Getting to Velocity: TeePublic Founder Adam Schwartz (Part 5)

Sramana Mitra: If I got it right, you bought BustedTees at $4 million in 2011 and got it up to $8 million in 2013.

Adam Schwartz: Yes.

Sramana Mitra: You sold it at that point?

Adam Schwartz: We were growing through this customer acquisition program. We had done a lot of work to get our retention rate up. We had done a lot of optimization on a marketing level. I thought that we were reaching the ceiling of what we could do. There’s only so much optimization that can be done. At some point, there needs to be an engine for growth that is the top of the funnel. We were just wasn’t sure how much longer we could do this. At that time, Josh and I started talking about it.

We were wondering what the next step was for me personally. Maybe, it was time for me to go and start something from scratch again. That was something I was considering. Instead, we tried to see if we can start something together. We didn’t have any investors. We started experimenting. How can we create a platform that enables other people to create a BustedTees? The core ethos behind that is that I had just spent two full years doing all this customer acquisition for a brand and didn’t want to do that anymore. I thought that it wasn’t an amazing model.

For a business to really scale, the reasons that it was growing needed to be built into the business itself. I didn’t want to brand our way or pay our way to growth. In thinking about what else we would start, I wanted it to be the completely opposite in terms of the acquisition model. We said, “Let’s do no customer acquisition. I want something that is going to drive growth organically through organic search and, virally, through social. I don’t want it to be a brand where we’re just shouting with a megaphone.”

I want to enable other people to create stuff.” It felt like a better business to me. We built that with a little bit of money from BustedTees and invested in building out an MVP of that site. We had a lot of experience with the supply chain already, and launched with a model that is different than what we have today. It was a campaign-style model or a Kickstarter style for t-shirts. We were using that for a community of artists and designers that we had recruited again were back to hand-to-hand combat. We emailed 500 artists and designers and said, “Will you come try our website?” They would post a shirt and try to get people to buy it.

It was a good model in that when you’re working with organizations like non-profits, it wasn’t a good model for artists and designers. It was too transient for them. They wanted a home online where they could have a store and post their art. Six months go by, we’re doing $10,000 a month. I start talking to designers everyday just doing qualitative checks. They all tell me that they like it. Finally, I started asking better questions, “Don’t tell me about my site. Tell me about other websites that you use. What don’t you like about them? What do you like about them?” There were a lot of issues that they were having with what was out there in the market.

There were issues with Etsy because they didn’t want to carry inventory or deal with fulfilment. There wasn’t a great place for them to be at home. That led to a pivot where we said, “We’re not going to do campaigns. That’s not the core of what this is going to be. We’re just going to create a marketplace where an artist can open a store, add designs to that store, and use this relatively new technology that had vastly improved called direct to garment printing so that there’s no inventory. We’ll do all of the printing and fulfilment for them.

By aggregating all of these artist and all of their works onto one platform, the rising tide will lift all boats because we will have so many SKUs. If we can get all these artists and designers to bring us all their stuff, we’re going to be a really strong player for search because we’re going to have this army of designers creating everything you can imagine at no risk. They’re not going to have to be choosy about what they put up. There’s going to be a viral network effect because these folks are going to share it.

We rebuilt the site and launched in October 2013. We still didn’t know what was going to happen. We probably had 500 designers on the site at that time. Pretty much immediately, it started to turn. We were lucky in that we went right into the holidays. In that first launch month in October, we saw growth. November grew. December grew. We were still thinking it might because it was the holidays, but then January, February, and March were good. Once we pivoted, we were growing in those two ways that met the hypothesis of the business. The traffic from those two channels was growing every month. We still have BustedTees. Now we’ve just started adding staff to the TeePublic team a little bit. We’re running both companies in tandem.

This segment is part 5 in the series : Getting to Velocity: TeePublic Founder Adam Schwartz
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