Why hot new Australian swimwear brand Kulani Kinis is a testament to the power of bootstrapping your business.
It’s that magic moment all entrepreneurs dream of: when a passionate notion becomes a solid idea and a successful business. For Dani Atkins, it all began around a trip to Hawaii.
Atkins’ annual pilgrimage to the country of picture-perfect beaches and swaying palm trees wasn’t so much a holiday as an escape from a high-pressure role as a psychologist, working with severely ill mental health patients. And as happens in many of these stories, it was something relatively small and mundane that started Dani on her Kulani Kinis journey: she’d ordered a bikini online and had a severe case of sticker shock when it arrived. “It was almost $100 for this one triangle top,” she says, “I thought surely this could be done at a lower cost.”
The realization that she could make the sort of stylish, high-quality bikinis she was looking for, and make them cheaper and better, was Dani’s lightbulb moment. Before too long, Dani and her partner Alex Babich were running their own million-dollar two-person bikini company from their garage in Sydney, Australia.
Opposites attract business
Well, that’s the overly simplified version of the Kulani Kinis tale. The reality wasn’t quite so fairytale-smooth. Alex freely admits that he didn’t immediately embrace Dani’s vision: “You know when Dani turned to me I was like – she wants to sell bikinis online? Oh my God, that’s the worst idea.” Luckily, Dani’s unstoppable optimism won out. But it’s the two very different personalities of the Kulani Kinis owners that may well be the secret sauce behind the brands’ success.
Dani is a people person through and through: “I guess in terms of understanding people and empathizing with customers, that’s something that my psychology background has added. I have a lot of empathy and that’s why we get a lot of customers who come back to us. I hold the customer at the heart of the business because without the customer there is no business.”
In contrast, Alex is naturally more of a numbers guy: “I was in accountancy. I did tax, high net worth stuff. I guess I was customer facing too but from a different angle. But it’s been really helpful from a business perspective.”
So, armed with well-honed interpersonal skills and some serious financial chops, Dani and Alex set off to take on the mighty swimwear market...
Bootstrapping, Kulani Kinis style
Right from the start, going it alone financially wasn’t just an option for Dani and Alex – it was the only route they were willing to consider. As Alex puts it, “We often say no one will ever care about us as much. And Dani will always care about the customer and I think when you bring in outside money and stuff, she has to start thinking about a shareholder. It kind of destroys Dani’s best skills and what she likes doing.”
As a result, the Kulani Kinis story offers up some great lessons in how to take the path marked ‘lean and mean’.
Focus, focus, focus seems to be the first take-out. Dani advises people to “offer a unique selling proposition and hold onto it as your core competency. In a sea of swimwear, it’s our price point and our vibrant designs.”
Then a lot of it comes down to not spending a single cent unless you absolutely have to. Despite its global reach, Kulani Kinis HQ is still Dani and Alex’s garage and the employee list still only has five names on it at most.
They’ve also been remarkably savvy about their marketing budget: “For example, if our photo shoot needs props, we’ll look at what we can exchange that isn’t money. We’ll happily give them swimwear and then do a shout-out on social media or something.”
As far as Dani and Alex were concerned this was a tipping point: “I know this sounds really corny but DHL kind of changed our lives in terms of being able to compete with some of the big players in the world.”
It transformed their turnaround times: “We can now send a parcel to a girl in LA and it’s there the next morning. It’s incredible.”
Getting to the customer, wherever they may be
It also enabled them to neatly sidestep any disappointment: “They’re obviously going somewhere and they’re awaiting that day. But – worst case scenario – if you find out what hotel they’re going to, we ship the new one there. So we get around it.”
DHL also helped them avoid a situation that could potentially have taken their whole business down ….
The test of any bootstrapped business is how it copes when things go spectacularly wrong, because, as Team Kulani Kinis testify, “Every week won’t be a good week.”
Dani and Alex’s moment of reckoning came when they were in the process of shipping a big order to a major retailer.
Alarm bells were ringing before the shipment even left the ground: “We’d heard some press that they weren’t doing that well, they were filing for Chapter 11 bankruptcy. For us as a small business, making thousands of dollars of swimwear, we were asking should we send this order? And they were either not answering or saying ‘yeah, everything is normal – don’t worry about it’.“
Then, once the collection was in the air, news came through that would send a chill down any small business’ spine: “Their lawyers reached out and said any product that you’ve sent, you’ve lost essentially and will not be paid for.”
There was a lot of money at stake but “we were actually really lucky because we called DHL, they stopped the shipment in LA and redirected it to another address.” They even managed to pluck a good future learning from the jaws of this disaster: “Trust your intuition.”
