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Tuesday, December 02, 2008,2:52 PM
The It Factor - Interview with Marc Ecko
Marc Ecko sits down with NY Report Editor-in-Chief Rob Levin

December 1, 2008

By: Robert S. Levin

In 1984, Marc Milecofsky was a 12-year old boy airbrushing his sweatshirts and hats in the garage of his parents’ Lakewood, N.J., home. Fast forward 23 years, and that same kid, now called Marc Ecko, sits in a studio atop his global headquarters on 23rd Street in Manhattan, with artists on his payroll to do his painting for him. Marc Ecko Enterprises is a billion-dollar corporation that has survived highs and lows so drastic they would give a NASA pilot vertigo. Founded in 1993, the company produced the hip-hop-inspired designs that Gen Xers across the country had been clamoring for. Today the company consists of several apparel lines (including ecko unlimited, eckored, ecko kids, Cut & Sew, Zoo York and Avirex) and two media divisions (Complex magazine and Marc Ecko Entertainment, which develops video games). In addition to his wholesale business, Ecko has 70 retail locations and is aiming for a total of 150 by the end of 2010. The father of three (6, 4 and 2 years old) has also launched philanthropic initiatives to help underserved children in the U.S. and in the Ukraine.

While his parents’ garage in Lakewood is only 50 miles from his Chelsea headquarters, Ecko is in a whole different world. From close calls with bankruptcy and professional missteps to becoming a modern marketing innovator, Ecko is far from where he started. The success of his company, which now employs 2,000 people worldwide, does not rest solely on clever T-shirt designs. Ecko’s innate marketing savvy and relentless efforts to better understand his marketplace are the true drivers of his success.

Ecko, a Rutgers University School of Pharmacy dropout, takes pride in aligning himself with American pop culture. For example, in 2007, he bought the infamous Barry Bonds baseball — the one he hit out of the park to shatter Hank Aaron’s longstanding home-run record — for $750,000. Never one to shy from controversy, Ecko then held an online poll and allowed the public’s votes to decide the fate of the ball. More than 10 million people logged on to Ecko’s site, and the majority voted to put the ball in Cooperstown’s Baseball Hall of Fame with an asterisk symbolizing the widely held belief that Bonds achieved his record with the help of performance-enhancing drugs. Editor-in-chief Robert Levin spoke with Ecko, a direct and “illustrative” communicator, about rescuing his company from near ruin, marketing triumphs and Yoda.

RL: You started ecko unlimited at age 20. How did you get started in the fashion industry?

ME: I had a wide-eyed love for art and illustration, particularly graffiti, growing up. But I couldn’t go to write graffiti on trains since there really weren’t any trains running through Lakewood. The kissing cousin to the aerosol spray paint can was airbrush. So I tried to shine up my illustration chops.

When I got to high school, painting T-shirts was like a self-validation play among my peers because my peers would acknowledge me as “talented.” It all felt good, and it was something I did better than most, and I stood out. I excelled at art versus at academics or athletics.

After graduation, I went to Rutgers College of Pharmacy in 1990, and it really highlighted what I was good at, what I wasn’t good at, and what I was passionate about. In school, I was very average. After class, I would go paint T-shirts and sweatshirts and sell them. I had cash in my pocket all the time and I really fell in love with it. So, in the summer of 1992, I asked my dean [if I could] take a year off, and in 1993 I started my business. I went from painting one T-shirt at a time to screen printing them.

It was a typical do-it-yourself, sell-out-of-the-trunk-of-your-car kind of story. Nothing was really that unique, except for the fact that the line between my adolescent ambitions and my professional ambitions blurred together so completely that it kept a piece of my brain permanently between the ages of 16 and 22. Those years really shaped my point of view, and it’s pretty much been the core demographic that I’ve emphasized and grown my business on.

RL: How did you go from selling out of the trunk of a car to selling it to the stores?

ME: There were a lot of brands that existed when I was coming up that are no longer around or are still quite small. I remember there was this pressure — [the other young streetwear designers and I] all felt like we were presenting something that was unique. There was a lifestyle, sub- or counterculture fashion that emerged 20 years prior, and we were the second wave of that — the streetwear wave. I was fortunate to be there at a time in the market where we were all new and young, and we felt like we were part of a movement. But the difference between me and a lot of my peers was that I didn’t limit my ambitions to the group’s ambitions. I wasn’t a groupthink guy. I wanted to go for it all.

I remember my friends in the business were selling to Patricia Fields [a designer who had a store on Broadway in the Village] or Extra Large [the Beastie Boys’ store in the Lower East Side and L.A.]. I’d walk into these stores; they’d be as big as my desk, and all the T-shirts sold for $36 each. It didn’t make any sense to me. I wanted to have my T-shirts where people bought their sneakers. I remember going to Dr. J’s on Market Street in Newark, N.J., to pick up sneakers. I wanted to buy T-shirts at the same place I bought sneakers. But my peers at the time said, “Oh, my God, how can you sell there?” I’d say, “Because I want [my T-shirts] where real people are shopping and where people are going to see them. I don’t want it to be an inside joke.”

Maybe it was delusions of grandeur or maybe a little bit of a Napoleon complex, but I wanted to be the Ralph Lauren for my generation. I wouldn’t be about silk ties and peak lapels, but I aspired to what that meant in terms of the breadth and scope from a brand perspective. So I put my head down and I focused on that.

RL: So you were a designer and a marketer while your competitors were just designers.

ME: I didn’t know what the word “marketing” meant until I hired my third marketing executive. It was less about having marketing chops and more about having the common sense that the consumer was going to validate me. I was bold enough to not let anyone try to define my consumers so narrowly.

RL: You market to the 13 to 30 demographic and for a long time you were part of that demographic. As you get older, do you worry if you can still serve the 13- to 30-year-olds?

ME: My demographic is growing, but I don’t worry about getting older. Look at Bill Parcells, Tom Landry, Vince Lombardi or any great coach in history; especially coaches that were once players. How does a guy like Parcells manage to get guys a third of his age to break themselves for him? I’m going to get older. I can’t forever be in the sweet spot of my demographic, but I could compel my staff to heed some of my life experiences so that they could be more effective design leaders, marketing leaders and executives. Age and the fact that I’ve gotten to travel the world makes me more astute with the business and less emotional.

Growing Up on the Job

RL: How do you spend most of your time now? Are you providing leadership, or are you still getting involved in a lot of the details?

ME: You can’t micromanage your way to success and you can’t get overly caught up in all of the details. I micromanaged this company for the first six or seven years. I’d wonder why I couldn’t keep my really good designers. It was because I was micromanaging them and they would go work somewhere else. I didn’t have the tolerance to allow them to get some blood in their mouths. It’s no different than how I am with my two-year-old now. She bangs her lip on the stairs and I tell her, “Shake it off, put some ice on it. You’re OK.” But she’s my third child. With my first one, I was like, “Oh, my God, call the hospital. She’s bleeding!”

So, am in the weeds on everything? No. I’m more engaged with certain projects. For instance, right now we’re doing a lot of research for potential new licensing opportunities, and I will get very, very heavily engaged in the global, big idea there. Once the big idea is set, you have to let the ship ride its course. I am not going to be so arrogant to think that the first thing that comes out of my head is the absolute ideal thing for the market. No one person can do that, not even Steve Jobs.

RL: As a business owner, what do you think was the biggest mistake you made?

ME: Oh, goodness! I’m constantly making mistakes. I don’t know that there’s any one big one.

RL: In ’98, you had a big cash problem. Your business was nearly $7 million in debt. Was that one of your biggest mistakes?

ME: I almost went bankrupt, but that wasn’t my biggest mistake. They were dumb mistakes: not being aware of supply side, not knowing how to ship and receive, spending more than I had, not knowing how to keep a budget, and not knowing how to be unemotional about design.

When I think of those years of being $6.5, $7 million in debt, I don’t reflect on those as mistakes. I find them to be the most relevant parts of my learning experience, because I was forced to learn how to do more with less. When you don’t have [resources], it forces you to innovate. You have to compete with an idea rather than with the dollar, and that’s a discipline we always try to condition ourselves on. It’s still in the culture of this organization; even though now we are — from a gross sales point of view — quite large, we still find that the best ideas come out of this organization when people are really forced and reminded to innovate with less.

The biggest mistakes are those moments when you get a little drunk [on success] or when you think you can walk on water, and you fall into that [pattern] of repeating the same mistakes. That’s the biggest mistake that I’ve ever made — allowing myself to repeat my mistakes.

Creating Culture

RL: You mentioned earlier that you have to really focus on who your customers are. How do you instill that into your corporate culture?

ME: There are mechanisms in place that attempt to do that. We’ve got daily sales reports that go to all the key managers and give people daily updates on what’s selling and what’s not selling. This provokes conversation between designers and sales people. Then that discussion becomes part of the social context [at the company]. That’s a best practice of the industry — that’s not something we invented.

We’ve also created a culture within the marketing team that encourages them to always look for that next big crazy idea, of which probably 5% actually gets executed. But when that 5% actually happens, people get a tremendous sense of ownership, a tremendous sense of building something from nothing that wasn’t necessarily on a business plan. So there’s a 95% tolerance to do all this wild stuff that’s far out of the range or the scope of our plan or capacity or budget, but we allow it, we encourage it, we cultivate it.

RL: How do you cultivate that type of environment?

ME: Wild ambition is quite stimulating. My business partners and I are serial entrepreneurs and we’re not going to limit ourselves. When I brewed up the idea for Complex, I was way deep in debt. That idea could never have manifested its way to the top if this organization was publicly held or owned by a larger company. It probably would have been suffocated and stifled early.

RL: Given the culture of the company, are there specific qualities you look for in employees?

ME: We don’t have the most refined human resource process. Maybe the parent in me, the nurturer in me, wishes that we could be better at vetting, better at nurturing, but we don’t have that kind of a culture. We push people out of their comfort zones. People that don’t have the chops to deal with a little bit of anxiety aren’t going to be able to swim here. They’re going to sink.

We just try to let employees know coming in that it’s going to be disruptive, that things are fluid. The sands are going to shift, not because someone’s trying to undermine you or for some emotional reason, but because that’s the way the industry is. So people who aren’t adaptive don’t necessarily do well here. The multi-disciplinarians are the ones that are the most useful, for sure.

The Virtues of Retail

RL: What went into the decision to get into retail?

ME: Best practices of other brands tell me I have to do it. [Retail] was out of my comfort zone; therefore, I needed to make it my comfort zone. With retail, you control your own destiny — everything from controlling the marketing message at the point of sale to getting faster and more accurate feedback on the product. Having your own retail stores gives you an amazing aptitude to correct your product range. You could test something in real time in the market. Also, we can present our own brand in a more meaningful way than anyone else can present it for us. I only wish I did it sooner.

RL: Did your company have a lot of experience running retail?

ME: Zero.

RL: So how did you tackle that?

ME: You screw up. You have to have the tolerance for screwing up. There needs to be a line item in your budget that says, “Screwing up.” You might call it something prettier for the bank, like miscellaneous. But you’ve got to pad [the budget] and you have to have that tolerance.

I started the [retail] business in outlets to cut my teeth. If you look at Ralph Lauren’s numbers, his predominant retail business comes from his outlet business. [Outlets] are less cost per square foot and so I could take my time to figure out: Do I have the staff for this? Do we need to hire regional managers? What about computer systems, restocking from my warehouse as I react to the department store versus my own stores? Slowly, we kept tweaking, tweaking, tweaking, and finally we were ready for our first [full-price] store. Outlet and [full-price] are two different things, but you learn the basics, like working your way up to a black belt.

RL: How did your wholesale clients feel when they heard that you were going into retail?

ME: They’re fine with it. In fact, many of them were eager — especially the bigger box retailers — because it helps strengthen our brand equity. It helps put the flag in the ground that you’re not going anywhere.

Next Generation Marketer

RL: In addition to the fashion brands, you have Complex magazine and Marc Ecko Entertainment. Do you see those as tied into the brand?

ME: I see them as related. I don’t operate like an ambassador brand, like Nike. Nike owns all things sports — from Tiger to Jordan to Bo Jackson. That’s an ambassador brand. They came up during the ’70s and ’80s, when you could run a TV spot and actually make a dent. In those days, you could have a “revolution moment” like a Super Bowl ad. Those are best practices of another era, another time.

In this day, when media is so atomized and disparate, how do you communicate [to your market]? How do I make a dent? Some of the laws of authorship and branding have changed. It’s less about the heavy-handed branding and more about the authorship. I want to convince consumers that I can author other things and I get credit for being more than just a one-dimensional fashion designer.

RL: With Complex, for example, how do consumers identify it with Marc Ecko if doesn’t have “heavy-handed” branding?

ME: The core readers of the magazine know that it’s us. Besides, how can I be heavy-handed about my brand and expect Diesel to advertise inside there? The first six pages of ads in the magazine are competitors. So I needed to back away in order to make the advertisers comfortable. How do I transcend being just a designer? By doing something more than what a designer would do. That’s what Complex is about. It’s the same with Marc Ecko Entertainment. I’ve got the license for Dexter, the Showtime TV series, and we’re creating a [video] game that comes out in ’09. We’ll create an iPhone game also. But it’s not like players will be Dexter killing a guy wearing an Ecko T-shirt. We’ll have a small mention on the back of the box, but not in the game. Enough consumers will know it’s Ecko. It’s like a “Six Degrees of Marc Ecko” thing that I’m trying to create; I think it could be meaningful to the brand.

I could have just taken those resources and bought big outdoor billboards, but would it effectively create the same kind of emotional transaction as being a guy who could author a moment of pop culture? Who could author some new consumer product that’s kind of cool and sometimes very logically associated to the brand? It’ll make you scratch your head and think, “Wow! I didn’t expect that from him.”

RL: I imagine that people want to partner with you all the time. How do you decide which ones you’re going to go forward with?

ME: The most important thing [for] any designer, creator, business leader or anyone who is holding the pen to make the transaction to fund something is to decide what you don’t do. That’s the hardest thing.

RL: Marc Ecko Enterprises is a privately held company. Any plans to take it public or to exit?

ME: I don’t know. I can’t really see further than three or five years out. I don’t see any kind of exit in the short term.

RL: Why not?

ME: Because I think I’ve got a lot more to achieve. I think I’d be underselling myself. Maybe it’s a little ego or maybe it’s real. Also, I’m a little afraid to work for someone else and I’m a little afraid of not doing anything at all. Actually, I’m a lot afraid of that. Hey, I’m young.


RL: Can you tell us about your philanthropy initiatives?

ME: I’ve got one organization called SEE, Sweat Equity Enterprises. It is a design education curriculum program for underserved kids. We take in a new batch of ninth graders every year. It’s amazing to see that three or four weeks of Photoshop or Illustrator [design software] classes changes the kids’ perceptions of what they could do with their doodling.

The other organization we have is Tikva Children’s Home in Odessa, Ukraine. My partner, Seth [Gerszberg], found the orphanage on a trip to Russia about seven or eight years ago. This orphanage was being run so badly, and these kids were just all over the streets. We could see what it could become. Tikva means “hope” in Hebrew. I think it was probably the first hostile takeover of an orphanage in history. Now we’ve got almost 400 kids in the program. Being in the philanthropy business is messy, man. In business, there’s no room for emotions. In philanthropy, you got to tolerate emotions, so it’s heavy stuff.

Pop Culture Enthusiasm

RL: Why did you buy Barry Bonds’s recordbreaking baseball?

ME: I bought the baseball because it was a great pop culture moment. People have really strong opinions about that ball. During Barry’s race up to breaking Hank Aaron’s record, you just felt a feverish tone. It is a rich debate that is loaded with so much meaning. And just like America, baseball has a lot of ugly bits and pretty bits and bits that you begrudge and bits that you hold up on a pedestal. It’s not perfect. And I thought that that was something really kind of cool to engage in. It would be in the spirit of watching American Idol.

It’s not the first pop culture [object that I’ve purchased], although it was probably the larger scale in terms of the transaction. I own Yoda. A lot of people don’t know that, but I got the original Yoda sculpture and model that they built all the casts off of.

RL: What does that have to do with Marc Ecko?

ME: It shows people the way I think. Maybe it’s a little bit of the P.T. Barnum in me. Maybe it’s the populist in me. Maybe it’s the narcissist. Maybe it’s all those things.

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