Coalatree Completes a "Damn Near Perfect" Pivot

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Struggling Outdoor brand “scales back in order to scale up,” focusing on e-commerce and its core competency to become a profitable, million-dollar success story

The most satisfying part of Coalatree's turnaround is that we have accomplished this without raising capital beyond the initial, nominal check to buy out the original partners… and we are now profitable.

Coalatree is a brand that's been around since 2011, and has gained a loyal customer base for its popular eco-minded outdoor apparel and accessories.

But in 2016, after years of attending expensive trade shows and launching hundreds of products too quickly, the company never got the traction it needed to be profitable. The Coalatree team reached a point many entrepreneurs unfortunately must sometimes face: how to best shut down the company.

One thought was to liquidate everything and mourn the loss. Fortunately, the team avoided that fate when Coalatree founder Jake “Charlie” Bessey discovered what he calls "smart money" from three investors who could buy-out the original partners and guide him through a major pivot.

"It was so hard to scrap our business-to-business sales, and even harder to move forward knowing we would no longer be attending trade shows,” Bessey said. “However, when things don't work out, you're forced to make hard decisions. Thankfully, we made a smart choice and turned things around very quickly."

Bessey says the turnaround for Coalatree came down to a single theme: “Focus on who you are and outsource everything else.”

“Rather than beef up staff to attend trade shows peddling hundreds of SKUs in a catalog that changed twice a year, we discontinued nearly everything and focused on unique items that were different,” said Bessey, "Sometimes you need to scale back in order to scale up.”

At the same time, Coalatree outsourced Facebook Ads, Amazon marketing, fulfillment, and sourcing – which are all now managed by Utah-based, third-party companies. Outsourcing to specialized experts has allowed Coalatree to keep overhead low while sticking to its core competency: focused product development.

Bessey credits much of the rapid success to two very successful Kickstarter campaigns.

The first was a waterproof blanket that converts to a poncho called a Kachula 2.0, which raised $257,000 – a product the company has had a hard time keeping in stock ever since. That Kickstarter Campaign was followed by the introduction of Trailhead Adventure Pants, which raised $424,000 in 2017. Outside Magazine recently wrote a feature titled "Why the Coalatree Trailheads Are the Best Hiking pants," and referred to them as "damn near perfect."

The new team reached $1 million in revenue with one full-time person on payroll: Just Bessey and two part-time employees. Coalatree is now on track to exceed $3 million in 2017 revenues with only three employees, with plans to hire a fourth employee next year while projecting $6 million in 2018 revenue.

“The most satisfying part is that we have accomplished this without raising capital beyond the initial, nominal check to buy out the original partners… and we are now profitable,” Bessey said.

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Ron Whittington
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