S4E7: Katie Warner Johnson of Carbon38 on the artistry of entrepreneurship and disrupting the activewear industry

Welcome to The Room Podcast. My name is Madison McIlwain and I'm a partner for seed stage investments at DefyVC.

And I'm Claudia Laurie, a co-founder of Pryve. We're a founder and funder who are in the room where it happens. If you're a first-time founder or an emerging venture capitalist, we're glad you found us. We share inspiring, authentic, and insightful stories from founders, funders, and operators who have been in the room and provide tactical feedback on their early aha moments and learnings along the way. Before we dive into this week's episode, we have a short message from our partners.

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This week on The Room Podcast, we are excited to share our conversation with Katie Warner Johnson, founder and CEO of Carbon38. Katie's journey to disrupting the activewear industry started early on as a professional dancer from childhood and later a Physique 57 fitness instructor who would teach class in ultra-flattering, custom dancewear that all of her clients wanted. After years in New York immersed in the health and fitness world, Katie realized that the sports bras and leggings that were being sold were just not meeting the needs of women. She decided to move to LA and build a business that provided fashion-forward activewear designed by women for women. And the rest is history, as today Carbon38 is one of the leading activewear e-commerce platforms carrying brands like Mishi, Beach Riot, Adidas by Stella McCartney, and their own namesake brand. On this episode, Katie talks about the relationship between being a performer and an entrepreneur, serving the needs of her customer, the boss, and empowering women with women-led brands, and the future of activewear and e-commerce more broadly. Let's open the door.

Katie, thank you so much for joining us on The Room today.

Thank you so much for having me. I'm really excited to be chatting with you guys.

We are so excited as well.

And before we hop into your founding story of Carbon38, we'd love to start at the beginning. You're Harvard class of 2007. Go Crimson!

Yes, yes.

Went to New York after graduation as a spokeswoman for Women's Health magazine. And then after that, you became a Physique 57 instructor for almost 7 years. And by the way, when I was in New York, I was an addict.

Oh, good! I know it works. It's painful, but it works.

And you've also been a dancer in ballet and on Broadway. It's clear from your early career that you've had a health and fitness passion. Tell us about these early days.

Yeah, no, of course. I was born in spandex, right? My— I started as a ballet dancer when I was 4, I think. Ultimately, my mother put me in class because I was breaking furniture and lamps by dancing through the house. I think I can attribute a lot of what inspires me and keeps me going every day as an entrepreneur to those early days training as a ballet dancer. Certainly because of the discipline and the rigor and the poise that you learn, but also the artistry, because I think entrepreneurs and artists are very similar. We are shapeshifters. We channel a larger human condition, whether we're on stage, we are the vessel for that big idea that is the choreographer's or the composer's bigger idea, or as an entrepreneur, we're tapping into market movements and bringing that to a wider audience. I think being a dancer, being an artist early on really prepped me for what I do now, not only because I understand spandex really well. I became a professional dancer at 15, had a career-ending injury, ended up at Harvard. Really was fortunate because quite honestly, I thought I would be a dancer and then when I was in my late 30s, early 40s, I'd finally go to college. So it reversed itself. And like you said, ended up in New York. Initially was going to take a job in equity derivatives trading, which is also a performative part of finance, and had an opportunity to dance in some national tours. So decided to do that, made my family very nervous yet again, and became a fitness instructor to pay the bills. You realize when you look back in hindsight, it feels— in the moment, it feels totally chaotic. But in hindsight, you're like, wow, each of these steps along the journey has prepared me for what I do today. My body, after a while, started to fall apart as I was dancing and as a trainer. I just am very prone to injury. And 26, 27, I was at this place where I couldn't count on my body to do what I had always counted on it to do. And so I had to pivot and I applied to business school, got rejected. So I thought, oh, what if I start a business? And then in a year I'll have something to write about and then I'll get into business school. And that was 7 years ago. So needless to say, I never went to business school and Carbon is better for it. Hopefully as a result.

Such an incredible story, both around sort of personal pivots and this theme of artistry and performance and how that carries through not only just being on stage, but also as a founder. I'm curious, did you ever think you were going to be a founder when you were younger?

It's funny, I always thought I was going to be an artist. And like I said earlier, artists and entrepreneurs are cut from the same cloth. They're just— maybe as an entrepreneur, I'm just a more mature artist. I don't know. I realize I really have to pay the bills. I can't be a starving love you, Bohème artist in the East Village, but you can't really start in the East. You have to actually make money to live in the East Village these days. So perhaps that's where worlds collide.

So I would love to just zoom in a little bit on your time in dance and also as a fitness instructor. There's definitely a connection between instructing fitness at Physique 57, dancing, and then also dressing for fitness activities with Carbon38. What's surprising about the boutique fitness and dance worlds, and what did you learn that you really, like, brought forth with you to Carbon38 from your time?

There's so many layers to that. So I think Step 1, I became an instructor because I can move really well. And when you're a dancer, at least when I was a dancer, I always taught dance to the little kids, which partially because it was really cute and fun, partially because I could get community service credits for it, but also partially I think that is the artist's way is passing on. And so teaching has always been just a part of, of my lexicon. I became an instructor in 2007 and I was thrust into this new world of boutique fitness, which didn't really exist. You, you had your gyms and people went running, but this idea of boutique fitness was fresh on the scene in 2007. And as a result, it captured the attention of a very interesting group of women who I still serve as my customer today. So we call her the boss at Carbon. But if I think about it, when I first started teaching, it was partners at private equity firms and MDs at, at banks and actors and writers and just a really interesting mix of powerful women. And then 2008 hit, and it was a really interesting time to every morning to see that they kept their appointment with themselves every morning at 5, 6, 7, 8 AM when I would teach them through a really stressful time where they were impacted very personally. And I watched them build community and connect the dots. A lot of women had to pivot their careers. A lot of the charity mafia, the Ivy League educated stay-at-home moms who are wives to, to the presidents of banks and their husbands lost their jobs. Suddenly were going back into the workforce. I think there was just this really interesting turn of the soil that happened, particularly in New York, that I witnessed front and center as a 22-year-old fitness instructor, their cheerleader. And one, it was a really humbling position to hold as this kid who was helping these women work through something really emotional by creating this hour of space or 57 minutes of space for them to feel better and build their prefrontal cortex and help them build better decisions and monitor their cortisol response, because that's what exercise does. And I, I felt very honored to be part of that. And as a result, really committed myself to serving this boss. And so you fast forward however many years later, and now I not only was I serving her, now I've become her. And so we've transitioned that boss into the core customer at Carbon. 60% of our customers are C-suite executives or entrepreneurs. The vast majority of our customers are the breadwinner in their families. And it's a really interesting demographic that I don't think the wider, particularly fashion industry, actually focuses on the unique needs of that woman. And it's weird to say that spandex leggings are the perfect, perfect apparel for this, but spandex is what superheroes choose because it gets out of their way so they can slay it in life. And, and I think that's a really important part of this boss's day is that hour in the gym. So how do I make her feel the most powerful and successful I can in that hour. And that will help set her up for a better day to be a better leader.

You've just like hit on so many interesting points about not only the customer that you're serving and how important fitness is to their emotional and also mental wellbeing. Not, it's not just product that you're selling. And through like the most stressful times in my life where I'm just like confused or not sure what to do or like incredibly stressed, like the first thing I do is go and buy workout clothes. That's my crutch.

So Yeah, great. Good core customer. Thank you. Thank you. Keep buying.

So almost 8 years ago in November 2013, you moved from the East Coast to the West Coast and founded Carbon38 in LA. Could you walk us through that moment when you decided that this next step of becoming a founder and eventually becoming this boss was going to be the next step?

It's interesting you say that, cuz I really was a frog in a pot. Suddenly I woke up and I'm like, oh boy, this water went from nice and cozy cozy, warm to boiling. Like, I— how did I get here? I don't think there was really a moment other than the fact that a couple suitcases and moved cross-country because I wanted a break. I wanted a new perspective. And there's something about LA, and I will really credit LA with being the ultimate founder city, at least for me. And because one major difference to LA and New York is that you spend so much time in the car and there's a place that athletes and artists, dancers talk about as being in a state of flow that I was so used to dancing and performing. And it's really hard to get into flow when you're walking the streets of New York and dodging all the things that are— you can't be lost in your thought. You have to be really focused in New York and sort of battling. LA, I, from the moment I got into my first rental car, landing in LA and driving on the 10, it was just different. There's something about driving when there's not traffic. Let me tell you, and there's always a lot of traffic in LA, but when there's not traffic, when you're driving at 60, 70 miles an hour, you become a visual processor. So your language centers turn off and you get into your right brain and it forces this state of flow. I became addicted to that. So when I was first in LA, it was really this time of, okay, what am I going to do? My body is starting to break down. I can't be an instructor. Forever. I need to honor the amazing upbringing my family has given me, the opportunities that I have seen. I need to make myself a success. How am I going to do this? And I got in my car and I would just drive back and forth on the 10 or up the PCH and look at the ocean. And there was just something about the limitlessness of Los Angeles that allowed me to think my way out of my current situation.

I haven't quite heard a city having such an impact on your founding journey, but I just hear that in the way that you conveyed it. And it's super powerful because as we are seeing in Silicon Valley, entrepreneurship is more and more everywhere. And specifically LA has become much more of a hub, I think, over the past 5 years, and COVID has certainly accelerated that. And it is core to you and the founding journey of Carbon. You're going on these drives, getting into your zen and your flow state, which I love, by the way. And you say there needs to be a better shopping experience for luxury sportswear online.

Is that what comes to mind?

It's more what do I know? What are the— like, and I say this to my team a lot and I think I drive them nuts, but it's how are we going to bake the cake with the ingredients in the kitchen? So it's like, okay, what are the things I know? I love the Boss. I love this boss customer. I found her on both coasts. I know how to talk to her. I understand her needs. I know how to adapt with her needs. She surrounds me. She's who I want to be too. Okay, great. When I was a dancer, I used to have a lot of my leotards made at this place called Class In Dance Shop in New York. And there's something— if you think of the ideal piece of performance fashion, it's a leotard because it's a very small piece of fabric has to do a lot. At the time, yeah, there was a Lululemon up the road, and I was a Lululemon ambassador. But I remember putting on my first Lululemon sports bra and being like, oh God, this isn't gonna work. I look like a linebacker. My shoulders are broad. What is this? I don't like any of this. So immediately I walked over to Classy Dance Shop, and I was like, hey, can you make me some stuff? Can I have a little bralette that looks like my old pattern for the this my audition leotard I used to use. Can you make me a pair of pants, like jazz pants? So Fosse pants. Fosse is a form of— as a choreographer, um, very created the Broadway aesthetic. He has this— all of his dancers would wear a very tapered bootleg pant, flare pant, but it hugs the calf and it makes your leg look longer and more sinewy. And so he— I had Madison make me some Fosse pants, and that was my— that's what I wore to class. So it had this ballet aesthetic, but it was really flattering on the body. And I could see everyone would ask me what I was wearing. So I saw all of these cool brands coming up. I had a very specific idea of how I wanted my body to look in clothes, and it made me a more discerning consumer of activewear. And I think the aha moment— and I don't really know when that aha moment was, whether it was in a car, in a warehouse, or God knows what, on a walk— but I'm thinking, okay, there are all of these really cool up-and-coming female-founded brands that want to be the next Nike. And Nike's had however many decades on us. Lululemon has had however many decades on, on us. We don't have the time to, to wait to dethrone. And only a few of these 50, 100 or so brands that I've been talking to are going to break through in the next decade or two. How can I ensure success? So I know the customer that they're going after, which is why they're coming to me. I see all these cool brands that all want to be the next— what if I stitch them together to make, you know, essentially critical mass and then we go after the big guys? And that was like the aha moment. And then the real cherry on top was I'm looking around at stats and 86% of the fashion industry is run by men and 99% of the activewear industry is run by women. And I'm like, no wonder when I put on a Lululemon sports bra, I look like a linebacker. Like, they don't get it. But when I put on a bra by Mishi or by BTRIET, suddenly I'm like hot and popping. It's because that, that female empathetic eye is what's driving what's behind that. So it's like, great. So let's be the queen maker of these cool up-and-coming brands. And through a network of fitness instructors, because that's the ultimate unlock, we create this like beautiful pyramid of customer, instructor, and brand. And that's how Carbon was born.

You just shared so many incredible moments in that founding journey. I'm hearing go-to-market strategy through your instructors. I'm hearing founder market fit with your unique insights as an instructor and just generally this passion for unlocking confidence in women no matter what room they're walking into at any moment. Walk us through the moment that you said, okay, I'm gonna do this, but wait, I need some money to do this. And that fundraising journey?

Oh God, it never ends. Honestly, I don't think I, I've stopped fundraising, for better or for worse. But look, as an instructor, what I was making between $30K and $60K a year, so it's not like I've got tons of disposable income hanging around. And when I look at my bank balance, yeah, it was pretty heartbreaking. Like, at this point in my life, I don't have a nest egg. I don't have options, but that's the beauty of investors is that ultimately if you can light that fire of imagination in your head and pass that to somebody else who says that's a value, that's, it's an incredibly validating point of any entrepreneur's journey. Yeah. So we went out, we needed cash and, and ultimately I think, yeah, I think as soon as I had the idea, I was out just trying to see One, if it was interesting to anyone, and two, if anyone would give me money so that I could go and make it. So it was an interesting sort of 9 months of just starting to see the idea and say, what do you think? What do you think? And someone said, I think, I'm sure this is like a trope, but it's you ask for money, you get advice, you ask for advice, you get money kind of thing. And so that was the sort of the spin cycle I was on for a while. But I remember when our first investor wrote us our first check, it was like such a, it was $100,000. I'd never even conceptualized that amount of capital coming in at once. And it was a really, it was just a really powerful moment where I'm like, okay. And so then once we got our first, I think $300,000, we were able to launch November 2013. And immediately, like day one, we were doing $50K a month, I think, which is pretty— when you're fulfilling out of your living room, it's, it's kind of cool. And then I remember the next piece where I was like, okay, let's make this a million. I was invited to speak at an event in LA with a bunch of entrepreneurs and CEOs for an organization called YPO. I was like, I don't know, they were having their big annual conference in LA and they wanted to showcase some LA-based entrepreneurs and I was lucky enough to be chosen. And so I had 5 minutes to essentially pitch this room of 3,000 entrepreneurs. And, and at the end I was like, I'm raising money. And we raised that million at the cocktail hour. I think it helped because I trotted out all of my fitness instructor friends wearing amazing sports bras and fabulous leggings from all the vendors we were working with. So I definitely knew my audience and we were able to close that. And then, you know, over time it catches fire. It's a very— once one, one investor believes in you, they pass that along to their friends. And suddenly fast forward 7 years, I've raised $60 million. And, and we've been able to accomplish a lot with that.

You definitely have. And today Carbon38 is a retailer to some incredibly high-profile brands: Adidas by Stella McCartney, Nike, and even Balmain. Who was this first brand that said yes to being sold on your platform?

Mishi, Michelle Watson, Mishi. So there was this really cool brand, Mishi, that I had just been hearing about, and I couldn't afford the leggings because they were $350, but I loved her aesthetic. It was— she was a former designer for Donna Karan for their couture, and Donna Karan's really good at draping. And so she actually draped her leggings. So talk about like understanding the female form and how fabric fits and how flattering that can be. She created these— I remember the leggings were called the Medusa Legging, and it just created this like sinewy, delicious shape around your legs with these with mixing and matching of a heathered gray and a black with a soft sheen, and then these slices of mesh. And I just was like, I've never seen anything like that. It's the most beautiful thing I've ever seen. And called her up and she was having to— she's based in Toronto and she happened to be in town and she walks into my studio apartment with her suitcase of clothes and we just had a field day trying things on. And I was like, let's figure this out. And now We're still selling her stuff 7 years later. But yeah, I remember that was the, that was a big moment. It's just so cool to be in on the ground floor with these, with artists, essentially designers or artists.

Yeah.

You keep going back to the same thing over and over again. And I just was like, we gotta tell this story. We gotta tell these stories.

And you've told so many stories specifically for female-founded brands, and that is a huge part of Carbon38's commitment. I think you've touched on this theme, but I am just curious about Why is this so important to you? And what has been a brand that you have really seen develop through this commitment that maybe wouldn't have otherwise?

Huh. I think a really fun story that's maybe more recent is Btryit. So Btryit is a swimwear brand. Fabulous. Was an only swimwear brand a couple years ago with just really fun fabrics and colors. And they did a lot of this like really cool micro-studding of stars and things. And, and I remember our now senior director of merchandising, I think she was a buyer at the time, came to me and she's, I love what these guys are doing in swim. I think we can help them figure out how to do this in activewear. It's the same fabric and they understand again, the women's body and how to create really flattering forms. Let's try. And, and I really credit Stephanie with discovering this and she went out and she worked with them and created a line that we would launch exclusively with Carbon. And it was just such a fun collab. And now fast forward however many years it's been and are selling all over the place and they have a huge business and an incredible supply chain and they've partnered with brands like Love Shack Fancy to create a totally coveted collab. And it's just been really cool to see. And ultimately it's like, how can we help? And I think that's a really great tactical example of that. And I'm really proud of my team for finding that and showcasing and helping along the way. Who's next? That's the exciting part.

Just rewinding a little bit, we talked a little bit about Misshi, Beach Riot, some incredible brands. And speaking of brands, would love to talk a little bit about some of the unique challenges of actually being a retailer and holding physical product. You spoke about having all of this inventory in your apartment and then shipping it out. How do you currently manage that? Supply and demand side of things?

Oh, it's challenging. Inventory is always, is always the bane of any retailer's existence because the customer is fickle, especially in today's day and age where customer desires change in the snap of a finger. And inventory is huge risk because that's where most of your cash goes to. Look, the best advice I can give you is figure out how to operate without inventory or inventory light. But yeah, I think ultimately when we first started, we were working as more of a marketplace before we raised capital. And then as we got bigger, we realized that the POs were essential to allow— to unlocking cash flow for our vendors. And so before our vendors could qualify for factors, we finance production for a lot of our earliest vendors. So it is a really cash-intensive business for better or for worse, which again is why I don't stop raising money. But that being said, I think the world has shifted particularly in the last 18 months. And I think there are a lot of opportunities out there to create sort of inventory-light models. And that's something that we're working on right now.

Speaking of the past kind of 18 months, but even just the past like 7 to 8 years that you've been doing Carbon38, like e-commerce is like, it's a completely different world now than it was before. And there's a lot of solutions to kind of help with those challenges that you might've had 7 years ago, but you've been through a lot of kind of waves. Like you've been through the come up of boutique fitness and you've been on the come up of this trend of athleisure and activewear, which is now what we all wear like every day, no matter where we go.

Yeah, every day. As well as the rise of e-commerce.

Would love to get your take on what's next in activewear.

Gosh, the customer will tell us. But what I, what I think is it goes back to, I don't know, I'll tell you a little story, or not a story, I don't know. I'll, let me give you an example. So a man's shirt buttons in the opposite direction of a woman's shirt, a button-down shirt. The placard is reversed. And that is, that's a vestige of Victorian dressing where a man's clothing was optimized for him to dress and undress himself, whereas women's clothing are optimized for us to be dressed. And we— I think even today, if you think about the cocktail dress you put on is always zipped from the back, you always need someone to help you. There's no place to put your keys. Like, when someone compliments us on a dress or a skirt we're wearing and it has pockets, we tell them it has pockets without fail. It has pockets. Thanks, it has pockets. Like, it's so— it's so wild that we have lived in a world and continue to live in a world in which our clothes don't work for us. We have to accommodate to our clothes. And there's something really magical about activewear because it truly is optimized for our utility. It's optimized for us to move in, to sweat in, and to get things done in, which is why we live in it, right? No wonder we gravitate towards it. In 2013, when I started this, you would be laughed at if you wore your WonderUnders to brunch. Now it's a fashion statement. And that's an amazing, that's an amazing transition to have witnessed and to have been a part of, because I think we have been a part of really legitimizing that, that fashion perspective. So how do, you know, how do we take it a few clicks in the future? I think performance fabrics and utility are going to be the future of fashion. And I think there's so many ways to create beautiful things that actually do haul their own weight. And it's as simple as allowing us to button and unbutton our shirts and get in and out of our dresses. With ease without needing help. How silly is that? If you think about, you were, Madison, you were just saying how you walked into work with a pair of sneakers. The previous generation, stacked heels were the MO. And if you think about a guy, all he has to do is put on a pair of khakis and a button-down shirt and he walks into work and all he has to do is— we, the requirements for our dressing to be business casual, even 3 years ago, is a pencil skirt and stacked heels and hose and a silk blouse. Like you can't run to catch a red-eye in that. And if you do, which often we were caught in, you look like a sweaty mess. So now to be able to wear cool chunky sneakers and a pair of trousers that have an elastic waistband and a really cool functional tank over, God forbid, a sports bra because it's comfortable and a really cool blazer made out of neoprene. What an interesting place to be. What is that gonna look like in 5 years? I can't wait to see.

Yeah. Everything you just said resonates to the T. I was a history major in college and I actually spent my senior year studying the history of denim and I love how, what has formed the past creates what we wear today and what it'll create, what we wear in the future. But particularly on this idea of what do we wear to work, I think that turtlenecks are women's button-down shirt, cuz they're just, everything's all hugged together. I'm wearing one right now and it just kind of keeps ya moving, especially in San Francisco where it's literally always freezing. But in parallel to this movement of athleisure and kind of this shift that you've been writing in what consumers wear, We've also seen a huge boom in creators and empowering creators to have more of a voice. And even the boutique fitness instructor that you used to be has so much more of a platform than 10 years ago when you were getting started, thanks to social media. And I have to say, we're seeing on the ground in venture a lot of companies that are trying to empower this group and this community of creators online. Do you have a perspective as a former fitness instructor creator yourself?

I think that's behind everything we do. I want to be a platform for all of the vendors, all of our brands who are creators, right? I want to be a platform for all of these amazing fitness instructors who are natural content creators, whether they're teaching that class for 45 minutes, that's content, right? So how do we bring that online? How do we empower her to, one, build a platform, two, own that platform, and three, monetize it? And we've been doing that in a really simple way where we equip our instructors with a promo code that they pass out to their clients. And when they redeem the code, they get credit because clothing, activewear is their uniform, is their business suit, right? So it's a form of currency and looking good, looking different, being able to curate their look as part of their brand. So that's been a really great symbiotic relationship. But now as fitness studios and gyms have— are depressed by 30% year over year because of the pandemic and all of these strains and how long is this going on? Everyone's moved to online and there are so many cool platforms, whether it be Peloton or ObéFit or FitOn, where instructors can find outlets to connect with their clients, but it's still disparate. It's the same way that studios work. You go from one studio to the other, but you don't own your client email list. You don't own— you own their attention for that 45 minutes, 50 minutes, an hour that you're teaching, but ultimately you're, you're renting space from a studio and it, it's the same thing. So how do I help these women own their worth? And I think that's the next, that's the next phase. But I think you hit the nail on the head. It's all about how do you build platforms for creators? 'Cause everyone has such cool stuff to say. It's gonna resonate more if I just let that shine.

We've looked forward a little bit in terms of kind of trends for both the world of activewear, but also the creator economy. And just like looking back a little bit, Carbon38 has grown so much over the past 7 years, you've raised $60 million and it's really a household name today, but would love to ask about a time during the early journey where things were not going as planned.

Oh God. It was like every day, it never goes as planned. It's never as you intend. And when you solve one problem, another one pops up. As even the, the smallest little things can sometimes have huge lasting impact, the big things are all full of blisters. It's just, there's just so much. I think the biggest pivot in my life was I thought I was going to be a dancer. That was the— that didn't go as planned at all. And but it put me here. And so I think the number one lesson I've learned is that if you're constantly on the balls of your feet in the center of the ring, you're going to be best prepared and most successful. As soon as you're backed up into the ropes and you're the victim of your circumstance, you're dead in the water. So So I would, I really try to stay away from ever being a victim of circumstance and truly just seeing every issue that comes up as an opportunity. My motto, especially for the last 18 months, but truly over the last 7 years is never waste a good crisis. Crises make you make decisions really quickly. It gets you really focused on what's important. There's something really valuable about crisis. So if you live, and business is about solving problems, it's not about riding the wave of luck. People do that and they're very successful and that's great, but that doesn't teach you anything. As long as I can glass half full it every day, I, I do. Don't get me wrong, I like cry in the shower several times a month, but that's all part of it. It's very cathartic.

I really needed to hear that comment around don't be a victim of your own circumstances, make them what you want to be. I just think especially in our mid-20s where Claudia and I are, you just feel sometimes overwhelmed by all the decisions and things that feel so permanent, but when in reality there's pivots abundantly that will happen and we have to learn to grow and be okay with that. So thank you for sharing that wisdom.

Yeah, you just make decisions. The quickest way to get control over your situation is to make a decision. Like you just walk through a door, A, B, or C, it doesn't matter. Just walk through it because then you'll have another set of doors, walk through that. And you start to build a reservoir of data in your gut. And I think a lot of us as women also refer to our gut, but no, it's not, it's data. It's data of experience that you're constantly drawing from to make better experience, to make make better decisions. So just know, just keep walking through the door because that data you're bringing with you and whether it's subconscious or, or subliminal, it's there. So just trust that and trust that you just have to keep moving forward. As soon as you're paralyzed, then you start to rot. So keep moving.

Speaking of this advice for either founders or operators or funders, you have a lot to prioritize in a given day, Katie, lot going on. And you're also a motivational speaker.

What advice You should tell that to my team because I think every time I open my mouth, they're like, "Oh God." No, but truly this is probably the most hyped I've been all week. So I'm ready to go and tackle the day.

So all of this and more, and clearly someone who cares about fitness and wellness for themselves, what advice do you have for other founders or individuals in business or actually anywhere who are struggling with prioritization?

Madison McIlwain: I think again, it's that just make a decision. I struggle with reflection. I, someone told me the other day that I get a new piece of information and I have a split, like half a second of deer in the headlights, and then I'm off. And that is great, particularly in the early days. Like I just, I process things quickly and then I'm off in the next. It's harder when you've got a much bigger boat to man. You can't, you know, the, the Titanic doesn't move that And so learning how to reflect and speed up that reflection is what I'm working on right now. So I guess it's a weird thing of advice, but like, as when you're nimble, when you're small, when you don't have a lot to lose, you can make quicker decisions. So all you gotta do is say, I know I have 8 really good hours in me today. I, let me take into consideration what my mood is, where I'm at, do I, what am I best equipped to solve today? And then you figure out what those 3 things are you can get done, or one big thing that you wanna 2, but as the business gets bigger, the priorities, you have to stay laser focused and repetitive in those. Every day you're still working on that. Like you have to, it's a priority because there's one. And when they say these are my 10 priorities, no, what's your one priority? What is your number one goal? And then every decision has to line up with that. And if it's not, it's great because then you just eliminate it. It feels hard. It's scary. I hate letting things drop. I'm bad at that. So I really shouldn't be the one giving that, that advice. Prior— priority one, what is that? And just focus on that.

Shashir Mehrotra, the founder of Coda, which is a workflow software, came on in our first season and he has this framework called I can questions. And it's essentially what is the question of all questions that you need to be solving? And how does that answer inform every other micro or the other 9 priorities on your list to use your terminology to create the solution that you're looking for. And I can just see that applied here in the framework you just gave for prioritization. We're coming up on time, Katie, and we've talked a lot about the past of Carbon38, your personal journey, and the future for this industry of athleisure, e-commerce, and creators. We would love to ask, what's next for Katie?

I love that question. I think I really want to be a really good leader, and that I think is going to be the life journey. For me. Talk about the number one priority for me is how do I be a better leader? And I think I'm a good founder. I think I'm really good at getting people excited about ideas. I'm really good at thinking of ideas. I have so many all the time, but it's different. There's a piece of that that is, that helps you be a leader, but you move from being the center driver to being the support system. And that's something that I'm working on. I've just hired an incredible team of operators who have all build businesses from $100 million to half a billion purposefully, because that's the next phase for Carbon. And, and they're all so much more qualified. I looked at the group of them, they all have 100+ years of consumer branded experience and 7. And so they're much better equipped than I am. So it's like, how can I be the best leader for this group of people who are so much smarter and so much more experienced than I am? And that's what's next. And that's just going to be the perpetual struggle. But I love being a student. I love learning, and so I'm learning a lot right now. So it's, it's cool.

Thank you for sharing that. We're excited to see the journey of Carbon38 continue and all that's to come in the future. At our last question, and it's our hero question for our podcast, who is a woman that has had a profound impact on your life and your career?

I have so many, honestly. I've been so fortunate to be surrounded by so many inspiring, powerful wom— women. But when I think of the last 4 years, The most impactful woman has been Lauren Peters, who is the— who was the CFO of Foot Locker, owns a big stake in us. And that is because of Lauren. Lauren discovered us in 2014 and we built a relationship and ultimately they invested in the beginning of 2018. And the reason why I took Foot Locker's money is because of a conversation I had with Lauren. And I remember it to this day. Where she said, carbon is a billion-dollar-plus business. And I had never been given permission to think that way ever. And I think women, a lot of times when they pitch, are always asked about how do we mitigate risk. And I spend a lot of my time talking about that to investors and my board. I always talk about how am I protecting investment as opposed to thinking about how I'm growing. And I think there've been many studies on that, and I'm sure you can find some data on that where men, male founders are asked to talk about upside potential and women are talked about, you know, downside risk. And Lauren was the first person to say, okay, so what are you going to do to build a billion-dollar business? And that was the most— I've never been able to think that way to that point. And it was a really exciting moment. And I credit her with that, for discovering us, for believing in the business, for believing in me.

Thank you for sharing that story. And we hope that all of our listeners are able to find Laurens in their own life. Thank you so much, Katie, for sharing your story. It's been so energizing and just such a pleasure to have you on the podcast.

Well, thanks for having me. I really appreciate it. Thank you. Thank you. Thanks for doing what you're doing.

Thank you for listening to this episode of The Room Podcast. We hope you enjoyed our conversation with Katie. Definitely check out Carpet 38. Please reach out to us on Twitter, Instagram, email, email and Clubhouse. We would love to hear from you. We'll be back next Tuesday at 10 AM Eastern, 7 AM Pacific for our Season 4 finale with a new conversation from another incredible founder. See you soon in the room.

All opinions expressed by Claudia Madison and podcast guests are solely their own opinions and do not reflect the opinion of The5EC. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Support for The Room comes from Silicon Valley Bank.

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