Outdoor Voices founder Ty Haney made a name for herself by making sportswear the hottest trend among non-athletes. Now, the 33-year-old entrepreneur is betting she can bring together another underrated duo -- consumer brands and crypto.
Haney joined TechCrunch's Chain Reaction podcast this week to talk about her latest venture, Try Your Best (TYB). The startup uses blockchain technology to help brands build customer loyalty without having to rely on buying up pricey ads on third-party social media platforms, Haney explained.
Brands use TYB, which is built on the Avalanche blockchain, to build their own on-chain communities of loyal customers, Haney said. Through TYB, these brands can reward their customers for participation in the community with virtual coins, similar to loyalty points, that they can redeem in exchange for physical products.
"We're allowing brands to create an owned community channel, where they're bringing in whatever amount of people from their existing audience into this channel," Haney said. In contrast, when brands use platforms like Instagram to build communities, they don't own the relationships with their customers and can be acutely affected by platformwide changes to ad pricing and user interface.
On the Chain Reaction podcast, Haney announced for the first time that her new company was about to close its second institutional funding round. Since we recorded the episode, TYB has closed on the $9.8 million round with existing investors Unusual Ventures, Sogal Ventures and Castle Island all participating, a spokesperson for the company told us.
Haney, who left Outdoor Voices in 2020 amid mounting losses and internal disagreements with the then-chairman of the company's board, first launched TYB in pilot mode this past spring. TYB came out of the gates with $2 million in funding from blockchain-focused Castle Island, a relatively modest sum compared to the $60 million-plus in venture capital dollars Outdoor Voices raised since its inception in 2014. Haney has since commented on some of the lessons she learned from running Outdoor Voices in the past, saying that the company grew too fast and fundraised too quickly.
With TYB, Haney hopes to apply some of those lessons in building a new company that leverages her experience building strong relationships with customers. The platform has already debuted with a sold-out NFT drop for one of its partners, Joggy, a wellness brand launched by Haney herself that sells CBD-based wellness products. Each Joggy collectible sold for $250 to 500 founding customers total, Haney said. These 500 customers will have access to 5% of Joggy's revenue through a revenue-based rewards program as the company continues to grow, and will eventually receive a free product and friends and family discounts, Haney said.
Haney designed these perks with a key takeaway in mind that she said she gleaned from her time running Outdoor Voices. "From a brand-building perspective, community really works," Haney explained, but she added that most consumer companies don't have the right toolkit to make the most of their community. At Outdoor Voices, managing thousands of customer relationships across a fragmented set of channels, including Slack, SurveyMonkey and Google Docs made the strength of the community difficult to measure and made customer feedback challenging to collect, she said.
The second big insight she's bringing to her new startup is that traditional customer acquisition channels for consumer brands are too expensive and ultimately "not netting valuable customers." Outdoor Voices recognized four times as much value from customers it brought in through high-touch, experiential strategies such as local events compared to online advertising, Haney added.
"[Outdoor Voices] would spend 30% to 40% of our dollars raised directly to the big [social media] platforms. I think it makes much more sense to take, let's say, 5% of that and distribute that directly to the people who are going to continue spending dollars at your brand," Haney said. She learned that bringing customers into the product development process and letting them choose colorways and prints for the brand's new designs often led to high-converting collection drops and resulted in the stickiness of its most popular styles, including the iconic Exercise Dress.
The community channels for each brand TYB works with will be exclusively available to customers who hold those brands' NFT collectibles, Haney explained. Once customers are part of the community, they can earn loyalty points that work differently based on each brand's preferences, such as Joggy's revenue-based rewards program. TYB has also created a play-to-earn mechanism called a "rep card" wherein a brand can set a specific mission or goal for its customers to increase engagement and can reward them based on their progress toward that goal -- for example, an athletic-wear brand working with TYB could reward its customers for exercising seven days in a row, she said.
For now, Haney said TYB's main focus is providing experiential features to its NFT collectible holders rather than expecting the assets to accrue value based on brand recognition alone.
"We are not optimizing for the flip or the secondary market of a collectible. We are really focusing on brands introducing collectibles that have utility. And so I intentionally use the word collectible, because I do know that NFTs kind of have baggage, and we do have to reintroduce what this technology can do that that people will be more willing to adopt," Haney said.
TYB is working with 30+ brands in its pilot program, Haney said, including Hill House Home, creator of the viral "nap dress," and jewelry company Vada. She added that the company has around 300 potential customers in its pipeline, which isn't limited to just companies with a DTC model.
"There certainly are companies that already have a very enthusiastic, engaged fan base, and we're starting there," Haney said, noting that she wants the first few launches to achieve demonstrable success.
Unsurprisingly, Haney has her sights set on more ambitious long-term goals for TYB.
"I'm very passionate about bringing this younger, in particular, younger female audience into the web3 space because of the potential for real financial upside," Haney said. "And for me, there's no better way to do that than by the brands that they love."