They say the best investors know how an event in one corner of the market impacts a company in another. New mining laws in Colorado require thousands of workers to wear a certain type of hardhat, and suddenly a plastics company in Norway quadruples its business to meet the increased demand. That sort of thing. Look, if I knew a current example, I’d be too busy making billions to write this story.
In some fashion, I see David Moreno and his company 232Tech as similar investors, but in meme commodities. When a moment happens on the internet, they produce the best product with which to profit from.
For example: it so happens that the Fourth of July and the Game of Thrones finale both fall within two weeks. Perhaps they could interest you in a T-shirt, featuring the likeness of Jon Snow wielding an American flag.
Moreno has been interested in the idea of reactionary apparel for some time, but his company’s first substantial success came last week when NBA star LeBron James celebrated the Cleveland Cavaliers victory over the Golden State Warriors. James wore a hat embroidered with Kermit the Frog sipping tea. Now, I’ll let my friends at Vox Media’s sports network SB Nation explain why James would do that; Moreno’s play was to immediately capitalize on the social media flurry that came with the hat by making the accessory available for immediate purchase.
I spoke with Moreno this week to learn about how 232Tech works, what it’s like to turn a meme into a product, and how he envisions the future of reactionary apparel.
This interview has been edited and shortened for clarity.
Chris Plante: What is 232Tech?
David Moreno: 232Tech is a conglomerate of companies, we have a bunch of different divisions, we do a bunch of different things. Our main focus, where we started out, was actually technology. We are, at our core, a distribution company. We distribute technological products, consumer electronic devices, wearables. We’re very, very strong in the mobile space, so a lot of mobile technology, cell phones, things of that nature.
"Anything that’s popular or trending, that’s really where we’re going to be focusing our efforts"
We’ve expanded our efforts to a bunch of different categories. We’re now dabbling in baby products. We work directly with manufacturers. We recently have ventured into apparel. Basically, the concept behind what we’re doing with the apparel space is we’re following trends, we want to be up to date with everything that’s going on.
Be it, you know, tragedies, things of that nature. We’d like to also get on board with that. Perhaps donate some of the proceeds to tragedies, devastations, things of that nature. Sports, paraphernalia, anything that’s popular or trending, that’s really where we’re going to be focusing our efforts.
When you say tragedies, something like the Orlando shooting, the idea would be that you could put out products for people who are coping with that? And part of the funds would go to a charity?
"We’ve sold close to a thousand pieces"
We would probably send 100 percent of the proceeds to a charitable organization that would then contribute those funds to family members or individuals that were affected by the tragedy. That’s definitely something we’re thinking of getting into. We want to make an effect. We want to be involved. We want people to know who we are. We want to do the right thing. We’re all about that.
A big tonal shift here; let’s talk about the Kermit hat. That’s how we found you. How many Kermit hats have you sold this week?
We’ve sold close to a thousand pieces.
How do you build a company to react to moments like Kermit that sometimes last a few hours or days?
"The design work will be done in 10 minutes"
We have established relationships with local factories that are manufacturing everything for us in the US. Nothing we’re making is being imported from overseas. It’s all homegrown. The factory we’re working with is Brooklyn-based, where we’re based out of. So that allows us to have extremely quick turnaround.
That’s coupled with a team I have that all day are monitoring trends, following the news, following things that are going on. The strategy going forward is to seize the moment. As soon as something comes up in the news, our artists are developing artwork. We’re building products. Going straight to the factory. We can turn around a product within a day. If I need something done, the design work will be done in 10 minutes. The product is up online. We begin selling. Production can occur the same day or within 24 hours.
How are you promoting your products around these moments?
"Production can occur the same day"
Right now we have a very strong presence through all the major marketplaces. That’s where our focus is. Eventually we’re going to build out our own website and online presence. But for right now we have a very strong relationship with the marketplaces. For example, eBay. We’re very well-established with eBay. Actually, last night they featured our hat as a spotlight deal. Front page of their Daily Deals section. You get thousands and thousands of views on the product over a short amount of time.
What are some of the other marketplaces?
We use Amazon. We use Etsy. We use Bonanza. We’re up on all different places.
What are some of the other pop culture memes or news moments that have popped up for you in the past?
To be honest with you, this venture into apparel is a fairly new one for us. So this will have to be the christening event.
A few other companies on eBay are selling a similar Kermit hat. Is there competition in this reactionary apparel space to be the first or the cheapest?
"This will have to be the christening event"
I think it’s a little bit of both. Once you know the trend, it’s whoever gets there first that gets the attention of the public. But there are so many variables that come into play. Obviously, you don’t want to miss the boat, so you want to get your product up. But the way that we see online sales functioning is that there are a lot of different things that come into play. Whether it be pricing, or how you’re assisting the customers. How you’re marketing it. Obviously these all are very important factors.
Is there a risk in creating stock for an apparel that has a limited lifespan? Memes can leave just as quickly as they arrive.
Yeah, absolutely there is. We try to produce as the orders come in. And we try our best not to overproduce, if that makes any sense. So that we’re not left with excess inventory. And if were are [left with inventory], we sit on it, and we sell it slowly. But yeah, it’s definitely a concern of ours. Fast as they come; fast as they go.
Do you have any legal concerns with selling pop culture items? I know Kermit is, obviously, a Jim Henson character. I saw a shirt on your store featuring Jon Snow with an American flag. Is that something you worry about, or do you feel there’s legal wiggle room for you there?
"Fast as they come; fast as they go"
Obviously we check trademark rights. We check details on products before we list them. And we make sure everything we’re doing is within the legal parameters. Technically the image that we have, although the public has dubbed it Kermit, it’s really a likeness of the frog drinking tea. If you check the trademark rights for Kermit, from what we’ve seen, it’s really just for plush toys and dolls. That being said, obviously if there was any issue, and anybody reached out to us, we’d have our attorneys correspond with them and come to some sort of an agreement. As far as we can see there are hundreds of guys up and selling it. We’re not documenting any names on the products, or anything of the sort. It’s a likeness of a frog drinking tea, and that’s pretty much it.
[Note: At the time of publication, the eBay page is titled "KERMIT TEA Hat StrapBack none of my business Emoji Frog Lebron James meme."]
The original design of the Kermit hat is widely attributed to the designer Cigarette. But I’ve seen this hat design on a number of different shops. I’m curious if, for something inspired by a meme, it’s seen as acceptable to copy an item.
Sure, sure. That’s not something that we — listen, if the item’s trademark held or [copyrighted], obviously that’s something that’s taken into tremendous account. But here, when it’s a meme, or an emoji, or a figure, or a character, you’ll tend to see a lot of guys jumping on the boat.
It all depends on their ability to price it properly and keep up with the demand. And keep up with the customer service that comes with it. And keep up with the shipping. It’s not easy to do all that if you’re a single-person entity.
Are there any memes or moments that you’re working on right now as the next thing?
"It’s a likeness of a frog drinking tea"
Sure, we have a couple things in the pipeline. We’re watching the Cavaliers very closely, seeing if there’s anything else that comes out. But we really have our tentacles to the ground in the sense that we’re watching a lot of different markets and trends. Anything that has to do with pop culture is on our radar.
What tools do you use to monitor pop culture?
That’s a great question. A lot of news tools. Our guys are on The Verge a lot. We’re following Instagram trends and Facebook trends and social media. We’re following a lot of different news outlets. Hip-hop outlets. Things of that nature. That’s really what we’re relying upon.