Kris Cody: Paka Apparel- How to Start and Run Your Own Manufacturing Facility Abroad

This week on Product Sourcing Stories we have Kris Cody, the founder of Paka Apparel.

See the video interview and the transcript below:

 

Nate:

Welcome back to Product Sourcing Stories. Today we have Kris, this is one of my favorite entrepreneurs in the world. Chris, thanks so much for joining us. Can you tell us a bit about yourself and your story and what you’ve been building?

Kris:

Boom. Thank you for having me, Nate. I remember hearing about you from my friends in YC, and it’s been so nice to connect and also see all of your growth throughout the past couple of years. But I own PAKA, which is an alpaca sweater company. Or started as one, I’m expanding to lots of other stuff now. But originally it was just traveling through South America, came across this alpaca sweater this grandma had made. Got one, got back to the States and realized every time I wore it out that people had never seen anything like it and wanted one. So I flew back there on one way the next summer, built a team of weavers, and then yeah, from there began creating this company and it’s been a wild ride. I just graduated from UVA last year, and now I’m going in 100%.

Nate:

That’s amazing. I love the story, and I really love what you’re doing. I want to talk about the first product you manufactured at PAKA. Like what was that experience? What was that like?

Kris:

I knew nothing about it. I mean, it’s also so crazy now, hearing other people’s stories of how they go to such a factory setting and they deliver a tech pack, or maybe never even meet the people, right? Like I actually did t-shirts in high school to sell to my class, and that was my first entrepreneurship hustle. But when I was building PAKA, I literally was going to these women’s houses in the morning in the outskirts of Peru, working on prototypes together, and literally then launching that website, did all the photography myself, and just shipping them out of my dorm room to start. But from conception, I was on the ground there, hands-on, which I think is underestimated in terms of importance for just seeing where stuff comes from, and having a better idea when maybe things go wrong, or to understand also how you can pivot and create a better product. It’s like you got to see where it comes from.

Nate:

Totally. Totally. That’s great insight. I’m curious, how did you find your first factory? I mean, you were on the ground floor there in Peru, where you just kind of walking the streets and asking people, “How do I produce these alpaca sweaters?” Or what was that like? Because I mean, from my understanding, there’s not like a online database like there’s Alibaba in China and that database, but in Peru, in South America, what was that process being on the ground floor there, going out and actually finding a factory?

Kris:

[inaudible 00:02:52] I didn’t. I mean, I built… So PAKA is vertical in the sense that I’ve build own manufacturing team of weavers that has had to also logistically move all the way from the Andes mountains to the United States to someone’s door. And that’s been a huge learning process for me, and one that I’ve had to kind of figure every step of the way. But the initial factory or manufacture was literally just out of some of these women’s homes. And now we’re employing over 30 women full time down in Peru, expanding our distribution network.

Nate:

That’s amazing. So PAKA literally owns and operates their own facility, which is incredible. I mean just walk us through, I don’t even know where to start, the process of managing that. I mean, you have to have a team that’s ordering the raw materials, making sure there’s operational efficiency. I mean, how do you go about that process?

Kris:

[inaudible 00:03:53] for handmade product.

Nate:

Of course.

Kris:

Just I think it would have been very helpful to have had some sort of mentorship. It was just failing and failing and failing, and trying to figure out what was going wrong at every step of the process. I mean, from the actual blend of the alpaca wool that we created ourselves, to the designs and creating a modern product out of these ancient weaving techniques, to shipping out of Peru, which is one of the most difficult shipping ports really in the world in terms of exportation, and figuring how we want to package them, like the whole biodegradable packaging. It’s been a process, and still continue to learn. But as you do things your way and yourself in the beginning, then you can outsource and contract. And I feel like nowadays we’re prone to outsource before we even understand what we’re outsourcing. And if you do that too fast, maybe then you don’t really figure out how you want to change the experience for the customer, or do something different, build a novel product.

Nate:

Right. So let me get this right, Kris. You… Did you have any manufacturing experience before this, or you just hopped on a plane, said “I’m going to build a facility that employs over 30 woman workers…”

Kris:

That was not on the plan.

Nate:

[crosstalk 00:05:27] These sweaters. I mean, that’s incredible just to think about and take a step back and realize what you’ve accomplished and what you’ve been able to achieve. And I mean, did you have manufacturing experience before this? Like that’s a huge undertaking.

Kris:

I mean, nothing apparel wise. Definitely had some entrepreneur hustles, since that middle school lemonade stand all the way through high school, like slinging. I’ve definitely worked hard on figuring out how to bring something to market a lot, and that’s been a focus of mine. But going to the depths of Peru has been the craziest internship ever in building a business, because of how hands-on it’s been. But there was no business plan. It was just mainly curiosity the whole way through.

Nate:

Got it. Yeah. And you mentioned quality control. I mean, what does that look like for your business, and as these products are rolling out of your facility? What does quality control look like? I mean, how do you manage that?

Kris:

That’s a great question. Especially because it’s a handmade sweater, and as we move to higher quality knits and blends, which require better technology, I’ve been considering how we can improve, how we can maintain the handmade story and also not limit our capacity to create such a high quality product that sits next to a modern brand like Lulu or Nike and rivals them just in quality. And that’s so important. Especially apparel, if your product doesn’t speak for itself and the sizing isn’t nailed, no one cares at the end of the day how much empowerment you’re doing, or sustainable the product is. So for us, and me right now, QC is extremely a huge focus, and we’re actually working on having a satellite powered image that you know, like is flat lines for every step of the way when they lie down, before it even goes to the United States and it’s finished.

Kris:

But a couple of people are replaced there, just going over each product before it’s packaged, and it’s made start to finish in Cusco. So before it’s… And also you have to account for, in apparel, the shrinkage after the vaporizing and softening. So there’s a lot that goes into it. But I had a designer come down this past fall, Nike’s ex senior designer, and he helped me a ton on building out real tech packs with measurements and understanding, because I had no experience in the fashion game. And it was so helpful to-

Nate:

Yeah, with apparel and fashion, I mean there’s so many little details that people don’t realize. I mean, every cut and trim needs to be super detailed dialed in. I want to also ask, and I know you started with sweaters, and now you’ve extended your product line, what’s your process to go about validating these ideas before you start a big production? I mean, how do you validate ideas with potential customers?

Kris:

That’s such a great question, because I think people trip a lot on if something’s going to be even wanted. And for me, a lot of it is just guided by our customer base. And try to let them be a part of the process in making the decisions. Like we launched these new baby alpaca bamboo socks, and I sent out a survey just to the whole email list, and I was like, what colors do you guys dig if we were to make the coziest socks you’ve ever had? And we literally took that information and went and made them. And then when we went to launch, the customers felt like a part of that process, and therefore were super excited to get them.

Kris:

In the same way, when we were building that initial sweater, I hit up, used US snowboarders, pro surfers, whatever, and was like, “How can I make your life better?” And if you go that direction, where you’re actually addressing needs as opposed to hypothetically thinking what the market could use… I mean, it’s a blend, right? And it’s always going to be intuition at the end of the day, but as much input as possible, I would say, from people.

Nate:

Got it. That’s amazing. I got to ask, what’s one tool that your supply chain or business could not live without?

Kris:

I want to build this. I mean, so XL. Like straight up Google Sheets, because I have dialed in, like if I needed to ship out 2000 hoodies by this date in the States, it backtracks and calculates based off the time, when to place the wool order, when to place the [inaudible 00:10:17] Like all of those things that need to happen. And I feel as if that kind of a software be extremely useful to plug in to Shopify, where it’s like you… The hardest part of PAKA for me is remembering to do stuff. Do you know what I mean?

Nate:

Yeah, yeah.

Kris:

I would love to have a program that allows me to not have to worry and remember to place orders for every part of the process.

Nate:

Right. Got it. Yeah, that’d be amazing. I mean, maybe we should build it out.

Kris:

I’m super game. I’ll show you my Google Sheet.

Nate:

Yeah, yeah. Can you tell us about either a manufacturing disaster you’ve had in the past, or a big manufacturing success story, either or?

Kris:

Big failure or roadblock was this past Christmas, actually. We created this new quarter zip, but sourced the zippers from YKK. And we were on track to deliver by Christmas. However, we get the package in Peru, we open it up. By the way, this is shipped FedEx International Priority. We get the package and open it up, and it’s just these weird metal parts from a Chinese company with like all of this Mandarin on it. And I was like, “Where are the zippers?” And FedEx, through going through Peru’s customs or something, switched out and put another box in ours. We lost that package, by the way. Never got it. It a total disaster. So I had to save that into all of those orders and customers, and send out like a wooden card that said, “Your sweater’s currently being made,” just so they could give something to someone for Christmas.

Kris:

But that was a big learning lessons for me, to always add more padding to the manufacturing process. Because when you’re building a startup, it’s always like, we got to do this by tomorrow. And that’s fun. And it’s like the stress is very real. But when you’re kind of moving to a bigger scale and stage, it’s important always to underestimate the amount of time it’s going to take. Overestimate the time going to take.

Nate:

Totally. And you know, you don’t want to have to put too much cash in inventory, but at the same time, if that’s going to create a problem in your supply chain, it’s something that you’ve got to really realize it’s worth the risk.

Nate:

Kris, thanks so much for joining us on Product Sourcing Stories. I know you have a ton going on. What’s next? I mean, what’s next for you? What’s next for the brand? You know, what’s the future hold?

Kris:

I mean, what a question for times like these, where… What day is it today? April 17th, 2020, in the middle of a worldwide shutdown where people are just questioning everything about their lives. So for PAKA, I mean, Peru in a state of emergency, so we’re paused until that begins again. But man, lounge wear is up 39% and I really think we can crush the comfort game, and continue to, and so we’re looking into building out really high quality pants and clothing that I think is timeless. And my focus is on building practical value in apparel, not on fast fashion. I think that’s where brands struggle. But you look at a company like Allbirds that has been still selling that shoe since day one, because it’s such a functional piece of clothing. And that is mainly my focus, is to continue doing that, and bridging gaps for people and adding value to both sides of the equation.

Nate:

Totally. That’s amazing. And I love how your supply chain is vertically integrated. I mean, there’s very few companies that are able to accomplish that, and achieve that to the magnitude that you have.

Kris:

Chip Wilson gives a real great… I mean, he did that with Lulu, and his book, Little Black Stretchy Pants is a must read [crosstalk 00:14:29]

Nate:

Definitely. That’s a great, great recommendation. Where can people find you online?

Kris:

Pakaapparel.com, just click that.

Nate:

Awesome.

Kris:

And then we’ll be rolling out with some really nice products in a few months.

Nate:

Cool. Amazing. Kris, thanks so much for joining Product Sourcing Stories.

Kris:

Much love.