Chad Horstman: CEO of Yandy.com

Chad Horstman, CEO of Yandy.com, photographed at Yandy.com in Phoenix, by Nicki Escudero

Chad Horstman, CEO of Yandy.com, photographed at Yandy.com in Phoenix, by Nicki Escudero

Chad Horstman
twitter.com/Yandy

You may not know it yet, but Phoenix is home to one of the coolest lingerie and Halloween costume businesses in the world — Yandy.com, an exclusively online reseller of more than 50 brands of sexy skivvies and costumes. The company started back in 2005, when brothers Chad and Evan Horstman started selling lingerie out of their garage and has now doubled in business every year, taking up residence currently in a 35,000-square foot warehouse. Though Horstman initially started Yandy.com because he saw potential because of web searches for lingerie, he now designs most of the brand’s original costumes, which range from everything from sexy watermelons to furry foxes. Read on for how he got in this titillating business, as well as to hear five reasons why the 34-year-old Northport, N.Y. native loves living in the Valley.

What brought you to Arizona?

My parents. My mom decided to go back to school to become a doctor, and we moved around a little bit and moved here sophomore year of high school. I went to Saguaro High School and spent a year in St. Lucia while my mom was in medical school. I have a Computer Information Systems degree from Arizona State University.

What was your career like before Yandy?

After ASU, I did consulting for iCrossing. I worked for another marketing agency called Silverback Marketing, and while I was there, I started some of my own websites. One was vcigar.com, a retail cigar website. Another one was keydefense.com, which sold pepperspray keychains.

How did Yandy start?

We started 8 years ago in 2005. I was helping market some pretty large Fortune 500 companies, and I was seeing the success I was helping them have, so I wanted to start something on my own. I thought of the idea to do lingerie and talked to my brother about it. His degree is in supply chain management.

Why lingerie?

Lingerie always gets a lot of Internet searches. As I was doing Internet marketing consulting, I was subscribed to a newsletter that told you what the top searches were. “Lingerie” was always around number 40, so I decided there was a market for that, that there were lots of people who wanted to buy lingerie online out of the privacy of their homes. What I later figured out is there’s a lot of traffic for lingerie from people who aren’t looking to buy lingerie. It’s still good exposure and good branding. We may not provide what those people are looking for, but they may come back later and actually purchase lingerie. I’m not a lingerie designer and definitely not the most fashionable person in the world, but I really did get into fashion as we started the business.

How did the Halloween costume aspect to the site come into play?

One thing I’ve always been a fan of was Halloween. I always used to win the Halloween costume contests in elementary school. One year, I was the Headless Horseman, and I had an extra-large white button-up shirt with a red scarf tied around my head to look like I didn’t have a head. I could only see out of it because I used white hosiery as the eyeballs — I won that year. The first year we started Yandy, the lingerie companies we carried were also making sexy Halloween costumes. At the same time, this holiday was exploding at different universities around the country, and there weren’t many places you could find these sexy Halloween costumes. That’s how our business took off, and that’s when I decided to quit consulting and just do this. Now I do design a lot of the Halloween costumes we carry. We’ve done some really unique and creative costumes over the years, and I’m sure a lot of girls have won costume contests in part to our designs. We carry all the brands, and we work with brands who do exclusives for us.

You started this with your brother, Evan, who is now the chief operating officer, and started working out of your house. What was that like?

We started in my two-car garage, and after the first Halloween, we purchased a 2,500-square foot warehouse. We went to a 10,000-square foot warehouse, and our new facility is 35,000-square feet.

What has the evolution of the company been like?

We’ve grown every single year close to double almost every year.

How many employees do you have?

60, and we’re expanding to 200 in October.

Besides you and your brother, are any other family members involved in the company?

My dad came on board after year two. He has been a CPA his whole life and was a controller for a helicopter company in Phoenix called Rotorway that makes kit helicopters. He left a pretty good position there to come here and do all our finances. What’s funny about my dad is he’s been crunching numbers his whole career, so he really loves to get out in the warehouse and help out back there with boxes. My Uncle John from New York works here, and my mom helps sometimes.

What are the benefits and challenges to working with family?

The benefits are it makes it more enjoyable to have success side-by-side with your family. That’s something you can really be proud of to say, that we did this together. On the flip side, there is more pressure doing it with your family because you know your family is relying on you, and vice-versa. It can be stressful for sure, but the other benefit is you can really trust your family. When you have your father as your accountant, most of the other business owners I’ve talked to are really jealous of that.

What makes you and your brother a good team?

His degree is in supply chain management from Michigan State, and he worked at Boeing, so he’s knowledgeable about warehouse logistics and has implemented a system here that’s worked really well. Everything is extremely organized, our orders go out the same day, and people are always really impressed about how quickly they get their orders. One half of the business is marketing, and the other part is delivering, and we make sure both aspects are covered.

What’s your typical week like?

I handle more of the management side now than actual marketing. It’s still a small business to the point where I’m managing everybody. I have to check in on all departments — programmers, marketing, purchasing, customer service, and the warehouse. I’m involved in everything.

Where do you get your entrepreneurial spirit from?

I’ve always been trying to invent things. I always wanted to design a sneaker that would help you jump higher, and I thought I was going to be an engineer before I switched into programming and computer information systems. I always wanted to be creative, and being a business owner, you get to be so creative in so many ways — not just in designing the costumes, but in the marketing, web design, the way we lay out our website, the way we run our warehouse, to the fact when someone orders from us, that order is shipped within an hour or less. There are so many ways to be creative as an entrepreneur versus working an office job.

How much of your merchandise is Yandy.com originals?

About 5 percent, but out of our top-selling items, about 20 percent are branded as Yandy.

What do you attribute to the popularity of the originals?

They’re exclusive, so it’s less likely someone at the Halloween party is going to have the same costume as you. They’re more original, more creative designs, but we also carry all the classics.

What’s your favorite costume you’ve ever designed?

The Sexy Fox costume is a furry costume. We’re one of the first companies to sell the furry raver costumes that have been really popular in the last few years. I worked with a designer to come up with all the styles that are exclusive on Yandy, and the fox seemed like an obvious hit to me. We went with bright orange to make it really stand out, and it’s just been a huge success. I think it’s a really hot costume, we’ve had it for 3 years now, and it continues to sell.

What’s your rave line like?

Rave is up-and-coming for us. Going to raves and electronic dance music concerts is becoming more popular, and there aren’t many companies who are addressing that market. In terms of how much we sell, it represents a small part, but we’re really excited about it.

Do you see the rave category as being more of a focus in the future?

Yes. We’re launching an exclusive glow-in-the-dark line of lingerie and ravewear that no one else has, and we’re really excited about it. We’re printing a lace pattern on the lycra solid fabric, so when the lights go out, it will look like it’s lace.

With the success of your Halloween costumes, have you considered branching out into men’s costumes?

We carry men’s costumes like we carry matching purses — a man’s costume on our site is an accessory his girlfriend will dress him up in. What we believe to be true is most men seem to make their costume, and most women seem to buy their costumes, so we don’t actively target men.

Where did the name Yandy come from?

It’s completely made-up and doesn’t mean anything, and the reason we chose a name like that is in clothing, there are so many trademarks, that almost using any real word in the dictionary can get you in court battles. We wanted to avoid trademark infringements, so we went with a made-up word that we knew we would get the trademark for.

Has it come to mean anything now?

We have a Yandy Candy line now, of 12 exclusive candy-inspired looks in the style of Nicki Minaj and Katy Perry, and it’s doing really well for us, but Yandy doesn’t mean anything to anyone other than a cool place to buy sexy lingerie and cool costumes. Our slogan is “Be sexy.”

What do you look for when you’re choosing a supplier?

In general, our prices are really affordable. When people visit Yandy, they’re often shocked by the prices, because our pricing compared to the competition is nearly half, if you shop Victoria’s Secret or Frederick’s of Hollywood. We want to carry quality products at a price that will impress our customers.

Who is your ideal customer?

During Halloween, we try to target college-aged girls, ages 18-22. They’re looking to go out for Halloween and look good, and during the rest of the year, our target market is any woman who’s wanting to dress up for their significant other.

Why should people buy from Yandy versus another brand?

One focus is convenience. Versus going to the store, you can shop at home in your pajamas. Also, you can shop with your husband or boyfriend together, and he’s not going to feel all awkward about being in Victoria’s Secret. When I started Yandy, I had gone shopping for my girlfriend at Victoria’s Secret, and it was one of the most uncomfortable feelings in the world. You’re in there, it’s all women, you’re the only guy in the store by yourself, and you’re thinking they’re looking at you like, “Why are you in here?” I think a lot of men feel that way about buying lingerie. During Valentine’s Day, it’s one of the few times we get a lot of male customers. For a man, a definite advantage to buying lingerie online is that you can really shop and not feel uncomfortable. For women, it’s the convenience of not having to go out to store, and also the prices. For one item at a competitor, you can probably buy four-five items from Yandy.

Why should women invest in lingerie versus underwear you might get at a place such as Target?

For the most part, we focus on sexy lingerie. We have some daily wear stuff, but we focus on items you might only wear once — so we feel the price on that stuff needs to be pretty low. A reason why a woman might want to buy lingerie is to surprise her significant other and keeps the excitement going on in the bedroom.

What advice would you have for aspiring entrepreneurs?

I’m more of a computer geek that fell into fashion, so it’s weird for me to give advice on the fashion industry, but one piece of advice I can give to anyone who is in high school or college and indecisive about what field to go into would be to consider web development. At Yandy, we’re really struggling to find web developers in Phoenix. You can always become an entrepreneur and develop your own app or go work for one of the best companies in the world with one of the best starting salaries. Even older people who are looking to change career paths, it’s not that difficult to become a web developer. You don’t even need a degree. Mark Zuckerberg and Bill Gates dropped out of college. It’s like learning a language, you can learn it from a book. Everything’s moving online, so the more you can understand how websites work, the better.

How do you think technology is affecting the retail and fashion industries?

I think more business will be conducted online, and I don’t know if there will be more stores because it’s harder for stores to be established. Ecommerce is growing at 20 percent a year every year, so I’m pretty happy to be involved in ecommerce. Theoretically, if we maintain our website, we should continue to grow at 20 percent.

Have you ever considered having a brick and mortar shop?

We tried it at our old warehouse and had a shop in Anthem, and it wasn’t for us. Retail involves a whole lot more investment and a different type of investment than online. It’s such a different type of business, even selling the same goods, that I feel anyone who attempts to do both is really losing focus. The customer service and marketing and everything is different. You have people just coming into your store and trashing your merchandise, and that’s a luxury we don’t have to deal with as much, except for online returns. For someone who’s just starting out, you have to choose what you’re really going to focus on. They’re not as synergistic as one would think, in my opinion.

One thought on “Chad Horstman: CEO of Yandy.com

  1. Pingback: Yandy.com provides awesome costumes, lingerie | Nicki a la Noche

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