Chapter 11

The World in 1998

Group 2Back to the Beginning

No Athletic Clothing for Women

As of 1996, teenage girls had just broken into extreme sports, an area which had long been dominated by men. For decades before this, athletics and sweating were not known as feminine virtues. Many “cool” girls were smokers who skipped Phys Ed classes altogether. Of course, girls competed in Olympic events, although at much lower numbers than men. I was raised in the world of competitive swimming where girls made up 50 percent of the participants, but where there was also a high dropout rate when girls became women – curves made hydrodynamics challenging.

The first girls in non-Olympic sports entered through surfing, but most girls entered through snow- boarding, as snowboarding was so much more accessible than surfing. The ’90s era of athletic girls coincided with the very Portland, Oregon male grunge look, which went well with snowboarding fashion. As girls became women, the timing was right for them to express their sense of femininity through yoga.

Meanwhile, the internet was just coming into existence (e-commerce was still a non-entity). Boys were being coddled by their single divorced mothers and girls were dominating education. Coke and Pepsi were marketed as the “American Dream,” fast food was becoming a staple, and Americans’ BMIs were rising – but no one was acknowledging it.

In the world of apparel, most clothing shrunk after only a few wash-dry cycles as everyone used hot water and hot dryer settings. In this context, there was no athletic clothing for women, except for shrunken men’s styles.

As I embarked on a new venture, I knew I was the only person in the world thinking of non-mountain technical apparel.

My ability to predict athletic trends was both a gift and a curse. I was designing items five years before public acceptance, so, naming the next trend, and getting it to stick, proved challenging. Back in 1995, I had coined the word stretch (street-tech) to describe the intersection between streetwear and technical apparel, but the phonetics didn’t work, and the term was never adopted. In 1996, I started calling the movement from office wear to street athletic clothing streetnic (street technical).

In 2014, the New York fashion media would eventually describe this intersection as athleisure, which is a term I don’t like, even if I must acknowledge that it’s here to stay. To me, athleisure denotes a non-athletic, smoking, Diet Coke-drinking people in a New Jersey shopping mall wearing velour tracksuits – too much leisure, too little athletics.

The Hedgehog Concept

A year earlier, during the six-hour drives to and from Oregon, while working for Morrow, I had listened to perhaps 100 audiobooks. I loved the histories of the retail growth of Starbucks, Walmart, and General Electric. I listened to everything by Jim Collins.

From this listening, I concluded that four audiobooks summed up the other 96. These four com- prised the philosophical, cultural, and people development ideas I wanted to use to form the basis of my new company. These audiobooks were:

  1. The Goal by Eliyahu Goldratt1 – a fun, fictional novel describing manufacturing bottlenecks, opportunities, and overall theory of constraints.
  2. The 7 Habits of Highly Effective People by Stephen Covey2.
  3. The Psychology of Achievement by Brian Tracy3 – how to be a great citizen, parent, and goal-setter.
  4. Good to Great, Jim Collins4 – about how “good” is the enemy of “great,” and a “Level 5 leader” is defined as someone who has trained a replacement better than themselves.
  5. The fifth addition to this list is not an audiobook, but a course, The Landmark Forum. Particularly influential for me was learning the Hedgehog Concept5, from the book Good to Great by Jim Collins. In this three-circle diagram, Collins contends that the area where all three circles overlap is where a person or company is most powerful. The intersection is where founders and their companies are intertwined and the greater the overlap, the better the business. For my own life, and in considering my new venture, I drew the following:

Circle 1: What was I “passionate” about? Athletics

Circle 2: What could I be the “best in the world” at? Black stretchy pants.

Circle 3: What would be my “economic engine”? Vertical retail (or skipping the middlemen).

The idea of designing technical clothing to suit athletic activity drove me. My brain worked full-time on athletic solves. Design sketches littered my day and my notebooks. Throwing myself into solving the apparel issues of yoga was exciting, and I was ultra-passionate about maximizing the athletic experience that produced an endorphin rush.

As I further considered the way the Hedgehog Concept applied to me, I realized the convergence of my three circles was not yoga apparel – it was people development. I knew people development was the key to my specific business philosophy.

Linguistic Abstraction (previously known as “Values”)

Culture is a way of operating such that people act consistently, inside and outside the company. Consistency arises from the adoption of a company’s vision and linguistic abstraction (a common set of terms and definitions that all employees understand). Lululemon’s linguistic abstraction was composed of a series of 20 to 30 terms and definitions that arose from the previously listed books, audiobooks, and participation in the Landmark programs.

Our linguistic abstraction allowed the company to communicate with speed and efficiency across all departments and geographies. A person in Vancouver had to be able to communicate effectively with a supplier in Beijing. Just as the Gutenberg press, the fax machine, or email facilitated exponential communication, as does the linguistic abstractions. A company of developed employees who understand the same business terms also grew exponentially.

My updated linguistic abstractions developed while at lululemon are as follows:

  • Purpose: a declaration of why we exist and what we bring to the world.
  • Linguistic Abstraction: the framework of terms for decision-making and a singular culture.
  • Being Present: The most powerful way of being; simply choosing to eliminate past experiences as though one had amnesia. By pretending there is no past, then we have no foundation to think about the future and all that is left is the present. The present is where we are free from social, parental, or self-imposed conditions.
  • Clearing the Past: when an office drawer is full, nothing more can be stuffed in. Likewise, a person’s past experiences can pre-occupy and fill their consciousness. The only way of having a meaningful conversation with a person with a full drawer is to let them first empty it. Once empty then there is room for the person to listen to what the speaker wants to say. To empty the drawer, the listener must listen as though their life depends on it, as fake listening will not work.
  • Power in Communication: There is no point communicating to someone whose mind is focused on something else, therefore, power in communication always lies with the listener.
  • Creating the Present from the Future: this is the opposite of creating a future life from past experiences. Example: A President in 1960 states that “in 10 years we will land a person on the moon”. This creates a way of operating that is informed by a past, not constrained by it.
  • Choice: a decision made free of influence from past experiences, and social, parental, or self-imposed restrictions.
  • Committed Listening: listening without obligation to act, paying attention to both verbal and non-verbal communication. A committed listener is cognizant of any filter they listen through (gender, age, ethnicity, world view, profession etc.).
  • Talking into the Listening: Within a conversation, each person’s position is based primarily on how they were raised and their life’s experiences. For a conversation to be effective, the person speaking must consider the filter through which the listener hears. (gender, age, ethnicity, world view, profession etc.).
  • Committed Speaking: communication that includes by-when dates and conditions of satisfaction.
  • By-When Date: The date on which a project or task is promised to be completed.
  • Condition of Satisfaction: A measurable action or criteria against which completion can be measured.
  • Time is Precious: our every action or communication respects another person’s limited time on the Earth.
  • Act: a way of being that was shaped in early childhood. There is a moment in childhood of perceived of “survival” during which a child’s parents are unavailable to “rescue” them. The child survives through a particular way of being (funny, dominant, competitive, quiet, etc.), and lacking awareness and Choice, they continue to default to their “Act” as adults.
  • Looking Good: a protective way of being that is inconsistent with how we declare ourselves to be.
  • Winning Formula: a declaration of who we are that was created in a moment when we decided who we could never be, that limits our lives and turn us away from other paths and possibilities (ex: I will never be an industrial designer).
  • Being Authentic About Being Inauthentic: being open and not defensive about who I am and how I protect myself, so I can be coached in moments when I revert to my Act.
  • Complaint: a way of speaking in which the speaker has an underlying, unidentified commitment to their position without intent to take action.
  • Racket: a reoccurring complaint in which the speaker is unwilling to take responsibility and unwilling to take action to resolve the situation.
  • Being Cause in the Matter: choosing to play on the court rather than complaining in the stands.
  • Law of Attraction: we attract people into our lives like ourselves: like attracts like. We only have to look to our friends to see who we are, and how we show up for others.
  • Giving without Expectation of Return: we believe that the highest form of being is giving to others with no strings attached. Our lives will be great because through the law of attraction, we will attract others who “give without expectation” into our lives.
  • Tribe: a group of people who, when exposed to a brand, take it on as their own. By nature, tribe members communicate, blog and live life on a level playing field. There is a shared excitement and deep understanding of the other person. A tribe is small at the start and is not mainstream.
  • Code: a collection of thoughts that comprise the soul of the brand.
  • Hedgehog: an intersection of three circles: Passion, Best in the World, and Economic Engine.
  • Tipping Point: the moment in which a tribe’s brand conviction is so strong, it emanates a desire to belong to the entire population.
  • B.A.T.N.A: Best Alternative to a Negotiated Agreement. We go into every negotiation knowing our BATNA, as well as the BATNA of the other party. Strong alternatives ensure that we are never negotiating from a place of desperation and that any agreement that we enter into will be great.
  • Differentiator: The “thing” that sets us apart from the competition.
  • D.A.I: We expedite the decision-making process by first identifying the Decision Maker, the Advice Giver and the Informed Stakeholders in any major decision.
  • Push It Down: Every decision represents a certain level of risk to the organization. If a decision is of low risk to the organization, push it down. Empower someone more junior and delegate that decision!
  • The Devil’s Advocate: When making key decisions, we first stress test our positions by assigning someone to play “Devil’s Advocate”. We rely on that person to express a view opposite to ours and to poke holes in our beliefs as a means of encouraging debate and coming to a more considered conclusion.
  • Private Collection: A means of data collection by which a question is posed, and everyone is asked to silently compile their considered reply in writing. This ensures that everyone is “heard”, and that those who are quiet or introverted are not left out of the conversation. The loudest voice isn’t always the most valuable.
  • Quality: the customer wants to buy the product again.
  • Design: make it perform first; then make it beautiful.
  • Integrity: we do what we say we will do, when we say we will do it, in the expected way. And when we fail, we clean up the mess we made.

The Fabric

From my first yoga class, I knew exactly the fabric I wanted to use to make my yoga apparel. I had used a version of my dream fabric as a first layer under snowboard clothing for the emerging 14- to 18-year-old female snowboard market. At the time, it was thick and shrunk too much, but the cottony feel of this particular synthetic fabric was amazing. It was unique because I could apply technical properties to a synthetic fabric to manage sweat and stink. As a bonus, it was matte black. With Westbeach, I sold 57 pairs of those pants wholesale globally. All 57 women who purchased them wrote to me pleading for more.

I realized that a lighter version would be ideal for yoga clothing. My key invention was to cut the pat- tern extra wide – effectively using twice the fabric of existing dancewear pants – so that when the fabric stretched, it would not be see-through or shine. I worked with a fabric mill to improve on the shrinkage, weight, and technical capabilities. The fabric still shrunk too much. It was good but not great.

The next thing to consider was the stitching and seaming of the apparel. From my time as an athlete designing triathlon clothing in 1979, I knew damp, snug clothing combined with repetitive movement and an open seam line, always resulted in chafing.

I couldn’t believe anyone at Nike had ever run 10 kilometres in a pair of Nike shorts without developing a rash on their inner thigh. They left their inner leg seams wide open. The result was very painful for anyone with prominent muscles. I guessed Nike runners were too skinny or were paid too much in sponsorship money to complain.

Athletic designers didn’t exist in 1998. I was it. One hundred percent of designers coming out of schools focused on runway fashion and I sensed a void. I wondered if this would become a major point of differentiation as time carried on. Designers were first and foremost aesthetically driven. Apparel function was uninteresting to high fashion designers because valuable hidden technology could not be displayed on fashion runways.

Over the previous year or two, I’d been reading about a new type of garment construction in which two pieces of material abutted one another in something called a flat seam – meaning there’d be no raised seam inside the garment and, therefore, less chafing with movement.

I immediately understood that flat seaming was vital to solving the athletic problem of rashing. But the prohibitive cost of the sewing machines combined with the challenges of training inexperienced and unsophisticated retail staff to educate the customer on this hidden technology meant that the consumer would probably not understand the value.

Refining the fabric took over six months. During this time, I also made a major purchase – two Japanese flat-lock sewing machines for a total price of $80,000.

By the time I’d imported these machines and developed the fabric, I’d spent more than 10 percent of the money I’d made from the sale of Westbeach. It felt like a huge outlay of cash, especially given that I was still a long way from having a final product.

With the flat-lock machines, I could cut labour time down to about six minutes per pant. It was almost like using a robot. I had expensive fabric, expensive machines but low labour costs. With robot-type machines, I could match the price of Asian manufacturing in Canada.

Before flat seaming, all seams were ugly, so fashion designers hid them. With beautiful flat seam technology, I could pull the seams outside as a functional solution and prevent rashing. By making seams visible on the outside of the garment, I inadvertently discovered that these seam lines accentuated the female body.

I believe this seam idea changed fashion design for the next 20 years. As a side note, flat seaming would not have been possible until someone had invented seaming threads that would stretch at the same rate as the fabric.

A New Generation of Women

A few years earlier, I’d dated a top-level track athlete. She was incredibly fashionable, passionate about the environment, and had a great mind for business. She was younger than I was, and she gave me a new context for the next generation. Our relationship didn’t work out, but she’d given me the experience of observing a new market of women that had never before existed.

As fashionable as she was, her athletic clothing never fit well, and it wasn’t flattering. I’d long wondered why.

The answer lay with the mantras of Adidas and Nike. At that time, both companies were all about men, shoes, competition, and winning at all costs. Their idea of women’s athletic clothing was to take men’s apparel and “shrink it and pink it.” It didn’t perform well for women, but there were absolutely no alternatives.


While vacationing in Mexico in the ’70s, I remember seeing a homeless man wearing a 20-year-old Aca Joe sweatshirt. It struck me at the time that, despite its age, the sweatshirt still looked solid.

Aca Joe colour-dyed their fully sewn garments in a hot dye process resulting in zero post-purchase shrinkage and a velvety hand feel.

Considering that Aca Joe technique in the context of my new venture, I knew I wanted my company to be known for goods that would not shrink when a customer got them home. I wanted everything I sold to look, feel, and perform as well as it did when it was purchased five years earlier.

At that time, women often had only one set of athletic apparel and would reuse the same outfit day after day. A hot wash eliminated stink but ensuring the garments wouldn’t shrink was key. The only way to achieve this was to put every garment through a hot water wash and in a hot dryer before selling it to the customer.

Devising the Business Philosophy

From Westbeach, I’d gained a superior understanding of Canadian and Asian manufacturing. I’d also acquired the business skills to manage a small-to-mid-sized company. I had 18 years of vertical retail experience, which was about 18 years more than any other person on earth.

I also loved to interact with people. I believe this made me unique because people in the apparel business tended to be either manufacturers who did not gravitate towards people or retailers who enjoyed interacting with people but had little understanding of manufacturing. I straddled both. I was not an expert in anything other than knowing how the vertical retail puzzle worked.

I had a healthy chunk of money for start-up costs. I was starting from scratch, but I already knew what I wanted the company to look like in five years. All I had to do was work back from that five-year vision to create a plan.

Choosing to be unconstrained by my past experiences, I knew I could create this new company any way I wanted. All the little things that hadn’t worked for me at Westbeach could be easily solved in my new business philosophy. The model I was formulating was so counterintuitive to “normal” apparel methodologies that I wanted to think fresh. Each piece of the puzzle had to work with the others. A change in accounting procedures could easily impact the speed in logistics. A change in the design of a garment could mess up the layout of a store.

I also knew I wanted to call my salespeople “Educators,” and that much of our success would rest on our ability to educate customers on the technical solves that they could not see (like the silver threads to kill bacteria for anti-stink). I believed that with education, the customer would understand why our product was three times the price of that to which they were accustomed.

I knew this model would only work if the Educators were phenomenal. It occurred to me that I could potentially transform a defined group of post-university women into Educators, using a catalyzed self-development program. Again, people development was the convergence of my Hedgehog Principle, as developed by Jim Collins.

Finally, I wanted to maintain 100 percent control over my brand without any dilution from middlemen. This meant staying as far away from wholesale as I could and totally embracing vertical retail.

To explain vertical retailing, I need first to describe the wholesale business model: manufacturers (known as wholesalers) make a product and sell it to a retail store which then sells to the customer. The wholesale model has a middleman.

With the wholesale model, great technology is impossible. As a wholesaler, when I made a stretchy, black, first layer snowboard pant for women in 1996, it cost $40 to make, and we sold it to snowboard shops for $80. The shops would sell it to the customers for $160. I knew if I changed to a vertical model, I could bring the cost of the pant to $30 and sell it inside my own retail stores for $90. At $90, I was sure I could sell thousands!

With wholesaling, I couldn’t get the customer to pay for technology they couldn’t see. Retail stores like Dick’s Sporting Goods didn’t have trained salespeople who could enhance the value of the product by educating customers on what was hidden. Further, retailers rarely paid on schedule – or sometimes went bankrupt – which meant the manufacturer had difficulty planning their budget (as was the case for Nike, Under Armour, and Adidas with the Sports Authority bankruptcy of 2017).

When a company’s primary revenue comes from wholesale, the store buyers call the shots. Typically, buyers review data on what has sold in the last quarter and extrapolate from that to decide what they will buy in the future. In effect, wholesale buyers just want more of the same as last year. Therefore, successful but outdated designs are rewarded. Buyers are given bonuses for achieving annual budget metrics and are dis-incentivized to risk.

Another danger of wholesaling is the loss of control over markdowns. Too many discounts on products can cheapen the value of full-priced items. Deep discounts can also damage the overall image of a brand.

I wanted to design apparel from “amnesia” – as though I’d just woken up in the hospital with no memory of my past or any apparel I’d ever known. I wanted lululemon to be design-driven, not buyer-driven, which would mean that all final decisions would be made by designers and not buyers.

One benefit of vertical retail is the complete ownership of branding and the customer experience. I wanted complete control of the store display and staff hiring. Every single detail the customer saw in my ideal store would go through a specific creative experience.

Vertical retail comes with its own challenges, however. There are more moving parts in a vertical retail operation. Because people are involved, a great retail company must love people. Hiring, paying, and maintaining staff can be arduous. The overhead expense of operating retail stores must be added to the price of the goods sold. Paying rent, storing inventory, making tenant improvements, and store infrastructure all represent major capital expenditures – and unfortunately, so does theft.

My new business philosophy would skip the sporting goods stores. I would own my own stores and take both the manufacturer and the retail store revenue. I would make enough money to be able to develop and pay highly educated people. I would make women’s technical athletic apparel beautiful, and then sell it at a premium. I would do what had never been done before.

Yet again, the time had come for me to risk everything.

Defining the Target Market

My experience taught me that if I saw something three times within a short period of time, it would show up in the mainstream public five to seven years later. In 1998, I read an article about yoga, heard a random person mention yoga in conversation, and saw a poster on a telephone post promoting one of the very first yoga classes in Vancouver.

But those three things were not the only trigger points for me. That year, I also read a statistic that said 60 percent of the graduates from North American universities were women. I was stunned. When I’d attended University in the ’70s, it seemed like our graduating class was only about 20 percent female.

Before 1998, a common misconception was that most women in North America would get married, then pregnant, and leave the job market before the age of 24 – that had been the case with many of my friends. But, because I’d read articles about eliminating poverty in Africa through educating women to affect lower birth rates, I saw a different future. I believed that a new demographic of highly educated women would have fewer children and wait much longer to have them.

I believed this would be the new North American order – a specific market segment that had never before existed. This market segment was the 24 to 35-year-old woman who was single or engaged, had no children, was highly educated, media-savvy, athletic, and professional. These women travelled, owned their own condos, earned $80,000 a year, and were very stylish.

The more I considered them, the more of an identity, context, and social history unfolded in my mind. I believed this entire pool of women would be untapped by other businesses because the prevailing thought was still “why risk investing in a female employee if she could just leave our business at age 24 to start a family?”

Power Women and Super Girls

I often develop a sort of “thesis” as a means of truly identifying and understanding various market segments. It’s a branding exercise that provides a historical context for me and enables me to design into the future of that specific target market. I have also found that there is power in giving market segments a name as other social scientists have done (e.g., Generation-X, Millennials, and so forth).

As I considered this particular group of women, I looked first at their family history and who their parents might have been. It occurred to me that in the ’60s and early ’70s, the birth control pill had come into widespread usage.

The pill immediately transformed the sex lives of anyone under the age of 40, sparking what is commonly known as the Sexual Revolution. Women suddenly had significant control over conception. If they did want children, they could decide when, and how many. There was a newfound sense of independence in this ability to delay childbirth. There was also the opportunity to pursue careers that had, to date, been dominated by men.

Meanwhile, men’s lives remaining mostly unchanged by the pill, and they had no idea how to relate to this newly independent woman. This new shift in power ushered in the era of divorce, with divorce rates peaking in the late ’70s and early ’80s (rates that have since undergone a steady decline).6

With all the publicity around divorce and equality, a new female market segment was created in the ’70s and ’80s. I came to think of this segment as Power Women. These women put in long workdays, kept a clean and orderly home, and gave their children all the love they’d had pre-divorce. What I observed is that they gave up their social life, exercise, balance, and sleep.

I had read that the hormone dosage in the original birth control pill had been too high. That dosage, combined with the Power Women’s lack of sleep, work-related stress, and poor eating habits worked together to possibly cause the increased breast cancer rates in the ’90s7. Too many Power Women had looked to their fathers to define business success, emulating both their drive and their toxic lifestyles. Regretfully, for many Power Women, this would ultimately cost them their health and, in some cases, their lives.

With the rise of the Power Women came a societal shift. These women wanted to be invested in, to rise to the top, and be treated the same as their male counterparts. The misconception that all women would leave their careers at 24 to have children had become a thing of the past.

The ’80s also produced new fashion trends and Power Women were seen in the boardroom wearing power suits with big shoulder pads (as a companion to the male suit and tie), a look that spoke to their confidence and their newfound place in the business world.

The daughters raised by these Power Women subconsciously knew that education was essential for their financial independence. They knew that education and a substantial income were critical to managing both a household and a career simultaneously.

Many of these daughters spent weekends with a newly divorced father who had no manual for how to be a single dad. These fathers did their best to encourage their daughters to pursue sports and activities and became their coaches and mentors.

As youngsters, I suspect these girls were influenced by Saturday morning cartoons, which traditionally featured men wearing capes and stretch fabric outfits, running around and saving the world. By the ’80s, most of these cartoons now included a female superhero – also wearing tight, stylish, form-fitting suits and capes.

I felt these powerful cartoon women became iconic to these girls, who were doing what most adolescents and teenagers do: dressing in a manner opposite to their mothers. They did not need to look like boys or men to compete with them; cartoon superheroes were depicted as equal. I coined this market segment the Super Girls.

In my mind, Super Girls didn’t have any context for gender inequality. It hadn’t existed for them in the same way it had for their mothers. They knew they were just as well-educated as men and had been brought up in an era that, if anything, favoured girls in education. The Super Girls that I knew had no use for Women’s Events or Women’s Achievement Awards. They were playing in a bigger pool and were the “best of the best,” not the “best of the women.”

The thesis I created for these Super Girls worked for design and branding purposes, which meant brand and design had only one person on which they needed to focus. I defined a single Super Girl to be 32 years old and born on the 28th of September. I called her Ocean. Each year, since 1998, Ocean never got a day older or a day younger. Every “Ocean” in the world would be our sponsored athlete, just as Nike chose specific pro sports men to sponsor. If Nike or lululemon couldn’t make athletes excited about their product, then the rest of the market wouldn’t be excited either.

For 22-year-old female university graduates, I posited that their utopia was to be a fit 32-year-old with an amazing career and spectacular health. She was travelling for business and pleasure, owned her own condo, and had a cat. She was fashionable and could afford quality. At 32, she was positioned to get married and have children if she chose to, and to work full-time, part-time, or not at all. Anything was possible.

For 42-year-old women with two to three children, her former 32-year-old self represented an era when time seemed so available – a time without the pressures of motherhood and when keeping fit was easier.

As my ideal customer and demographic, the 32-year-old in 1998 did not yet exist. In 1998, she was

24. Essentially, I imagined who she would be eight years before her 32-year-old self existed. I then designed for who I knew she would become in eight years’ time. Because Super Girls were iconic to women of all ages, I felt they would best represent the perfect way to dress for a busy life.

The Church of Athletics

The stage was set for yoga wear in 1998. The Super Girls had just graduated from university. They averaged 24-years-old but would soon become the 32-year-old urban professionals I’d envisioned. Super Girls were determined stay fit and healthy.

Yoga was a great way to maintain balance, and because it was non-competitive, timesaving (nearby at a local studio), and mentally calming, it appealed to the core of what women wanted. I’d experienced the endorphin rush of yoga for myself – I knew it would be on par with other great endorphin producers of our age: sex, drugs, espresso, surf, skate, snowboard . . . and the soon-to-be-developed “ding” of a smartphone.

Why Women Would Pay Three Times More

Even though my product would be three times the price of Danskin dance pants, I could deliver a superior quality product the customer would buy in volume only with a vertical retail model. Starbucks was doing the same thing with coffee.

At first glance, no one could believe a person would pay three times the average price for better quality, but I knew the Super Girls would have the professional jobs that would pay them well. I knew they would invest in their wardrobe. I knew that after owning a lululemon piece for five years, women would know it was the best clothing investment they’d ever made.

They would have disposable income, devotion to health, organic food, and athletics. They were fit and were waiting on average four to eight years longer than previous generations of women to have babies, so they could invest longer term in their wardrobes without any concern of how their bodies might change with pregnancy. There was a propensity for Super Girls to buy fewer, better-quality ward- robe staples that would stay in style longer. They were willing to pay for quality material and fastidious construction.

The clothing was also designed so that it could be worn outside the gym. Workout clothes could now be worn to drop the children at school, go shopping and then go for coffee. Before lululemon, people had never felt comfortable walking around all day in athletic clothing.

I had met my ideal customer, at least theoretically. To take this to the next level, we had to speak with the Super Girls themselves and ask them to help us create a new future for athletic apparel.

While I believed women would respond positively to the designs taking shape in my mind, my experience told me it was imperative to contact my target market and listen to what they had to say. My tried and tested way of connecting was to host design meetings and find out exactly what women wanted.

I could sense the decline of the East Coast American fashion houses because in the long run, it made no sense to buy a fast fashion brand built on a manufactured fake image and mediocre quality over a brand built on authenticity with enduring quality. Of course, I also knew if the product didn’t cosmetically enhance a woman’s image of herself, she wouldn’t care about quality or technology.

Initial Design and Formation of lululemon

Female athletic fashion seemed to die after the short run of Reebok’s step classes and Jane Fonda workouts in the early ’90s. In the ‘90s, athletic companies made most of their apparel money from T-shirts with big logos on the front. There was no such thing as an athletic, technical apparel designer. Finding a designer who was 99.99 percent focused on technical solves was impossible. Most designers went to design school to showcase their individual creativity and design flair on the runway. Design was all about the look. There was no glamour in technical function. If it was great, technical function was virtually invisible to the naked eye. Lastly, yoga was rare in big cities. I was entering uncharted territory.

Amanda Dunsmoor was a designer I had hired at Westbeach to design outerwear jackets. She was athletic and had the perfect style of a fresh, healthy Vancouver athlete. From my kitchen table in a decrepit one-bedroom Kitsilano apartment, we developed samples in anticipation of conducting focus groups.

In Amanda’s words: “There was Nike, there was Adidas, there was Reebok, but there was really nothing that catered to women who wanted workout clothes that actually fit and felt good. Chip was really keen on finding the perfect technical fabric.”

I would sketch something on paper and give it to Amanda to expand into a design. Even though my sketches were usually rough, I made sure I was very specific about certain aspects. I would tell Amanda: “I want reflective here; I think it’s important that the seams are flat and away from underneath the arms and inner thighs so that there’s no chafing; I think it’s important the pants have a diamond crotch gusset to solve for camel-toe and make pants approachable for women to walk to the studio in public.”

Even in the beginning, the most important item was the pants. Most of the pants in the marketplace at that time were high-waisted, non-gusseted, and shiny with open seams in the worst places. They were simply dance tights women only wore when other women were around. Women were not yet wearing running tights. I wanted something with a bit of a flare at the ankles so that it was more flattering to women with rounder hips.

I was adamant that the rise of the pants would mimic that of men’s surf shorts. I knew athletes had a bigger butt and a higher thigh-to-waist ratio. That meant the back rise had to be significantly higher than the low-rise front. Then athletes could bend over or squat without exposing their butt cracks and without having to put up with the doubling up of fabric in the front. I wanted crop tops to vent body heat as many yoga classes had moved to dedicated heated rooms. This was a radical departure from the high-rise front and back of the mid-’90s and of styles after 2014. Pants with high-rise fronts in 2018 were made in response to women wanting their pants to shape their waists. In 1998, fit women did not want a high-rise front – they wanted a low rise to expose more skin to the air to control sweat while doing hot yoga.

The first line was simple. We had two pants, a pair of shorts, and three tops. There were six designs and around four or five sizes of each style. As the fabric was so expensive and a dye-lot was about 2,000 metres, we could only buy one colour – and that colour was black.

Even with those constraints, I developed an idea to make the pants with black thread or multiple coloured threads, and then multiple colours of fabric trim taping around the neck and armholes of the tops. From one black fabric, we created various colour-ways to give the customer options.

The more we reworked the styles for fit, the more confident I was we had a great product, but I still needed a name for my new company. The Westbeach name had been vital to the success of my surf, skate, and snowboard brand. I needed something for the new line that would have the same iconic and memorable feeling.

The Name

I came up with about 20 possibilities for the name and logo, including Athletically Hip. Another name, lululemon athletica, had a history attached to it.

At Westbeach, we purchased a skateboard brand called Homless Skateboards. We produced Homless for two or three years, and it was becoming very popular in Japan, so I proceeded to trademark the name. But through the trademarking process, I found there were already countless variations on the name – mainly since hom (or homme) means man in French. Trademarking the name was not a viable option.

Skateboarding had crested, and snowboarding was blowing up, so I told all our distributors and salespeople that Homless Skateboards was done. It didn’t make sense, I thought, to put any more re- sources into the brand or skateboarding.

To understand Japanese psyche, it’s important to know that when you deliver something they love for two years and then you stop, it becomes doubly valuable – like rare art. That year – 1990 – as I brought Westbeach’s new snowboard apparel to our Japanese buyers, they said, “Mr. Chip-san, where is Homless?”

“We’re not doing Homless anymore,” I told them.

The next year, even as snowboarding apparel exploded in popularity in Japan, the Japanese buyers asked me the same thing. “Mr. Chip-san, where is Homless?”

Again, I had to tell them we weren’t doing it anymore. At that time, the yen was at its very pinnacle, and the Japanese were buying up hotels, property, and brands in North America as fast as the Chinese did in 2018. We got a call from my Japanese buyers.

This time, it was an offer to buy the Homless brand name. This surprised me, especially since I couldn’t trademark “Homless” and Westbeach didn’t own it. So, when I gave the Japanese a price I thought was ridiculous and they came back after mere seconds to say “okay,” I was astounded. This felt like the easiest money I’d ever made.

After that, I often thought about why my Japanese buyers liked the name Homless so much. I could see how the big Japanese trading companies were coming up with North American/Western-sounding names because the Japanese consumer at the time wanted “authentic” Americana.

On further consideration, it seemed the Japanese liked the name Homless because it had the letter L in it, and the Japanese language doesn’t have that sound. Brand names with Ls in them sounded even more exotically North American/Western to Japanese consumers, especially the 20-year-olds.

This felt like a neat idea, so over the next few years, I played with alliterative names with Ls in them, la la la, jotting down variations in my notebook. This continued until the time came to develop a brand name for my new yoga apparel concept, and during this creative experimentation, lululemon was one possibility I wrote down.

It came out of nothing. Absolutely nothing. And it was risky at the time because the word “lemon” was attached to poor-quality ’80s Detroit automobiles. However, the word lemon also represented fresh- ness. Either way, I would have to see how the focus groups responded to it.

I wanted a lower-case L to start the word lululemon because I wanted an athletic name that was less in-your-face than male-focused athletic companies. Meanwhile, I sketched a bunch of logos for the focus groups to discuss, then worked with a graphic artist, Stephen Bennett, who put a circle around a stylized “A” that I had sketched. The “A” was made to match the name Athletically Hip.

To trademark a corporate name, the name has to have a “descriptor” name attached to the marketing name. So, once I had decided on the name lululemon, I needed a descriptor that would help explain what the company was. The obvious descriptor word was “athletic,” but I associated the word “athletic” with men’s smelly, equipment-heavy, unclean sports stores. Because lululemon was to be a cross be- tween West Coast technical and Euro styling, I decided to put an “a” on the end of “athletic” to create a new made-up sophisticated Italianesque word: “athletica.”

The Focus Groups

As I only intended to be a vertical retail operation, I hired a woman named Amrita Sondhi to assist me in dealing with the hundreds of operational details involved in opening a retail store, including assembling focus groups.

As far as the focus groups went, we invited 10 groups of 10 women. Their ages ranged between 20 and 40. The focus groups took place over a couple of months at an apartment I’d recently moved into, about a block from Kitsilano Beach.

“The focus groups were fun,” Amanda Dunsmoor would later recall. “We would just gather around Chip’s kitchen table. Most of the people he knew from the community, some were yoga instructors. I re- member there was an artist there, reworking a logo. The focus groups helped me understand what people were wanting in yoga wear, and that was essential for me because I had never done yoga. I would not have been able to do it if not for their feedback.”

It didn’t take long for us to create an effective way of running our focus groups, despite having no real training. Our questions included asking the participants what they thought of 20 possible names, 20 possible logos, and their favourite running shoe brand.

We also asked about vitamin usage, emerging trends in athletics, and whether our participants had ever visited a massage therapist, homeopath, or chiropractor. We even asked about their favourite music and what could be improved about women’s change rooms and the entire shopping experience.

Most importantly, we asked each person in our focus groups to bring one piece of athletic clothing they loved or wanted improved.

One of our first designers, Shannon Gray, explains, “The focus groups were so important to the evolution of lulu’s product design and became part of the design process for many years. We asked people to bring their favourite pieces of athletic clothing. We were able to learn from all types of athletes what they loved and what they felt was missing in the market. We were able to learn what companies were doing better than us and how we could leapfrog what they were doing.”

We started to see trends. We learned that asking open-ended questions about a wide variety of topics encouraged the participants to engage in conversation with one another, rather than just replying to us. This, we found, was what got us the interesting and useful information.

Usually, during each group, I would have three “aha” moments. But I also found this was the same for the participants. One woman would say something that would cause the rest of them to suddenly get animated and think of the topic or question in a whole new way. When this spontaneous conversation happened, we would sit back, listen carefully, and take notes.

Something I’d learned through personal development was that you can’t create the future without first clearing up the past, so we made a point of having the participants talk about what didn’t work for them in the athletic clothing or the retail experiences that were available. Once this clearing was finished, and the participants got any background issues out of the way, we could move into questions to solve the unknown future.

We wanted to know what our participants thought of the future of athletics and how athletic apparel needed to perform to provide for changes. For instance, snowboarding had gone from hard-boot, ski-racing clothing to free-ride, to pipe-riding, to powder, and each stage in this evolution required different apparel. Likewise, as it grew in popularity, yoga morphed from one version to the next – power, Bikram, flow, sports yoga, meditative yoga, etc.

The most satisfying part of the focus group experience was watching people’s reactions as they touched our fabric for the first time. No one had created a technical fabric that felt like cotton before. I already thought this material was special (although it had yet to be perfected), but the feeling of seeing someone’s eyes open wide as they touched it demonstrated that we’d made something unlike anything that had come before.

I believed in my gut that this pant innovation would affect people’s behaviour and the way they lived their lives. Once our focus group participants felt the fabric with their hands, they could hardly wait to put it on and feel it against their bodies.

The people in these focus groups could see the possibility of performing without all the hang-ups of transparency and fabric turning shiny when it stretched. But it went beyond that: what I really saw was the possibility of customers using our clothing not just for yoga but also to go to the studio, or gym, and back. Solving the camel-toe problem was probably the key invention. Without that solve, the pants couldn’t be worn on the street. I knew Super Girls valued time above all else. If they could go through their day without changing between activities, I could save them 45 minutes a day.

Westbeach succeeded in surf, skate, and snowboarding because the athletic look of those sports transferred out onto the street. I failed at street clothing for triathlon, beach volleyball, and mountain biking because they did not make that transition. I knew the real success of lululemon would be in the ability of the apparel to perform 24 hours a day, in several settings, if needed.


At the end of every focus group, I came away with three or four improvements I’d never even considered. The groups talked about the length of pants and the psychology of sizing. Because we took the time and effort to run these groups, I not only came away with what has since become an iconic name and logo, I also avoided countless mistakes that could have proved costly, or even, disastrous.

To this day, I answer the, “Where did the name come from?” question daily. The answer is that I took 20 names – including Athletically Hip and lululemon – to the focus groups. I was almost certain the participants would go for Athletically Hip, but to my surprise the overwhelming favourite was lululemon.

Also to my surprise, the participants selected the subtle, stylized letter A, intended for Athletically Hip, as the best logo.

Long Pants

In 1996, I was selling snowboard boots at Westbeach, and in the first week, all the size 13 to 15 boots sold out. Further back, in 1973, when I was a six-foot-three teenager, I was five inches taller than almost everyone I knew. By 1997, my height felt normal. The population was getting taller.

I’d never been able to find pants of a decent length for me, especially with shrinkage after a wash. So here was another issue I could solve. As I had spent considerable time in Japan, I noticed most stores had sewing machines for on-site tailoring. The Japanese body is generally long in the torso but short in the arms and legs. For Japanese retail stores to sell American goods, every pant needed to be hemmed on the spot.

I loved this idea and wanted to incorporate it into the very early stages of lululemon. As I saw it, with our own stores we could build the cost of hemming into the product and provide a pre-shrunk pant that was the perfect length for tall women. I decided I was committed to making perfect pants for tall women.

Styling and Design

On my trips to Europe in the ’70s, something that stood out to me was how people dressed – specifically, how well they dressed. The design lines in their clothing created the illusion that their bodies were more fit than they were. I could see how much thought Europeans put into styling. It differed greatly from what I’d seen in New York fashion magazines or non-existent fashion on the West Coast. There was nothing functional about European fashion – it just looked really good.

I would think about how to bring the dichotomies between European style and West Coast function together into something that had never existed before. That was the birth of the idea that eventually became streetech, and its inception can be largely credited to my seeing the world at a young age.

Until lululemon, fashion dictated that either the top or the bottom was tight, but not both. Incorporating stretch yarns made fabrics more form-fitting, and for the first time in history, women wore a tight top and a tight, low-rise bottom. Because of hot yoga rooms, a crop top was a functional necessity, and the combination of all three created a look no one in fashion would have ever thought possible.

My success at Westbeach and then at lululemon was due to honing a perfect combination of Euro- style and West Coast function, but always leading with function.

Accentuating the attributes that made people feel confident – wider shoulders, smaller waists, slimmer hips – meant Guests would feel good and look good in our clothing. I realized that the shape of our logo provided a perfect contour to enhance the natural shape of a woman’s body. I designed the lululemon logo into the seams of tops and hoodies. This was a critical shift in brand design for us because we could subtly show our logo without it reading as such.

I wanted the same for pants. There was a huge debate about where to set the seam lines on pants. Women told me they preferred side seams because when they looked in the mirror, side seams slimmed their hips. I wanted to move the side seams to the back to frame the bum and make the bum appear smaller. I persisted because I believed that eventually men might disclose to their partners that the pants looked great without their ever really understanding why.

I wanted beauty to be where the visible meets the invisible. More than anything, I wanted lululemon to stand for great quality, and I wanted our Guests to be proud to wear it.

That’s how lululemon athletica came to be.

  1. Eliyahu Goldratt, The Goal (North River Press, 1984.)
  2. Stephen Covey, The 7 Habits of Highly Effective People (Free Press, 1989).
  3. Brian Tracy, The Psychology of Achievement (Simon & Schuster, 1989).
  4. Jim Collins, Good to Great: Why Some Companies Make the Leap…and Others Don’t (Random House Business, 2001)
  5. Ibid.,
  6. Miller, Claire Cain. “The Divorce Surge Is Over, but the Myth Lives On.” The New York Times, The New York Times, 2 Dec. 2014,
  7. Roni Caryn Rabin, “Birth Control Pills Still Linked to Breast Cancer, Study Finds.” The New York Times, The New York Times, 6 December 2017, (Accessed on August 16, 2018).