How Calico educates buyers on agentic AI systems when no budget line exists | Kathleen Chan

Calico is building an agentic AI system for apparel sourcing and production—automating the "messy middle" of manufacturing that has operated on emails, Excel, and WhatsApp for decades. As a founder who previously built and exited apparel brands, Kathleen Chan experienced the pain firsthand: opening a Shopify store takes minutes, but actually producing inventory requires staying up until 2am managing factory communications. In this episode, she shares how Calico is creating a new category during the 2025 tariff crisis, when sourcing directors are rewriting playbooks that haven't changed in 50 years.

Topics Discussed:

• How Calico functions as an AI co-pilot for sourcing directors and production managers
• Creating a category when no budget line exists for agentic AI systems
• Leveraging the 2025 tariff environment as an adoption catalyst
• Why six months of paid acquisition produced high signups but zero quality customers
• Sequencing GTM tactics from unscalable one-to-ones to conferences to content
• Building authenticity in a market saturated with AI slop and generic LinkedIn content
• Hiring early evangelists who maintain conviction through the startup zigzag

GTM Lessons For B2B Founders:

• Match GTM motion to how your market transacts, not what scales: Calico tested paid acquisition for six months before realizing relationship-building converted better despite being unscalable. In apparel manufacturing, decades-long supplier relationships can't turn on and off overnight—the buying motion reflects this reality. Kathleen's approach: early-stage requires one-to-one dinners and networking to answer nuanced questions; mid-stage shifts to conferences for broader reach; late-stage deploys LinkedIn content once the market understands your category. The sequencing matters because each stage builds on the previous one's trust foundation.
• Brutally audit customer quality, not conversion metrics: Calico's paid acquisition drove signups and "conversions by marketing sense," creating a false signal of product-market fit. After six months, the math revealed these customers cost more to acquire than those from relationship channels and had lower quality. Kathleen's lesson: vanity metrics provide a "weird little dopamine hit" that masks broken unit economics. For B2B founders in complex sales cycles, track cost-per-quality-customer, not cost-per-signup.
• Use macro disruption to collapse sales cycles: The 2025 tariff crisis created an "impossible challenge" for Calico's ICP—sourcing directors forced to rewrite playbooks built over decades while tariffs changed via tweet. Rather than fighting the chaos, Calico positioned itself as the solution to this specific moment, anchoring customer conversations on tariff-driven urgency. This transformed education from abstract ("here's what agentic AI can do") to concrete ("here's how we solve your tariff problem today"). B2B founders should identify trigger events that make the status quo untenable.
• Create category clarity by defining what you're not: In a market where "AI could mean things to many different people," Calico differentiated by explicitly stating what their system cannot do. Kathleen prioritized "dispelling the notions of what we are and what we aren't" over overselling capabilities. This matters because sophisticated buyers—especially in industries with low tech adoption—need to understand boundaries before they'll trust promises. The tactic builds credibility in noisy markets where everyone claims AI magic.
• Hire evangelists who outlast founder doubt: Calico's most impactful GTM decision was bringing on early team members who could evangelize value through the inevitable "zigzaggy" early stage—when "it's exciting one day and the worst day ever the next." These people interface directly with customers regardless of whether the founder is having doubts or frustrations. Kathleen's insight: in B2B relationship-driven sales, your early GTM hires' conviction directly determines whether customers stick through product evolution. Hire for authentic belief, not just skills.
• Deprioritize content in high-noise environments: Calico deliberately delays LinkedIn content until later stages because "folks are a little bit more muted to all the LinkedIn content coming at them." With AI making content easier than ever to create, Kathleen sees audiences questioning whether to take it seriously and whether AI-generated content has less value than human-generated. Her approach: authenticity trumps quantity. For B2B founders, this means investing in formats that can't be easily faked (video, in-person) before scaling written content.

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