Next Billion-Dollar Startups: How Two Young Entrepreneurs Used Relentless Online Marketing To Build Away Into A $700M Luggage Brand

Jen Rubio was rushing through the ­Zurich airport when her suitcase broke. She stuffed her clothes back inside and duct-taped the mess. Then she asked her 2,600 Facebook friends for advice on what suitcase to buy. No one had a good answer.

Rubio was an early employee of Warby Parker, the company that upended eyeglass retailing by cutting out the middleman. “I started thinking, How do we do what Warby Parker did for glasses?” she says. “How do we take something really simple, and make people care about it?” If a direct-to-consumer business can displace opticians, surely it can displace luggage stores.

And so was born Away (formally known as JRSK Inc., for Rubio and Korey), a firm that has carry-ons manufactured in China and sells them via the internet and in six company-owned stores. Rubio’s airport mishap was less than four years ago; this year the privately held firm is on target to do $150 million in revenue.

Rubio, Away’s president and chief brand officer, and Steph Korey, its chief executive officer, met at Warby in 2011 when that company was just getting started. Both alumni of the Forbes 30 Under 30 and both now 31, they launched Away in 2015. The company’s roughly $700 million venture-capital valuation—Accel, Comcast Ventures and Forerunner Ventures are investors—makes the two founders’ stakes worth more than $80 million each. Away, based in New York City, earned a spot on our Next Billion-Dollar Startups list this year.

The November 30, 2018 issue of Forbes featuring Away's Steph Korey. Its first product, a four-roller hard-shell bag that can be squeezed into an overhead rack, comes in ten colors and costs $225, including standard shipping in the U.S.; a similar item from Tumi goes for $525.

Away turned profitable in 2017, a year after it launched its first product. How did Rubio and Korey pull that off while offering low prices?

For one thing, they are not splitting the revenue with high-overhead department stores. Away does the vast majority of its volume online, while stores in high-traffic locations serve as marketing billboards to drum up online sales. The stores, open until 7 p.m. or later on weeknights, host low-budget events like palmistry and tarot readings. Away puts its marketing effort into things that deliver a lot of mileage for the money spent. Its digital presence includes a custom travel magazine. There are 1,000 influencers who push it on Instagram.

Away’s success comes at a time when the luggage market, which the analysts at NPD Group estimate at nearly $3 billion in the U.S. and which may be as large as $35 billion globally when defined more broadly, has been in flux as companies scramble to sell direct to consumers amid consolidation. LVMH acquired the German luxury brand Rimowa in 2016 and has been giving it a makeover under the leadership of 26-year-old Alexandre Arnault, the son of LVMH’s billionaire chairman. Industry leader Samsonite paid $1.8 billion for high-end Tumi, now one of its fastest-growing brands, with sales last year of $678 million.

Selling wanderlust: Away's half-dozen stores, including its flagship in New York's NoHo neighborhood, feature travel books and tarot readings.


Selling wanderlust: Away's half-dozen stores, including its flagship in New York's NoHo neighborhood, feature travel books and tarot readings.

Other so-called smart luggage startups have come and gone—while Away, focused more on brand than on technology, gained a foothold. “Away is definitely making an impression on the market,” says Beth Goldstein, an analyst at NPD. “They are taking share away from established players.”

Rubio—born in Quezon City, Philippines, raised in Branchburg, New Jersey, and living in London until Away’s launch—once thought she would become a lawyer. But at Penn State she studied supply-chain management. A talkative extrovert who dyes her short hair blonde, she spent her college’s co-op program at Johnson & Johnson, extending the program multiple times rather than return to campus.



At 20, Rubio was working for J&J’s ­Neutrogena division in Los Angeles. Realizing she wouldn’t get into the marketing department without an M.B.A., she quit and started going to meet-ups, ­presenting herself as a social-media consultant. “It was fake it till you make it,” says Rubio, an early adopter of Twitter and Facebook. She made it, talking her way into a digital agency in New York, where she worked with Ford, Disney and Estée Lauder.

Korey grew up in the suburbs of Cleveland, the daughter of immigrants from Romania and Lebanon. She studied international relations at Brown and assumed she would work in nonprofits. But after a short stint writing research reports about Middle East conflict resolution at the Carter Center in Atlanta, she went to work for Kate Spade in New York as an assistant buyer.

Korey and Rubio joined Warby Parker on the same day, when Warby had but a few dozen employees. When Korey met cofounder Dave Gilboa, she asked how the company was analyzing its sales data to make product purchase decisions. “He said, ‘I’m pretty sure we’re not doing that, so why don’t you come work here for a month?’ ” says Korey, who became head of supply chain. Rubio was hired as Warby’s first social-media manager. The two became friends. By the time they left two years later, Warby Parker had raised more than $110 million at a valuation of $500 million.

Rubio moved to London to work for the fashion retailer AllSaints; Korey left to get an M.B.A. at Columbia. When Rubio’s suitcase broke, she called Korey. Luggage had become staid—wasn’t there an opportunity to create a brand consumers would love? Korey, who consulted for bed-in-a-box startup Casper, realized that luggage was a lot like mattresses: Markups were high and shopping was frustrating. “You the consumer are being failed at every angle,” Korey says. “There is no reason at all that nobody is doing this better.”



Rubio crashed on the couch of Korey and her boyfriend (now husband) in New York, while they raised $150,000 from friends and family. “At that stage we did a thing that a lot of female founders do: We only asked people who we thought would say yes,” Rubio says. The money was enough to hire an industrial designer and take a digital blueprint to China. “I went from my last class of business school to JFK to Asia,” says Korey, who completed her exams at night in a hotel room.

They found a factory in southeastern China willing to make a few thousand suitcases for two young women with a lot of ambition but not much experience. Korey and Rubio visited the plant eight times in 2015.

The first carry-ons were delivered to customers in early 2016. Luggage may look boring, but small touches matter. Away’s polycarbonate shell suitcase has four Hinomoto 360-degree spinner wheels and YKK zippers that can stand up to abuse. It includes a 10,000-milliamp-hour lithium-ion battery for charging phones, removable in order to comply with a safety rule forbidding such objects in checked bags and some airlines’ subsequent requirements that they be removed in carry-ons. A compression pad helps travelers squeeze in more stuff by strapping over clothes and smashing them down.

Boring? Away started filing patent applications within months of its product launch and has filed more than a dozen worldwide.

Since then, Away has expanded to a variety of travel products and accessories, including an everywhere bag and a backpack. A slightly bigger carry-on—which Away designed after ­discovering that most airlines’ printed maximum measurements are slightly smaller than the size box at the check-in counter—debuted in October 2016 and is now its bestselling item. To turn it around, Korey spent three days at the Chinese factory. Her strategy: “I’m just going to hang out till it’s done, I’m going to drive you all insane till it’s done.”

Away has Nike-style partnerships with celebrities, like model/entrepreneur Karlie Kloss and actress Rashida Jones, for limited-edition products. In September Away introduced a wine case in partnership with Dwyane Wade of the Miami Heat, which sold out within weeks.

Julia Beaty, 28, who manages military recruiting at the furniture retailer Wayfair in Boston, started following Away on Instagram (it has 297,000 followers) even before she bought a suitcase last April. Now she notices Away bags when she travels. “I never would’ve thought of a Tumi, and seen it at the airport, and thought, ‘Oh that’s that type of bag,’ ” she says. Korey and Rubio hope to build on that cultlike following. They opened a pop-up Chez Away hotel in Paris during Fashion Week last year and see potential in everything from skin care to apparel to travel booking. It’s not clear that Away’s customers want any of these things, but Korey and Rubio say they’ll choose what to do—in the manner of any analytics-tracking, direct-to-consumer company—based on customer feedback.

For now, they will be adding to their European presence (currently only in London) and showcasing what they see as the Away lifestyle. Rubio, who has traveled to more than 50 countries, says: “We didn’t get into this because of an obsession with luggage but because of an obsession with travel.” So far, that obsession is paying off.

SOURCE https://www.forbes.com/sites/amyfeldman/2018/11/20/next-billion-dollar-startups-how-two-young-entrepreneurs-used-relentless-online-marketing-to-build-away-into-a-700m-luggage-brand/#7c003c536a29
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