So many entrepreneurs are focused on finding the capital investment for their startups. Angel round, Series A, B, C, and D are the common rounds of funding a founder looks to secure for the startup.
We burn so much energy on raising capital and completely forget about the purpose of our company and the longterm scale or sustainability that it must have. Entrepreneurs want their dream to happen so badly and fast we become cheerleaders and sell the idea without enough validation. One way of avoiding this is the lean startup methodology taught by Stanford business professor Steve Blank.
Steve Blank challenges us to get outside the building and test our business hypothesis with real customers. See what they want through validation, iteration or pivoting entirely. One company that mastered this idea early in their company’s life is Threadless.
Threadless is a community of artists and designers who get to test their products and creations online. The designer submits a t-shirt creation for public vote. After a week, the staff of Threadless reviews the top ten designs. They print the design on shirts and other products to be sold and distributed world wide. Designers whose design is chosen receives a sum of cash and gift cards for other products at Threadless. This is an excellent example of startup providing a service or product that your customers want. It is a validated formula that is simple to repeat; starting with a trial run in the community then to the printing press and distribution instead of vice versa.
Based in Chicago, IL and founded in 2000, co-founders Jake Nickell and Jacob DeHart started the company with $1000 of their own money. After submitting a t-shirt design to an online contest and winning, the co-founders created that simple process into a multi-million dollar business today.
What can founders learn from companies like Threadless? They must remember to stay focused on the problem their business solves for their customers. Usually, the simpler the process in solving the problem, the more successful the company. Always be testing your product with your customers no matter what growth stage your startup is in.
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