What do you do if you sell your company for $75.5M in cash?

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Well, if you’re an inventor, you keep inventing.

Meet Michael Pratt, he is the founder of Ogio and Handsfree Labs. Ogio sold to Callaway Golf in 2017 for $75.5M, and Michael went on to start Handsfree Labs (hands-free footwear technology)

If you are an inventor, would you start a brand, or would you license your innovation?

Micheal chose to have his cake and eat it too. First, he started the brand, Kizik, and then licensed the technology to other footwear companies. In 2019, Nike invested in Handsfree Labs and entered into an exclusive intellectual property licensing partnership with them.

The brand Kizik was born in late 2018 with a Kickstarter campaign. Their goal was to raise $15K, and they ended up raising $41K. In June of 2019, Monte Deere (a former corporate attorney) was hired as CEO of Kizik and Handsfree Labs. Unlike other brands I have recently broken down, Kizik was a team of hired guns rather than the founders building it from the ground up.

How big is Kizik?

I was listening to a podcast from last year featuring Monte, and he was referencing that Kizik shoes were in retail stores. He even referenced their store locator on their website. However, the store locator is no longer on their website and I am unable to find any other retailers for the shoes (besides Amazon) via a google search. It appears they have gone 100% direct to consumer.

In the past 12 days, Kizik.com has received 8,843 orders. On average, they are receiving about 735 orders per day. Their average order value is approximately $85. This gives them an average daily revenue of about $62K, monthly revenue of about $1.9M, and a yearly run rate of about $23M.

This is not an apples-to-apples comparison. But, five years in, and Allbirds is generating about $200M in annual revenue. In their 3rd year of business, Kizik is generating approximately $25M in annual revenue. I am curious if the growth discrepancy comes from having the founder(s) actively run the business vs. essentially outsourcing the business.

Note: I have zero insight on how much revenue they are generating from the licensing side of the business. I also do not know how much each brand spends to generate its business. But Allbirds by far has a much greater valuation than Kizik and Handsfree Labs.

Viral?

Sort of. On TikTok, Kizik has 4 videos that got over 1M views. However, I am not sure 1M views on TikTok is considered viral anymore. If Charli Damelio gets less than 10M views on a video, it’s considered a flop.

Kizik has 2.9K followers on Tiktok. 30K on Instagram, and 42K followers on Facebook. None of those stats say “Viral” to me.

Kizik seems like the brainchild of a bunch of Mckenzie consultants rather than the grind of a passionate founder. The business of Kizik appears to work and seems to make money, but it most likely is not going to be a rocketship.

Demographics

Two call outs I see. First, the majority of their followers are males. Females do the majority of the shopping (whether its for themselves, for their significant others, or for their families). I would think they would want to appeal to more females.

 

Second, their age demographic skews to the older side. I feel like this is a result of who they think their target market is and the marketing they have created.

 

Search

Here are the top 5 paid keywords for Kizik:

  1. slip on shoes
  2. kizik
  3. kizik shoes
  4. zeba shoes reviews
  5. slip on sneakers

I fully expected to see their brand name dominate their search terms; however, I was pleasantly surprised that their number one keyword was “slip on shoes”. However, this search term has an average monthly search volume of about 40K (ok volume at best).

Facebook Ads

Kizik has approximately 100 active Facebook ads at the moment. The vast majority of these ads are videos.

See their Facebook Ads

Email

On August 3rd, I placed my first order with Kizik (which was for a gift card). I have received zero… ZERO marketing emails from them. I am a fish in a barrel… shoot me! 

Send marketing emails to me! Especially if I have an unused gift card to your store. And even more so, if that gift card is less than your average order value.

Send me emails!

Now that my rant is over, there is a chance I didn’t check a box and they are for some reason respecting that I did not check that box that they could send me marketing emails. But they are in the minority of companies that do not send marketing emails after you have made a purchase from them.

Market Position Change?

Maybe Kizik is missing a giant user base, kids. This could be similar to Nugget Comfort, where they originally marketed their product as something for young adults, but when they marketed it for kids, it took off. I have a 4-year-old and he stomps down the back of his shoes (often walking around with the back of the shoe under his heel). I want this for my kid! 

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