Five Things I Wish I'd Known When Starting My Small Business
In March 2012, my business partner Ross Lohr and I drove from Boston, Massachusetts to Morganton, North Carolina with a car full of t-shirts that we were planning to upcycle into t-shirt tote bags and circle scarves. Two years later, we have sold over 15,000 custom t-shirt quilts. How did we go from upcycling random t-shirts that we thought were ironic, into becoming an affordable way for people to preserve their t-shirt memories? We made a whole lot of mistakes, but we tried not to make the same mistake twice. In order to save other aspiring entrepreneurs some time, here are five things I wish I’d known back then:
Do your research: There is more than one place in the United States that does cut and sew.
Instead of doing our research and being resourceful, we drove across the country to find our manufacturer. On the one hand, we made a lifelong connection with the people at Opportunity Threads in western North Carolina; on the other: we did not have enough traction to justify a road trip. There are now also a lot more resources to find textile-manufacturing plants, and we should have done our homework.
Hearing that you have a ‘cool’ idea is different than people purchasing your product.
A lot of times in the social enterprise or for-profit world, people ask their friends and network if they would buy x if it existed. Most people say, “Yes, that’s a cool idea.” But when the product is actually presented, oftentimes it's too expensive or just not that good. During that first spring of trying to convince people to buy our totes, we asked a lot of people what they thought, and the typical response was that we had a nice concept. One night on the bus coming home, we asked a random passenger what she thought, and she said, “It looks like the first bag ever created—it’s not very good.” At the time, we felt she didn’t understand the “story,” but if we had stopped and really listened to an unbiased consumer reaction, we would have saved a lot of time and money.
Don’t worry about margins, worry about strategizing your business to stay around for as long as possible.
It’s not: “If you build it, they will come.” It’s more like, “If you build it, and tell everyone humanly possible, they will come.” It is easier than ever to get a website together, but tougher than ever before to distinguish yourself from the rest. Startups, especially someone making a consumer good or apparel product, fail because not enough people find out about them and it's not because their margins are too low. The longer you stay in business, the more opportunities come your way, and the only way to stay in business is finding ways to reach a wider audience before you run out of money. We used a series of e-commerce marketplaces and flash sales to reach a wider audience, without raising the capital to spend on marketing. For instance in February 2013, we ran a campaign on Groupon, and ended up selling 6,000 custom t-shirt quilts in two weeks.
Focus on value to customer over raising capitol.
Accelerators in “innovation capitols” like San Francisco, Boston, and New York City give advice based on a traditional tech startup: build a user base, show traction, worry about revenue later, then raise money to reach more customers. As you may notice, startups get more attention for the amount of money they have raised rather than their sales figures. When a business like What’s App gets acquired for $16 billion, but only employs 55 people, they have created an unsustainable model for entrepreneurship. We need more consumer goods ventures to stimulate the economy and generate jobs for thousands of people instead of a few dozen. It can be easy to get sidetracked trying to convince those with money that your idea is worthy of investment rather than acquiring customers and building a quality product.
Find businesses to work that are transparent with their process and costs.
Our priority in the first year of operation was to sell as many t-shirt quilts as possible. We had a good relationship with our production partners, but we didn’t spend as much time learning the intricacies of the production process. The technique was never our number one priority; we just wanted a quality product to ship out. That prevented us from seeing the bottlenecks in the process. When we took the time to learn every step for manufacturing one quilt, we could make more informed changes. By simplifying the process, we started to give the customer a better experience at a more competitive price.