Starting as a side hustle and competing with H&M by using storytelling

The Startup Team - Nikolaj & Kevin

“Sit down and figure out what is your goal and what is your desire for the company. Choose like two products and be the master in that particular category.” – Quote from Nikolaj, co-founder of Savvy Copenhagen

In this episode, we have a chat with Nikolaj, one of the co-founders of Savvy Copenhagen, a company based in Denmark who is one of the frontrunners in the production and sale of sustainable and organic clothing. We talk about the current shift with regards to manufacturing practices to more sustainable and eco-friendly ones and how these are even affecting the bigger commercial companies. We also dive deep into how they source their products, what their business model is, and how they are able to retain their customers by selling good quality sustainable and organic clothing that tell a story.

Link to the episode

In this episode, you’ll learn:

  • Who Nikolaj is, what his startup Savvy Copenhagen is about, and the story behind it

  • The many things Nikolaj does and how he gets paid in Bitcoin

  • What it’s like to work with a big brand like Neutral

  • How Savvy Copenhagen sells their products and how they retain their customers

  • What being sustainable and organic means

  • Whether it’s a good idea to build a startup in Denmark

  • Savvy Copenhagen’s biggest challenges and learnings as a startup

  • Nikolaj’s thoughts on the future of sustainable clothing

The story behind Savvy Copenhagen

Savvy Copenhagen was started two years ago as a clothing brand that is focused on producing organic and 100 percent sustainable clothing both for the B2B segments etc. through web shop. Nikolaj, one of its founders, finds that more companies (even big companies like H&M) are going towards the sustainable route in the clothing industry/sector and this shift will continue in the coming years. He sees that in the future, there would be more startups focused on producing their clothing in a sustainable and organic way – comparing this to how you see supermarkets in Denmark having sustainable, ecologic and organic products although the process took quite a while but the shift is definitely here and you can see it everywhere.

Wearing different hats

Nikolaj is a student, entrepreneur and ice hockey player. He cannot be full-time in each but those days that he has nothing planned are the days he gets the most things done when he’s just on the couch or in front of a computer browsing through Facebook, ironically.

The first Ice Hockey player paid in Bitcoin

Being interested in bitcoin and the blockchain industry, Nikolaj gets paid in this currency for playing hockey. Given the unpredictability of bitcoin, he still thought it was a great idea, wanting to do something new that nobody has ever done before, attributing this to his entrepreneur side, and sought the help of lawyers to help iron out things in cases of a financial disaster.

Check out the following links if you want to read more about how it works to be paid in bitcoin:

Sourcing products

Savvy Copenhagen as a brand does not only focus on the quality but also the whole process of making a piece of clothing. Nikolaj sources his products from Neutral, another sustainable apparel line who facilitates the whole production process for them including the certificates. He has come into an agreement with the company that he can buy products from them but use his own brand where he is allowed to do some minor changes on a piece of T-shirt.

Selling to other businesses

Nikolaj’s company mainly taps into influencer marketing to help promote their brand and tell their story using Facebook and Instagram. They also do some Google Adwords. Third is from the network and doing B2B deals with companies, seeing a snowball effect from this. Their business model relies heavily on customers coming back to them. Although they sell their products to businesses, he only sees this as competing with other suppliers describing that there are “levels” amongst them – different suppliers (one level) getting their products from one big company (another level).

Retention in a clothing brand

Nikolaj believes it’s about telling the story and trying to catch people with your product. Admittedly, not all customers come back to them due to the fierce competition in this type of industry but in the past two years they’ve seen customers coming back due to their offers of a reward like a discount code for when the next time a customer buys. Sending emails or getting in touch with their customers who have bought with them before is another key thing they’re also doing as well. Using a subscription model with regards to clothing is something in the works at the moment.

Their customer base and how it’s set up

Savvy Copenhagen’s business model is now 70 percent B2B and 30 percent B2C, but they do want to equalize that. Nowadays there’s a spotlight on corporate social responsibility when it comes to manufacturing products and Nikolaj believes that Savvy Copenhagen can help achieve that goal by providing good service and quality sustainable clothing.

Working with Neutral

Often the words “sustainable” and “organic” are used interchangeably but those two are not the same. There are many caveats to those but the only way to present your brand as sustainable and organic is through the use of certificates, in the same way trademarks are issued. They can check if these requirements are actually fulfilled by Neutral and are up-to-date. In this way, they can trust Neutral and that those certificates exist.

Building a startup in Denmark

For Nikolaj, high taxes and wages in the Danish market are definitely a showstopper for any startup. But that’s just the way it is and it's not debatable, you’d have to live with it. Besides the high wages and high taxes, there’s a lot you’d have to do as a startup, which are the more critical parts like fulfilling the paperwork of what your brand does as an example. Nikolaj thinks it's a good idea to have a feel of the ground in Denmark before seriously starting there. Unless you sell strictly online, then he’d recommend doing it somewhere else in the world. But there are pros and cons to anything. There’s no particular bad reason for starting up in Denmark but there are no benefits either. It all boils down to what makes sense for you and what market you’re trying to sell towards.

How he sees Savvy Copenhagen in the future

There’s a consideration being made to change their company name due to a lawsuit, but it's still up for debate. One way or another, Nikolaj believes Savvy Copenhagen is going to live whatever the outcome is. Also, definitely they are going to expand to other countries as well, but first they want to focus and establish themselves in the Danish market as of now to be able to scale it to other countries in the near future. His vision for the next 3 to 4 years is to expand their current customer base who shop through their online store and keep coming back to buy their products.Another strategy they’re employing right now is to get their clothes in stores and shopping centers in Denmark where they’ve started in just 2 to 3 stores to test it. This is one strategy that they’re going to pursue more in 2019 where offline sales is another different ballgame.

Their biggest challenge and biggest learning

The greatest challenge and his advice for anybody who wants to start a clothing company is to not get too focused on how many different products you want on your website. He’d recommend choosing even just two products and being the master in that particular category. Don’t go too big in the start. See first if you can get people to like it and then you can go big next time.

What he would change

Thoroughly check first for any trademark issues of the name or brand especially when you're in the process of starting a new company. A lot of lawyers will come after you especially when you're facing a lawsuit, so he’d advise using a lawyer and allocating enough money to spend on one even from the start to check in the trademark register, etc. This is very important so you’d not have to deal with it down the line and the lawyer will take care of it for you if something happens.

Link to the episode

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