Monday, May 12, 2008

The End of Nau

For those of you who didn't know, I was "blogmaster" for the outdoor clothing company Nau for the past two years. It was a job I really loved because I believed in the products Nau produced and their mission to change the apparel business by using more sustainable materials and donating 5% of their sales to social and environmental causes.

I heard about Nau almost a year before they opened their doors and interviewed for a job that would be both a copy editor and photo editor position. After several months, I realized that I didn't get the gig--that they actually hired two people fill those roles--but a few months later, when Nau decided they wanted a blog to be their first web presence, I interviewed again and was hired to "curate" the Thought Kitchen as a freelancer. I have Sissyfish to thank for that.

Despite the fact that I was asked to bill a rate that was almost half my normal editing/writing fee, it was an amazing two years of work. Nau's target audience was, in their words, "Artists, Athletes, and Activists" and it was with those loose parameters in mind that the blog content was created. As a surfer, I could write about my experiences in the outdoors; as an artist I could contribute illustrations and photography; as a person concerned about the environment, I could talk honestly about how I was trying to do my part to do less harm to the planet. I was never asked to pimp products on the blog or to overtly sell anything. That was the website's job. Blog posts contributed by employees that I edited came from the same honest perspective.

While I was in Mexico, I found out that Nau went bankrupt. It all happened in a matter of days and I couldn't wrap my mind around how a company that seemed so healthy and well-loved could disintegrate so quickly. Everyone I talked to at Nau (mostly within the creative department) seemed genuinely surprised and shocked by the closure. I was suspicious that somebody high up in the company was aware of financial troubles brewing but kept it a secret, because I hadn't received payment for a month's worth of invoices. And this was a company that had paid me promptly every week for almost two years.

Not long after, I was blindsided by the fact that Nau probably isn't going to pay me for that month of work. The company closed with just enough money to cover payroll and send their "real" employees packing. The liquidators took over, and from what three lawyers have told me, I should expect, "pennies on the dollar, if that."

Contractors and freelancers who had been working steadily--and under intense pressure, in some cases--were hung out to dry. I think there are about 20 people in my situation, and we're all going to be grouped in with Nau's other debtors which probably include huge vendors like Chinese factories and the Beverly Center, where Nau opened a store about two weeks ago. I wonder what the lease is on a store there? Millions? Our invoices are a drop in the bucket.

This sucks.

It sucks because the people who we worked for were our friends. It sucks because a company that claimed to be "sustainable" knowingly let a large group of their friends down. It sucks because somebody didn't have the foresight to tighten the belt a few notches when times got tough, resulting in a hara-kiri style ending to what could have been an enduring brand. It sucks because this brand was actually making a difference. It sucks because I have a family to support.

In the spirit of the company, one that held up TRANSPARENCY as one of its tenets, I would like to be able to know what really happened at Nau. If they spent $35 Million in 18 months, but still owed so much money that they couldn't pay their freelancers (people who were all asked to significantly chop their rates and work until the day the company closed), where did they go wrong? I think this information would benefit other companies with noble ambitions who don't want to suffer the same fate, or at the very least not harm the people who loved them.

OK. This rant is over and the bad puns are finished ....... Nau.


surferbrat said...

That does indeed suck. I know how you feel but there can be a positive side to it. In 1999 I freelanced for a tech magazine called Red Herring. When they folded they owed me and a lot of friends money. We never got it. One photographer I knew was waiting to be reimbursed for a huge trip he fronted expenses for--to Europe.

The good things that have come from it are endless. I've gotten so much work from the people who worked there and went on to bigger and better projects and positions. Everyone stayed friends. There was a lot of guilt at first from people who were on staff there and doing the hiring--but shit happens.

Not that it isn't a bummer though...

On a weird side didn't go to a wedding in Santa Cruz last weekend did you?

Nico said...
This comment has been removed by the author.
Chum said...

Indeed. My point is that the part of management that may have had an idea that the company was struggling should have told the creative department to hold off, or at least given me a choice as to whether or not I wanted to continue with the idea that I may or may not have gotten paid.

I plan on remaining in close contact with the people at Nau who I worked with in the creative department. This post wasn't meant as a criticism of those individuals. They were a pleasure to work with.

And, yes, I was at a wedding in Santa Cruz last weekend! Were you?

lawless said...

That sucks. I think we've all had that situation where we get burned for our hard work and take it personally and have some hostility towards the person/company owing us. In the end, it's just money, it comes, it goes. Don't let it get you down or dwell on it, just take with you whatever positive experiences and knowledge that you gained from the position and move on.

I recently went through the same situation with my last employer who I also considered a friend, but I was knowingly working while not getting paid, so it's as much on me for not walking away sooner. The fact that you were blindsided sucks. Hey, at least you were in Mexico :D

I'm with you though, the first thing I thought when I read the news that Nau was done, was if they were going to come clean with where they went wrong. It was such a progressive business model and had potential to do good things. It would be great if someone in the know could evaluate where the shortcomings in the business plan were so that others can take the pieces that worked from the model and apply them to their own endeavors.

As with most VC backed endeavors, there's probably more to the story behind the scenes that no one will ever know. I'm sure pieces of Nau will pop up again in the near future. Ambitious plans like those for Nau aren't easily abandoned by those who believe in them.

surferbrat said...

Oh I didn't think you were criticizing...I just wanted to offer up that something positive or great could come out of it.

I was helping my friend Toby photograph Erik and Darlene's wedding last weekend. I noticed you and your wife and baby and thought that you all looked familiar but couldn't think from where. I remember faces pretty well--even from pictures. Then I remembered Erik surfs and is an art director and lives in Oregon and guessed that it might be you. I didn't get a chance to ask before you left and wasn't sure it was appropriate anyways...I always think it's weird when someone recognizes me really out of context.
Did you get any good surf while you were in town?
It was pretty flat wasn't it? I surfed on Sunday after the wedding and was able to milk a couple 2 footers at best in Pleasure Point.

tres_arboles said...

Chum--I learned of the closure the day before the Futurewise fundraiser to which Nau had generously donated two beautiful shell jackets. The folks at Futurewise were big Nau supporters and that (along with finding out you were on the payroll)led me to support them too.

I mean how cool is the prospect of rich, smart, progressive former Nike and Microsoft staffers leaving cushy corporate gigs to start something new and different?
I appreciated the Nau business model as my wife's non-profit was one of the Washington State beneficiaries of the Nau giving program. I also appreciated the Thought Kitchen and became a regular reader and commenter over the past few months. But I think they had problems from the get-go.

The fact remains, they frontloaded an advertising-heavy market approach and bought up very expensive exposure in the outdoorsy glossies. The readers of those glossies, like many of my Seattle neighbors are not stylish people. They like their outdoors gear techie, functional, pedestrian, even ugly (does anyone really like the way Keen shoes look?). And those folk will wear there stuff anywhere they go, whether hiking or going out for sushi!

The Nau stuff was urbane AND functional, and the majority of the Nau target demographic is not! Even more unfortunate, those within the target demographic that have some notion of urbanity while considering themselves at least "semi-rugged," just couldn't afford the stuff!

I think most of us in this little surfo-orbit within the blogosphere meet that latter part of the demographic. Shit, the only Nau purchase I was able to make before the demise was off their clearance page, where the items were discounted to about 50% retail. I mean, I may be a dinosaur, but I don't pay $110 for pants and I don't pay $68 for shorts, and my $35, Ebay-purchased, Burton snowboard coat has kept me very warm for the past three seasons, thank you very much!

Bottom line, their stuff was sharp, extremely well-made, and perversely overpriced, especially in an economy where middle-class outdoors-folk are expected to shoulder the wildass increases in the price of gas, healthcare, and childcare. Not a sustainable formula at all.


slim said...

Well put, David. I agree.

Salty said...

It is a bummer to hear about the fall of NAU. To be honest I've been hearing through the grapevine for months now that the business model and company structure probably wouldn't last. I work for Nike (no snickering please) and a lot of the people here are still really connected with the founders of NAU. From those who saw the original business plan it seemed really heavy on the staffing...especially on the top end and the fact that $35 million got burned through in operating budget so quickly seems pretty sketchy. I agree with a lot of the commentors on this page as far as the price of their goods and the idea of walking out of a retail store without any product in-hand. I would've loved to see this company excel...especially in this day and age, but unfortunately we still have to work within some harsh realities in the biz world to make change. Times are tough right now and maybe with some fine tuning and better economical times a company like this could make it happen. There are some great things to be learned from this sad news that could be adopted by a leaner version of NAU with the same high ideals. Otherwise we will live in a world of giant Walmarts and mall stores (including Nike). At some point we need to work and build in a more local for local aspect with the idea of purely creating a sustainable business model...not one driven by constant need for profits for stockholders.

Morgan said...

I still wanna hear the Top 10, Worst 10 and Guilty Pleasures of XTREME Sportz Movies.

ras said...

maybe they were having trouble selling $200 rain coats.

El Hefe said...

Sorry to hear about your situation and good luck. My best friend growing up (Bryan) left a great job at Nike to work at Nau, too, and I feel bad for him. Here's my little thoughts about Nau.

It's target is people who care about the environment, or hippys in lay terms. Hippys genrally don't have $65 for a t-shirt or $149 for a pair of jeans unless they come in 10-packs. I'm very conscious of my footprint on earth and do everything I can to limit everything. I could never bring myself to pay $149 for a pair of jeans or $34 for 1 pair of boxers when some family in Nicaragua spends $31 a month to feed themselves.

Most rich people who can afford these prices don't care about the environment if means they have to change their ways. The clothes have to look GREAT for them to buy them. Shallow I know, but that's how it is. Most rich people don't want to be assocciated with hippys.

It's an incredible tough sell caught in the middle like they were.

kdub said...

hey chum,

a coworker turned me onto your story awhile back because basically you had my dream job -- curating a blog. i am fascinated that a blog curator position even exists.

i just read your nau post and i've been following the story too. i was bummed because i blogged about a new nau store opening up here in fremont (seattle).

i hope your experience at nau opens up some other digital doors for you.


Anonymous said...

Well hope your taking advantage of being unemployed. Almost 90 on the coast, solid swell, and offshore. Fucking unbelievable!

NiegĂ  said...

Think positive: time to surf!


Chum said...

Thanks to everyone for their comments and support. Sounds like this contractors-be-damned phenomenon is relatively common in the startup world. As many have reminded me, I'm sure great things will come from the relationships formed during Nau's short but exciting existence.

Incidentally, I spoke a coworker from Nau who read my blog, and he tried to shed more light on what went on: He explained what caused the closure (bad economy for risky investing) and why they didn't just cut me a check (it would have been illegal for them to pay me, but not the other creditors). I still wonder why I wasn't informed of the impending financial problems a month before they wound down, and more specifically why I wasn't paid on the Tuesday BEFORE they closed, thereby getting me out of the "creditor" category before going bankrupt.

As for the price point of Nau product, I didn't think it was that bad compared to companies like Patagonia, who offer quality products with 4% less of a giving initiative. But then again, I got a 40% employee--I mean influencer--discount.

Regarding surfing my troubles away, unfortunately both my son and my wife got sick this weekend, so I stayed home and am awaiting the full reports from my friends!

Anonymous said...

Hey friend,
Was thinking the other day about the things I missed most about my job, and one of the foremost was that whenever I was particularly struck by creativity, you were always there to put my voice into the world.
Not only that, but you were encouraging and affirmative, which prompted me to feel excited rather than apprehensive about writing down whatever I was thinking.
I was feeling grateful that although I am jobless I managed to get out of Naudom without a whole lot of resentment, (I feel like getting bought out would have been almost more painful to me), but I'm really sad the same thing didn't happen for you.
All I can say is, I've really appreciated having you around the past year. I know that's not quite worth the money you probably missed out on, but hopefully it's worth something.

Chum said...

Thanks, Vera. Having words like yours to work with made my job a pleasure. Let's stay in touch!

Gaz said...

Nau is "later"...... bad puns live on!

Maybe you'll get some surf time as a result....

Festus P. said...

What Nau, wiggler?

Jake said...

There is really no excuse for burning your contractors, especially for a company pitching itself as ethical. I found it kind of weak that they blamed their failure on market conditions. They tried to change to much to fast, slow and steady wins the race. Burning 30 million just sounds wasteful to me.

Anonymous said...

i think that anyone that got a glimpse of even 10% of their business plan knew it couldn't last. their plans of expansion was slightly short of ridiculous. and, it's unfortunate, because i believe their aesthetic was ahead of its time. what i have learned from working with green companies is that people don't really care about green. i mean, sure, they care in that abstract i care about puppies and butterflies sort of way, but they don't care to the point that they want that to be the crux of the marketing pitch, especially when you're asking for such a high price point. i think that patagonia's successful model shows that: people want to know their choice is doing something, but they're not overly concerned with how much.

i am not saying that some people don't care more than that, but you can't have that small of a niche. and, the beverly center! what a mistake.

but, the main point: i am very sorry that they didn't fulfill their obligations to you, or many others. i am sure that more than a couple of people were aware of their troubled waters. i find it to be a real cop out regarding the "market," due to the fact that the market is and will always be risky, but they chose to spend money freely, opening new stores before the first were even successful.

Anonymous said...

We are a manufacturer for Nau. I must tell you that I was quite surprised by the extreme positiveness of all the Nau staff that visited our factory. I was also quite surprised by the enthusiasm and positiveness of all the people who wanted to get involved in Nau as a consumer of the product. Here's the reason why I was surprised--we are a clothing manufacturer and for the last 5 or more years have seen all of our apparel customers immediately rush to Central America, Asia, etc. for very, very cheap labor. Where before companies would extoll the virtues of a certain fabric and its performance characteristics, now these same companies look at a fabric and immediately think, if I buy this fabric, what manufacturing options will I have? Would it make sense to make this in Vietnam, or China?

Here comes now... Nau who is going to be environmentally friendly, etc. AND BE PROFITABLE? No way, not in this or any other business. The consumer wants their garments cheap and will never support the likes of a company like Nau. Even Patagonia, the company that has for so many years called itself environmentally friendly. This is not the case especially for them. They use the cheapest of the cheap labor all over the world. THEY MAKE NOTHING IN THE USA!!!

I must say that I too am a little surprised that Nau did not make it, but again, other than organic foods and vegetables, I don't believe Americans will put their money where there mouth is to support ventures like Nau.

I will only be anonymous in this post as what few customers I have may take offense in this post. Not because they themselves disapprove of what I have to say, but because the parent company that owns them may.

Chum said...

Thanks for the comment, Anon. I sincerely hope that under the new banner of "Nau 2.O" they will continue to uphold their strict manufacturing policies, among other things.

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