You've likely seen them plastered across your social media accounts, if not on someone's feet in San Francisco, where the company is based: attractive women's flats in bright red with black soles, or bright red with pink stripes and blue detailing, or a gray camo pattern with a red sole.
Rothy's, available online only at the company's site, suddenly seem to be everywhere.
What's the appeal? In addition to their aesthetics, the shoes are highly eco-friendly. Founders Roth Martin and Stephen Hawthornthwaite -- a former gallery owner and investment banker, respectively -- say the company has now used more than five million plastic water bottles to create an undisclosed number of shoes. How? After sourcing the bottles from recycling centers, they are "hot-washed" and sterilized, chipped into tiny flakes, then shaped into pellets that are then melted into malleable, thread-like fibers that get weaved into shoes by car-size knitting machines.
Right now, the shoes are available in two silhouettes -- a rounded and a pointed-toe version. Shoppers further have 20 patterns from which to choose.
Yesterday, TechCrunch talked with Martin and Hawthornthwaite about how, given their very different backgrounds, they came together to form this modern shoe company. We also talked about the company's funding picture, including the $5 million that it quietly raised from Lightspeed Venture Partners in April. (The company had earlier raised $2 million in convertible notes, including from Finn Capital Partners, M13 and Grace Beauty Capital.) Our chat has been edited for length.
TC: Neither of you worked in retail. How did Rothy's come into being?
SH: I’d spent around 18 years focused on M&A [at various banks]. A lot of what I'd worked on was in e-commerce and highly relevant, and by 2010, I was ready to make a change and really wanted to build something on my own. Roth and I have been friends for about 10 years, and professionally, he was in the same place. He'd been running a gallery and wanted to bring his design aesthetic [to something new].
RM: We were at a dinner and started kicking ideas around. We both have a passion for consumer goods and discussed a number of ideas but settled on footwear based on a number of trends we saw developing, including women wearing workout clothes whether or not they were working out. We wanted to create a front-of-the-closet shoe that she [the customer] can gravitate toward, without knowing what's happening on a particular day.
TC: How did you decide to create knitted footwear, specifically?
RM: What drew us to knitting was the ability to create shaped art. Instead of cutting a circle from a square, one could knit a circle and eliminate waste in doing so. In typical manufacturing, 30 percent of materials can end up as waste. So we innovated by being able to program shaped parts. That drew us to knitting, then that drew us to footwear. [I will add that] the requirements of footwear in terms of fit and standardization is really complicated; we had no appreciation for that at the time.
TC: Where are the shoes made?
SH: We have 100 employees in southern China, working in a 65,000-square-foot factory that we own. The shoes are made by knitting machines that are about the size of a car, and which we've been adding to quickly to keep up with demand. We have waitlists for certain items; demand is still outstripping our expectations, but we're catching up.
TC: What's your marketing strategy? I can't open Facebook without seeing a Rothy's ad.
SH: Word of mouth is a huge element; customers email us all the time, delighted with their discovery of the shoes. The Facebook strategy is to visually make people who haven't heard of Rothy's aware of the product. Despite that you may be seeing a number of ads, we're not spending as much money on Facebook when you look at it holistically. We're seeing great return on our ad spend, but it's way less than half our marketing budget.
TC: What other platforms are giving you the most bang for your buck?
RM: Facebook is important. We're also using Twitter, Pinterest, Instagram, Bing, keyword advertising. I'd say we're getting good traction on Instagram; any platform that's particularly visual is effective.
TC: Many e-commerce companies are jumping right into off-line channels to raise brand awareness. You had a pop-up store at a farmer's market in San Francisco. Is a brick-and-mortar store in your future?
SH: No. For now, we're focused on direct-to-consumer. We have no wholesale or retail strategy.
TC: What about other products? What's coming?
RM: We're taking a really disciplined approach to any new categories. What we're selling isn't going to change any time soon. Where we'd like to innovate right now is by continuing to invest in our fiber technology.
TC: How long is the production cycle?
RM: We're writing purchase orders for 15 days from now, so it's a very nimble and responsive manufacturing process. We're not taking a lot of inventory risk; this is just-in-time manufacturing.
TC: You've used five million water bottles so far. How many bottles go into each shoe?
SH: We don't release that information.
TC: In other words, you aren't talking about how many shoes you've sold so far. I've also read that you donate an undisclosed percent of each purchase to an organization, the Ocean Cleanup Project. Why that organization, and can you be more specific about what you're donating?
RM: We haven't put a stake in the ground as it relates to the ocean per se. They have one of the most innovative approaches going, but we're always looking for equally beneficial technologies. [Regarding how much we donate], there's no [hard-and-fixed percentage]. We intend to give generously when we can.
TC: Which shoes are selling best, and are you profitable?
SH: We've been profitable since the beginning. Our sales break pretty evenly between the point and [rounded toe]. Our most popular color is black. Generally, black shoes outsell others in the industry by a significant margin.
TC: I've read that the shoes themselves can be recycled. Does that say something about their durability? Also, is this something you're actively encouraging customers to think about?
RM: The shoes last a really long time. Our wives are still wearing pairs that are several years old at this point. With washing -- and their washability is a key selling point -- they come out looking brand new.
To recycle, customers can just go to our website, print up a label at the end of [their shoes'] life, and they can be used [by Plusfoam, a partner company that makes other performance materials] for low-grade carpets and other things.
Photo courtesy of Rothy's.