A 600-mile taxi ride, ten hammocks and a $1m Shark Tank deal

Joe Demin was travelling through Thailand with friends in 2011. Business school was next; he was not sure he wanted it.

On a remote island he found a hammock that was soft, tightly woven and comfortable. He had shopped for hammocks at home and found most of them rough and badly made.

He assumed it was a mass-market Thai product. He asked, and it was not.

It had been woven by members of the Mlabri, an indigenous community in northern Thailand. Their name is commonly translated as "People of the Yellow Leaves", after the leaf shelters they abandoned when the leaves turned yellow.

The Mlabri had lived as nomadic hunter-gatherers in the forests of northern Thailand and Laos. Deforestation and development wrecked that, and the community became exposed to extreme poverty, exploitation and servitude.

An aid worker had helped some of them take up hammock weaving for independent income. They could already make something worth buying. They could not find enough buyers.

About a week after finding the hammock, Demin left his friends and took a taxi 600 miles north into the mountains to meet the weavers.

He found people working from home, around their families, rather than in a factory. He did rough sums and reckoned that customers for around 2,000 hammocks could change the economics of the community.

There was no plan and no market research. He bought as many hammocks as he could carry and flew home.

Waiting for him was his girlfriend, Rachel Connors. He arrived with a backpack of hammocks and announced he was starting a hammock company. She was not instantly convinced, which is a reasonable response, and she became his first customer.

They founded Yellow Leaf Hammocks and started with the roughly ten hammocks he had carried home. They sold those, bought twenty, sold those, bought fifty.

For much of the first year almost every hammock was sold face to face, at craft fairs and markets around New England. There was no venture capital. They bootstrapped, entered business competitions and scraped money together.

The model ran backwards compared with most companies. Because the point was stable employment, taking on a new weaver meant committing to finding the work, so sales had to be won before capacity was added.

Within two years the model had spread into neighbouring villages. Demin's line was that people should buy the hammocks because they were the best they had owned, not out of guilt.

Then a new cruise line got in touch. It was Virgin Voyages, and Yellow Leaf hammocks would go on to hang from the balconies of its ships.

In 2020 the pair went on Shark Tank. The business was turning over around $1m a year, and they asked for $400,000 for 7%.

Robert Herjavec made an offer and Lori Greiner wanted in. Guest investor Daniel Lubetzky, who founded KIND Snacks, offered $1m — more than they had asked for. They settled at $1m for 25%.

Demin came to America as a refugee from the Soviet Union. His family arrived, as he remembers it, with about $100 and two suitcases.

That may explain what he saw in northern Thailand. Not people waiting to be rescued, but producers short of customers.

The useful lesson for founders is not the taxi ride. It is that Demin asked where the hammock came from, and kept asking until the answer turned into a business.