Many companies start with a grassroots, viral marketing strategy, but Brendan Lynch and Sergio Salas have taken the idea one step further with their new surf-inspired, eco-friendly clothing company nvohk. The apparel brand, which is still in the design phase, is using a creative business model, known by a variety of names like crowdsourcing, crowdfounding, and community managed, that raises small amounts of money from a large group of members and allows them to shape the direction of the company.
Salas and Lynch met in 2005 in Pepperdine’s MBA program and launched nvohk in December of ‘07 through word of mouth and the projectnvohk.com Web site. They started by getting commitments from interested parties for $50 that would be submitted when the brand had enough momentum to launch a product line. Within two months 1,250 people had pledged support, and by the beginning of May, the tally was at 2,800 folks from more than 20 nations.
“nvohk is challenging the way brands are built and managed and testing the ‘wisdom of crowds’ on a whole new level,” says Lynch. “Before nvohk, consumers could only vote with their wallets, now they can participate in the development and management of the brand they wear. nvohk’s business model starts with member demand and word of mouth marketing baked in before products are even offered for sale.”
Although members will not actually own the company due to prohibitive SEC regulations, they will be involved in decision making processes such as choosing logo, product, and web designs, advertising campaigns, sponsored athletes, and product mix. Salas and Lynch say that while there will be hurdles to clear due to the new business model, they will manage group think paralysis closely and fine tune the decision making process as they go.
The company has joined forces with surf artist Robb Havassy to design the limited edition co-founder t-shirt, printed with low-impact dyes on organic cotton, which all initial members will receive. Members will also get 35 percent of all profits as reward points that can be used to purchase product, 25 percent off on product, and the piece of mind of knowing that an additional 10 percent of the profits will go to collectively chosen environmental charities.
If this sounds fresh off the commune, keep in mind that these are Pepperdine MBA’s at the helm with their take on a business model that worked for the soccer hooligans who purchased England’s Ebbsfleet United Football Club through MyFootballClub, Threadless, a Chicago t-shirt company that allows members to submit designs and vote on them, and a number of similar projects that have helped fund bands and films.
nvohk, which draws on a long heritage of creative manipulation of the English language in boardsports, is planning on opening up membership activation on June 5th. Despite earlier plans to not launch until 20,000 prospective members had signed up, the company lowered the hurdle to 5,000 and then decided just to dive in. “Because nvohk’s model is highly non-traditional and groundbreaking there are very few models to benchmark against,” says Lynch, who is a member of MyFootballClub. “With that said, we want to get the ball rolling.” The first group decision will be deciding on a member submitted logo. The artist behind the winning design will receive cash in the neighborhood of $500-1,000.
Lynch wants prospective members to know that “nvohk is not a scam for us to get rich quick and take peoples money $50 at a time. We have personally invested a fair amount of money to get to where we are today. For those of you that have tried to start and manage companies in the past, it is not easy and it takes not only money, but also countless hours and dedication. Simply put, nvohk is not a scam. It is a new kind of company.”
For more information visit www.projectnvohk.com
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