When you’re the co-founder and CEO of a company that, at its peak, was sold in more than 10 countries, donated thousands of items across the Americas and became a symbol of mainstream success for Native American fashion, you don’t generally leave the industry you’ve had so much success in.
Liam Massaubi, a Mohawk, who started Kanati Co. with a couple of friends while attending college in 2009, is doing just that.
Kanati’s success came fast. Within 6 months of launch the brand was carried nationwide and within the first 24 months, the brand was distributed internationally and didn’t stop growing until recently. As the company approached its 7th year in business, rumbles of overseas issues began to circulate and the company was struck with supply chain issues. A sale was announced without warning in July leaving many wondering what happened to the Canadian streetwear staple.
Now, the 29-year-old co-founder and former Kanati CEO Liam Massaubi is finally setting the record straight as to what caused the downfall and sale of the company – citing overseas issues and outside capital as major influences. For the first time since leaving the company, the reclusive leader also opens up about the impact the brand had and drops some jewels along the way for us in this rare and in-depth interview.
Did you ever think the Kanati brand was going to be as successful as it was?
LM: No. Not at all. We never really thought it would go anywhere or last this long. We really started with very little. There is usually some initial success with anything because it is new but keeping it going more than a year and continuously growing gets more difficult. Our initial success was mainly due to the overwhelming support we had from the First Nations community. We really didn’t even promote anything. We weren’t taking out ad space. We couldn’t afford it. It grew organically and people kind of did our marketing for us.
We had major retailers calling us with orders we really had no way of filling or really meeting compliance with, but somehow we made it happen. It’s crazy thinking back. We were literally filling retail orders from my mom’s garage. I don’t think you could do that these days.
Even though others had bigger names. We were doing numbers. We have sold and donated more units than some better known brands have ever produced. We created and developed something in a garage and that reached different countries, generations and ethnicities. That is pretty cool.
Kanati truly became seen as a brand for the people and has been compared to a “Native version of FUBU” with all the support it got from the First Nations community. How did it have such an impact?
LM: I wouldn’t really make that comparison at all. FUBU carved its own lane and was one of the most successful brands to ever do it. I’m fan of Daymond (John). There is a huge difference in style and direction though and it isn’t just for Natives.
Kanati was a brand for everyone and was intended to share Native culture with the world. It had so much support because this was a brand that was in demand from major retailers and cultures across the world that all wanted something Native and people liked seeing that. It is crazy to look back at all the support it had and a lot of the early help came from guys like Drezus, Joey (Stylez), Wab (Kinew), Plex, Hellnback, The Jump Off stores and a bunch of others. No Native companies were really doing anything like that or really crossed over into other markets. They still don’t today, mainly because of access to capital or support but the design and talent is there for sure in our community.
We would send boxes and even truckloads of clothing to remote reservations or schools. We tried to help with whatever was asked of us from communities so people respected that. These are places and people basically forgotten by the rest of the world. It doesn’t even cross most people’s minds that there are communities right here in Canada or the US with no access to healthcare or clean drinking water. There are mothers in Canada who have to worry about their child dying before their first birthday or freezing to death in the winter because the only thing blocking the weather is some plastic sheets or plywood.
So if your own government is not providing the necessities to live and your own leadership won’t, or can’t, provide adequate shelter for you, but some random company is willing to send you a jacket to at least stay warm then yea, of course they support and spread the word and people see that. We were not exactly changing anyone’s lives here but the hope was to change someone’s day and we never made any spectacle out of it like other company’s that beg for attention or need a pat on the back for being decent.
I always looked at these kids living in extreme poverty that could never afford a new jacket, or any clothing for that matter, and thought “why should they never be able to have anything new?” These kids are committing suicide and dropping out of school at alarming rates. These are kids dying from drug overdoses, getting murdered and suffering. Some are being forced into the sex trade, being abused at home or feeling like joining a gang is something they have to do. They are traumatized. Their mothers, sisters, aunts are literally being hunted by serial killers in some cases because they are easy targets or have been missing for years in others. It’s pathetic a developed country that has all the room, cash and support in the world for others fleeing warzones has this happening to their own people. Everyone deserves to be safe but it really goes to show the priority level of the first people here. The least we can do is give them some free fucking clothes.
I used to get emails from kids who said how much they loved the brand and always asked me for jobs. There were a few times I’d find out those kids committed suicide or were murdered down the road and the fact I can say “a few times” speaks volumes to what’s happening. Others would send me school projects they did on Kanati which were always cool to see. It is just really crazy the impact that it had as a sense of pride for a lot of people. If you ordered one t-shirt, we’d send you two. Everyone who ever ordered from us in the early days will tell you that.
People just supported the authenticity. You have major brands capitalizing on ripping off our culture. From the DSquaw-type collections to the recent one with the Inuit designs and its all just basically saying “Fuck you” to First Nations people and our culture whether they see it that way or not. I don’t even think some of these corporations think we still exist as people to be honest.
There was just a need for the brand at that time. Anyone who knows the brand knows we supported First Nations artists, MMA fighters and businesses from day one whether they were popular or not.
It meant a lot to people for sure and I’m glad to see more brands popping up that are kind of following what we did. There are some Native brands out there with some great concepts and design. I just have a problem with the novelty stuff that further propels negative stereotypes and make us look bad. It’s not funny to me at all.
Do you feel the Liberal government that Canada now has will improve conditions for First Nations people?
LM: Less damaging than the Harper regime for sure. I would think any First Nations person who is aware of history is a little tired of hearing how great new governments will be for them. It tends to be the same story over and over for the most part. Hopefully Mr.Trudeau takes steps to break that cycle. It looks like a promising start so we’ll see. We are not treated with respect because we are not an economic force. We are in some places. But we are not as a whole community. You have pockets of very successful reservations and entrepreneurs that are true innovators and understand business and have turned these communities into prosperous places. But that is far from the case everywhere.
Clean drinking water, sustainable food sources, adequate housing, childcare and education are problems in a number of communities and they can be solved fairly quickly. The point is nobody wants to do it. We can get clean water and food to some of the most remote places on the planet when their wells become polluted or dry up. We can send balloons that give internet to people in the middle of the desert but we can’t seem to get anything to Northern Ontario. This makes no sense. The fact of the matter is, the people are underrepresented so there is no political motivation to help them. They are somewhat demonized by many in society and dismissed as somehow deserving of these conditions.
First Nation people demanding water or blocking pipelines or railways in protest are painted as radicals and domestic terror threats and we have legislation written so vaguely that basically anyone who speaks up or defends their land or resources could be considered a terrorist or a criminal. It’s a really dangerous and slippery slope that we have been heading down in this post 9/11 world.
It’s not all up to the government to improve things either. We hold a lot of responsibility as well. We can’t wait on others in the future when people are suffering now. We need to stop the people poisoning our own communities by giving them opportunity to succeed and not tolerating the drugs or violence. It’s a complicated issue internally because of the history of genocide and fallout from the residential school system that is still present today because it is recent history. There were religious extremists that would round up and First Nations people in the name of religion and they would basically put them in reeducation camps, rape children, murder them and torture them while reciting verses from books they don’t even follow themselves with a goal to destroy a culture. We call groups that do that overseas radicals and terrorists but here we call it a mistake.
That being said I also believe you stop being a victim the moment you victimize someone else and sitting around feeling helpless for yourself only continues the job they started years ago and as hard as it is you’ve got to push forward as a culture because we can’t do anything about the past. My dad was literally tortured and he never abused me because he broke a cycle. It’s time to empower our youth and our communities to do for themselves and break these cycles. We have some prime examples of success to look at and follow. We need more support and programs to assist with entrepreneurship in our communities and stop making it so difficult to access capital. We could be huge in manufacturing for one and corporations and foreign investors are eager to do business with us. We have a lot to offer the world. It’s time we realize it.
You’ve helped a lot of brands and celebrity lines reach success and even worked with the son of Dr.Dre. What prompted the move into manufacturing and what challenges, if any, did that move create?
LM: Brands that are going to have success reach it themselves. We just eliminate costs where they’d normally hit a wall and position them better to offer more to their retailers. We never had control of any brand. Celebrity lines sell themselves but I tried to stay away from a lot of those lines though. We tried to kind of have one celebrity in every industry and that kept things interesting rather than have a bunch of rappers or athletes.
A lot of people don’t understand how much time and money need to go into creating a brand. Everybody thinks they’ll be an overnight success and that is just not the case. Even if they have a great product they’ll run out of money 99.9% of the time whether it be six months or two years and never be profitable to even get an investment substantial enough to really do anything with. They come and go daily. Just because you can sell a few hundred items or get some likes on Facebook does not make you a viable business. You can’t really just jump in and compete against established brands with millions of dollars and VC firms behind them or just jump into retail. Things don’t work like that. There is a lot of work and a lot of money involved.
The manufacturing came from experience and seeing how the manufacturing industry can drain money from creative people and position them to fail. They drag you into a circle of making next to nothing off minimum orders and you never really make enough to get out of that and into real stores or producing full collections. They’ll lie to small companies and say they manufacture for huge brands to get them in and that’s how it goes. The factories that manufacture for global brands do not want and will not accept a new brands business because they cannot supply the volume to be worthwhile. A newer brand can rarely afford to offer variety paying for huge minimum orders let alone convince a retailer they can deliver on time and meet compliance because they can’t. One bad order from overseas puts a lot of these people out of business. They just lack resources, capital and experience and the majority will never really get ahead through that model and that sucks because there is so much talent out there.
The concept for our manufacturing service was made as simple as possible. Make tags, labels and packaging in bulk which allows us to manufacture and ship one item at a time allowing a label to offer more variety, sizing and cut out the need for minimums all together. But the main function is working with the retailers on their behalf to place the products. This was a membership-based program and it was done that way to eliminate the random manufacturing requests and build long-term relationships with brands.
Challenges come with everything from transport when situations deteriorate overseas to manufacturing to dealing with inexperienced brands and everything in-between. There are problems every day in any business and probably more in apparel. We took an unforeseeable hit overseas which created some delays for us so we had to move fast to implement manufacturing domestically, which we did fairly quickly. That was a massive undertaking and a lot of our resources and a lot of sleepless nights.
Other challenges come when working with new and small brands that generally have a limited knowledge of the industry. You’d have these smaller brands sign up and pay for tags and packaging and then they couldn’t provide tech packs or supply basic information off our checklist because they did not know how to design which created problems because so much of our manpower was being consumed trying to walk them through running their own company. It’s like signing up for Netflix and not having a TV. We eventually had to stop accepting small brands all together because of this. The reality with clothing is there are just so many kids and people who just want to impress friends or be seen as big shots that just don’t care to ever learn the business because their minds aren’t even at that stage in life yet and it is really hard to get them to focus on the future and building and realizing their brand does not have the value they think it does in the here and now. Then you have others who care more about looking successful than actually being successful so the bar is so low that them having money to spend on a weekend or renting a luxury car is what they consider succeeding in life. People like that will never click in or succeed no matter what you do to try and help them.
There were so many people trying to sign up that our website actually crashed once and we had to constantly keep coming up with ways to screen them. It’s funny to look at things now but it turned into a real challenge at the time. It got so crazy that people were lying about their age, some as young as 14, previous sales and getting upset and swearing at us because we would not accept them as clients. We had one brand name apply and after being rejected they’d start a new brand and apply again with pages of fake sales thinking we don’t have relationships with stores they’re claiming they were carried in. We rejected over 700 labels in 5 or 6 months. Just going through all of these brands was time consuming. Some were already out of business by time we looked at them or requested further information. It is an industry where businesses pop up and disappear overnight.
We had brands from big to small and from luxury travel goods to make-up companies. A lot of them did great and are now positioned with distribution and retail placement through the company that acquired our operation and manufacturing rights when the company sold in the summer. My main concern was these brands and their continued success and had we not sold the manufacturing that might have been up in the air so it was important for me that we make that move. Company’s far bigger than us copied this model from us to use with their established brands.
The Government of Pakistan implemented a new textile policy after Kanati abruptly pulled production. Even the head of Shell Pakistan commented on the situation. What happened over there?
LM: A country like Pakistan is already a challenging country to do business in. It is a country that lacks resources and energy. There is not enough power to even run certain machinery over there and outages are constant, which means down times are frequent.
At that time there were fuel shortages causing chaos for transportation, terrorism was, and still is, increasing which creates all kinds of issues for the people and daily routines. There was flooding that cost us thousands in inventory as well. There are more problems in that country than you can name and collectively cause major disruptions.
We lost a lot of cash and machinery and that is because of my mistakes and I need to own that. Our cash was lower at that time because we had just invested into our retail businesses and it was bad timing for sure. Especially because we then had to rush to create something domestically, which burns up more and more cash and we really weren’t really trying to borrow more. We certainly aren’t going to continue throwing money into a bottomless pit over there so we had to move things here where we could get a better grip on things.
If they did implement a new policy, I don’t know, or care, to be honest. There is so much chaos over there whether that makes a difference or not is anyone’s guess. There are far better options out there as far as manufacturing than dealing with the headache of Pakistan and I think many companies see that especially with what’s going on in the world right now. You don’t really know what your cash is supporting in countries like that unless you’re over there either.
The last year has been bad for a number of companies. There have been so many huge brands and retailers that have gone out of business, bankrupt or bleeding cash it’s crazy. Many struck with issues similar to ours. We never went bankrupt and minimized our losses as best we could though. We never left any of our suppliers hanging or carried a lot of debt other than our main lenders. Bankruptcy is basically just a way to shake debt and force out existing leadership so now banks own a lot of brands and websites and the entrepreneurs that made them are long gone.
There are definitely a lot of companies struggling right now and a lot of trading challenges. Consumers want fast and cheap fashion rather than paying for quality and supporting companies who pay fair wages. If you knew what went into getting you a shirt that retails for five dollars you may feel different about buying it.
What led to the sale of the company and at what point did you realize you wanted to pursue other interests and leave the fashion industry? Do you have a relationship with the company that now owns the brand?
LM: I have not had a controlling interest for years. Things started going south only in the last year and the end for me came shortly after our problems overseas because there was definitely some tension over the losses and costs associated with the domestic manufacturing. I think those tensions somewhat got in the way of everything I was bringing to the table and it was shot down or dismissed so I basically felt ineffective at making things happen. I have had to turn down so much potential revenue and business since January it is mind blowing and it became a really negative thing for me and put me in a very dark place for some time but there is always going to be pain and there is always going to be dark times in any business.
I had all these retailers getting mad at me because their purchase orders aren’t being accepted. These are clients trying to spend tens of thousands monthly and we just aren’t accepting the business. I’m forwarding them but hearing nothing back. My inbox would be flooded with purchase orders for approval and I’m not in a position to really make any calls because everything is up in the air so obviously I’m not accepting them. A lot of buyers were pretty frustrated but I’d rather that than risk not delivering.
So with a combination of my mistakes and a controlling lender who had no real interest in the industry it just becomes a bit of an internal standstill. If they would have listened to me, all issues could have been solved no later than March and we would have made up for all losses in 60 days but nothing happened for whatever reason.
It didn’t need to end the way it did but at the same time, they took a shot in the dark and did all they could to be supportive, but not understanding the industry or what was happening at that time caused everyone to lose in the long run. It is not a good feeling to see something you created suffer. But I can’t really say anything negative and having 7 years of continuous growth is a pretty solid track record to have.
Reflecting on things now, this is something we created when we were like 22-years-old so we had no business experience prior and of course we made a lot of money and a lot of mistakes but also had an amazing run with it and the company still continues to be profitable and that is what really matters whether I am involved or not. It has positioned us for success in our careers moving forward. One of the other co-founders, Kyle, has moved on to restaurants in airports and clubs and we have accomplished and exceeded everything we set out to do so it was time to move on anyway.
I am not involved with the company any longer from brand direction to retail. That ship sailed back in July for me. The new owners and team they have there is great from what I have seen so far. They are focusing on Canadian-made products and building their own relationships with our key retailers and distributors as well as new ones. I am interested to where they take it. They’ve got a solid foundation to build on and the retail is doing very well.
Any mistakes that you guys made that were learning opportunities for you? What have you learned over the years about business or life in general?
LM: Everything is a learning opportunity. As far as mistakes go, probably hundreds of little ones and a couple of big ones like any business built from the ground up. We blew one major deal early on and I regret that one because it could have been really big in our community. We were just too inexperienced and messed that up. We lost money hand over fist at the start as well. Not all of it needed to be lost but you learn as you go.
I’ve learned a lot about business and people in general over the years. I’ve learned that in business, there are no friends, even when they are your friends, and that was one of my main mistakes. Being friendly with the wrong people or people I thought were my friend that showed me different.
I am definitely doing better now than I ever have in my life across the board and learning not to care about petty things and carrying stress and weight on my shoulders. I move completely different now and every day I cut out more negativity and drop negative feelings I may have towards people. I’ve learned to live in a positive space and I sat and realized that anyone who has tried to do any wrong to me or hurt me has only done me favours and only hurt themselves in the long run so these things work themselves out so there is just no need to spend my energy on them.
I used to stay up for days at a time making sure projects were done properly with no breaks. I’ve learned to relax which is most important for my sanity. I will out think and out work anyone, which can be good, but it can also become a negative. You have to outwork everyone to succeed. Finding that balance is key though.
Would you ever invest in a startup-clothing brand?
LM: Probably not unless I was really confident the people behind it would put in the work required, or, they already had purchase orders from a major retailer and just needed the capital. Even then there are a lot of challenges. It takes 5 or 6 years to build a brand.
At this point I don’t think I’d personally commit the energy and resources required to build one. Not an industry I’m really interested in at this time and I wouldn’t be inspired enough to commit to it because I have already accomplished that so to do it again is not really something new and exciting and that challenge of the unknown or people telling me I can’t is what I thrive on.
What are your thoughts on the downfall of Karmaloop and the criticism it faced in the fallout? How do you deal with criticism?
LM: I don’t know about anything internal at Karmaloop so I can’t comment about that. It was sad to see that happen. I do understand how a lender who wants you out of the way just to drop the debt though can squeeze you and kind of block you to do that though. Karamloop helped a lot of brands become viable businesses and I don’t think you can take away those years of solid service from them. Greg (Selkoe) is a true entrepreneur and an innovator. The brands that had genuine issues I understand for sure. They’ve got businesses to run too. I think genuine business issues are handled in courtrooms or in person, which is why you never really saw any brands speak about their issues. Professionals don’t really do that in most cases. Anyone else criticizing doesn’t really mean anything unless they’ve built a business that has done over a hundred million in yearly sales. It’s easy to talk shit when you haven’t done it. Unless you’ve built something that big or have a genuine business issue, your voice is kind of irrelevant on the subject.
How do I deal with criticism? I don’t unless it’s from someone I can respect. People talk shit all day and all night about anyone and everyone who has done more than they have. They are talking while others are doing. People who criticize others are insecure about their own accomplishments. When you’re comfortable in your own skin and happy with yourself you don’t feel the need to talk about others. So I don’t listen to anything if the person has never been successful in what they are criticizing. These are the same kinds of people will say cars they can’t afford suck or professional athletes play bad from their couches and hide behind an anonymous comments online. It’s just not really valid until you find a spine and come direct or have accomplished something in life. This is a projection of who they are in life and that is just kind of sad when you think about it.
You have been rejecting numerous offers and most recently, a substantial seed investment for a new project. Why are you turning investors down and what is next for you?
LM: Right now I’m focusing on my family and growing as a person. I’m done with the hundred hour workweeks. I’ve got a daughter that needs me around more. The last year has weighed heavily on me because I’ve barely slept and I am not looking to jump back into anything right now. That may change in the future, but for now I have declined a number of offers from jobs to investments. One fairly large one from a firm out in San Francisco is in that area of around a million to start something new but that means staying in fashion and realistically I don’t really need anyone else’s money at this point in my career and I’m not looking to spend more time away from home or move. Any time you take someone else’s money, they own your project and I’ll probably never borrow at that level again. It would have to be structured in a way that worked for me and right now nothing has been. I’m not jumping into anything like I once would have.
For now I’m just looking to focus on other company’s I have interests in that are doing very well and one that is on life support but has potential and focusing my resources in real estate where I don’t need partners, investors or to be stressing deadlines and awake all hours of the night worrying about things being done. I’m sure I’ll help out with other people’s projects as they come up but I’ll probably never enter into a partnership again. I don’t really believe in working for something that I can’t pass down to my children.
I’m actually looking forward to get involved with the community and non-profits I support. I’m more enthusiastic about doing that than anything else. I’m very blessed in life and I believe true success is measured by how much you give back.