Neon Cowboys Founder, Asia Hall, on Dealing with Knockoffs and Protecting Intellectual Property

Audrey Saccone: Asia Hall is the founder of the fashion tech company Neon Cowboys. During college, Asia attended a country music festival and wanted a cowboy hat that would represent her American pride and identity. Knowing that neon signs are symbolic for having memorable nights, she envisioned wearable cowboy hats inspired by their glow. She believed it would be the perfect accessory to keep any party going after the sunset. After growing up with a couture designer father, Kevin Hall, and graduating with a bachelor's in Computer Science and Art, Asia is now at the forefront of the ready-to-wear fashion tech industry with her second e-commerce company, Neon Cowboys. Since its inception, Asia has continuously evolved and expanded the Neon Cowboys brand to include even more wearable tech pieces than ever before. Asia, welcome to the show!

Asia Hall: Thanks for having me.

Audrey Saccone: Okay, so I've been following you for obviously a long time because you are an early student of business class, which is the course I helped launch when I worked for Sophia Amoruso. We're currently in a mastermind together, and it's been really fun actually getting to know you and hearing everything that's going on inside your business because I just had no idea.

Asia Hall: Yeah… it has been a minute because I was in the first cohort. So, yeah, it's been a couple of years that we've been connected, which has been pretty fun. And I agree, the Mastermind has been really fun, especially just to see everyone's businesses, learning from them, meeting you, going to the retreat… it's been really fabulous.

Audrey Saccone: I couldn't agree more!

Asia Hall: And now we’re friends.

Audrey Saccone: Yeah, which is great!

Asia Hall: It's great. 

Audrey Saccone: Here on Tough Stuff, we talk about all the things we don't hear about on regular podcasts. And today we're talking about protecting your intellectual property and how to deal when your products get knocked off, which is especially relevant given the culture of dupes we're in right now. So, Asia, tell us a little more about your products and what happened the first time you realized somebody copied you.

Asia Hall: Yeah, so I started the brand in 2014 by going to Stagecoach, which you mentioned. And it's kind of interesting because the hats, we get a lot of people that are over the years that are like, oh, well, it's not that hard to make. And so we definitely have knockoffs that are on a mass-produced level. We also have a lot of people that do like, their own fake version or whatever, and a few people did that and they went viral for it. So actually, it was kind of interesting, especially growing up in the maker space, to then have makers claim like, oh, it's not really worth the money or whatever. And I don't really want to say that they're wrong, because I do understand that you can technically make a version yourself, but it's not the same as the hat that we make because obviously, our hat is plastic injected, so it requires a mold, the lights are set on the brim, there is 9ft of lights in every hat. And so a lot of it is like, I guess, finding the cheapest way to get a similar effect for them to feel like they have the product, which I understand as well. But it was a little bit more difficult when it became a thing where bigger brands were distributing them to all the big box retailers. And then people were kind of getting confused and saying like, oh, this is the Neon Cowboys hat. Or like a knockoff would hit television. We had a knockoff on a couple of Netflix shows and then we had the Kardashians wear a knockoff on their Hulu show recently, like last month or two months ago. So, yeah, it's just kind of been like this weird journey. But I've had the hat for nine and a half to ten years.

Audrey Saccone: That's wild. And I know, too, for you especially, and we'll talk a little bit more about this later, but you even have relationships with some of these stylists, too, who have access to you and know that you create the OG.

Asia Hall: Yeah… and it's interesting, too, because with television you have this thing where you're not actually able, usually, to showcase a logo and our hat has a logo on the front of the hat because we wanted to make sure that when people are taking selfies and whatever, you would know where to get one if you wanted one. And so that was very intentional. We even had our hat in a campaign for Apple and we didn't even know it was going to be in the campaign… they reached out to us like, a week before it launched and they just put the hat on backward in the campaign, which was great because then at least we still were like, oh, yeah, we've been in that campaign and it's like a beautiful thing. And it was to promote their night. It's not called Night Sight because that's Google, but their night version of the other night camera. The other night camera, which is beautiful for, I think, like iPhone eleven or something like that. So there are people that have gone around the logo part and has been great for us, but then there are a lot of others that just buy a knockoff because it doesn't have a logo or whatever. But, yeah, it's just been kind of a crazy journey because it's very frustrating. It definitely takes away a lot of market share when it happens, because the knockoffs are so much cheaper than our product. And even when I went out for investment, when I was a lot younger, a lot of them were saying, like, you should just knock off your hat and do, like, a felt version or a fabric version or a mesh version. But it isn't the same product because it doesn't hold the brim as well. We didn't do samples, so now we're just like, okay, well, our solution to that, I guess, was creating the mini version of the hat, which we were like, it'll be a cheaper alternative, it'll be smaller. But what's crazy about it is that it's actually not that much cheaper to produce because most of the hats’ money in cost comes from the length of the lights and the shipping from China. So even with the smaller version, they ship in a small little box, so they're not as stackable, and they can't really be assembled here for packaging…. so it's pretty much, actually, close to the same price, which is very frustrating.

Audrey Saccone: Well, I mean, it's kind of like how a size two dress and a size ten dress are not that much different in cost to produce. Like, yes, it's less on material, but the process is still ultimately the same.

Asia Hall: Yeah. And also, too, for our large hat, even for us to ship it locally in America to another place in the country is like, $12. And that all goes to UPS. We don't make any of that money. So I understand where it's like, yeah, in retail, they're buying it in a huge thing. They're putting it in their stores, and then the customer can go and pick it up. They don't have to pay for that because of shipping costs. So if you go on our website and you want to buy it, you're like, okay, I can do the $80 or whatever it is on sale. But then when you go to check out, it's like, another additional twelve. They're like, oh, no, that's really frustrating. And that's not something that we can really control. Because if we said, okay, well, all the hats are $100, and it's free shipping, it's still a conversation of, like, selling a $100 cowboy hat. Now, they do sell at that price, but when the knockoffs are just, like, able to buy 10,000 units and distribute them to all these different stores, and then people can kind of go and pick them up, it's, like, way cheaper. And a lot of it is logistics.

Audrey Saccone: Yeah, it's a constant conversation that happens, but that I don't think people understand of the cost that all of these big box retailers are eating up or Amazon by not charging for shipping or not charging for express shipping. And it has reconditioned the consumer to expect free one or two day shipping from everywhere, regardless of price, and really erodes the relationship that you can have with smaller retailers who can't afford to do that.

Asia Hall: Yeah, it's really, really challenging. And we've been starting to go onto Amazon. We're in the Black Business Accelerator, which has really been amazing. And we're only selling our face jewelry on there because it's so small. And then we have a prop share with our manufacturer for the mini hats that we also sell on there. So we are slowly trying to transition to that. Amazon's been asking us for years, we want your big hat, because we used to sell the big hat on Amazon and we were part of the Amazon Exclusives program and we were on the homepage and we didn't have the product in stock because we weren't able to get it in time and it sold out too fast. And then that becomes a whole other cycle of manufacturing problems and cash flow problems when you're starting out and trying to scale. So, yeah, it's really challenging. And I think there's a lot of education there that needs to happen with the consumer because I do think a lot of them just kind of blame you for your prices or think you're.

Audrey Saccone: Or think you’re being being greedy when really it's just what it costs.

Asia Hall: Yeah.

Audrey Saccone: So going on that, I know it's been a big challenge to compete on the manufacturing side. It's a lot for you to produce these hats. You have a high standard that you try to keep with, and it takes a lot of capital to produce in bulk. And I know you do things like preorders and there are things you've done to combat that. But what's been, like some learnings for you on that, and what's been a challenge?

Asia Hall: Yeah, we've had to do a preorder model the entire time the business has ever existed. And the customers get really frustrated with that because especially when they're saving for it, they usually will miss the window of when they want to buy the color they wanted to buy. So, like, for example, we ran the Rainbow collection, which is just like a color, like every color hat of the rainbow once in 2018, and this is the second time we've ever run it. So for the most part, people are like, well, I really want a red hat. And it's like, okay, well, you got to wait, like, four years until we can afford to buy it again. And that's, like, exactly what happens. And then people get frustrated or they need it for their look or whatever, and they just want to go to the closest place, but they can buy it or they want to make their own. And so that's a little bit of a challenge. But it's also kind of amazing, too, because they really will collect them, too. They are definitely, like, a limited edition item, and people do collect their whole collection. And sometimes we have a couple of customers that come in and they're like, oh, rainbow is back in stock. And they'll buy one of every color because they don't know. And they know… they don't know when the next one's going to come because we don't. And we try to be really transparent with that because obviously, the quicker it sells, the quicker we can restock. But also, I don't want our customers to be upset. We just can't afford it. And so that kind of creates this little interesting relationship where we have really loyal customers that are just like, okay, well, when they have a preorder open, we got to buy it because we don't know if they're going to restock it or if they can restock it or if it's going to be an item that doesn't come back. So like, all of our new products, we've been able to work with a few new manufacturers that have a smaller MOQ for our cut and sew. Yeah, we'll test something up there and be like, hey, we've got 200 units coming out. Depending on how quickly that sells, we might restock it or we might not be able to because the hats have to always stay in stock as much as possible because that's what people are coming to our store for because we've built the brand on it. The brand is literally named after the hat.

Audrey Saccone: Okay, so going back to the copycats and all of that… that's been happening. How have you tried to protect your intellectual property? What steps have you learned to take? What do you wish you did sooner? What has that process been like?

Asia Hall: Yeah, so I had a provisional patent when I thought of the idea, and I wrote that myself. I hired somebody on some platform for lawyer advice, and they helped me submit it, and then after that got approved, provisional patent. You have, like, a year to file one. I filed, like, a utility patent because everyone's like, it's the strongest one possible and, ya know, design patents can only do so much. So I was like, all right, we'll try and go for real protection because it probably will get knocked off. And it took, like, five or six years to get that patent. It cost, like, tens of thousands of dollars to get that patent. And it is… Well, a few things. It's not very helpful because obviously there's like, knockoffs on the market. But I had a couple of calls, like, last two months since the Kardashians and since people during Halloween time is when a lot of them pop up, because that's our best time of sales. So actually, it really, really fucks with our sales. Really hardcore. And basically, we talked to a couple of attorneys, and one of them had said some really great advice where she was like, to be honest and to be very frank, your patent is obviously effective because there are no transparent versions on the market. And I think that was the first time that I really heard it like that. Because as a creator and a designer, it's super frustrating for me because I'm just like, oh, man, I put all this money into this, and I put all this work into getting the brand out there. And people are tagging us every day on knockoffs because they don't even know. And it might be an issue of trade dress, but we'd have to claim that, and we'd have to fight for that. And we can only fight for that once. So it's like building the case before I can even go and try and do that is a little bit expensive. And it's frustrating because it's like, okay, it's a patent, and everything's been paid off, and we invested so much in all of this money. But she was like, they can't make a transparent version, so it'll never glow like yours, which is why it isn't felt. And that was the first time I appreciated it, amongst the knockoffs, obviously, I was super excited when I got the patent because we had fought so hard for it. And also for me, as a Black creator and designer, and I am half Chinese as well, it was really important for me to say, I have a patent. I was the originator of this product, and there’s a lot of products and a lot of product development that I've done that I could probably get patents for. And now it's more of a thing of like, is that where we put the money? Or is it more like, let's really get this inventory handled? Because when I started, that was, like, the thing, because I was like, okay, well, then we'll have a lot of runway to start selling, but instead, they kind of, like, once it got approved, they were like, oh, this is where the loopholes are. And then that's when they started hitting the market, was actually after they got approved. And that's what a lot of lawyers will say to you anyways, is like, you're safer as patent pending than you are having it public.

Audrey Saccone: That's so interesting. Is that because they don't understand what's going to be in the patent, so they just play it safe?

Asia Hall: They just kind of wait.

Audrey Saccone: That's so interesting. So really it actually helped you that it took, or, like, it delayed the inevitable, essentially, by the patent taking long to be approved?

Asia Hall: Yeah, and, I mean, there are versions. There had been the version where it's just like, there were LEDs around the brim of the hat that existed before me. That's not what our hat looks like, though. It doesn't have those lights. They're different lights. And also the inverter and the battery placement and everything. For mine, I made the hat crown taller so it could sit inside of the hat and not actually run down your neck and stuff like that. And all the new ones have… they've made molds for it. So it's just kind of like, okay, well, it's clearly my hat, but they don't make it out of the same material. And that is the caveat.

Audrey Saccone: Yeah, I know you've done a lot of things to react to these copycats, whether it's working with a lawyer, responding online, ya know… what helps you sleep at night, and what's always your first reaction when you see something new coming on the market that's just like your product?

Asia Hall: I don't know. I think I'm getting a little bit more over it, probably because I have to. I think there's, like, no other. I used to get really scorned and kind of ruined. And also, negative comments are negative comments and they hurt everybody. And I think a lot of people don't understand how small we are in terms of a team and who they're actually talking to and the fact that I'm actually reading them and, ya know, all that stuff.

Audrey Saccone: You look like a big team. Like, if you go to your website, it's like, oh, she's got 20 employees, and you're a team of three, if I'm not mistaken.

Asia Hall: Yeah, we're a team of three. We have an engineer, and we have my partner, and that's it.

Audrey Saccone: And you!

Asia Hall: And me. So we do everything ourselves, which is mostly me in terms of forward-facing. We do have a customer service team member from a third-party firm in the Philippines that we also work with. And we have somebody in the warehouse that fulfills all the orders. So it's really small, but we like to keep it that way if we can kind of scale with more tools because it's just like, scaling the business is like a really big, it's really hard. It's really hard. We used to have like eight people. And so, I mean, it was helpful because all the channels were growing a lot faster, but it's also a lot to kind of really manage. So, yeah, no, I think we looked like a really big team and I think that it was kind of really frustrating because we did get knockoffs of our other products in the last two months. And that was kind of a little crazy just because usually it's the hat, but we worked really closely with China and now that we're on Amazon, we get knockoffs a lot faster because everyone on Amazon is mostly Chinese companies selling direct. And so that's been a really huge issue for us in terms of knockoffs but also in terms of price competition because they're selling it at cost to us. So what our cost would be would be the price on Amazon. So we have to make our margin for our team, our overhead, and our marketing… but they don't. And so that's been a little bit challenging. And we are on Amazon, like, brand registry. So actually, we had the bottle opener keychains knocked off and we told Amazon about it and they took it down the next day. So it is helpful because we're kind of a double-edged sword where it's like, okay, now they're seeing our corona, we're getting knocked off sooner, but because we're working with the registry, as long as we can prove that it's ours, then they'll get rid of it. But yeah, other things like our boots and stuff getting knocked off that really, it just gets a little bit crazy when you're realizing like, oh, every single idea I have, somebody else is going to want to profit off of it. And so I guess emotionally and mentally it’s kind of like how much money do we really spend towards this? How important is it for people to know it's really us? And we're having more and more conversations with buyers and distributors and trying to make more volume orders. And I think that that's really going to help not feel so like, attacked when these things happen because it's going to affect everybody, not just like me, myself and my like, two people. So we're trying to kind of pivot a little bit in that direction so that we can get the product out there and the brand out there faster. Because, yeah, most people have probably seen our products online from viral posts, but they don't necessarily know that we make them or that we own patents.

Audrey Saccone: Well, speaking of viral posts and things being on some very famous people, you've had your products be on some really notable celebrity clients like Beyonce and Kesha. And how did those projects come about? And what's been exciting about doing that type of custom work in addition to your direct-to-consumer?

Asia Hall: Yeah, so we do get a lot of celebrities because, ya know, I say it a lot, but I believe we are the number one brand for light integration in apparel and accessories. And so with celebrities in particular, they want a lot of lights for stage performances, for music videos, and sometimes red carpet. So we have a lot of relationships with a lot of stylists that reach out for the projects and the mood boards and stuff that they want to create. And that's how they usually come to us with a project in mind where they're like, oh, we have this scene and this music video where we want her to glow and whatever. And that's super fun for us because the three of us are really like product designers and developers and engineers and makers. And so when we get projects like that, it's like, okay, we can go a little crazy on a one-off. Then we can learn a new technique and figure out how to scale that back to mass production. So it's a little crazy because the business has so many different channels of, I guess, sales, but also in terms of reach… But we try to use all those opportunities to get us more evergreen products that will consistently stay on the market, on our website, and then now we're trying to push that off on Amazon… while protecting us. So it's kind of like a trickle-down effect, which I know a lot of designers do. Ours is just a little crazy because it does require MOQs that designers don't have at all. Our MOQs because we're working with plastic, we're working with lights, and lights are very much like, you have to order a lot of them unless you're doing a celebrity piece and then it's a one-off, but then you're buying the lights at retail. So it's a really expensive piece.

Audrey Saccone: Yeah, there's definitely a lot to it that is not as simple or as straightforward as I think the general consumer realizes. And I hope anyone who's listening to this can understand that the plight of the small business owner is in no way exaggerated. And it's really difficult to be producing physical products, especially ones that are unique like yours.

Asia Hall: Yeah. The consumer goods industry is so crazy and tricky to me, especially because like, even VCs are like, they won't touch it. You know what I mean? Like, we don't do software. We're a tech brand, but we're a consumer goods tech brand. And that doesn't make a lot of sense to even be in unless you're someone like Apple. And so it is really challenging. But we have good partners. We have good factories, we have good marketing. We have good branding. We have a lot of loyal customers… a lot of fanatics.

Audrey Saccone: And you have a good product.

Asia Hall: We do. Our stuff is so cool. We have some cool stuff. It's just a long journey. And I think that's the other thing. It's like people don't know that I've been doing this for like ten years, you know what I mean? And so it's kind of like the plight of it is. The struggle is not really talked about a lot unless people, probably, know me.

Audrey Saccone: Well, if people do want to know you and the brand and follow along, where can they find you?

Asia Hall: Yeah, sure. So our website is neoncowboys.com. Our Instagram is @neoncowboys. Our TikTok is @neoncowboys.com …which I love because people like, they'll tag us and they'll be like, where do I buy this, @neoncowboys.com? And I'm like, right there.

Audrey Saccone: You said it. Right there!

Asia Hall: And then my personal account is @asiahall on Instagram. But it doesn't really matter because I'm still the person that reads all the DMs.

Audrey Saccone: I know. I know you're in there.

Asia Hall: I need to get out of there.

Audrey Saccone: Well, you'll get there. You'll get there. I believe in you.

Asia Hall: Thank you.

Audrey Saccone: Well, Asia, thank you so much for your time and for sharing your invaluable insights here on Tough Stuff. Listeners, don't forget to share your thoughts on this episode on our latest post @toughstuffpod and hit that subscribe button to always get the latest episodes in your favorite podcast app. I'll see you next time!