Welcome to our ongoing series, Launch Plan, featuring deep dives into the founding stories, journeys, and decisions behind the organizations, projects, and people changing the world of doing good. We’re continuing the series today with Rami Helali, the co-founder and CEO of Kotn.
Kotn is an apparel brand that ethically creates quality essentials from authentic Egyptian cotton. Based in Toronto, the online store was founded in 2015 and features a “traceability” tab on its website, allowing consumers to explore every step in their ethical supply chain.
It all started with a plain white T-shirt
The idea for Kotn first came up in 2014. My co-founders, Benjamin Sehl and Mackenzie Yeates, and I were all friends living in New York at the time, working in a diverse range of industries. I was in finance, Mackenzie was in the agency world, and Benjamin was in the tech world.
On the consumer side, we felt like there was an opportunity: we realized that when it came to people’s staples or essential clothing, they generally had to pick between designer options or fast fashion. We wondered: was there a way to do this at a more price-competitive point but with the quality of designer clothing?
Honestly, we didn’t go, “Okay, we’re building an ethical company.” I think, like some people and many people in our generation, we just figured this is how you do it. You build a company by including more stakeholders than just the shareholders — which at the time, was just us.
So I quit my job and spent six months in Egypt. My background is Egyptian. I grew up in Toronto, but I vaguely knew that Egyptian cotton was a thing. I had no experience in production, fashion, farming, social impact, anything like that — but I figured I’d just go figure this out. I just wanted to create a simple T-shirt, right?
I’m glad I approached it with that sort of naive confidence that we could do this, because what I found was a system that was in rough shape — with a lot of small, older farms that were not supported. To give you an idea, cotton is a heavily subsidized industry across the world. In the United States, China, India, all the big cotton-producing countries, cotton is heavily subsidized by the government.
At the time, the Egyptian government hadn’t really been standing with farmers. And farms in Egypt are quite different from farms in the United States: they’re a lot more manual and they haven’t been modernized in some time.
We found out that Egyptian cotton industry was 5 percent of what it was 12 years prior, and that these farmers were struggling to make ends meet and support their families. Kids were pulled out of school to be able to help out. So our values came out of that: we wanted to help rebuild a thriving industry, where the people that participate are compensated fairly and treated with respect, and both the environment and the people are benefiting.
It took me six months of literally living on these farms with these farmers four and a half hours out of Cairo. I had to convince farmers that hey, this person who speaks a little Arabic (but very much has North American body mannerisms, I’m sure) is promising you a subsidy and a guaranteed price if you just grow cotton in this way.
It was an uphill battle convincing these farmers. We started with 11 farms, and two of them literally let me live with them for four months. I think really embedding myself in that ecosystem taught me a lot about their struggles and the things they do really well.
I had to learn the subspecies of Egyptian cotton; I had to learn what the farmers had to deal with, what kind of pesticides they used, what kind of fertilizers they used, what kind of subsidies could we help with? How could we modernize their techniques? And then we got to a final cotton product, and that’s when everything started. So that alone was a huge learning problem, and then we had to figure out how to make a T-shirt.
The challenges of launching a physical product with impact baked in
While designing and creating our first collection, we ran into a fair number of challenges. The problem with launching a physical product — instead of, say, a tech product — is that if you make a mistake, you now have 3,000, 5,000, 20,000, 50,000 of those items and you’re stuck saying, “Next time, we’ll make it better, but this time, it looks like this.”
We were lucky that, early on, we had people involved that really believed in the mission. Looking back now, they probably had to deal with some problems with the physical product that they wouldn’t have to do with a very big, developed retailer. We now have an incredibly talented design team, production team, and people that come from the industry and know what they’re doing, but at the beginning, it was just us trying to figure it out.
A T-shirt seems so simple, but I promise you, it’s a complex thing. So, you know, you do a thing, you spend a bunch of money on it, you do it completely wrong, and then you learn from it.
But one thing I think we’ve done really well since the beginning, and something we try to foster within the organization, is that we always reflect on our work and think, “Okay, are we doing this the right way? What can we learn?” We do that with both the positive and the negative. It’s very much our approach to problem-solving to say, “What is the learning here?” and then move on. And that’s been great, because it’s enabled us to grow this quickly.
Raising capital for an impact venture
For us, growing quickly came out of necessity. We started Kotn with about $5,000 to $10,000 from my savings, $5,000 to $10,000 from one of my other co-founder’s savings, and then a couple of thousand dollars of savings from our third co-founder.
It was a tough spot— I ran out of money pretty quickly. For the first year, my two co-founders were doing side gigs to keep the lights on. I had a little bit of savings, and then just massive amounts of credit card debt for that period.
But we actually bootstrapped this for the first year and a half, until we got to the kind of revenue that wasn’t a huge amount but was enough to show that there was traction there and real potential for a high-growth company. We were very fortunate to find the right investors that align with both our timeline and vision, and that were able to look at the business holistically, versus just driving that top line.
So that’s the way we approached it. I think we approached growth and funding the right way for this kind of company, where we were combining a high-growth distribution channel — e-commerce — with a physical product, which can limit growth.
On the things you don’t always see coming
Despite the trickiness of balancing a high-growth distribution channel with a physical product, we saw Kotn grow in a healthy, organic way — and then had a happy surprise when we started getting calls from companies that wanted branded Kotn products.
We were getting approached quite a bit by tech companies that aligned with our values and were finding that the options they were presented in the promotional goods world were low-quality products. We’ve had a really great second business unit come out of this, which is a brand we’re calling Ordinary Supply, where we create high quality, ethical products for companies’ internal swag and branded products.
So we didn’t really see that coming. People often say, “Sometimes you have to build a business to find a business,” but we’ve been really fortunate that our original business has been successful and we’ve been able to develop that community — while at the same time we’ve had this other revenue stream come up, which is really, really exciting.
We’ve always been open to seeing things objectively as much as possible, and we saw this was a real opportunity. But we had to figure out how to tackle the opportunity: what does that team look like? What tough decisions do we have to make in order to capitalize on this opportunity or on this type of company? It’s brought its own set of challenges, for sure, like being able to divide our labour between the two businesses. But we’re getting better at it.
Building an “honestly priced” business model
As we built Kotn — and later on, Ordinary Supply — one of the questions we asked ourselves was, “What kind of margin should we be making to create a real, compelling business, and make it one that can continue to give back and build these programs?”
I don’t know that there’s an exact number — every industry is different. In some industries, you need a 90 percent margin to be able to sustain business; in others, a 10 to 20 percent margin is good enough. Honestly, for us to create a product, there’s a certain level of quality and attention to detail that we want, a certain number of natural materials that we want to use — for instance, we try to avoid polyesters completely, since that’s plastic, and we try to avoid things that are never going to biodegrade — and these decisions result in a price point.
We try to take that price point and say, “Okay, here’s the cost to produce.” But what you also have to understand is there’s also marketing. Yes, we’re an e-commerce company, but Facebook is essentially everyone’s landlord now. So now you have to pay rent to Facebook to get in front of people who align with your values.
Then from there, you have to have brilliant people internally to create this compelling product and a compelling experience with a compelling message. How much is it fair to pay those people you need? You then need to bring all those things together and compare how you’re stacking up to the market. What we hope to do is make luxury quality at a mid-range price. If we can do that, plus everything that goes into it — that, to be honest, is our definition of honestly priced. And it’s one that seems to work for our community overall.
On the spread of impact ventures globally
I think people in general — people who are empowered with information around the world, wherever that may be — understand that the philosophy of consumption that we have held as a society for the last 30 or 40 years is unsustainable. We’re starting to feel the effects of that labour and they’re not pretty.
I think people understand that traditionally, historically, there has sometimes been a cognitive dissonance between how we consume and what we believe, and our goal is to be able to bridge how people consume — at an affordable price point, keeping in mind accessibility and convenience — with ethics.
We don’t want to be a fast fashion company. We don’t want to use all these synthetic materials. We don’t want to, and I think a lot of people also feel that way.
So our messaging is resonating really well in the countries that buy from us — but the question then becomes, well, a lot of environmental problems are coming from developing countries right now. The issue is, in the West and as developed nations, we really put a dent in the world while getting to where we are now, thanks to the Industrial Revolution.
Now, a lot of those countries that haven’t gotten to the equality or economic development that we have are now doing some damage. We’re trying to get ahead of some of that, hopefully, and say, “Okay, there’s actually a better way to do this. We’ve already made the mistake, as a nation on this side of the world, getting to industrial development this way. And we actually think that there’s another way to get here that doesn’t lead you to burn a sh*t-ton of coal and a sh*t-ton of gas.”
Cutting through “green-washing” messaging to communicate value
These messages are clearly resonating in society, and it’s great to see more businesses focus on ethical production and sustainability.
I can’t actually speak about people who are green-washing. I hope that there’s positive intention behind it, but I’m not going to get into whether someone’s trying to be deceitful or not — that’s between them and themselves and the organizations that are supposed to be policing them. My focus is less about what other people are lying about and instead about learning what we can improve on.
Because at the end of the day, if this business can’t do good for the people and the places and the team we’ve worked with, I personally don’t want to do this. So we go into each day thinking, “Okay, here are ways we can improve. Here are things we’re doing well. Here’s how we can do better.”
And I know from the customers I speak to that our values come off as authentic because they are. So, how do you cut through the noise? Be authentic in what you do.
Anecdotally, in my experience, when I encounter businesses where I think, “Ah, that doesn’t feel authentic,” it’s usually because they’re just saying, “Oh, we need to do a thing that people care about.” So they just decide to say, “Hey, we’re donating 10 percent of our money to this organization.” Sure, the 10 percent is important, but it doesn’t seem authentic. We gravitate towards authentic, holistic approaches, rather than band-aid or marketing campaigns.
Choosing B Corp certification
Consumers these days are busy, and one of the ways they help cut through the noise is by seeing trusted certifications like B Corp or Fairtrade.
To be honest, at first, I frankly thought most certification was bullshit. When we were first launching Kotn and I’d be looking for new factories to work with, I’d go visit a factory and they would show me this long presentation about them being certified this and that. And I’d walk in and say, “I don’t frankly care what certification you have. I have eyes and I see what’s happening here as not being okay. I asked you how much you’re paying your employees and you’re not telling me. I don’t care what organization will rubber-stamp that — I’m not okay with what’s happening.“
So that was eye-opening for me, and honestly was my kind of introduction to certifications. Then I remember one of our investors brought up B Corp, and I honestly thought it was just another certification. But I realized a lot of companies I respected were B Corp certified, so I looked into it further and saw the sheer amount of information and documentation and paperwork people had to go through to get certified — and I was like, okay, if this is the process everyone has to go through to get certified, then I feel confident that aligning with B Corp.
Advice for other impact entrepreneurs
In just my personal experience, from what I’ve learned — which is, again, very limited and only through one lens — what I’ve found works is being authentic and aligning your commercial North star with the impact and change you want to see. It’s very compelling and very effective both for inspiring your team internally and your customer.
People are attracted to authenticity, so be authentic and, and make sure it’s not like, “Okay, I have a tech startup. How can I now find a social cause for it?” It all really needs to happen in tandem, with an equal amount of thought and consideration.