How We Bootstrapped A $720K/Year Sock And Apparel Company That Supports The Homeless Community

Michael Mader
Founder, Hippy Feet
$60K
revenue/mo
2
Founders
4
Employees
Hippy Feet
from Minneapolis, Minnesota, USA
started September 2016
$60,000
revenue/mo
2
Founders
4
Employees
592K
alexa rank
22K
followers
424
followers
market size
$42B
avg revenue (monthly)
$295K
starting costs
$13.7K
gross margin
60%
time to build
210 days
growth channels
SEO
business model
E-Commerce
best tools
Instagram, Twitter, Shopify
time investment
Side project
pros & cons
35 Pros & Cons
tips
11 Tips
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shipping
social media
analytics
freelance
crm
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Hello! Who are you and what business did you start?

Hippy Feet is a Minneapolis-based sock and apparel company dedicated to supporting the homeless community. Each product sold allows Hippy Feet to provide transitional employment to young people ages 16-24 who are experiencing homelessness.

Hippy Feet creates jobs for homeless youth via their packaging, pick & pack order fulfillment, product assembly, screenprinting, and embroidery operations. Hippy Feet’s current employment program is a 6-month job readiness program hosted at its Minneapolis office. Participants of the program are offered employment for an average of 15-20 hours per week during Q1-Q3 and up to 30 hours per week during Q4.

By strategically partnering with local non-profits, Hippy Feet can identify its workers and ensure that their employment efforts are happening in a safe, convenient, and familiar environment that overlooks the traditional barriers that limit homeless youth from finding consistent forms of employment. Hippy Feet’s goal isn’t to be a forever employer for young people affected by homelessness. Instead, they aim to provide income, opportunity, job training, and giving in a way that is both earned and respects human dignity.

The long-term goal for Hippy Feet is to play a pivotal role in positioning young people into stable housing and transition them into full-time employment elsewhere. Since adopting an employment model midway through 2018, Hippy Feet has created jobs for 160+ individuals and offered more than 5,100 hours of employment in total.

Hippy Feet is committed to making all of its socks and apparel products in the United States and with environmentally friendly materials and practices. Every pair of Hippy Feet socks is manufactured in North Carolina using sustainable materials such as recycled cotton, recycled polyester, and organic cotton.

The recycled yarns used in Hippy Feet products are sourced from a recycling facility in Spain that takes pre-existing materials such as T-shirt trimmings and textile waste and turns them into upcycled yarns. This process uses 99% less water than growing new cotton requires and eliminates the need to add artificial dyes and harsh chemicals to the finished product.

Hippy Feet is in a growth phase of its business, having grown 2020 revenue 156% over 2019, and 2021 revenue is currently projected to exceed 2020’s by 56%. Future projections show Hippy Feet keeping pace with the 50-100% growth year over year.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

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

Hippy Feet was a business that I founded during my time in college at the University of Wisconsin, River Falls. On October 5th, 2016, during the fall semester of my senior year, I suffered a traumatic brain injury after taking a fall from my longboard and landing face-first on the cold hard concrete. This injury forced me to drop out of school (for the 2nd time) and left me unable to work and provide for myself.

During the 3 months of recovery that followed my accident, my family stepped up to pay my rent and buy my groceries. My friends would take turns driving me to doctor's appointments, running my errands, and taking me for walks, just so that I could maintain some semblance of social life. I realized that, without this support group, homelessness would have been my most likely outcome.

I was amazed that such a horrible outcome could happen to anyone without the proper support systems or backup plans in place. I felt incredibly privileged and lucky to have people in my life who were willing to step up to help me during my time of crisis. This realization inspired me to start a business that could act as a support group for individuals experiencing homelessness who weren't as fortunate as I was during their greatest moment of need. This was where the idea for Hippy Feet was born.

I spent the majority of my months in recovery developing a business plan for Hippy Feet; a buy one gives one socks donation company that would donate a pair of socks to a person experiencing homelessness, for every pair that is sold. After my doctors gave me the go-ahead to return to work and classes, I took my business plan to one of my professors, telling her it was my goal to complete 30 credits in the Spring Semester, all while developing my new business idea.

While admitting that it was a near-impossible feat, my professor gave me permission to take all 30 credits and connected me with an on-campus business model competition to further develop and potentially fund my new idea. Of the two contestants in the on-campus competition, I placed 2nd, but thankfully it was enough to qualify for the state business model competition in Madison, WI, that April. With the additional time to refine my pitch, I was able to win first place at the Wisconsin Big Idea Tournament and take home the $22,500 prize in seed funding.

After graduation from college that May, I took that cash, called a friend of a friend who’s now my business partner of 5+ years, and the two of us got to work on launching Hippy Feet, the formerly buy one give one socks company.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

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

While $22,500 sounded like a lot of money at the time, my new business partner and Co-Founder, Sam Harper, realized very quickly that we were the definition of a lean business.

Thankfully, my background in college was in lean business models, so we knew how to get scrappy. The problem was, we couldn’t get a single socks manufacturer to take a couple of bright-eyed recent college grads seriously. It wasn’t until August of 2016 that we finally were able to convince a hosiery mill to take a chance on us, and the only way we were able to do so was by showing up at their front door.

After being rejected by every manufacturer that we spoke with, Sam had the idea to tell the next one that we were going to book a flight to come visit their facilities and design our first collection. 12 hours after getting off the phone with the next manufacturer on our list, I was on a plane to North Carolina. 12 hours later, I was back in Minneapolis with the first 6 pairs of our collection designed and in line for production. The funny thing about our first collection is that these are still some of the best-selling socks that we’ve ever created.

Now that we had our manufacture lined up, Hippy Feet was ready to launch, and on September 13th of 2016, we did just that.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

Describe the process of launching the business.

Hippy Feet’s launch was as soft as they get. We didn’t even have a website at that time and were simply raising awareness about our company and our mission. We began selling products at local fairs & festivals as a way to earn cash flow for the upcoming holiday season. At the time, we knew that we needed to be fully launched before the holiday. Otherwise, we wouldn’t be able to earn enough cash to continue.

Thankfully, we had our website up and running by November 2nd and were able to start driving traffic & eCommerce sales. Admittedly, the majority of our revenue in our first 2 years came from in-person sales events. While these events were exhausting & time-intensive, they not only made us money, but they gave us the opportunity to speak face to face with our customers.

This facetime turned out to be invaluable as we were able to take our customers' input and apply that to our future products and marketing efforts. These conversations allowed us to learn who our target demographic was and make adjustments to our business to meet their needs.

Additionally, these in-person events allowed us to cash flow Hippy Feet until we were able to figure out our advertising and media buying efforts to drive revenue through our website. These early conversations still help inform us on who our customer is and how to target them through paid advertising on social media.

Today, Hippy Feet is still a self-funded business. We leveraged a line of credit to offset some of our seasonality and took a small relief loan at the start of the pandemic, but outside of that, we’ve been able to grow solely off cash flow.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

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

Hippy Feet has been able to sustain growth for several reasons. Historically, our revenue has come from 2 channels, our eCommerce business does most of the heavy lifting these days, but the remainder comes from B2B sales efforts, specifically, creating custom socks for other organizations.

We have a unique ability to create custom branded socks for organizations to use as gifts or promotional products. While branded socks are a common promotional product, our customers purchase from us knowing that their partnership creates employment for homeless youth and because of the sustainable materials that we create our socks with. When compared to other socks providers in the industry, Hippy Feet’s are considered a premium due to these unique value propositions.

On the eCommerce side of things, Hippy Feet’s success comes from constant testing of ad types, creativity, and customer demographics. We’re constantly running roughly 40 ads at a time, and reallocate our marketing budget to the ones that are performing the best.

Due to the seasonality of socks sales, Hippy Feet spends the majority of our advertising budget in the 4th quarter when socks sales peak. This seasonality however, was a challenge for us during the spring and summer months when socks are a less desirable item. This seasonality was a challenge to overcome because it limited the amount of cash that we had to carry into our busy season.

Through 2019, we would get to October feeling incredibly cash strapped, which of course impacted how much inventory we were able to order and limited our marketing budget. With a weak cash position going into our busiest months, we struggled to take advantage of the business of the holiday season. We felt that we were missing out on revenue simply because we were limited by the amount of inventory we were able to purchase and the dollars that we were able to spend on ads.

To offset this seasonality, we released new products that had less seasonality or at least the opposite seasonality of socks. Most new product efforts such as generic apparel (shirts, shorts, etc.) weren’t driving enough revenue to keep up with our cash flow needs.

We didn’t actually find the winning product until April of 2020, when we released our Hippy Friendship Bracelets - a beaded jewelry item made entirely by hand by young people affected by homelessness. This product not only was a year-round popular item, but it also allowed us to change the messaging around our mission when purchasing ads.

Rather than telling our customers that “each purchase of Hippy Feet socks creates employment for homeless youth” we were able to market the Friendship Bracelets as “Every bracelet is handmade by a homeless young person.” This small change to our copy seemed to land with our customers, and this bracelet ad is still one of our top-performing ads of all time. Today, our Hippy Feet Friendship Bracelets are our top selling product May-August and a top 5 revenue-producing product even in the 4th quarter.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

In my opinion, the single most impactful decision that Hippy Feet has made that has led to further growth & customer retention was the pivot away from our Buy One, Give One socks donation model. At the start of 2019, Hippy Feet had donated 20,000 pairs of socks. While my business partner Sam, and I were proud of this accomplishment, something didn't feel authentic.

When we set out to launch this business, our goal was to be a support system for folks affected by homelessness. What we were actually doing at that time, was simply giving away socks. Sure, socks are the most requested items at homeless shelters, but we viewed that as a symptom of homelessness and nothing more.

By giving someone a pair of socks, were we having a measurable impact on their life? Or were we simply slapping a bandaid and an incredibly complex issue. Sam and I decided on that latter, and knew that we needed to change our mission to stay authentic to our original aspirations.

That's why, at the beginning 2019, Hippy Feet entirely abandoned the BOGO model, and made a pivot to our mission. From that point forward, Hippy Feet’s mission was to provide opportunity and employment to young people ages 16-24 who are experiencing homelessness.

Our logic - giving someone a job, is much more impactful than just giving them a new pair of socks. We saw the real-life impact of making this change almost immediately. Today, there are young folks who are no longer experiencing homelessness who credit Hippy Feet’s employment program for playing a major role in their success story.

Not only was this pivot made to be more authentic to our original goal of being a support group for homeless folks, it was also a decision that allowed us to separate us from our competition. Bombas is a company that I’m sure most Americans are familiar with at this point. Shark Tank's success has gone on to raise several hundred million dollars and is now one of the largest socks companies in the world. They launched on a buy one give one donation model and still operate with this model today. Since their launch in 2013, they’ve given away over 50 million products to homeless people. With only 4 million people experiencing homelessness in the US, that's more than 10 items for each person.

There’s no way that Hippy Feet was going to compete with numbers such as this, so we knew that we needed to make a change to our mission for this reason as well. Now we can honestly defend the idea that Hippy Feet’s mission to employ homeless young folks has a deeper impact on an individual level than donating millions of products has. Homeless folks will always need donated items. But if these same people were given job opportunities, then they have a chance to break the cycle of homelessness, find sufficiency on their own, and would no longer need to rely on donations just to survive.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

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

Today, Hippy Feet is in a growth phase. YoY growth from 2019 to 2020 was 156% and YoY revenue growth from 2020 to 2021 is on track to be 50-60%. This growth has primarily been sustained by our eCommerce business, specifically by running ads on Facebook and Instagram. This ad platform will continue to be our main advertising platform, though we will be expanding our ads to TikTok in 2022. During the holidays season, Hippy Feet’s average ROAS has fluctuated from 2 - 3.1 during the 4th quarter for our top-funnel efforts. For retention efforts, our ROAS will be as high as 6 or 7.

In addition to growing our revenue, Hippy Feet’s customer list has significantly grown as well. Our social media following grew from 10k to 20k on Instagram alone in 2021. Our email list has grown from 6,000 members to 12,000 members in 2021 also. Through December 10th, 2022, Hippy Feet has driven 116,437 unique visitors to our website, which is up by 74% from the same period in 2020. Through this same period, our AOV is $68.03, our conversion rate is at 2.73%, and our returning customer rate is at 12.36%, which is a 3% increase over 2020.

Through December 10th of 2021, we’ve seen an 88% increase to our ecommerce sales, a 76% increase to our B2B sales, a 49% increase in traffic, a 6% increase to AOV, and a 26% increase to our returning customer rate.

For 2022, Hippy Feet’s goal is to increase revenue by 100%. We project this will be done primarily through our eCommerce channel, though we will be attempting to land a big box retailer in 2022 which would account for a significant portion of the aforementioned growth. Stores such as Target, REI, Macy’s Dillard’s, and Nordstrom have all been identified as a good fit for our products & price point and our goal is to have items in at least one of these stores by October of 2022.

Starting a business is scary and comes with a lot of risk, but I promise the risk is worth it. Even if you fail, and believe me most people do, the risk will have been worth it for the expertise and insight you gain alone

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

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

One of the main lessons learned by launching this business is the importance of staying lean & nimble. Without funding, Hippy Feet has relied on cash flow to scale. This means we need to make incredibly well informed decisions when it comes to where we’re going to spend our money. We test often, and try to fail fast & fail small. We’ve made pivots to our product, to our mission, and to our marketing efforts to keep up with the needs of our customers and the ever-changing advertising industry.

Let's be honest, the digital advertising industry isn’t what it used to be. Back in 2012-2014, organic revenue was possible to drive on social media channels alone. In these ecomm “glory days'' it wasn’t unheard of to earn an 11+ ROAS on digital ads on Facebook or Instagram, but these companies realized they were giving away traffic, and have since changed their algorithms so that their platforms have become a “pay to play” type system. The result of this has been more expensive ads and less ROAS overall.

And then came iOS14… This update has flipped the digital ad space on its head. The amount of data that we can access on our target customers has all but disappeared. We simply cannot track users across the internet like we used to. This made all of our ad efforts more expensive and less accurate, which has truly damaged our ability to advertise profitably.

Our ability to stay nimble has been one of the only reasons we’ve still been able to grow in 2021. I can confidently say that if we would have had the marketing budget that we do now back in 2020, before the iOS14 update, that we would have easily been able to have grown more than the 156% that we did that year.

One of the efforts that we’ve made to offset this new challenge, has been to regularly collaborate with influencers and artists who have large organic followings on their social media platforms. One of the first collaborations we did in 2021, was an apparel and socks collaboration with Minnesota Vikings Pro-Bowl Linebacker Eric Kendricks. Eric helped to design the collaboration and share it with his followers simply because he is a fan of the work we do with homeless young folk.

In the 2 months following the release of this collaboration, we’ve generated more than $23,000 in revenue from his collection alone. Since that collaboration, Hippy Feet has worked with 2 other collaborators, both artists, and has sold more than 2,700 pairs of collaborative socks. In 2022, our goal is to have at least 1 new collaboration every month.

how-we-bootstrapped-a-720k-year-sock-and-apparel-company-that-supports-the-homeless-community

Something that we ignored early on that we shouldn’t have is the power of SEO. Today Hippy Feet ranks high on Google for specific keywords such as American made sock, eco-friendly custom socks, and socks that help the homeless. In the past 3 years, we began to focus on SEO through blogs & backlinks and the result of this is about $500 in revenue each day of the 4th quarter simply due to organic traffic.

What platform/tools do you use for your business?

Hippy Feet’s web store is run on Shopify. They are by far the best platform for an eCommerce business to operate on. Outside of that, our business lives on Google Workspace and we use OmniSend for our email marketing. For our B2B efforts, Hippy Feet uses Mixmax for sales automation, HubSpot for our CRM, and Shogun for our inbound custom socks requests. Hippy Feet also used UpWorkto hire supportive roles such as outbound sales, customer service, and graphic design.

My personal favorite tool that we use is ShipStation. We onboarded with ShipStation at the start of 2021 and have saved HOURS of time in our fulfillment efforts. The automation tools on ShipStation are a true godsend. Prior to using this tool, Hippy Feet was manually fulfilling orders through Shopify. We outgrew their fulfillment services at the end of 2020 and ShipStation has been the only reason we’ve been able to keep up with order demand during Q4 of 2021.

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

The Huberman Lab has been a favorite podcast at Hippy Feet. The podcast itself isn’t strictly business-related, rather it focuses on ways to optimize the human brain and body to perform at a higher level. In the fast-paced entrepreneurial environment, efficiency is key.

Traction by Gino Wickman is another book that Sam and I are quite fond of. This book is where we learned the value of dividing up roles & responsibilities. We found it to be incredibly helpful for Sam and I to become experts in different areas of the business rather than each of us trying to learn everything. Today, I lead our sales, product design and development, as well as oversee the mission and operations. Sam is in charge of our marketing, finance, and supports our high level strategy.

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

My best advice to aspiring entrepreneurs is to simply start. Everyone has an idea for a new product or business, but only a slim percentage of them will actually pursue this dream. Starting a business is scary and comes with a lot of risk, but I promise the risk is worth it. Even if you fail, and believe me most people do, the risk will have been worth it for the expertise and insight you gain alone.

If you do decide to take the leap, make sure you surround yourself with a team of talented and passionate people. One of Hippy Feet’s biggest strengths is the people that make it happen. My business partner, Sam, possesses skills that I don’t, and vice versa.

When choosing a team, make sure you find people who balance you out, but also remember, know one will love the business as much as its founders. You will forever be your best salesperson, so level set expectations and continue to love what you do and showcase that love to your partners & customers, because at the end of the day, that's a big part of why they chose to support you.

Also, don’t forget about SEO.

Are you looking to hire for certain positions right now?

Hippy Feet recently brought on an Employment Program Director in October of 2021. This person has 14 years of experience working with young people affected by homelessness. This new hire will focus their time on improving and developing Hippy Feet’s employment program so that it can be the most impactful program for each young person who participates in it.

As the Hippy Feet program continues to grow & develop, we’ve realized that it would be beneficial to start a Hippy Feet Foundation, that would allow us to expand the impact of our employment program to efforts outside of our own business needs. Our Employment Program Director would naturally shift to becoming the Executive Director of said Foundation.

While Hippy Feet will not be hiring until late 2022, roles that we’ve identified as future hiring needs include a digital marketing manager, copywriter, and part-time graphic designer.

Where can we go to learn more?

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

-  
Michael Mader, Founder of Hippy Feet
Pat Walls,  Founder of Starter Story

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