Anyone with an internet connection and a computer can start a business. Generally, you don’t even need a particularly good idea. Just let people indulge their vanity in a public way, and you’ve got a punchers’ chance of a billion dollar valuation.
Young companies that actually manufacture a tangible product are far more rare. The need for inventory necessitates higher startup costs, and with higher costs comes higher risk. Threadmason is one such company, and co-founder Jake Huston is here to discuss his experience for all the would-be makers in the readership.
MN: How did you secure your initial funding and how much preparation was necessary?
JH: All of the leg work we did for the first eight months of Threadmason was with the end goal of launching our Kickstarter campaign and testing the concept. While we had a vision for what might come next, that was really step one for us – creating a minimum viable product and testing the market.
Kickstarter is really an amazing platform, because it has a built-in audience. To be fair, it’s not exactly “if you build it, they will come”. The KS community expects a thoughtful and detailed explanation of the product and its goals. We spent as much time developing our Kickstarter page’s copy, video, images, and contributor benchmarks as we did on marketing to press outlets. Both are important and we sought to create a bit of an echo chamber for our product by which the buzz would grow across relevant blogs and a variety of social media platforms.
It worked. Contributions reached our goal of $20k within four days, and an additional $15K over the next month. People had validated us with their wallets – and we were ready to really get moving.
MN: Lack of familiarity with the professional side, like law and accounting, can often be a pitfall for young companies. Did you experience any of this?
JH: The complicated tax and legal frameworks have been a major challenge. We didn’t know, for example, that by forming an LLC in Maryland that we’d be subject to a substantial state tax on revenues. We did so because my co-founder Vincent was from there and had a permanent address. No one stays in one place for long in NYC, so that was the most stable option.
With the benefit of hindsight, we would have spoken to a lawyer or accountant to get some basic advice.
MN: What’s your motivation for taking the risk to become an entrepreneur?
JH: I’ve always had the entrepreneurial itch. I like big picture, strategic thinking and I have an appetite for risk. I like the idea of calling the shots and being in charge, tasks you can’t shy away from if you’re going to be in a founding leadership role.
From a risk/reward perspective, I also knew that an entrepreneurial venture would allow me to gain a wide breadth of experience and knowledge and an accelerated pace. No one would hire a 25 year old to be their head of operations or strategy if he lacked the experience – and I did. I had to create my own learning opportunity.
MN: There’s no company without a product. Tell me a bit about yours.
JH: The primary goal of Threadmason is to deliver a custom fit in men’s basics. The bottom line is – generic sizes don’t fit everyone and they’re not meant to. S/M/L has persisted because it’s streamlined from a manufacturing perspective. A store doesn’t have room on its shelves for twenty sizes of t-shirt, but guys come in at least 20 sizes.
Ecommerce has created opportunities for a new model, and Threadmason is that model. We’ve created 24 proprietary sizes so that our customers can get as close to a tailored-fit as possible – without an actual tailor. Feedback so far has been outstanding, and we’re confident that our fit technology delivers for guys who have never really been well-suited to any one of the standard sizes.
MN: If everything was predictable, we’d all be billionaires. What are some unforeseen challenges that have arisen?
JH: One thing we’ve learned is the rule of two – costs will be twice as high as you budget and things will take twice as long as you schedule for. There’s some good business advice out there to this effect, but we didn’t read it until we’d done our projections and established our plan. Thankfully, we built in enough margin to cover these unanticipated increases.
Ultimately, I think the key lesson for me, as a first-time entrepreneur, was that plans are nothing but planning is everything. Things won’t go exactly the way you expect, but by allowing room for setbacks, by being nimble and avoiding bloat, you give yourself a better chance of success.
MN: Where do you stand now after your rollout?
JH: Right now, we are a two man team doing the work of five. We’re taking the customer service calls, fulfilling orders, planning future productions, handling parketing and PR, forecasting, looking for investors… it’s a lot. We’re also approaching the “scale” phase faster than I anticipated. Infrastructure is starting to become important. We have to get our logistics in place to support a much larger operation. It’s a very positive development, but a source of pressure. The decisions we make over the next six months will be critical, with success or failure being the consequences. Talk about stress, but this is exactly what I signed up for. And I’ve been loving every minute of it.