How I Created A $12.5K/Month Patented Heelless Running Shoe

$12,500
revenue/mo
2
Founders
6
Employees
product
the DIFFERENCE
from Leominster, MA, USA
started June 2016
$12,500
revenue/mo
2
Founders
6
Employees
1.93M
alexa rank
8
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Hello! Who are you and what business did you start?

Hello everyone! My name is Olguy Songolo. I am the co-founder and CEO of the DIFFERENCE, the very first heelless running shoe brand. Why heelless? Extensive research by the original designer, Etienne Penka, has determined that heel strikes are one of the leading causes of injury for runners, causing a host of negative health consequences in the heels, back, knees, and other impact absorption points. We discovered a simple and elegant solution: remove the heel.

At this time we have one product line, the Heelless Technology Runners. These unisex shoes are designed with the modern runner in mind, with 5 different color schemes and all adult sizes for men and women. You won’t be surprised to hear that our target audience consists primarily of runners, especially runners with an interest in avoiding heelstrikes through barefoot running techniques.

As a Black-owned business, we’ve also seen a great deal of interest from the Black community. Another large segment of customers includes medical professionals such as nurses, who have found that wearing our shoes prevents the pain they are accustomed to the feeling after spending all day on their feet. Over the last two months, we’ve seen our revenue dramatically increase, grossing an average of $12,500 each month.

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What's your backstory and how did you come up with the idea?

When I was a young boy, my father was in the throes of his research at Boston University. One day, to test out a concept he was developing, he cut off the heels of my school shoes, and sent me to class in heelless shoes! Despite looking a bit silly, I was amazed to find that I was comfortable throughout the day, and had no problem running, walking, or standing in this strange prototype. My dad had discovered something amazing.

His research had been focused on the functional anatomy of the foot, and in particular how different kinds of landings (front foot, flat foot, and heel landing) affected the body. How did foot and leg muscles compensate for these different impacts? In the end, the research was clear: heel landings were by far the most damaging to the joints. Simply put, this is because the heel has no shock-absorbing mechanism.

When you land flat or on the balls of your feet, the transverse arches of the feet and the associated muscles easily handle the impact, just as they would if you were running barefoot, in which case you always naturally choose a forefoot landing. However with a heel strike in running shoes, the force of 3-5 times the runner’s body weight is distributed into areas of the legs, knees, and back which are not designed to take these shocks, and over time all kinds of injuries can occur. Such damage includes back pain, plantar fasciitis, knee damage, flat feet, and more.

The problem is that nearly all modern running shoes encourage the user to land on their heels. Today, some companies are even designing “maxi-heels” that blow the heel out to incredible proportions. My father’s research demonstrated clearly that such thinking is exactly backward. He believed that many painful physical ailments associated with running could be solved simply by wearing a shoe that prevented a person from heel striking entirely.

This new concept could change the game for millions of runners and anyone else prone to heelstrikes. At the time of this discovery, however, he was still raising me and my siblings. There simply wasn’t time to develop this new shoe. So the idea was shelved, for decades.

In 2016 I told my father that the moment had arrived. His children were grown, and the time had come to finally design and build the heelless shoe. As you might imagine, we were both thrilled to begin and also rather intimidated by the formidable journey on which we were about to embark. At the time, I was working as a health and safety instructor for the American Red Cross, and we had just formed our non-profit Runners, Walkers, and Standers Foundation.

Take us through the process of designing, prototyping, and manufacturing your first product.

The first draft of the design was created in Boston, as we used digital prototyping technology to work up how the shoe ought to look and feel. Soon enough we had a concept that we felt would do the trick, but the clear problem was the manufacturing cost. There was no way we could afford to produce the shoe in the United States. Though I had no contacts or personal connections, I reached out to manufacturers in China and found one that was willing and equipped to take on the task. It was an uphill battle seeing that none of us had experience in design let alone manufacturing.

We’ve found that our biggest revenue driver is consistently Instagram, even when the level of investment is lower on that platform.

I traveled to China and worked with my designer and the manufacturer. I knew next to nothing about the culture or language so it was an incredible learning curve trying to figure out how to live in China, and how to design a shoe.

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Partway through, my designer decided the pressure was too great and left the project. At this point, it was all on me. I slept at the factory, survived a root canal and even a typhoon!

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how-i-created-a-12-5k-month-patented-heelless-running-shoe

The prototype molds were extremely expensive, costing $7K in different attempts before we finally found the right model. We also realized the importance of obtaining a patent for this unique product. Securing the patent wasn’t easy either, but after some wrangling with the attorneys, we were able to get our heelless design legally protected.

Describe the process of launching the business.

The launch was incredibly challenging, there’s no getting around it! We did not officially launch until 2017 upon my return, though pre-orders were coming in well before then. In hindsight, it’s clear that I made a mistake common to many passionate entrepreneurs: I assumed that since we had created an incredible product, customers would beat down our doors without any need for extensive marketing. As a result, we used all our capital to produce the shoes, leaving nothing for marketing or PR.

At launch time and immediately following, we went through no less than 4 website redesigns and had no social media presence. It soon became clear that this strategy wasn’t going to work and we needed to start looking for ways to put our product directly in front of customers. This began with trade shows, speaking engagements, and anything else to gain exposure, but online sales remained weak in the early days.

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Our family did this with no loans. We took out equity on our house and my parents along with myself and sister burned through all of our savings. We attempted a Kickstarter campaign to raise funds, but this was an unfortunate failure because, as mentioned before, we did not plan for marketing budgets. The biggest lesson learned was don’t be afraid to fail as much as you can but never give up!

Since launch, what has worked to attract and retain customers?

We have learned so much it’s almost hard to know where to begin! One huge lesson has been the impact of disruption and getting attention to generating sales. Once, on a trip to California, I tried to sell the shoes I had with me on the boardwalk but met with no success, so I got creative. Walking into town, I rented a brand new Corvette, parked it right on the boardwalk, and started talking to every person who walked by.

Within a few hours, I had sold out the dozens of pairs I had with me. I bootstrapped throughout the city of Boston regularly, talking to runners by the Charles River and inviting them to try heelless technology. Another successful driver of sales has been trading shows, where potential customers are everywhere and looking to buy the next big thing.

With the pandemic, however, these in-person sales channels were no longer an option. So early in 2020, we made some big changes. First, we contracted with a programmer overseas to revamp our website. He updated the look and flow of the website, dramatically improving its appearance and useability. I also solicited the help of a few different digital marketing companies, since this is not my area of personal expertise. There were a couple of expensive failures, but about two months after almost giving up on social media marketing entirely, I found a new company called Trajex Digital Marketing that worked well with me and that I could afford, and the impact has been huge.

Since contracting with that company in July 2020 and another skilled partner a couple of months after that, we have tried all kinds of new online and offline channels. We put up new posts on Facebook and Instagram at least daily. These are a mix of content, mostly some variation of inspirational material, and pictures of the shoes either by themselves or worn by a model. Most often, we organize our posts into social media campaigns.

About once a month since September we’ve offered a promotion or sale of some kind, which typically last for a few weeks. Three campaigns have been run so far, each with a different theme.

how-i-created-a-12-5k-month-patented-heelless-running-shoe September: Black Panther

This campaign evoked the tragic death of Chadwick Boseman and the ascension of the Black Lives Matter movement to push a message about Black excellence, which was the theme found throughout September’s posts. We offered a limited edition black shoe and promised to donate a portion of proceeds toward the Colon Cancer Foundation (colon cancer being what took Mr. Boseman’s life)

how-i-created-a-12-5k-month-patented-heelless-running-shoe October: Black Friday

October’s campaign was all about Black Friday and our 40% off sale. This month’s campaign also involved email marketing, sending an email to all of our previous customers informing them personally about the sale and allowing them to access it before anyone else.

how-i-created-a-12-5k-month-patented-heelless-running-shoe December: Christmas Sale

In December we focused on gift-giving, encouraging customers to buy the shoe for friends and family at our 20% discount and providing a countdown every day (“only 6 days left!!”, etc)

During each of these campaigns, we used a multi-prong strategy to generate sales:

  • 3 posts per day on Instagram and Facebook (the usual content mix interspersed with posts about our specific promotion).
  • 1 paid boost on Instagram about $150-300, spread across the length of the promotion. These boosts are targeted at our specific audience both geographically and in my interests.
  • Paid ads on Facebook, $500-1,000.
  • Paid shares on larger, well-engaged platforms on Instagram. We work with a number of them and negotiate with them to rates generally below $100 each depending on their reach.

With this combination, we’ve found our marketing cost to be between about 13-30% of revenue generated during these campaigns.

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Some other great opportunities have presented themselves as well. A friend of mine who is an up-and-coming rapper produced a video heavily featuring our shoe in exchange for the DIFFERENCE promoting him.

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Black Entertainment Television allowed us to appear in their holiday gift guide.

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We also partnered with Afterpay, which allows customers to pay overtime for our shoes interest-free. This has been a huge driver of traffic, bringing in hundreds of more visitors to our website than any other link outside social media. In light of this, we advertise Afterpay in some way in nearly every post.

We’ve found that our biggest revenue driver is consistently Instagram, even when the level of investment is lower on that platform. The majority of sales directly from social media always come from Instagram, with a smaller portion arriving from Facebook, although the gap is closing. In all, between 25-50% of our sales each month come from social media sources, and the rest originate from direct links to the website and not specifically from a social media click.

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It’s hard to gauge exactly how many of these are related to our social media advertising, but since we advertise exclusively on those platforms, it’s fair to say that nearly all of our sales are connected in some way to our Facebook and Instagram marketing.

An important question is “why do customers buy?” One big reason we are seeing is to support the Black business. Much of our targeting is directed towards individuals on platforms with a deep interest in supporting black-owned businesses, and those pages tend to generate sales. Others appear to buy the shoes because of the unique, flashy look.

Another segment, often those who reach out to us or are directly referred by a brand representative, purchase because of the potential health benefits for their running or exercise routines. These are the customers we have the greatest interest in, but they are also the hardest to capture, as most runners are pretty well stuck in their ways when it comes to what they choose to wear, especially something as utilitarian as running shoes. Educating the consumer is a huge part of our goals for the future.

While these strategies are working well to add new customers until very recently we had no clear path to retargeting previous ones. To take on this challenge, we created a text message campaign reaching out to most of our previous customers, which cost about $90 and generated a return close to $2000 even with a steep discount. The campaign was a flash sale, lasting only 25 minutes after being sent out. It was also advertised simultaneously on Instagram using a Big 9: 1 image split into 9 sections to take up 9 squares on our Instagram page. We followed the first sale with another late at night as a “last chance”.

No matter what we’re doing for a campaign, we try to do 3 things: Keep all content focused on the theme, use snappy captioning and catchphrases that stick in the reader’s brain, and choose bold images that take advantage of our colorful, unique product’s ability to stand out.

One strategy that did not work as well, was reaching out to local retailers to see if they’d consider making a wholesale purchase. With the product being so new, the times being uncertain, and not knowing whether a market existed, most retailers were uninterested. Another unfortunate attempt for us has been Pinterest, which generated only a single direct sale despite our recent large investment in the platform.

How are you doing today and what does the future look like?

At this time we are not profitable, but our current metrics are broadly improving and have done so increasingly over the past few months.

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The gross margin stands at about 76% (due to very few costs weighing on the business at this early stage). The cost of goods is $21 per pair, and most other current expenses are from marketing. Last month, we spent about $22.03 per order and $14.51 during our Black Friday campaign. Advertising costs are hovering at about $2000 per month, and represent an average of 17.2% of the income they generate.

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YoY revenue growth has been a remarkable 1078% compared with 2019!

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Despite our fairly recent attempts to actually target them, repeat customers have been a consistent occurrence for us, averaging 17.8% of all customers over the past 4 months.

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Monthly traffic has spiked in the fourth quarter, largely due to our aggressive online marketing efforts, reaching their peak during the Black Friday rush.

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Our conversion rate is low but not appalling, at 1.27%.

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We currently have a little over 300 email subscribers and more than 400 text message subscribers. Our social media following on Facebook is just under 1500, and on Instagram, it’s around 1600.

Today, we are focused on our major revenue channels: Instagram and Facebook. We are constantly on the hunt for new pages that will share our content for a reasonable price, and any new opportunities that arise (such as our feature on BET’s list). We are also looking to drum up PR opportunities, bringing us ever more exposure through the media.

Almost the entirety of our sales are online through the channels we control, but a big change is coming. We were very recently invited to join the global wholesale platform Alibaba, and are currently in the process of getting set up to sell through them. As we’re still a small, family-owned and operated company, all business outside marketing is handled by family, including order fulfillment and responding to customer inquiries.

In the short term, we want to continue to test new marketing platforms such as a regular newsletter/blog, and also generate enough cash to fund each month’s next round of sales. Looking forward, we have multiple exciting projects coming down the pipeline. Most importantly, we will be adding new product lines as soon as the capital is available to do so. These will include casual wear sneakers, trainers, and new colors among others (all heelless, of course!).

Through starting the business, have you learned anything particularly helpful or advantageous?

The most obvious lesson I took away from the launch process is the necessity of having a marketing budget in advance. It’s not enough to make a great product or service; people have to know about it, be educated about it, and get ample opportunity to purchase it. Not being prepared for this set us back by some months. I also learned about the value of persistence! We went through one after another of expensive molds, watching tens of thousands of dollars disappear as we strove to get the shoe just right. But this careful attention to detail paid off: Our return rate is almost zero, 3 years and many hundreds of sold pairs later.

We are fortunate that in some sense, our emphasis on natural landings (i.e., landing the way you would if you were barefoot) has recently been mirrored by a very different brand: Vibram, the maker of the infamous FiveFingers “toe shoe”. They had bolstered the idea of barefoot running, despite the lawsuits against them for unproven claims of health benefits by their shoe. Hopefully, the public interest in a natural landing will continue to work in our favor!

Another great source of value was the many partnerships and helpers we encountered along the way and continue to find. I had the opportunity to meet with celebrity investors who gave me good advice, entrepreneurship programs that gave me chances to speak and present, and a marketing contract team that saw my vision and got on board.

Don’t be afraid of opportunity. Seize on everything that comes your way and at the very least give it a chance! You never know when one open door will lead to the next one. It also helps to have certain personality traits. I’m a passionate, extroverted person with a clear vision. I’ve developed strong product development and public speaking skills as well. I didn’t begin this journey with all these abilities, but I’ve been open to learning them, and that has made a huge difference.

What platform/tools do you use for your business?

At this time we are using a whole slate of programs to conduct our business and spread the word about the DIFFERENCE. The core of the online experience for us is our Shopify-hosted website. The website has been heavily modified by a programmer from India that we have successfully contracted with but continues to rely on the basic Shopify apps and analytics interface. The vast majority of purchases are made through this site, although in the past year occasional purchases have been made through Facebook Shops.

On the website, we use the Facebook app to seamlessly link Facebook Shops with our Collections page. To help gauge where users are finding us, we added an optional survey question after purchase using the app Grapevine, which catalogs customer answers for our convenient review.

For text marketing, we use a separate site called ClickSend, which has been helpful in its ease of use and great customer service. We used the phone numbers of customers who had voluntarily given us their numbers and signed up for email marketing, also being sure to allow them an easy opt-out if they didn’t want to receive texts.

As previously mentioned, our primary marketing channels are Facebook and Instagram. We fastidiously link every image of a shoe-in each of our posts directly to their “for sale” page on the website, so an interested user can go straight from clicking on a shoe to being ready to buy it. Once an order is placed, a family member takes care of fulfillment, shipping the shoe out from our storage area through UPS, and an email is automatically sent from Shopify to the buyer (through Gmail) to let them know their orders have been placed.

Our shoe does currently sell on Amazon as well, but through a channel not directly controlled by us. A local retailer heard about the DIFFERENCE on the news and made a wholesale purchase, which he sells now through Amazon. This is a weak stream, however, and the last time we checked it only sold about 1 pair per month.

Going forward, we will need to take a closer look at the potentially huge opportunity this platform can provide. We are almost finished getting set up to sell in bulk through international online retailer Alibaba, and we’re hopeful that this will be a great new source of revenue. We’d be remiss, of course, to neglect the simple word of mouth. One of our marketing partners routinely makes sales simply by sharing her review of the shoes with those she works with as a personal trainer or fellow exercise enthusiast.

What have been the most influential books, podcasts, or other resources?

I’ve been fortunate to have a father who is extremely intelligent and well educated. His doctoral dissertation had a profound effect on me, and in large part set me on the path to developing the DIFFERENCE heelless shoes. His passion for his subject and his brilliant studies inspire me to make the most of his research.

I also find myself looking up to the great writer Dale Carnegie, whose influential books on salesmanship, self-improvement, and other critical business skills helped me to become the company leader I am today.

Other great books that helped me to grow and improve myself include The Great CEO Within, and Grit.

While it’s not a book or podcast, I have to say also that the experience of living in China and being thrown into a whole new culture for many months had a profound influence on me. I learned so much about how the world works far from my comfort zone in the United States. It certainly wasn’t always enjoyable, but I must admit there’s no better way to learn about our world than to go out and experience it.

Advice for other entrepreneurs who want to get started or are just starting?

Entrepreneurship is no easy lifestyle, and it’s rarely glamorous. It may seem basic, but ask yourself. Can I do this? Consider the sacrifices involved, of time for yourself, time with family, potentially big money or lots of equity, and plenty more. Don’t be coy about the big question: what am I willing to give up for this? Because you will give something up, and you don’t want to get into the process only to discover you aren’t prepared for those sacrifices.

It’s also a great practice to consider your goals. Not just for your company’s success, but for yourself. Where do YOU want to be in 5 years? 10 years? What do you consider a reasonable level of achievement? In other words, consider whether there is a point where you’ll be able to say “enough is enough”, that you’ve achieved what you set out for and are ready to take your foot off the gas a little bit.

Asking yourself these questions will help you focus your business efforts and give you a target to shoot for, rather than an open-ended picture of wild (or moderate) success. Get specific in your personal goals whenever you can.

Are you looking to hire for certain positions right now?

Currently, we are interested in part-time applicants who are skilled in public relations work. An important part of our strategy moving forward is garnering media attention for the brand, and any help we can get with that will be useful. Individuals with some connections or experience in this field will be given special consideration.

Another valuable role would be in podcasting, as we’re looking to add an audio component to our marketing.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Olguy Songolo,   Founder of the DIFFERENCE

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