For our second episode of the Secrets for Scaling Podcast, we spoke to Mikael Söderlindh, Co-Founder and CEO of Happy Socks. Selling happiness through beautifully designed and brightly colored socks, Happy Socks has 12,000 retail accounts selling socks in 90 countries.
On top of that, they have 30-something Happy Socks concept stores and have sold millions of pairs of socks over the past eight years. And, they’ve added underwear to their product line this year, which will also increase sales considerably.
Founded in 2008, Happy Socks has been successful since the early days through strategic partnerships and hiring decisions. However, they’ve faced some challenges too. For example, though they mastered wholesale almost immediately, it took six years and many lessons to get ecommerce right. Learn more in the full episode below!
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Giving a forgotten item some love can go a long way. The Happy Socks product is simple. They took something people wear every day and showed it some love. The result was a brand that people are obsessed with.
Creating a lovable brand attracts retailers. Customers love the Happy Socks product because it’s high-quality and delightful. It’s simple and unique. And because customers want Happy Socks, retailers want them in their stores. It may sound oversimplified, but building a product that people love and maintaining its quality generates organic demand.
Happy Socks went global through local partners. Happy Socks has local distributors in every market they sell in around the world who buy supply from Happy Socks then market them to retailers. It was by aligning with these strong partners that Happy Socks was able to go global.
Partnering with entrepreneurial people has contributed to success. Happy Socks likes to partner with new, entrepreneurial distributors who are hungry for success, rather than established ones. The result is a partnership of two parties who are equally dedicated to each other’s success.
Success comes from recruiting smart people. Hiring energetic people from all over the world who want to take initiative and want to prove something has had a huge impact on Happy Socks’ success. They give their team a little bit more responsibility than what they had prior and let them make decisions on their own without blaming them for trying if it fails. That has been the team’s key motivator for working hard and sticking with them through their growth.
The secret behind a good founder relationship is structure. Mikael and his Co-Founder, Victor Tell work so well together because they’ve had a Board and organized company structure since day one. Due to their defined roles and organization, they’ve only had one disagreement during their eight years of working together.
The most important metric is happiness. Happy Socks’ number one metric for success is happiness. Happiness of the team, of their distribution partners, of their retailers. It’s only if they’re happy that they will sell socks.
You have to work to actively maintain team happiness. If people are unhappy, Mikael calls a two-hour workshop for people to write down what’s wrong with the company. Then, they create action around it. He sends a summary and plan of action after the two hours. Having a Board to bounce ideas off of and to provide that guidance in these situations has been essential.
You have to hire people as you grow. In order to maintain a healthy work/life balance for your team, you have to take the risk to hire someone today instead of waiting until people burn out. This could, of course, go poorly if you don’t sell enough product, but growing a business is about taking those calculated risks.
Don’t think it’s going to be easy. Although Happy Socks was very successful with wholesale early on, it took six years to see success in ecommerce. It took a global team and partners who could handle local adaptations of the pages and maintain local warehouses, etc. It takes time to get the stars aligned. In Mikael’s opinion, it’s much more difficult to get the stars right in ecommerce compared to retail and wholesale. You have to advertise your business, customers aren’t going to just find you. It’s easy to think organic traffic will be more than what it is in reality.
Believe in your idea when people doubt you. You need to count on your idea. Do a healthy calculation to make sure you can grow and be profitable. Then, work with a professional Board who will help you steer the company.
Be devoted. Be prepared to put all your time and energy into it. Mikael says that it’s the founders who quit their jobs and put everything into it who are the most likely to succeed.