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Andy Dunn on Bipolar Battle and Why Brick and Mortar Matters

Bonobos co-founder and former CEO Andy Dunn has had what many would call a storied career. 

He started an e-commerce business that disrupted retail one pair of pants at a time, raised money to investors swooning over fashion tech companies and sold that business to Walmart for $310 million in 2017, but there was another part of his story that was kept out of the headlines until more recently.  

The entrepreneur, who had been diagnosed with bipolar disorder type one when he was a senior in college, had his second psychotic episode in 2016 as he faced multiple options for what path to take his growing business. 

He spent a week first in psychiatric emergency and then the psychiatric ward before being arrested for felony misdemeanor assault for what occurred during his manic episode. 

“We’re all on this journey of trying to manage our ups and downs,” Dunn said in the opening keynote at the annual Sourcing Journal Fall Summit on Tuesday. “We have to take care of ourselves. We have to make the kinds of investments in our mental health or mental fitness that we make in our physical fitness…. I wish I had been on meds, seeing a therapist or coach. I wish I had thought of self-care as something that would be productive for my job, and I didn’t [but] luckily got through it.” 

Dunn’s book, “Burn Rate: Launching a Startup and Losing My Mind,” came out in May and found the entrepreneur revealing a different story from the one most associate with Bonobos.  

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He recalled an Architectural Digest story featuring him and his family, pointing to a particular picture of him with his wife and son, underscoring what he aims to get across in his book.

“It looks like our lives are so good. It looks, in a way, like this airbrushed, Photoshopped version of our lives was true,” he said of the magazine photo. “And I remember thinking, ‘This is just bulls—t.’ Like, this is just not the real story of our lives.” 

Dunn calls himself lucky to have the medical help and family support to navigate his mental illness, saying he feels obligated to recount his experience due to what he’s been afforded. 

He ultimately left Walmart in 2020 and has since gone on to be an angel investor in a number of startups as the founder of Red Swan Ventures. He’s also currently CEO of Pumpkin Pie, an app he started for people to meet and strike up potential platonic friendships, and is chairman of Monica + Andy, an organic baby clothes brand started by his sister Monica Royer. 

Lots of realizations have marked Dunn’s personal and professional path up to this point. 

Starting Bonobos in 2007 as the country was headed into the Great Recession was a good first lesson in managing through a downturn. 

“It was one of those things where, in retrospect, I feel fortunate to have lived through that crisis as an entrepreneur from the very beginning,” he said. “It was an exercise of humility and how tough it could get.” 

Launching a direct-to-consumer apparel business at that time proved another challenge, faced with critics of the model who scoffed at the idea of selling soft goods successfully online.

Dunn recalled being inspired by the late Tony Hsieh, who founded Zappos on a business model based around excellent customer service and a generous return policy.

Dunn feels “fortunate” to have survived the 2008-2009 Great Recession as an entrepreneur.

“In retrospect, sometimes I joke, we pioneered a business model that doesn’t make sense,” he said of pure play digital. “And the only way that we evolved that to make sense was doing a relationship partnership with Nordstrom, which ended up being our fastest-growing channel and our most profitable channel. And then figuring out how to do brick-and-mortar stores, and we opened 60 of those.” 

Although Bonobos was able to scale at a time when many believed born-online brands were disrupting traditional retail for good, Dunn holds the view that brick-and-mortar matters in balancing out what’s happening online.

It’s a different thesis than what nabbed Bonobos venture funding in the past, when Dunn said he and the rest of the management team were able to convince investors they were building a technology company instead of a retailer. 

“Now, when I see an e-commerce startup, with a brand coming up, I suggest that they open a store and have that be both their headquarters and their warehouse because this model of the idea that the internet is going to disintermediate the channel turns out to be a lie,” he said. “The new middle people are Larry Page, Sergey Brin and Mark Zuckerberg. And Meta, Facebook, Instagram and Google expect more rent than landlords do.” 

Dunn went on to say physical retail is more profitable from an operating income standpoint than e-commerce, driving home the point that online-only strategies aren’t necessarily long term. 

“I wish I had known that,” he said in retrospect, “rather than give money to Mark Zuckerberg, I should have given money to landlords on good streets.”