growth
problems
are good problems
In our latest Up-Close interview, we speak with Morgan Fowles, Chief Executive Officer at TALA.
What drew you to join TALA?
Whenever I join a new company, the first thing I focus on is the product because I'm naturally drawn to product-based companies. The product and category need to spark excitement in me. Then I look to business model in its current state and what it could look like. With TALA there was a history of and emphasis on organic traction, especially through social media channels. That’s a shift from the traditional DTC model of the past ten to fifteen years. That appealed to me as I am enticed by companies which are disrupting and where I can leverage my existing skills while also encountering new challenges that I can sink my teeth into. Lastly, the final thing that got me over the line you could say is Grace. During the interview process, I had the opportunity to get to know her and we had great conversations where I was particularly impressed by her clear and goal-oriented thinking, as well as her desire to build a company doing better. We were on the same page very early on.
What achievement or achievements are you most proud of during your time so far with TALA?
Overall, what I'm most proud of is the consistent growth we've experienced. This growth encompasses revenue of course but also the development of our product and building our team. Delving deeper, I take pride in the strategic approach we've taken towards growth. We set out to explore new avenues and carefully measured their performance, then systematically introduced new channels, expanded into different geographical areas, and launched new products. The growth we've seen is a direct result of these deliberate efforts, which is encouraging. Additionally, it's important not to overlook the significant infrastructure projects we’ve had to implement concurrently to support this growth. Thus, the growth wasn't merely a stroke of luck; rather, it was the result of diligent, planned work on our part. Furthermore, we've been fortunate to have a strong product-market fit and a loyal customer base that is deeply passionate about our product and brand. This enthusiasm translates into significant excitement and growth.
What is a particularly tough challenge that you have faced in the last couple of years? How did you overcome it and what did you learn from it?
I always say, "growth problems are good problems" because anyone who has experienced being on the other side of the coin, i.e. in a shrinking company, understands that is the hard stuff. So, many of the difficulties we've encountered over the past couple of years fall within the category of “good problems to have." That said, one recurring theme during this period has been the struggle to keep up with our rapid growth in terms of hiring. Due to our accelerated expansion, there have been occasions where we haven't been able to recruit quickly enough. A glance at our social media presence reveals the bustling activity of our team, constantly engaged in creating activations, developing products, and launching new campaigns. It’s window into how busy we are as a company generally. Workload is particularly demanding in the fashion industry and it’s without software profit margins (though in my humble opinion we have a lot more fun). Consequently, finding the capacity to hire in this context, even where roles are approved and ready to go but the team is too overburdened to focus on recruitment or thoughtful recruitment, has created pinch points and occasionally burn out.
Touching on the hiring agenda, what attributes are most important to you and TALA? Given that TALA doesn’t necessarily operate out of the traditional playbook, presumably some of your hires are working in this way for the very first time which must add complexities to your process?
Some of what we’re looking for is probably very “traditional.” We are looking for a really bright, hard working, very creative, diverse, collaborative, kind, and self-starting group of individuals. We’re also really lucky at TALA that in the UK there is a large available and experienced work force in fashion, which is particularly helpful in hiring for product categories like design, merchandising, buying, etc. Finance, Ops, Customer Service are similar. The challenge comes in emerging functions, particularly social media; where roles and availability of resource is limited by the number of years it has existed. We rarely hire anybody with no experience at all but one of the good things about hiring in socials is that candidates can create an MVP of sorts, whether that be their own social network channels, or small projects done for other people. Given that the work is then public facing, we can quickly get a good sense of what someone can do. Our unfair advantage is that Grace has a keen understanding of what excellence entails here, having been in the space and hiring for it since its naissance. An interesting aspect of our current hiring process involves requesting a 30-minute fake task on a made up event, in place of a traditional cover letter. We're mindful of not overburdening candidates, especially early in the process, and so have found that cover letters for these roles are not nearly as valuable as a snapshot of a candidate's abilities.
“A particularly influential woman in my career was Cheryl Abel Hodges, who I worked for in New York for years early on in my career. She served as president for sportswear brands at PVH and later became the global CEO of Calvin Klein. Cheryl's leadership style left a lasting impact on me which is hard to overstate really, particularly her clear thinking, the strength of her convictions, her fearlessness, her boundaries.”
Would you have any advice for anyone stepping into a position like yours as the first time CEO/MD of a company where the Founder is handing over the reins for the first time?
The obvious aspect is the need to excel in the role doing the CEO / MD thing, whilst also quickly earning the trust of the Founder and remaining aligned with them even in absentia. Though I’ve also been incredibly lucky in my current role, and Grace's approach as a founder to me as an incoming CEO is often one I share with others as an example of how to do it. I've never encountered someone as excited to delegate as she is. Grace views every delegation opportunity as a chance to allocate her time more efficiently, and onto something she needs to spend it on, only. She focuses on areas where she excels, enjoys, and sees the most reward for her time, while trusting others like me to handle our respective responsibilities. Delegation is definitely a managerial style where both Grace and I share a similar outlook—we’re both happiest when we’re delegating. Because when we’re delegating it means we’re operating in high trust and successful environments. However, we both understand that there are always going to be times where we should get into the weeds and delve into the detail if the situation demands it. This delegation muscle may not come naturally to everyone but has been really powerful to observe in her case in particular. Beyond these points, (learning how to align with the Founder, learning how to accept and give delegation) what helps Grace and I is our alignment in approach and overlapping skill sets. Fundamentally we disagree rarely, so there is an element of just being well matched here too.
How do you go about building a high-performance culture and establishing those foundations so that you can ultimately remove yourself from the detail, yet maintain the things that will be delivered to a certain standard?
The first aspect I would highlight is leading by example, which isn't about removing yourself but rather setting the standard. Grace and I are not particularly laid-back individuals; we work very hard, we’re very ambitious and we are always striving for improvement. If you aim to foster a high-performing team, it's imperative to demonstrate high performance behaviour yourself. Additionally, when hiring, it's crucial to consider whether the individuals you bring on align with the lifestyle and environment of your organisation. In terms of structure and processes, I’m fairly obsessed with KPIs and data. They’re not the only thing that we look at, but you can’t possibly assess how well you’re doing if you’re not measuring. With KPIs: 1. consistency is key; therefore, we establish fixed KPIs and periodically revisit them over a sensible timeframe to ensure continuity. 2. Context is crucial when interpreting KPIs; understanding the underlying context enables us to derive meaningful insights. For instance, we prefer to measure results over a 13-month basis to account for seasonality in our business, rather than relying solely on month-to-month trends. 3. Moreover, it's essential to have a structured approach to sharing results to ensure transparency and accountability. We incorporate various methods, such as trade meetings held twice weekly at fixed times, a dedicated Slack channel for updates, and displaying our Shopify data on a centralised screen in the office. This culture of continually reviewing performance reinforces our objectives and fosters accountability among team members.
What are those key KPIs that you religiously review?
They’re probably all the ones you would expect. At a high level, revenue, Customer Acquisition Cost (CAC and Cost Per Order (CPO), margins, throughout the P&L including EBIT of course, volume and mix of new and repeat customers, lifetime values, list sizes. But there are lots of them, in much more detail than that depending on the functions of the department, the channels etc. Each department agrees specific NorthStar metrics, and they are tracked daily, weekly, monthly, annually and so on depending on the metric. Where it can be tricky is establishing KPIs for brand-related activities. In particular, influencer campaigns and events present challenges due to limited access to data. Metrics such as media impressions and engagement with organic social media content become helpful in this context but are not perfect and revenue attribution across channels can be tricky too.
On a more personal note, where do you get your inspiration from? Given we recently had Women's History Month and that you obviously work in a business that is dedicated to empowering women, and that is surrounded by incredible women, are there any female role models who have inspired you?
I find inspiration all the time really – I’m often quite blown away by the women I encounter professionally and feel so lucky in the network of professional women I've built, including angel investors, venture capitalists, and various groups I’m involved with. I make it a priority to carve out time for conversations with the incredible women in my network and attend events like Women's Day breakfasts that were held last month. Despite busy schedules, I get so much from these conversations; they’re utterly nourishing. When it comes historical figures I often mention Katherine Graham, the former editor of the Washington Post, who achieved significant milestones at a time when such opportunities were rare for women. She wrote a Pulitzer Prize-winning book called "Personal History” which I’d recommend to anyone. Recently, I had breakfast with Marty Wilkinson, a board member of Fortnum & Mason and Farrow & Ball, who was equally inspiring and ironically was a personal friend of Katherine Graham. Hearing their stories together was truly amazing. A particularly influential woman in my career was Cheryl Abel Hodges, who I worked for in New York for years early on in my career. She served as president for sportswear brands at PVH and later became the global CEO of Calvin Klein. Cheryl's leadership style left a lasting impact on me which is hard to overstate really, particularly her clear thinking, the strength of her convictions, her fearlessness, and her boundaries.
Often, we hear that women are lacking in confidence in the business space, experiencing feelings of imposter syndrome and so on, so do you have any advice for women who are earlier on in their careers and how to not be afraid to step into situations and roles that they might feel unprepared for?
The first thing I would say is, fortunately you’re probably not fooling anyone. The people who placed you in the role are people you presumably admire, so trust that they knew what they were doing. Maybe they didn’t think your blind spots were important, maybe they’d give you space to learn on the job but they knew you were capable. Who knows, but they had reasons. Secondly, be willing to put in the work early on to get yourself up to speed. There used to be a saying that ‘you’ll be doing your boss’s job a long time before you get their title’. I don’t hear that anymore but I think the underlying point is an important one; sometimes you need to put in a full time gig, and another one on top, to prove and earn your belonging where you want to be. Either way, day-one you don't need to have all the answers; the important thing is to show up, bring your best self, and give it your best shot.
Can you tell us what might come next with TALA and the athleisure space more broadly? Are there any trends that you are observing that will change the space and are you looking at others and thinking about how to position yourself in regard to that?
We pay attention to ourselves more than to what is happening with other brands, in large part because the way women dress is ever evolving and so to look sideways is to look backwards. We care most about what the customer is responding to, which is an ongoing, every day conversation which informs our future decisions much more than what we see other brands doing. There’s an overall trend towards more casual dressing, but then there has been a bit of a counter-reaction post Covid. Regardless there is a long-time feminist movement towards refusing to be physically uncomfortable in our clothes, and a movement towards more thoughtfully produced clothes, towards transitional dressing, towards dressing for an active lifestyle. One of the really exciting things about fashion is that, regardless of the economic climate, there are always winners and losers, and trends can change quite quickly. It's not winner takes all. So, if you're great at what you do, the rest is noise. For us, the future looks like much of what we talked about at the start: thinking about growth in terms of product opportunities, channel opportunities, geographies, and also doing more of what we're doing now because there's still quite a lot to do in this space. That's really what we’re focused on.
In terms of AI, what are you seeing in terms of how it might affect the space that you are in?
The one AI product which is probably most useful to us today is ChatGPT. However, one thing that I'm particularly interested in revolves around understanding customer feedback across multiple touchpoints. So this could look like gathering reviews from social media channels, or from customer service tickets, and pulling all of that together to thematically analyse results. There are some emerging technologies in that space, and we've been talking to a few people, but nothing I've seen is really locked in yet. There are also some important players emerging in performance marketing. And then one that’s interesting but still a way off for us is content creation / generative AI. We have such a strong point of view on our content, it's the longest shot for us as it stands today but there are brands using it.
From your perspective, what are the unique differentiators that set apart European scale ups and their American counterparts?
Well Europe isn’t one market crucially, in logistics, operations, legals and customer preferences. Achieving a minimum threshold of scale and establishing impactful messaging in the United States is often more challenging than in respective smaller European markets. However, once you reach a tipping point, scale can accelerate rapidly in America. Additionally, whether and where you raise capital can significantly impact your trajectory. Everywhere, the availability of capital tends to correlate with the economic climate at that time. The USA economy has just been in a stronger place for a little while which is why you hear about the availability of capital being a little looser, certainly at the moment. Locally sourced capital influences your ability to scale. Both regions present their own advantages and challenges. I've observed UK businesses successfully scale in the USA, whilst others have encountered difficulties, and vice versa. It's not a matter of one being easier than the other; they're simply different.
Staying with this theme, the consumer sector in Europe at the moment is relatively underfunded compared with SaaS and Fintech sectors for example. Have you found challenges in that regard?
I’ve worked in consumer my whole career and I’ve always heard resistance in the venture community towards consumer brands; even in the early days of venture backed consumer DTCs in Europe circa 10-15 years ago. So, it doesn't seem like a recent phenomenon to me. Compared to tech businesses, consumer brands don't command as high multiples, and they can be more working capital intensive. Consequently, consumer has typically attracted interest from specific funds, while others remain entirely uninterested. This trend has persisted for over a decade at least. The USA may have experienced more of a boom and a bust in this regard, with ripple effects felt in the UK. Early direct-to-consumer businesses, along with their legacy, have perhaps instilled a degree of caution in the USA, which has translated to the UK, despite being less directly impacted. Though ironically I’m just back from the USA where I found the investor community to still be very excited about great consumer businesses, the funds who play in that space anyway. Investor sentiment often reflects a bit of recency bias, influenced by recent deals and market trends. However, this timing can be incongruous, considering that investment rounds anticipate exits several years down the line. I always say “The very richest men in the world own fashion (consumer) businesses and tech companies.” History is littered with lots of failures in both SaaS and fashion, but their appeal is also undeniable both to customers and to investors. And I’m biased but I know which one I think is more fun to work on! Nevertheless, similar to the fashion industry as a whole, startup consumer businesses witness both successes and failures. But as my friend Will Sheane who is CEO of Finisterre said to me recently, “there will always be buyers for good businesses.” So, while consumer brands may not attract as many funds, a truly outstanding business will be fine.
