Historians will one day point to the horrendous and failed lockdown policies of the COVID era as one of our society’s worst-ever economic own goals. There will never be a full accounting of how many businesses failed, and we have no idea today how many continue to struggle even after most of our economy has re-opened.
Yet some companies not only survived, but grew smartly during those dark days. How?
Here are the stories of two startups whose stories appeared in this space in their early days, Allegiance Flag Supply and Alexo Athletica, each of which was able to drive rapid growth while the pandemic raged.
Allegiance Flag Supply
This Charleston, South Carolina company makes American flags here in the U.S., and sources American-made flag accessories as well. Founded in 2018, Allegiance experienced growth exceeding 4,500% in 2020 and 200% the following year, and they expect to grow by another 200% this year. They’ve also grown the company’s headcount from just the three founders, Katie and Wes Lyon and their childhood friend Max Berry, to 30 employees today.
When it came to beating the negative business effects of the pandemic, for Allegiance it was a combination of good timing, good learning, good positioning, and good luck. “I think the stars were aligned for us,” said Katie Lyon. “We’d beefed up our marketing, gotten our price point where it needed to be, and gotten our digital marketing going right at the beginning of 2020.”
“There are other made-in-America flags, but they’re not made with the same care and quality,” added Wes Lyon. “Then there’s all the imports. Our focus on American-made with quality materials played a big part.”
Treating their employees well is another big factor in their success. “It takes hiring really good people,” said Berry. “For example, seamstresses are hard to find. It’s a dying art. People who do know the job are true artisans. We make sure they understand how much we value them, whether that’s having lunches, taking them to a baseball game, or Katie bringing in an ice cream truck. We let them know we care.”
“It comes down to us creating a work environment where people want to be,” added Katie Lyon. “We really do want them to know they have ownership in what they do.”
The resurgence of interest in American-made items helped too. “Our flags are not cheap,” said Berry. “The reason people pay extra dollars for them is that they’re the best quality, plus our customers know they’re helping bring back textile jobs that were lost overseas.”
Alexo Athletica
Founded in the Dallas, Texas, area in 2017, Alexo produces sportswear designed specifically for securely carrying self-defense tools, whether a firearm, pepper spray, or just a cell phone. Co-founder and CEO Amy Robbins, a former fashion model and TV host, originally launched her line just for women, driven by her own frightening experience with harassment by male motorists while she was out on a marathon training run.
Alexo’s success came from navigating through some of the extreme supply chain challenges faced by most producers, while taking advantage of tremendous new market opportunities by expanding the product line. “There were eight million new gun owners during the pandemic,” Robbins said. “They got a gun and then asked themselves, ‘Where do I go from here?’ They all needed help with training and clothing, and there weren’t a lot of options. That allowed us to accelerate our product line expansions.” Alexo grew revenue by 75% and secured new drop ship and retail partnerships in 2021. This year has seen them double their inventory orders while collaborating with one of the top five firearm manufacturers in the country, landing a critical new partnership with Springfield Armory for a special line of readywear that was announced this past April.
But there were tremendous difficulties too. “We shut down our production for about six months because of the supply chain backups,” explained Robbins. “We considered air shipping versus ocean, but that would have caused too big a hit to our bottom line. Instead, it gave us a really big opportunity to engage with our audience in different ways. If we had no product, we could focus on our newsletter and other information channels, to provide education on using these tools safely and effectively.”
The pause allowed the company to focus on other potential customers besides women. “People weren’t expecting Alexo to come out with a guys’ line,” Robbins said. “But the market has shown us that it was just right. We’re just extremely thankful it finally got here. Guys are tough to design for. We were excited to finally get it out there. We got a big write-up in the U.S. Concealed Carry Association magazine, and we instantly sold out!”
Alexo made some tough pricing decisions too. “One hurdle was incremental costs,” said Robbins. “We were short raw materials, and labor costs were going up because demand was a lot higher. We didn’t want to pass those costs on to our customers or reduce our quality. We decided as a company we were going to absorb those costs.”
Now Robbins is looking at how to continue Alexo’s growth. “One opportunity is to put out new products no one else is doing,” she said. “Nobody else has the breadth of product line that we have, with our full range of integrated apparel. We’ll continue to innovate, and to expand that lifestyle.”
Another opportunity is the one Allegiance is already taking advantage of: the made-in-America movement. “We’re looking at U.S. manufacturing,” said Robbins. “We’re going to be talking to Texas officials about it. We have to find a way to make more fabrics here.”
Conclusion
It’s a sad fact that you can’t make your business immune to social or political crises, especially after the COVID debacle saw such extreme abuses of authority by governments at all levels. But critical to both of these companies’ successes through the pandemic’s challenges was having a solid business model going into the tough times. Positioning for resilience, whether in sales channels or funding, also played a part. Boldness in pursuing growth opportunities despite the business challenges brought on by the unprecedented times was vital too.
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