Success Stories with Marshall Atkinson

Success Stories Ep 51 - "The Journey from Streetwear to Merch Powerhouse"

August 24, 2022 Marshall Atkinson Season 3 Episode 51
Success Stories with Marshall Atkinson
Success Stories Ep 51 - "The Journey from Streetwear to Merch Powerhouse"
Show Notes Transcript

One of the most remarkable Success Stories in the industry is Chicago’s own, Culture Studio.  In today’s podcast, we’ll be talking with Rich Santo about providing tour merch for some of the biggest names in the music industry, how they launched their own shop software, and how they have grown over the years.

Get ready to be inspired as we chat about success with Rich Santo and his shop, Culture Studio.


Marshall Atkinson 
One of the most remarkable Success Stories in the industry is Chicago's own culture studio. In today's podcast, we'll be talking with rich Santo about providing tour merch for some of the biggest names in the music industry, how they launched their own shop software, and how they've grown over the years. So get ready to be inspired as we chat about success with rich Santo and his shop. Culture studio. So Rich, welcome to the Success Stories podcast.

Rich Santo 
Hey, thanks so much for having me. It's a pleasure to be here.

Marshall Atkinson 
Yeah, I can't wait to dig into it. It's gonna be lots of fun. And I think you guys have had a really remarkable track record. And it's gonna make a really great show.

Rich Santo 
Yeah, thanks. It's kind of crazy to think that, you know, we've been doing this for almost 14 years. It seems like yesterday that we were just starting the business in 2008. It seems like we blink an eye and all these years have passed. And here we are.

Marshall Atkinson 
Yeah, right. So let's time machine, you hit the button. We're gonna travel back in time to then and start off with the roots of how you guys got started. So talk about where you were then and how you started your business. And then how that's kind of morphed into what you're doing now.

Rich Santo 
Yeah, so something that's, you know, kind of funny is my daughter, my three-year-old is going to summer camp. And you know, so the reason why that is part of our story is that, as a kid, I never went to summer camp. Actually, Nick and Joe did go to summer camp. But even as a very young child, I opted instead of going to summer camp, to work at my grandfather's screen printing shop in Cicero, Illinois. And so, you know, instead of like running off and playing basketball, and you know, soccer, you know, whatever the kids played it at camp, I checked in garments, I changed out the RC Cola pop machine, I boxed and put stickers, you know, even as a very young kid at my grandfather's company, and he started that business in the 60s. And so we kind of had an element of growing up as kids, you know, we say like playing hide and go seek in a screen printing shop. So I guess it was kind of always in our blood. But it certainly wasn't the path that we really necessarily knew we were going to take in 2005. The first thing that we got into was and actually still is the corporate umbrella. We created a streetwear brand called Shy, and it was ch I shy clothing company, which again, still is the corporate name. And so we built this brand and basically sold it across the country to small boutiques, even got into some, you know, larger doors, and then eventually made retail stores of our own selling, you know, wildly decorated T-shirts, hoodies with rhinestones all over the hood and everything. And, you know, our first orders were actually printed at my grandfather's shop. And then we started to use different outsource facilities and factories all over the country from LA all the way down to Florida and everything in between. And we did that basically from 2005 to 2007. And basically, the way that we marketed that brand was we got heavily involved in the music scene. So we were throwing parties locally. And then nationally, under that same brand was an offshoot of called Shai events. And so we had these two things, kind of the clothing side of the business and retail, and then the way that we drove traffic to it, they're really back in those times with social media and Facebook ads and Instagram ads really didn't exist like they did today. So it was a lot of just straight guerilla marketing and throwing constant weekly events. So we were heavy on the entertainment side, and you know, on the clothing side, and enter in my brother Nick, who ran the retail stores, and then my brother Joey that started to run production. And then the fourth brother from another mother is Carlo, who we brought in when we decided to open up our own studio. And so that's where culture studio came from, as we decided that the biggest issue that we saw for running the business of Shai, the streetwear brand was very high end, large format, waterbased decorating, and we were pretty much met with knows across the board, could you print a skull across the seams across pockets? Could it be soft? And really, the answer was no. Interestingly enough, we did stuff back then I don't even necessarily think that we can reproduce today, because we produce everything on such a scale, that when we first bought our first manual press, we would actually turn the screen sideways and print three different times. And keep moving the garments along, we did all over prints and stuff like that with just like, you know, an M&R Manual for the station, maybe six colors, whatever it was that Joey would print the sleeve and then flip it over, and then print the inside of the sleeve and flip it over. And, you know, continue to do that. And so like, I don't even think we could reproduce some stuff that we did today. But really, the root story here is we basically made the studio for ourselves to make our own brand.

Marshall Atkinson 
And really just jumping in and not being afraid to do it. Like, hey, what does it take? Let's do it. Who cares if we fail? Let's print our own giant skull. Right? I know, you can't do it, but we're gonna figure it out. That's the mentality.

Rich Santo 
Yeah, I mean, I mentioned, you know, our background that our family has because I think that gave us at least an element of confidence that like, hey, well, we've kind of saw these machines, we knew what they look like, and Joey would come there. And he was sure he was always the machine guy. I was on the creative side. And Joey would be able to say, Well, I think I know how that works. And I remember there was just a small shop where we were running some stuff through here. And they allowed Joey to go in there and just kind of watch. And he really picked things up on his own. And that's what gave us like the vote of confidence, like, Okay, our first shop was 900 square feet. We had a dark room inside the bathroom. And we washed out in this little tiny basement below. I mean, it was like that small manual press almost touched both sides of the wall. And it was just Joey and then my cousin Dominic came in later. And they would just produce the brand of Shai all day, every day. And we had unlimited creativity, which was really fun.

Marshall Atkinson 
So juxtapose that just so people who maybe haven't heard of your company, where are you now?

Rich Santo 
Right now, we have over 150,000 square feet of production floor spread across the country. And the headquarters here in Chicago is 50,000 square feet, three shifts seven days a week. And our newest facility that we're building out right now in Daytona Beach, Florida, is 76,000 square feet. And then we have other facilities scattered across the country, all powered basically by a piece of technology that we build that is able to manage all of that production, team member-wise, just to embark on 200 team members within you know, across all facilities. So yeah, it's a long, a far cry from three guys, four guys in 900 square feet, making the dazzled hoodies.

Marshall Atkinson 
Right. And then that growth, you've seen your company, and you've had to adjust and you've had to go through lots of pain as you go through the metamorphosis from the caterpillar to the butterfly, right? And so talk about that a little bit, because I think that's very interesting because there's somebody out there right now rich, who's in a 900 square foot space, and thinking about taking over the world like you guys are. So talk about that a little bit and kind of those speed bumps that you had to go over.

Rich Santo 
In 2008, we decided to, you know, basically create our own studio and make our own products for those of you that can look back to you know, what the economic climate look like in 2008. You know, we were selling back then $150, hoodies, you know, $100 t-shirts that were printed from top to bottom, and they had stones and foils all over them, and the retail side of the business dramatically declined. And so, you know, basically, you know, we were left with, you know, what, I think we understand how to actually produce and do the decorating, and how to source products, garments specifically, we had a great little family team that we had assembled here. And so Carlo and I went out and started to find local businesses to work with, you know, some of those local businesses were those bars and nightclubs that we were working with on the entertainment side. And then while they were in 900 square feet Carla and I pitched Threadless I don't know if you're familiar with threadless.com. But it's a Chicago company. And at that time was doing some pretty incredible things. And we had just actually taken images off of Google. And we put this whole pitch deck together and went in and showed them all of the automated presses that we had, I believe, at the time we were pitching that we had for autos when we only had one manual press, and Joey and Dominic printing on this one single m&r manual press. And somehow, some way, you know, we were able to convince them to start moving some production to us. And so I actually don't think that the autos, that giant 18 colors that we have, we just bought four brand new ones in Daytona, I don't even know if they could keep up with an 18 and 19-year-old, Joey and Dominic on the manual press. I mean, these guys were just animals. And we actually started producing that volume for Threadless on that one single machine. And that was like, I would say, our like our official move away from making our own product. And into, you know, I would say being a factory or being in manufacturing. And we pretty much all devoted all of our attention at that point to building the business that we thought would be sustainable for a very long time. Unlike the streetwear world, where you're really at the mercy of how the economy is doing, how willing people are to spend money on what's height, and it's not hype anymore. Now, what do you do? So, you know, that thing that's we all came together and looked at that. And so that got us to move from 900 square feet to 9000 square feet. And that's when we started to add automated machinery.

Marshall Atkinson 
And that was before the building you're in now.

Rich Santo 

Yeah, we were in 9000 square feet. In the west loop. You know, when we moved in there, we pretty aggressively started adding machinery, I think we went from zero to four within a year. And I think it was really because we had such a great core little team there. 9000 square feet was a sizable space coming from 900. You know, at that time, that means, Nick and Joe and Carlo, we all sat down and we said like, you know, what is our background, what is the industry that we want to pursue. And we looked immediately to the entertainment side of our background, we were pretty deep in the music industry. We're booking artists, at nightclubs, and at big venues all over the country. And we saw we had some decent roots inside of the music industry. And also, you know, we were just big music fans. And so when we got into that 9000 square feet, that was when we looked to the music industry. And we tell the story quite often when we're with those guys, that gave us our first shot. But basically, Carlo was knocking on the largest, I would say record label in the world knocking on their door constantly. I mean, this, this was you know, I will say like the two-year process of you know, Carlos constantly reaching out, showing images, pitch decks of what it was that we can do. And there was a gentleman by the name of Frankie V. That and Eric flick and juror that, you know, came back to us off on a whim and was like, You know what, you I'm gonna give you guys an opportunity. And that's for a little band called Black Sabbath. When we went crazy. We like we couldn't even believe like a little band. It's like one of the biggest bands on the face of the earth. Our first order with them was somewhere in the tune of like 15,000 hoodies. And when we were in 9000 square feet, we did not have loading docks. When those hoodies showed up on pallets, we had to manually unload those hoodies up two flights of stairs to be produced and back down onto Adam Street. That was basically our entrance into the tour business. And we haven't looked back from that.

Marshall Atkinson 

Wow, my back hurt just thinking of that. Yeah. Well, that's fantastic. And you've told me before, that the music industry continues to be your north star where everything kind of revolves around that. And so what does that mean? And how are you supporting that mission now?

Rich Santo 
Yeah, you know, our bread and butter is a tour, we understand that, that that business works at a wildly fast, you know, I would say overwhelming pace. We're certainly never in the Hey, this is when we can produce it. And it's a three-week turn or whatever. I mean, we turn stuff fast. I'm talking 48 hours, same day, 24 hours fast. And so it is our North Star to be a two-day ground ship anywhere in the US. So that would require us to build or acquire facilities across the country, build the infrastructure for our clients that have been, you know, so amazing and gracious to us. That, no matter where that artist is performing in the country, they can engage with our team in super high touch. That's where we probably apply, you know, most of our resources on the account management side in which those team members are pumping those orders into our platform. And then the platform is running wildly sophisticated algorithms on where the capacity is available. And so, you know, the dream for us to build to service our clients is that if the artist is performing in Nevada, that we can have it there in a two-day ground ship, or if they're at Madison Square Garden, you know, we're right here in Chicago. Now, that's why we started to move down to the southeast coast because a significant amount of our business is shipped to the East Coast. And that's also why we chose somewhere very high in the state of Florida. Although we're all huge Miami fans, and we'd love to go down for you know, fun 48 hours in Miami. It's too deep down into the state. So we chose the toner that's up top. But yeah, that's the big long North Star for us.

Marshall Atkinson 
And you guys are relabeling and hang tagging and pricing and stickering and hollow ramming and all the craziness that goes along with it is just not reprinting shirts.

Rich Santo 
Yeah, I mean, first off, it starts with sourcing, I think it's all fun and games if you can order 100 garments from SNS. But when you have to actually pull all of the forest green long sleeves, say Gildan long sleeve garments across the country, because the orders say 112,000 units, it really sourcing becomes I would say like, where everything starts. And you know, one pretty unique thing that we've done on the front end of our catalog is we pull in every API that is available, whether it comes from a mill or comes from a distributor, and we aggregate that all into one place. So we can do this quickly. So yeah, it starts with where can we get these garments, and even today, you know, with the supply chain challenges that we have, right now in the world, finding that garments at that level of quantity are probably the hardest part. And then it's getting them in bringing them into our facilities. And then we do everything that you can imagine under the sun, you know, big giant retail lines, folding and SKU sticker size strip polybag you know, every specialty item that exists.

Marshall Atkinson 
And maybe you guys do it, but we thought about you know, making your own blanks, it seems like that would be a natural resource.

Rich Santo 

Yeah, you know, I have had the opportunity to be a guild and board of decorators. That's been a fun experience and learning a lot about the company Gildan, and what it takes to make products at the scale that we sell them at. And they build manmade lakes in different countries because they use so much water, just the sheer volume that we're producing. to even think about getting into that side of the supply chain is daunting. You know, we've been you know very lucky to partner with credible companies like you'll Dan and you know, I'm we do some serious volume on Gildan products.

Marshall Atkinson 

Like what you hear so far? Be sure to subscribe so you can get the latest from Success Stories. And now here's Zach shortly with our SNS spotlight.

Commercial 
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Marshall Atkinson 
So one of the most remarkable things I think about your business is that you built your own internal software to help manage this giant avalanche of orders. So talk about what that is what it's like, because I think everybody out there, you know, they're using the tools that exist in the industry, and you just built your own. Right. So that's a completely different mindset and dedication. So talk about that for a bit.

Rich Santo 
Yeah, I think one thing that I can, you know, just kind of paraphrase before I jump in is that I vastly underestimated what it costs to build a piece of technology. And when I say underestimated by 1,000x I never in my wildest dreams when we entered into this process and in 2013 We built our local and it was just built simply on FileMaker. And that wasn't so possibly we found an engineer, actually, that was in Florida who was really incredible. And we built an MVP really quite cost-effective. But we only had to use it inside of our 9000-square foot place, and we had it on a server. And it was really very simple. But when we entered the market at that time, there really wasn't anything in the space. I mean, there certainly is today, you know, there's some incredible software for the industry today that certainly would have thought about using if we had the opportunity back then. But in true culture, studio fashion, we chose the hardest possible route. And so, you know, we, we jumped right in. And after we built that MVP, we then decided that we were actually going to put this thing up in the cloud, and we were going to put it on AWS servers, and we were going to build the ability for our team members in the future to access it in the browser and from anywhere. And although it is definitely been the most costly venture that we've possibly had, we've spent more money on that piece of tech than we have on assets, as you know, meaning machinery in a hole, maybe fourfold, it is really an a very pricey, although I'll get into the good side, too, you know, like I just so dramatically underestimated how hard it would be, and how costly it would be to build it correctly. And it was hard, it was really tough. We went back and forth with a couple of different dev shops. And that whole process was really tough to deal with especially, I don't necessarily have like an engineering background, certainly extremely tech savvy, and have grown up using computers my whole life. And I would say I'm like the people side possible without being an actual engineer. But that whole process was probably more challenging than making a t-shirt or, you know, hiring people or building these facilities. But now that the groundwork, you know, the architecture has been built. And we now have some absolutely incredible engineers on our team in-house that work to offices down from me right here in the field, we have now the ability to build things exactly, specifically only for culture studios business, using our terminology, our algorithms, you know, tying in multiple locations across the country. And this has allowed us to really scale, the size that we not only have gotten to today but where we plan to go. And I don't really don't think that it would be possible if we didn't have that piece of technology. Now, I think it's easy to say like, you know, I have 10 orders in production, I can use a magnet board, or I have 50 orders in production. And I can use an AI calendar or Google Calendar. But when you step up into 500, orders, 700 orders in production with an average order size of 1400 units, you have to have something built specifically for the way that you're going to run the business, your specific machinery, and you know, you enter into like an enterprise side of the business when you don't necessarily have Enterprise revenue. You know, it's not hundreds of millions of dollars organization, but you're weighing in such high volume that you need enterprise planning. And so that was always the big challenge. But now that we're here, it's been incredible.

Marshall Atkinson 
And to be clear, it's not built on FileMaker. You've moved on from that?

Rich Santo  
Yeah, yeah, no, it's sitting on AWS. And we've written that code base from scratch. And Oscar and Jordan, and their team are just doing some absolutely incredible things on capacity planning.

Marshall Atkinson  
And you've toyed with the idea of bringing this to market and you've been in trade shows. And for those that have seen it, it's called stock up. That's what you call it. Right? What's the plan for that? I know you were kind of toying around with that for a little bit.

Rich Santo 
Yeah, I mean, you know, we've always thought that we were going to build something incredible. And we're going to fit it certainly for our business because we were going to be the power user on the platform. We haven't necessarily put you know, many resources in, you know, trying to sell it or building, you know, the network, we pretty deeply focused on culture studio using it and really stayed there. So I don't necessarily know, you know, where it goes in the future. But, you know, our main focus has been building this platform on an enterprise level, not necessarily wanting to compete with anything that's in the space. And you know, certainly, the way that we're doing business is I would say, you know, very different often than what a typical shop would be doing is the platform of fit. That would be the biggest question. Is there a shop that is running that level of capacity in a very unique way?

Marshall Atkinson 
I've seen your software up close and one of the things I really appreciate was the A carcinoma production operations guy is just the automatic scheduling feature where you're moving, and thinking about or capacity loading a piece of equipment, and you've got the data, you've got all the information to make really good decisions really far in advance. So you're hitting all your numbers all the time. That's what I really appreciated about it. And so color me impressed rich.

Rich Santo 
No, I talked about like, just sheer cost, you know, because I did kind of straight straddle in the finance department as well, with my awesome team. Marcelo leads our finance team, but I can't tell you how many times he's been like, this is crazy, you know, like, how can we be spending this amount of money on this, and I can point directly to that, Joey, on his laptop, on a flight to the Daytona facility, could tell you almost the exact hour unless something unforeseen, if somebody calls in sick, you know, he's got to adjust for that. But he can say, you know, we could take this 1000 unit 2000 impressions is a front and a back, we can take it on Friday on press 11. And it'll be produced, at least before three o'clock, I really don't see that anybody has that ability. And so that one little advantage, although may not seem so significant, like the ability to say yes, that he has because of the platform is really a game changer.

Marshall Atkinson 
Well, that's the power of it, right? Because I talked to a gazillion shops, and for some folks out there, they're late on jobs that they've had in their shop for three weeks. And just because they're so overwhelmed with things, and they have no clue when they're gonna get to figure out, right, I think you're leading the industry with stuff like this. And that's why it's so remarkable. So, good job. Thank you. Thank you. Alright, so let's wrap up here. So let's talk about the future. Right. So you've just opened your Daytona facility. So give us the roadmap on what you guys are thinking about for the next few years, and what you guys are going to be working on.

Rich Santo 
First, off Daytona, the city has been incredible to us. I mean, absolutely no red tape, I mean, permits and business licenses. And I mean, we are two blocks away from the Daytona Speedway that holds 100,000 people, I mean, it's so alive. In that area, I know, Daytona, you know, kind of was a sleeper was like the home of MTV spring break in the 90s. But Daytona has really come a long way. So, you know, we're very focused on building that facility, you know, we occupy about 5% of that entire giant warehouse right now. I mean, it's kind of funny, even to see the presses that are in there, they're like tiny little ants, compared to you know, how big the facility will be and can be grown into. And then our next move is to start to build more facilities across the country, specifically on the West Coast, and in the middle of the country. And we do that in two ways, you know, build them from the ground up, as we do in Daytona, or we acquire them. And so we're definitely interested in talking with shops that have those aspirations, and, you know, finding great ones. And, you know, we apply our science to it, and our process and our tech. And then we go into a partnership, that really is like the big plan. And you know, get to this two-day ground ship anywhere in the US and build all that infrastructure to repay back those clients that have been so loyal to us for so many years, many of our clients have been with us since we moved into the 5000 square feet, the biggest ones, they've always been so loyal. And so that gives us the confidence to build this for them. Because we know that's what's needed.

Marshall Atkinson 
Right? And you guys do massive quantities for orders. Are you doing anything in the print-on-demand space at all?

Rich Santo 
We pilot it. You know, I think one thing that we have the advantage of is having the engineers in-house, you know, we certainly have the ability to build anything and everything. It's really just about focus. So you know, we haven't shifted our focus to the print-on-demand side. And mostly because our average order size is just so high. We have been playing and piloting and we've been messing around with having some fun with it. And where the industry goes up. I don't necessarily know from our side of the business. I know print on-demand is massive. And a lot of people are doing some incredible things there. But I don't believe we're going to put our focus there just yet. We're going to stick to the volume side.

Marshall Atkinson 
Well, great. Well, that's cool. So Rich, thank you so much for sharing your story of success with us today. If someone wants to learn more about what you do, or how you can help them what's the best way to contact you?

Rich Santo 
I'm on everything, you know every platform possible, but you know my email is just simply rich@culturestudio.net. But otherwise, I'm on LinkedIn. We're on Instagram, we're on every one of the other platforms. I've always enjoyed, you know, working with other shops. And I think sometimes I'm almost like, so brutally honest and giving it all away that people are like, what? Why would he be telling me everything? And, you know, there's been so many incredible people like yourself, Marshall, you know, that have helped us along the way. And I've always thought that you know, there really are not many secrets in this business. It's, and I prefer to just work with good people. And if I can help someone along the way, I'm always glad to do it because of the help that I've gotten.

Marshall Atkinson 
Yeah, there really are no secrets. But it really comes down to people who do the work and people who don't. That's what I found. Right? Yeah. And you guys are definitely doing the work.

Rich Santo 
Yeah, to say the least, you know, it's 100 degrees in Chicago right now. And I don't know, you know, I don't even know what it is in Daytona. But you know, certainly, just have to give credit to the team here. You know, there's been so many people that are going on their 10-year anniversary here in a culture studio, and they just do some absolutely incredible work. And they do it. Three shifts, seven days a week, Saturdays and Sundays. And you know, just doing the work that these guys have done has been incredible for me to watch.

Marshall Atkinson 
Well, that's great. All right. Well, thank you so much. Rich, really appreciate you.

Rich Santo 
Yeah, thank you so much for having me.