[Interview] Reinventing the beach towel concept

The Vertty towels are quite extraordinary in terms of design. Cameron, our CEO, is a happy customer of Vertty and that's how we turn our attention on the company, trying to dig into their experience with the supply chain world.

We had the pleasure to talk to Diogo Cruz, the founder and CEO of Vertty. The company is based in Portugal, the home of great surfers, and ships its cool towels to over 40 countries around the world. And it all began only one year ago.

AP: I find it quite fascinating that your business inception happened while participating in a tech business accelerator, Startup Lisboa, however you turned to producing and selling physical goods. How come?

DC: My background is in Management and not Engineering. I didn't really like the idea of building tech companies where you are completely dependent on engineers to start making money. I wanted to work on "the real world" and that's why I tried to go to the physical goods business.

In this business, you have something that you can touch, you can manage the production line and you can see what's really happening. And you see the product being "actually" made. And the value of a physical good is still better perceived than a virtual good.

And the other reason why I started Vertty was because I really wanted to build a love brand. I really wanted to have a highly desired product. Like Apple, like Coca Cola, like Havaianas. That's the big challenge. The brand challenge.

We are a niche product focused on design and fashion people. That's our positioning.

AP: And how was the path from idea to implementation? What were the challenges with manufacturing and distribution when selling an innovative fashion product?

DC: Manufacturers are very conservative when it comes to production. They are used to do one thing in one way and they hate to try a different way.

I had to spend a lot of time convincing them on literally taking our money and accepting our projects. And when they accepted the challenge of trying a new thing...they "punished" us with the price.

I sent 50 emails to factories, only 8 answered and only 4 accepted a meeting. And from those 4 only 1 accepted our challenge about creating a design beach towel. It's very hard: 1 out of 50!

Regarding distributors - they have a big power because they own the supply chain. And they are very difficult to deal with because they always ask for very big margins (their business is the stock business). And when you have a high-end product it's very hard to have interesting margins.

But, fortunately, there are online stores where brands can sell directly to customers at much lower customer acquisition costs.

We ship all over the world, we have customers in more than 40 countries. But each country comes with challenges too. Brazil is a very hard market to enter. They have really high customs costs. The only way you can enter there is by having a local partner. And Russia is also a difficult to enter market for selling online. They only accept the Russian post in their country. All the big shipping companies cannot enter there.

AP: So what platform do you use to sell your classy beach towels?

DC: We use our online shop, www.tryvertty.com, and we also sell on Fab.com. We don't use anything else. We want to maintain exclusivity and to give our customer's the best purchasing experience possible. To build our own online shop, we used Shopify. And we handle everything regarding operations only through a team of two girls.

AP: What excites you the most about leading this business?

DC: The fact that we do what we love, that we managed to build a love brand that people embrace. We also have a few celebrities among our customers. We have the 11 times world champion surfer Kelly Slater loving our brand and owning one Vertty. We also have the Hollywood actress Kate Hudson using a Vertty. We've been featured in a lot of good publications like Vogue, Fast Company, IdN etc.