1. Do What You Love: After years of working in marketing, João rekindled his love of basketball and sneakers. By focusing on the latter, João was able to build a brand that he was passionate about, which he feels is essential for any entrepreneur trying to bring their product to market.
2. Identify Gaps/Disrupt the Market: The sneaker industry is headed by major brands that dictate trends in the market. Eschewing a ‘fast fashion’ approach to design and production, João focuses on offering made-to-order sneakers that not only look good, but people can feel good about wearing.
3. Have a Purpose: At the core, Diverge is a socially and environmentally driven brand that also happens to make a stylish product. João believes that having a purpose beyond being a cool sneaker company is attractive to customers and has contributed to Diverge’s steady and sustainable growth.
4. Be Resilient: Despite what entrepreneurs on social media portray, launching an E-Commerce brand is anything but easy. João believes emotional resilience is necessary for keeping a level, steady head when faced with challenges – there will be many.
5. Focus on Steady, Sustainable Growth: Rarely does an E-Commerce brand experience meteoric success right out of the gate (and if they do, it’s usually short-lived). João feels that by focusing on key factors directed toward a steady growth, a brand has a stronger chance of being sustainable, and ultimately profitable.
After a successful career in marketing, João Esteves returned to one of his first true passions – basketball. A lifelong sneaker enthusiast, he was tired of seeing the same BIG brands pushing the same mass-produced styles season after season. Be inspired by how João and Diverge are disrupting the sneaker industry’s game with custom design footwear backed by a commitment to environmental and social impact.
Meet João Esteves, Founder of Diverge!
DiVERGE is a decentralized digital brand that promotes environmental and social impact in the apparel industry. DiVERGE empowers every individual through self-expression using a co-creation digital platform that bridges the digital world with the physical world. The brand has an environmentally responsible “slow fashion” approach with a made to order supply chain and is also socially active through a proprietary impact program for young people at risk of social exclusion.
Before starting his entrepreneurial journey at 42, João had a successful corporate career in marketing and communications. A position as a marketing director for a sports retailer in Portugal reignited a passion for sneakers that stemmed from his days playing basketball. “We were seeing the last moments of the athleisure phenomenon, of being able to wear casual clothes to more formal occasions,” he remembers. “I thought there was an opportunity to do things differently in the sneaker space.”
Big sneaker brands, João believed, were offering customers limited options regarding color while mass producing product in circumstances that were environmentally and socially irresponsible. Founded in 2019, Diverge (the company’s name comes from a famous line in Robert Frost’s poem ‘The Road Not Taken’) aimed to disrupt the industry by giving people creative freedom to design footwear that not only looks good, but they can feel good about wearing. “We only produce what we can sell, because that is how we can be less impactful on the environment,” João explains and goes on to say, “and we also developed our social inclusion projects for our community – we work with young adults at risk for social exclusion and poverty, eventually launching microbusinesses for them on our website.”
Diverge’s internal team is lean yet robust with members working in areas that include technology, operations, design, marketing, and social impact (production is outsourced). Currently, the company follows an in-office structure. “I have nothing against hybrid or remote,” João says. “But because we were born just before the Pandemic, the company lacked a core focus culture and a way of interacting. And I’ve been working on building that back up.” Focusing on slow growth has been beneficial in the process, he notes.
CX Philosophy and Cultivating Meaningful Relationships
Diverge approaches CX with the goal of giving customers the tools and guidance they need to create a custom shoe that reflects their style and personality. João elaborates, “as a brand that wants to be for those people who diverge, or take ‘the road not taken,’ it’s important that we try to create a journey where we show you what can be done, while inviting you to put a bit of yourself into the sneaker, you’re about to co-design with us.” From a technical standpoint, this means finding a balance between the photorealistic 3D customization tool and website performance to make the design process as clear and seamless as possible for customers.
“We like to be very personal,” João says about communicating with customers. For example, because size is critical when buying made-to-order sneakers, Diverge sends an email to customers immediately after they make a purchase to double-check shoe size. “We’ve been able to bring down the exchange rate to 7-8% versus 30%, which is the industry standard.”
“From the start, we wanted to be a brand about customization,” João reveals. “It was a question about what the best technology is, and using it to enable a quick customization process with the right level of realism.” It took numerous rounds of adjusting levels in website performance and customization for Diverge to strike the balance between the two key CX components. Typically, a custom order has a production time of 2-3 weeks (up to 4 weeks during peak seasons).
After launching as a D2C (direct-to-consumer) custom sneaker brand, Diverge has expanded its business outlook. This approach was successful during the first couple of years, João remarks, with the company having stake in almost 100 markets, 95% outside of Portugal. “It was easy for us to grow, but it wasn’t easy for us to grow profitably.” The Pandemic also made it difficult to attract outside investors.
Revaluating strategies, Diverge diversified and incorporated B2B (business-to-business) into its business model. João explains that being a socially and environmentally focused brand appeals to major companies in the hospitality and tech sectors that want to do special editions for their employees. “It became a second revenue stream and has since become a very relevant part of who we are.” While not by design, the social impact program has become a significant revenue channel as well.
The Role of Customer Retention
Recorded at around 20%, customer retention has been a key factor in growth at Diverge. João credits prioritizing CX as a main reason people continue to buy from the brand. “Having customer retention and striking enduring relationships with our customers is what we are all about. We want to follow you on your journey and make you feel you have a brand that delivers at that moment in your life.”
Made-To-Order Brand Plans Peak Season
Diverge’s peak season coincides with the holidays with November and December being the busiest. While not entirely aligned with the brand’s ethos, João says they do Black Friday because “it’s the moment of the year when people are more focused on consuming and have the resources, so we need to be a part of it.”
Having no back stock means the company must plan accordingly to meet demand. “We compile orders, presenting them to our workshop in a way to optimize production… And we’ve been growing, extending to a bigger number of manufacturing partners.” João admits it’s been a challenging process because most factories are structured for mass production, which makes discussions about brand philosophy and opportunity for future business imperative.
Looking ahead, João wants to continue to build main revenue streams – D2C, B2C, and the social impact program – believing each holds many opportunities for Diverge. “My main objective is to continue to grow… I did this because I thought it was a great idea, that the market was big enough, and there was space for a new brand to do things differently. If I could make a profitable business, great. But we don’t need to be huge, I just want us to be relevant.”
Overall, João is focused on continuing to pay his employees good salaries, providing them with enriching opportunities, and making a social and environmental impact.
Social influencers are constantly pushing brands and their products, ultimately making E-Commerce seem like ‘easy money.’ João wants aspiring entrepreneurs to know it’s all an illusion. “This is not for everyone,” he emphasizes. “The sacrifices you need to make, the stress you’re going to be handling daily to cover all the bases require every single ounce of energy you have.” His advice to aspiring E-Commerce entrepreneurs is to focus on emotional resilience. “I was not prepared for the emotional rollercoaster,” he admits while recounting the highs and lows he’s had to put out in just one morning at work.
Can’t-live-without-tool? In terms of business management and customer service, our email platform, Gorgias, is critical. And our customization engine is the reason we can showcase our value proposition. We use Shopify, which we’re very pleased with overall, for our E-Commerce and Google Suite for team management. Personally, I am a big fan of Notion.
Key hiring trait? Being a startup means it’s not always easy to hire the highest level of talent and experience. Right now, I look for the right combination of attitudes, experience, and skills. I value people who have their own project going on the side. What I’ve found is for someone to get really into a startup and understand their role is by having a startup themselves. For example, our content creation designer has her own sunglasses brand that she does with her father who makes the wooden frames in his garage. I like that we can talk and exchange ideas. That pragmatism is something that I’ve really learned to value. I like the attitude of ‘making my own journey.’ I believe we are born to nurture, and what better way than to bring these kinds of people closer to the brand.
Favorite thought leader? I follow certain people on Twitter (X) – I’m a farmer and try to focus on positive things that are being said. One of my favorite podcasts is Scott Galloway’s ‘The Prof G Pod.’ I also listen to ‘Revisionist History’ by Malcom Gladwell because he puts things in perspective from a different angle. I try to challenge myself with reading choices – I’m currently reading ‘Never Split the Difference: Negotiating as If Your Life Depended on It’ by Chris Voss.
#1 challenge as a leader? Going on 6 years now with Diverge, I’m really tired. One challenge is making sure that I don’t pass my state of mind on to my team when it’s not positive. I’m outgoing, my team members are mostly introverts. I must be careful about the vibe I submit to not bring everyone down. Another main challenge is that I’m a people person. But with all the stresses of being a leader, patience can run a bit thin, and you react instinctively in a situation. Being a good, inspiring leader is very much about managing emotions.
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