, Alex firmly believed in the uniqueness of people and set out to ensure that Krakatoa catered to the specific requirements of the reproductive system.
Experiencing a range of issues with conventional underwear, including stuffiness and uncomfortable waistbands, Alex embarked on thorough research by testing various underwear options from around the world. This extensive exploration eventually led to the development of a prototype. The journey was not without its challenges, particularly when it came to finding a suitable factory and effectively conveying the vision. Collaborating with The State, the first collection of Krakatoa Underwear came into being, surpassing 99% of what was available in the market.
Building around your own problem Everyone builds a problem around their products, right? AB: It's true really. Imagine if Mark Zuckerberg had got laid in college – we might not have Facebook today. 😅
👨💻 Entrepreneur life Naturally extroverted and drawn to engaging conversations with strangers, Alex faced a significant challenge when transitioning into the role of an introverted entrepreneur working from the comfort of their home. In the video game industry, daily interactions with a large team were the norm, but now, the most extended exchanges occur through Zoom or Google Meet. This shift away from the vibrant Brazilian culture has left Alex feeling isolated, often buried in work.
In order to remain focused and successfully adapt to this new environment, Alex embarked on a rapid learning curve. They acquired new skills, became proficient in managing a variety of software packages, streamlined onboarding processes, and upheld high standards, particularly given their responsibilities encompassing people's finances, taxes, and brand image.
👥 Customer Feedback Initially met with skepticism when offering people samples of the underwear, Alex had a pivotal moment when one individual shared their experience of wearing it for important occasions. This profound impact served as the driving force behind launching Krakatoa Underwear, and Alex began selling the product with contagious enthusiasm, which resonated with customers.
Despite encountering challenges in the realm of online marketing during the early stages, Alex invested time in understanding the market, pricing, and fulfillment, even taking on these responsibilities personally. Eventually, they discovered someone who had genuine faith in the product's quality, to the extent that they wore the same pair for an entire week. Over the years, armed with valuable feedback, Alex continued to refine the collections, ultimately introducing the ultimate men's underwear, informed by five years' worth of insights.
Listening to feedback Balancing a high level of personal interaction while expanding presents a notable challenge for Alex. Their ultimate objective is to strike a harmonious equilibrium that facilitates growth, the operation of a thriving company, and the delivery of exceptional service to as many individuals as possible. Alex is resolute in steering clear of expansion into unrelated areas and remains steadfast in concentrating on the essentials that directly touch your skin, such as socks, underwear, and undershirts, ensuring that they provide the right feel.
Wearing comfortable basics carries the potential to instill confidence, preparing individuals to take on the world, pursue their passions, and focus on their daily tasks – all of which encapsulate the essence of Krakatoa's mission.
👷 Brand Building - Creating a narrative around your product When it came to working with marketing agencies with high expectations of immediate profits, Alex faced a significant challenge. Many of these agencies struggled to deliver results, despite the evident quality of the website and the product. It was only when Alex met John that their perspective underwent a transformation. John stressed the significance of comprehending the customer and crafting a narrative that explained how the product could enhance their lives.
The shift transitioned from merely selling a product to a more profound approach to solving problems and elevating the overall customer experience. A prime example of this shift was evident in Alex's first design, which had issues resulting in discomfort and insecurity. In order to uphold the commitment to comfort, Alex made a difficult choice to sell 6,000 pairs of that particular design at a loss. This setback compelled a redirection of focus toward highlighting other products within the line.
Personalized approach Facing challenges with fulfillment centers, Alex grappled with issues of slowness and high costs. In search of a more personalized approach, they decided to shift away from relying on Amazon and instead concentrated on their own website, providing dedicated attention to customers. This change struck a chord with customers who valued the personal touch.
The focus transitioned from merely promoting exceptional underwear to addressing the discomfort of the customer, adopting a more direct approach, saying, "You're great, but your underwear sucks. Let's do something about it, and I can help you with that." The primary goal became making customers feel comfortable and confident in their everyday lives.
The feedback from customers proved to be eye-opening for Alex. Many had never been asked about their underwear and shared stories of discomfort. When they tried Krakatoa underwear, their reactions were nothing short of incredible, as they felt liberated and more comfortable. It was all about transforming their daily experience and leaving them feeling better.
🏄 Customer Experience Alex regards their creation as more than just a piece of clothing; it's an experience. On one Thanksgiving, Alex shared their product with a man who experienced profound comfort and had an emotional reaction to it. This moving encounter served as a powerful reinforcement of their mission to help people find comfort in their daily lives.
While some might suggest expanding into a large enterprise, Alex's preference is to maintain a focused approach, ensuring exceptional service and crafting outstanding products. Rather than inundating the market with numerous options, their goal is to provide the highest quality without any compromise. Alex's primary focus revolves around creating the finest underwear conceivable, staying attuned to the latest materials and techniques by attending trade shows, and relentlessly pursuing continuous improvement.
🎁 DTC Inventory Management is a nightmare Managing inventory and orders presents an ongoing challenge for Alex, due to constant fluctuations. Alex has observed that brighter colors tend to sell better in smaller sizes, while larger sizes are favored in darker hues. Predicting sales based on color and size is a manual endeavor, as software solutions often fall short, making it intricate to deconstruct bundles and maintain inventory accurately.
In an effort to present a comprehensive site, Alex initially employed bundles, but this approach soon revealed its logistical complications, as they were essentially treated as individual products. To address these issues, progressive discounts were recently introduced to facilitate inventory forecasting and management.
However, despite these improvements, Alex finds it necessary to regularly monitor product sales and place orders, particularly since customers sometimes make bulk purchases, which can complicate the sale of bundles or packs. The intricacies of managing inventory and orders are clear, prompting a recognition of the need for additional assistance in streamlining the process.
💻 Performance Marketing In terms of advertising performance, the Facebook click-through rate consistently shines, typically ranging from 8% to 9%. Despite offering a 20% discount for sign-ups, the primary emphasis remains on fostering value and trust in the brand, thereby reducing the reliance on constant email discounts to drive purchases. The overarching objective revolves around delivering high-quality underwear at a price point roughly 40% lower than some competitors selling inferior products at a higher cost.
To track and optimize digital marketing campaigns effectively, Alex leverages the tool Form Torro, which furnishes valuable insights into website traffic and has played a pivotal role in markedly enhancing conversion rates. Facebook campaigns are strategically designed to target a combination of broader and specialized interests, with a surprising success story arising from the targeting of individuals interested in high-end car brands. This unique audience often holds a genuine appreciation for premium-quality underwear and is willing to invest more for superior products.
🔊 Final piece of advice In the realm of dealing with critics, Alex's advice is clear: ignore the naysayers who will always be present. However, it's equally crucial not to dismiss constructive criticism. Listening when someone highlights potential issues, even if it appears as though they're merely expressing negativity, can be immensely valuable. The overarching objective is to help people succeed and offer assistance, contributing to the continual improvement of the business and the betterment of the world.
Passion, while essential, may not always be sufficient to pay the bills. Alex encourages individuals to identify their areas of excellence, as passion often follows suit. Entrepreneurship isn't a walk in the park; you are beholden to both your customers and your company, essentially making them your true bosses. Striking a balance between becoming the face of your brand or remaining behind the scenes is vital. Alex advises individuals to be prepared for criticism and to develop the ability to let it go. Not everyone will be pleased, but ultimately, it's just business.
The key to success, as emphasized by Alex, lies in staying unwaveringly focused on impacting people with your product, with the profits naturally following suit. This focus on creating an impact serves as the cornerstone of success in the business world.
If you reached this point, well, thank you! Please consider following D2CVille on social media and contacting us if you’d like to be a guest in one of these podcast episodes!
And if you’re looking for comfortable men’s underwear, visit Krakatoa Underwear ! They have pretty cool stuff...
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