By Beth Carter
Posting in Cities
Jason Reed left a job in finance to make T-shirts. Now his Los Angeles-based brand can't fill orders fast enough.
It took a shot of L.A. attitude for Jason Reed to turn his back on a buttoned-up career.
With his friend Nate Koach, Reed is co-owner and co-founder of Sub_Urban RIOT, a T-shirt company based in West Los Angeles. "Riot," as it is affectionately called by fans, is known for pairing soft, organic fabrics with a laid-back look.
Just four years old, the company is a nationwide hit, with its threads appearing on television sitcoms such as It's Always Sunny in Philadelphia. (One example: a T-shirt with the words, "I'm not fat, I'm cultivating mass" across the chest.) The company has since diversified into fashionable casual wear without the quips.
The idea for the company, oddly enough, came during Reed's short-lived career in finance. Hailing from a small town in southern Oregon, Reed dreamed of working a high-powered job on Wall Street. After studying business finance at the University of Oregon and taking a job in Portland to work at a brokerage firm, he was well on his way.
"It sounds stupid, but when I was young, I just really wanted to wear suits to work and work in a skyscraper," he said. "Growing up in a small town, we didn’t have any sort of financial industry or big buildings, so it was like a dream."
It didn't take long for that dream to be dashed. A 2004 job at Smith Barney, the large financial services company, sapped Reed of his independence. He found himself a cog in the corporate finance machine and quickly became disenchanted.
"The 'gathering assets' process was very old school," Reed said. "I'm not saying the company wasn't innovating, just at that level, there was little creativity involved."
That's a big deal when you're stationed in sunny Venice, Calif., famous for its promenade of performers and artists. There was always a bit of incongruity in having a buttoned-up job in this place; without independence, it was stifling.
"I got a creative itch," he said. "I just wasn’t satisfied doing what I was doing. Living in a creative town and having super creative friends -- actors, directors, producers, designers -- we just wanted to see if there was an opportunity to start something on our own."
So they did. Two years after he started at Smith Barney, Reed got out -- and left the finance game completely.
The great unknown.
Reed met Koach during his time at the University of Oregon, and when Reed moved to Venice, Koach came along to pursue a career in branding. Once Reed ditched his brokerage gig, the two started brainstorming together on their next act.
Just a few years earlier, local white label clothing manufacturer American Apparel expanded into retail, to great success. Overseas imports Uniqlo and H&M gained traction in the U.S. market. Apparel appeared to have a low barrier for entry: make a clever product, show it off and let the money roll in. The pair determined there was a gap in the market for designs that were wry but subtle -- a wink, so to speak, if you know where to look.
"[Nothing really] bridged the gap between surf and skate and Ed Hardy tees," Reed said.
If selling T-shirts is easy enough for an enterprising college student, it seemed easy enough for two career men with a business plan and investor connections. Soon enough, the garage of their house in Venice Beach was stacked to the ceiling with shirts. There was no turning back.
"All we had to do was make some tees, and then go and try to sell them," Reed said. "So we did it."
Learning the hard way.
Like many new business owners, Reed and Koach were industry outsiders with big ideas. The pair sought to do it all differently: make apparel more efficiently; make it local, using area artists and designers; use organic materials.
To their surprise, apparel was an ancient industry with deep roots in Los Angeles, where most American-made apparel is manufactured. That's the good news. The bad: the pair barely knew where to begin to get the T-shirts they pictured in their heads -- the "perfect tee for guys" -- actually manufactured.
"We went through way too much trial and error in production," Reed said. The pair hired a contractor to handle the cutting and sewing, but it quickly turned into a rat's nest of details. "Turns out [that] creating a pattern, spec sheet, grading rules, calculating shrinkage, using the right garment wash and dye, is harder than it looks," Reed said. The first batch of Riot tees was too small; the second, too big.
That wasn't the only lesson the pair learned. One memorable one: never pay a contractor before the work is done, lest he skip town with your $25,000 and leave you negotiating with the sewers tasked with making your tees.
"I remember showing up at his warehouse, and he had cleaned most of his stuff out," Reed said. "He had some sewers still there, just sitting around. I loaded up my truck with everything I could grab: fabric rolls, supplies, hang tags, zippers, neck labels. I still have the fabric scissors I took from his warehouse that day."
The misstep could easily have put the budding business under for good, but the pair managed to rebound. Soon, they found themselves going city-to-city, product in hand, pitching vendors to stock their wares.
"We essentially built the brand," Reed said, "lugging a suitcase through the turnstile on the subway in New York City in the middle of the summer dripping sweat."
Walking on sunshine.
Though Sub_Urban RIOT outsources its production, Reed and Koach are responsible for all the menswear design. (Womenswear design is outsourced.) The pair now have strong relationships with local graphic and street artists who execute designs after they are conceptualized. The company, now firmly established, locates its office in the arts district in downtown Los Angeles. Behind the casual apparel is a strict business sense that keeps the company from straying too far from its core.
"There are so many things we would love to be making and/or making a certain way, but we have to be smart about the execution," Reed said.
In a heavily saturated apparel market, the pair would still be trying to gain traction if not for one lucky break: It's Always Sunny in Philadelphia.
The irreverent FX television show didn't start off as a hit, but it quickly became an oddball cult classic with critical acclaim. Along the way, the show's creators and cast -- who happen to call Reed and Koach friends -- wore Riot gear on camera. It was the best advertising the company never bought.
"[Sunny viewers] certainly know our name, and probably own a T-shirt we did for the show called 'Beer' that has a bear with deer antlers," Reed said. (Of course, "bear" plus "deer" equals "beer.") "None of us really anticipated the power of television, and more importantly, the stars of a hit show on television."
The Sunny online store quickly became Fox's most popular, leading to "crazy" volumes of orders, Reed said. The company now designs specifically for the characters and makes limited-run items for individual episodes.
The challenge for Sub_Urban RIOT today is finding a life beyond It's Always Sunny. To do so, the young company has been working for larger accounts, finding placement in national retailers (and suburban mall stalwarts) such as Urban Outfitters, Bloomingdale's and PacSun.
But it's a crowded market, and the startup must continue to maneuver around bigger, deeper-pocketed competition -- particularly those like Forever 21 and H&M, which are using their economies of scale to redefine the casual apparel marketplace into an inexpensive, disposable proposition.
"There's a difference between what we’re trying to do and what they do," Reed said. "There is room for both."
Reed and Koach see their casual pieces as classics to be recycled, much in the way that their favorite thrift store pieces are. The lifespan of Riot clothing should not be by season, rather, "until you’re sick of it," Reed said.
The company also needs to maintain its focus. Reed and Koach built their name on clever T-shirts, but they recognize that it's not enough to sustain the company over the long term. The challenge is keeping restraint when it comes to further expansion into other types of clothing.
"For us, it’s not about being first, it’s about being better," Reed said. "Something may not fit into what we’re doing right now, and we’ll need to table it for a few seasons until we have the resources or the production ability to make it the way we want to make it.”
"We're not just a tee brand. Yeah, we sell tees, but our flannels and our pullovers are what we're most pumped about."
Oct 8, 2012
Dear Beth and Smart Planet, What does this article's subject have to do with being a smart planet? We know you are a marketing tool for IBM - let's stop there. Thanks.
Two things! First: we're all about business innovation here -- and I'm working hard to expand what that means. (It's not just multinational tech companies.) This is a lovely little story about a small business in Los Angeles getting off the ground. If you don't like it, tell us! But please, be kind. Second: We're owned by CBS! You know, like on the television! IBM just buys the ads. They buy a lot of them, and I can see how you'd feel that we're a marketing tool. But I assure you -- our editorial is fully independent.