With 100 Million Dollars In Annual Sales, Life Really Is Good

Submitted by Dmitri Davydov on Thu, 2007-11-22 11:53.
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Even though he broke his foot dancing at his brother’s wedding one recent weekend, life is still good for Bert Jacobs.

Mr. Jacobs is the 42-year-old co-founder of Life is good, a popular apparel brand based in Boston that is on track to break $100 million in sales this year. This is rarefied air for Mr. Jacobs, who a dozen years ago was selling T-shirts out of a battered van on the streets of Boston with his brother John, now 39.

From a single childlike drawing of a character they named Jake and their uplifting three-word slogan, the brothers have developed a fashion brand sold in 4,500 independent retail outlets in the United States and 27 other countries.

Since 1994, they have sold nearly 20 million Life is good T-shirts and now have a product line with more than 900 items, from hats to dog beds, and the company continues to grow 30 to 40 percent annually. There are now 93 independently owned Life is good retail shops selling only their merchandise, and the company plans to have a total of 200 by the end of 2009. With all that, Life is good has just 250 employees.

Life is good, which rations its use of capital letters, offers one more example of a small company creating a big brand. Though most consumers associate great brands with marketing giants like Procter & Gamble, General Motors, Apple and Nike, the ability to build a powerful brand is no longer reserved for the big spenders. Small companies with great ideas and well-planned strategies — Kryptonite bicycle locks, Stonyfield Farm yogurt, Zipcar — have spawned prominent brands.

“A big brand comes from big insights about culture and consumers and what it is that they need,” said Susan Fournier, a brand expert and associate professor of marketing at the School of Management at Boston University. “To me, that has nothing to do with big budgets.”

“Life is good tapped into an emotional ethos that struck a chord with where the culture was at a certain point in time. That is not done by a marketing budget but by their customers who become evangelists and give the brand visibility and credibility.”

Internet start-ups like Google, YouTube, Craigslist and Facebook used the Web to promote themselves and have now grown into giants themselves. Facebook, the popular social networking Web site, for example, was started in a Harvard dormitory room by three undergraduates less than four years ago, and today, with just over 300 employees, has nearly 50 million active users and has been signing up 200,000 new ones a day since January. New brands can be started online with stunning speed and efficiency by small groups of entrepreneurs who understand the impact of the viral environment of the Web.

Creating that ubiquity for a brand in the nondigital world is tougher. Though they had been reasonably content to sell enough of their wares to pay a meager rent and avoid taking real jobs, the Jacobs brothers always believed that they could make a better T-shirt and turn it into a bona fide business.

They posted their own drawings and slogans on the wall of their apartment near Boston and regularly polled friends at their frequent keg parties for feedback about their ideas. “It was truly like a focus group,” Bert Jacobs recalled.

In search of something that would resonate with a broad audience, they created Jake, a crudely drawn stick character not all that far removed from the Smiley Face, and were amazed at how he inspired an intensely positive reaction.

“This guy has life figured out,” wrote one friend next to the drawing.

They later posted a list of 50 slogans they had compiled and got a similar reaction to the unremarkable phrase “life is good.” A girlfriend concluded that the slogan with three simple words “kind of says it all.”

The brothers printed 48 test T-shirts that combined the slogan with the drawing for a street fair in Cambridge, Mass., in 1994, and sold the entire lot in 45 minutes.

That night, the brothers huddled and decided that the gold they had seemingly struck was a result of their message of optimism. “The reason people bought those shirts was because they understood it instantly,” Bert Jacobs said. “It made them smile, and it was tangible. They could reach out and get a little sunshine.”

Doug Gladstone, chief executive of Brand Content, an ad agency in Boston, agreed. “They tapped into something positive yet benign,” he said. “The product makes you feel good but it’s not over the top.”

By the end of 1994, the brothers had sold $82,000 of Life is good shirts through a couple of willing retail outlets. Within four years, they broke the $1 million barrier and believed they had found the small business they had always dreamed of and that they were sitting on an emerging brand.

The outside world did not see it that way. “It was a real uphill battle to get other people to say we had a brand,” Bert Jacobs said. “At $10 million and even $20 million in sales, they were still asking us when we were going to launch something different.”

With no business acumen, the brothers sought out successful retailers and peppered them with questions. Bert Jacobs acknowledged that smarter businessmen could have expanded the company more quickly but that was never the point.

Prof. Fournier said that slow growth is an asset for small companies trying to build brands.

“People with deep pockets put the pedal to the metal and do too much too quickly,” she said. “Big companies try to do everything in the first two years but often fall off the cliff. Small companies have to hold back and build the brand more carefully and diligently. Slow and steady often wins the race.”

The Jacobs brothers considered a consumer advertising campaign several years ago but decided to wait until growth slowed to start it. Growth has never slowed. Instead of advertising, the company spends its money on charitable fund-raising festivals for children’s causes.

“People who are facing adversity embrace our message the most,” Bert Jacobs said.

Skeptics have warned the brothers that their concept has a limited shelf life, and, indeed, they plan to extend the brand to try to keep it vibrant. Next spring, Life is good plans to start several apparel and product lines like Good Karma, Good Kids, Good Dog and Good Vibes that will aim at specific audiences. Good Karma, for example, is an environmentally sustainable clothing line. Good Kids will extend the product line for children.

Bert Jacobs is confident the brand has legs. “So much of fashion and culture is cyclical. It comes and goes,” he said. “When the trend tails off, so does your business. But optimism is not a trend. It’s empowering to celebrate life’s simple pleasures.”

[Via - NYTimes.Com

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