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JD:

Hello and welcome back to eCommerce in the Trenches. This is JD Crouse. Today I’m excited. Calling in from outside of Austin, Texas, Rick Hinnant. Rick, welcome to the show.

Rick:

Thank you, JD. So glad to be here.

JD:

Rick and Melissa, your wife, you guys started a company Grace and Lace. Grace and Lace dot com. Tell me a little bit about your origin story. How did this company come to be?

Rick:

Sure. Yeah. Before Grace and Lace we had three companies. We were not looking to start another company. Actually, we still have those three companies but Grace and Lace has taken over as our main business by far.
The story really started with a tragedy. My wife and I were fairly newly married, looking to start a family, and we’re pregnant and things are just cruising along, going great. Halfway through the pregnancy, when Melissa was in the hospital for a routine checkup and the doctor looked at her and said, “We’ve got a problem here. You’re going to give birth to this child in the next 24 hours and it’s not going to make it. However, there’s a very slim chance that we could save your child so we’ve got to take you into emergency surgery right now.”

Through about a two week process, the surgery went through and things went really well and we were totally optimistic. They did tell us, “You’re going to be living in the hospital for the next four months of this pregnancy.” She would have to be in what’s called a [inaudible 00:01:59], I believe, position.

What that basically means is she has to be on her back, slightly tilted with her head to the ground, to keep the baby in. It was kind of a precarious situation. When you get that news it’s not convenient obviously. We were just excited about starting a family and we were thankful that the surgery went well.

We said, “You know what? If that’s what it takes for us to have this beautiful baby girl then so be it. We’ll do it. We’re going to do it with a smile on our face.” We lived in the hospital for a couple of weeks. Unfortunately, things took a turn. There was nothing they could do and Melissa had to give birth, had to deliver our daughter, and she was maybe a week too early to survive.
She didn’t make it. That for us was extremely difficult, JD. I think the most challenging part was Melissa and I are strong Christians. We believe in Jesus. We were praying like no one’s business. We had a gazillion people praying with us. We were just totally full of faith. Like there’s nothing that’s going to go wrong. This is going to be a miracle child, this is going to be a testimony, and we’re going to be all good.

Well, it didn’t happen. We were faced with a decision, which I think many people are. “Okay, what happened here? God, I was praying. Why didn’t you answer my prayers? What happened?” We were full of faith, didn’t waver. With that, I told Melissa, I said, “We’re at a crossroads. We can be bitter, upset, mad at God, ask why or we could be trusting in Him that He’s got some good to come out of this.” I said, “The stance we’re going to take despite the pain that we’re going through”, which was just heartbreaking.
Any parent that has a child knows the love of that child is so special. To lose that when you fought with everything you had was extremely difficult. I said, “You know what? We’re going to trust and we’re going to move forward. I don’t know if anything is going to come out but we’re just going to believe that something good will happen.”

Sure enough, that’s where Grace and Lace was born because in those two weeks in the hospital Melissa had this desire to create. She’s not a person that sits around and watches TV all day and eats bon bons. She’s active and she’s creative. She wanted to sew a baby blanket for our baby girl. Her love of knits and sewing and creating really started right there.

That was the genesis of Grace and Lace and it wasn’t until about six months after that tragedy that Melissa had an idea. She wanted to make a pair of boot socks that would stick out the top of her boot that had lace and buttons. She just wanted to make a pair for herself because she couldn’t find it anywhere in the marketplace. It took her about seven hours to create. She told me after she did it, “Rick, I will never ever make one of these again. They were the biggest pain in the butt but I’m going to wear them.”
A supporting husband, hey, that’s great. Do that, please. JD, what happened was crazy because any time she wore these boot socks people would flock around her and they would give their business cards and they would ask where she got them and can she make them a pair. I thought we might have stumbled onto something but we didn’t know.

I told Melissa, “Why don’t you just put them online and see what happens?” She did. She had a little homemade website for homemade goods and whatnot. Threw them up online and they sold in five minutes, which amazed her and me too. We didn’t really expect that that would happen. Within two days, we had over 400 purchase requests for that pair of socks that she’s never going to make again.

I said to Melissa, “Okay, well, again, we have a decision. We can refund all these people …” They paid us for something we didn’t have and definitely didn’t intend to make. A lot of people had paid us for this and I said, “We can either refund all these people or we can figure out how to fulfill this.” Melissa looked at me and she said, “Well, I don’t think I want to give all that money back so let’s figure out how to do it.”

That’s really where things started. I thought it might last a couple of weeks until we fulfilled everything. Orders just kept flowing in. Not to the tune of hundreds. It started to become thousands of people and it kind of went viral and took off. Before I knew it we had a business. We call it our accidental business but I think you and I know there’s really no accidents. We firmly believe that God was the author of the business. It basically turned our tragedy into a potential triumph.

JD:

Yeah. Wow. What a great story. He has the habit of turning good for things that are meant for bad, right?

Rick:

Absolutely, He does.

JD:

How long had you guys been in business before you got the opportunity to go on Shark Tank?

Rick:

The first sale took place in October of 2011. I had it on my heart, which is kind of an interesting story to be on Shark Tank. I just felt like that that was the route we were supposed to take. This was three months into our business. February of 2012 I told Melissa, “Hey, I really feel like we’re supposed to be on Shark Tank.” She kind of looked at me like, “You’re nuts. I love you but whatever.”

She said, “Well, why don’t you just go ahead and apply?” She didn’t think anything would happen. I said, “Okay, I’ll apply.” I applied online in February and didn’t hear a thing. I applied online again in March and didn’t hear a thing. A few more times in April and didn’t hear anything. Another time in May and didn’t hear anything.

I said, “You know what? Maybe we’re not supposed to be on Shark Tank. Maybe what was on my heart is not the right path. No big deal” because every once in a while we miss it, right? In mid-May of 2012, I’m on the phone with a really good friend of mine, very successful internet marketer. We were discussing him potentially partnering with us because he brought a lot to the table.

I asked him point blank if he wanted to be involved. He said, “I do. However, I really feel like you’re supposed to be on Shark Tank.” I hadn’t told him about this so I kind of chuckled and I said, “Why would you say that?” He said, “I’ve been praying for you guys and I just feel like that’s the route that’s supposed to happen.”

I told him, “That’s exactly what I feel like.” He said, “I know a producer. Let me make a phone call.” Within minutes, Melissa and I were on the phone with Shark Tank producers telling the story. They loved it, they loved the numbers, and they said, “Hey, we have to have you.”

We were supposed to be on Shark Tank on season four, which would have been in the summer that we would actually go there and film. However, Melissa was pregnant again. After talking with the producers and then hearing our story they just said, “It’s going to be best to probably not have you guys come out just for liability purposes.”

Melissa was crushed but I told her, I said, “Quite honestly, I didn’t think the timing was great either.” They said, “Hey, here’s a date. Give us a call. We want you to be on season five.” Melissa didn’t think that that would necessarily happen. She thought maybe our big opportunity is blown.

A little portion of me did too. There was a little bit of fear involved like maybe we did miss it, this enormous opportunity. However, I told her, “I feel like the timing is not right and more time, going into next season, will allow us to figure things out that much more and be ready, have better numbers, all of that.” I said, “I think that’s probably God’s timing for us.”

Sure enough, I called the producers back and they told me … I told them where things were at. They about fell out of their chair. They said, “Okay, it’s on. Season five. Here’s the dates.” We came out and we filmed in the summer of 2013. Started the business accidentally in October 2011. We filmed for Shark Tank in the summer of 2013. Then we aired in November of 2013.

JD:

Well, the timing had to have been great because as I’m sure you’re going to tell me in a little bit, Shark Tank has the ability to really break your supply chain and operations and customer support and everything. It allowed you guys to have a little bit more time under your belt, right?

Rick:

You know, for our experience, it was all great, to be quite honest. As far as being on the show. We’ve talked a little bit about faith already. I’ll just share this story with you. When I found out that we were definitely going to be on and filming, of course, I’m on my knees and praying and saying, “Okay, God. This is your deal, this is your business. If you’re aligning this for us then I need you to give me direction. I need you to tell me if we’re supposed to partner with anyone and if so, who?”

I prayed hard for two months and I just kept hearing over and over in my heart Barbara Corcoran or walk out of the tank. Though, we went in with a tremendous amount of confidence that we had heard from the creator of the entire universe on what’s supposed to happen. We felt great about being there, we felt great with everything that was taking place. Sure enough, we ended up being the exact partner that I felt like God put onto our hearts at the exact equity … It just went absolutely fantastic.

For us, it was an amazing experience. I will say, though, it is not necessarily great for all the companies. That being said, if you’ve got your ducks in a row a little bit … You don’t have to be perfect, you don’t have to have it all figured out by any stretch, but if you kind of have your ducks in a row operationally and you have a foundation of a team, you’ve got some things figured out logistically and with your shipping, then Shark Tank can be incredible for any business because it’s gasoline on a fire. That exposure is insane for a business.

If you don’t have some things figured out, if you don’t know your numbers when you’re in the tank you’re going to get crucified. If you don’t have things operationally figured out and you don’t have at least some key people in place before the tidal wave of business happens then you can be absolutely wiped out. I’ve talked to a lot of companies that unfortunately Shark Tank put them out of business. That’s never what you want to hear but it’s certainly a learning lesson.

JD:

What steps did you take expecting that you would air or … How soon did you know after you shot in the summer of 2013 that you would actually air that fall in November?

Rick:

Yeah. There’s no guarantees that you’ll air. Even if you think it will you’re kind of at the mercy of the show. We didn’t know. We got the phone call two weeks before we were to air. We had prepared as though we would air. We were talking with Barbara in that process.

The funny thing is we said, “Okay, based on how it went, based on your past experience, Barbara, what do you think we need to prepare for as far as inventory and all of that?” She said, “You know, I think it’s going well. I think that you guys will probably sell 10,000 units.” We had 54,000 units in our warehouse so 10,000 was no big deal.

We air and it absolutely went insane. We actually broke a record for Shark Tank at that point. We did over a million dollars of sales in a five day period. We needed about 150,000 units. We only had 54,000 so we had to obviously get with our manufacturers immediately, rush stuff immediately, apologize a gazillion times to everyone why their products were late and all of that.

We did prepare beforehand with our staff. We had a foundational staff in place. We essentially said, “Hey, you need to put all of your friends and family on notice that if things go crazy we will need them.” Thank God we did that because we had six employees the day that we aired and two days after we aired we had 36 employees. We had to scale that fast. If we had not had people ready and in place then we could have been in very serious trouble.

JD:

Amazing. I love it. I love it. What are you guys doing right now to attract new customers into the business? You’ve moved away, even though I think you still sell socks but you’ve expanded your product lines. What are you doing to attract new customers to Grace and Lace?

Rick:

Yeah. We’ve definitely grown well beyond boot socks and boot cuffs and leg warmers. I knew when we were in the tank, I even had a discussion with Kevin O’Leary, which was not aired, we were talking about this exact same thing that if we get copied and if the fad dies away what’s going to happen? I said it’s not a big deal because our vision is much bigger than just these particular products. We want to become a worldwide brand. We want to become a women’s apparel company.

We’ve expanded well beyond what we started with and as far as how we’re attracting and converting and retaining it’s customer acquisition, it’s what every company really needs to get good at. I wish, JD, I could tell you that we’ve got it all figured out. We’re still learning, we’re still getting better but I think what we’ve done well to attract people is we work on excellence within every facet of our business. We really pay attention to detail.

I’m not saying that we’ve done it all right. We haven’t. We’ve made so many mistakes it’s insane but everyone knows within our culture we work on excellence, we get better, whatever mistakes we have we learn from them, we move on. I think there’s a level of humility that we take because when we screw something up we have to eat the crow. We have to apologize to our fans, the followers, our customers and say, “We’re sorry we missed the mark on this. We are working on it and doing everything possible we can to improve and we will improve.”

JD:

Awesome. If you had today one word to share with an aspiring entrepreneur or maybe an entrepreneur that’s been in business for a couple of years what would that one word be and why?

Rick:

Man, that’s a tough question. One word? Wow. I can think of a gazillion. I’m going to go with a little bit different direction here because I think this is one of the keys, if not the biggest key, to success. The one word that I’m going to give you, JD, let’s start with this one and I can give you some others for sure. I don’t know that … If you’ve asked this question before I don’t know that you’ve gotten this answer. The one word I’m going to give any aspiring entrepreneur is failure.

The reason why is we learn more from failure than anything else. A couple of people come to mind when I think of that word. Reggie Jackson, famous baseball player, he struck out over 2600 times. The most in the history of Major League Baseball but people don’t hear about the strikeouts. They hear about the home runs. That’s a concept that I have called failing forward.
I think about Thomas Edison. We’ve all heard of him, we’re all the recipient of his creation. Well, he conducted a thousand failed experiments but on the 1001st the light bulb was created. He failed forward.

I can look at my career in business, which goes back to seventh grade. I’ve started over 15 ventures. I’ve failed a lot. If I look at the most successful entrepreneurs that I know, including the sharks, every one of them has failed way more than I have, which is why they’re as successful as they are because they’ve learned.

You think about it, JD. Anything in life that is worth anything at all, it’s a process and there’s failure along the way, whether it’s learning to walk, learning to ride a bike, learning to snow ski or snowboard, or climb a mountain. Whatever it is that someone is looking to learn if there’s any significance at all there’s going to be failure and what I tell people is don’t worry about it. Learn from it. That is part of the game.

If you’re not failing then something has happened. You’re not doing anything if you’re not failing. If you are failing, learn from it. It’s not a big deal. It’s not going to crater you. Just don’t let failure be final. If that’s the case then success is inevitable. Eventually, you’re going to get that home run, eventually you’re going to create that light bulb, eventually you’re going to figure out what it takes to succeed as an entrepreneur.

JD:

Fantastic advice, Rick. I completely agree. It’s a concept that I have actually used to fail fast that the quicker that I can get through the failure part of it, the quicker that I can figure out what works. I think that’s applicable in business generally.

Rick:

That’s good.

JD:

It’s for sure applicable in marketing because, like you said, if something is really working in marketing chances are it’s not going to work much longer. You’ve got to figure something out quick.

Rick:

Mm-hmm (affirmative)

JD:

Well, Rick, I really appreciate you being on. I would like to invite people to connect with Grace and Lace. What would be the best place for people to check you out? Obviously Grace and Lace dot com. Do you have a preferred social platform that you guys engage with the most?

Rick:

I think certainly the website, which you mentioned, is Grace and Lace dot com. That’s the best place. We’re on Instagram, we’re on Facebook, we’re on Twitter. We’re on all of that but they can connect to all of those platforms through the website. That’s probably the easiest way.

JD:

Perfect. All right. Check out Grace and Lace dot com. Rick, I really appreciate it. I know you’re a busy guy. Until next time or the next time that you’re in Fredericksburg, I’d like to buy you a braut or something over here.

Rick:

Would love it. Thank you so much, JD.