Laura Beck: What I Learned From My Failed Startup

Story by Laura Beck


Today, we're featuring a reader contribution from Laura Beck, who has been very active in Austin's startup ecosystem, and was most recently founder and "chief shirt schlepper" at Laura recently launched what she calls her Kickstopper to liquidate the business on Youtube. In the spirit of startups--where every failure is a lesson learned and the roots of the next great startup--we asked her to share some of her lessons learned from her entrepreneurial experience.

To paraphrase Frank Sinatra – MISTAKES, I've had a few!

Two weeks ago, I went public with my breakup with stripedshirt, and launched my Kickstopper. If you haven't yet seen it, all the gory details are in the YouTube video, here:

In 14 days, I've been floored by the response! 137,000 Facebook views of the video, 6,800 YouTube views. I (along with my unpaid interns, my 70 year old Mom, and my 10 and 6 year old daughters) packaged up and shipped nearly 400 orders. That's nearly 900 shirts sold! YAY!

But when this started May 26, I had 6,000 shirts still to move. I'll happily take these orders!, but my garage still shows me my mistakes every day. And so, after all this Kickstopper buzz and love, I felt it was a good time to think through what missteps I took with stripedshirt. Perhaps there are lessons here for others, to spare them some of my pain.

First, It Was All About ME. That was by design, I had done 18 years of PR agency life, 10 running an agency, and leading an amazing team of 16 people. But I was burnt out, fried from managing others, especially aggressive young guns new in their careers and eager to advance. I wanted to do stripedshirt entirely on my own. NO WAY I was taking any outside funding. First of all, I didn't need it (again, I worked 18 years, I had savings), and second, I've seen the goods and bads of VC funded start ups doing PR for them for years. This was also MY dream, and no one else would be as passionate about it. I didn't bring in any partners, I wasn't beholden to anyone! I could do it my way (Sinatra again!), I could take my time. Well, turns out, a partner or two, an investor or two, they'll hold your feet to the fire.

2 – Over-Architecting the Website – I did some homework, but while I do tech PR, I'm not that technical, and I went with Magento, an open source shopping cart for ecommerce sites, and I had that thing built big from the start. I wanted to be able to expand like crazy, assuming (hoping), I'd grow, add products like long sleeved stripes, tanks, striped beach towels, waterbottles, flash drives, and bikinis (I'm not kidding, these were on my roadmap). If I knew then... I would have done a simple Word Press template. I would have worked with Volusion, BigCommerce, WP Engine (in my defense, all these guys didn't have the amazing SMB website offerings they have now back in 2010). Any of these providers likely would have saved me money as well as pain, as I put $10,000 into that cludgey website. I also went with Paypal for payment processing so I wouldn't have to do my own SSL, my own security. And wow, Paypal + Magenta is just wonky. If I totaled up all my abandoned shopping carts... there'd be a lot less shirts in my garage!

3 – Inventory – BLERG! Again, with absolutely no background in fashion or apparel, I did some homework, but really just went for it. Through an amazing guy here in Austin, I was connected to some factories in India, and they took me on. But to do so, and to really show my concept, I committed to 14 different color combinations and 15 sizes. For each, to do the manufacturing, I committed to about 50 of each size of each color, with a few exceptions. You do that math. We are talking over 10,000 shirts!

And I had some colors move and need reorders (hello, what is up with the popularity of red and white stripedshirts? I should have started RED stripedshirt, would have been a lot more successful!) Then there were other colors that absolutely sit there. I thought my Ohio State connections from growing up in Columbus OH would make my red and gray stripes fly off the shelves. But it is my absolute slowest mover! In the end, of the 10,000 shirts, I sold (or gifted – more on that below) about 4,000 in 5 years. I've written off some, but about 6,000 are still in my garage today!

Now, again, if I knew then... I should have done market testing, started with small sets of shirts, only ordered colors that were actually moving. But, there are not a lot of manufacturing options for apparel start ups. It's a pretty brutal industry all around. Margins absolutely stink. I was lucky to find someone to take on what I thought was a mammoth order, but for them, was teeny. I couldn't find a way to do small, test run inventory orders. And when I did get my inventory, 10,000 shirts arrived in a semi on pallets – that's pretty overwhelming for one 40 year old Mom to figure out, organize, track and manage. I quickly had no idea what I had, what I didn't. It was too much, too overwhelming. The garage was full, but I didn't know of what.

I could go on and on here about the problems with Fast Food Fashion in America, all the bad stuff I hope our apparel industry sorts out soon. That cotton is still grown in the US, but shipped overseas for cut and sew and then shipped back is absolute insanity. That factory conditions in Bangeldesh, but also East LA, are so dismal should not be happening today. And that the size and scale of orders from Forever 21 and H&M give us shoppers $5 Tshirts, but other apparel hopefuls no prayer of competing is depressing but very very real.

4– the Premise Didn't Work. The idea of stripedshirt to show your colors, support your favorite team or school – it absolutely did not fly. The sales I've gotten are mostly women ordering stripes they like. I hardly believe all the navy and white orders I've had are really Yankees fans. (or as a Red Sox fanatic, I guess I hope not.) And, when I had the idea, 20 years ago, fan-wear options just for women were really limited. Now there are tons of options - Alyssa Milano, Victoria Secret, college Ts at Old Navy. I also bet on women wanting to do Mommy and Me combos with their children, what I call the Lilly Pulitzer effect. Didn't happen, those sales didn't come.

Funny enough, my biggest sales weeks on the calendar were mid September to mid October. Yes, Halloween. Turns out there are a lot of costumes that incorporate stripes – Where's Waldo surely, but also Olivia the Pig, Doc McStuffins, Pirates, French, even Freddy Krueger. While these were sales, and money in, it was kind of depressing to think someone bought a stripedshirt for one day a year, for a costume.

5 – Marketing Alone Does Not a Company Make. This one was the hardest pill to swallow because remember, before stripedshirt, I was an 18 year PR veteran. I KNOW MARKETING. I'm good at it. I thought I had this part in the bag! Yet, I thought I could build stripedshirt entirely on marketing, on PR, on word of mouth and buzz. I know better. Way better. For 18 years, I told clients “PR is AIRCOVER for sales.” You need integrated marketing and a sales strategy. But in 5 years, I was the sales team, and I'm not a very good salesperson, for myself. I never brought on any agents or distributors, I never figured out deals with stores, or even built a network in retail. I also never did any paid search or Google ad words. I relied fully on organic search, which was very strong, but not strong enough to carry a business. I never even put in place a CRM system to communicate ongoing with customers who had already bought – and hopefully loved – a stripedshirt.

Finally, I put all my trust and hope into influencers and bloggers. I gave away more shirts than I care to count, to fashion bloggers to do a review with a great write up and high quality photo spread, and then do a giveaway. Lots of raffle copters out there with thousands of people putting in their chance for a free stripedshirt. I wrongly figured many of those, not getting the free shirt, would come to buy. They did not. I appreciate all the support and buzz my fashion bloggers gave stripedshirt, but make no mistake, they did not produce sales. Way too much inventory went out with very little return. I knew better, I know what integrated marketing is required to create and grow a business, I've counseled people on this for 20 years. But I didn't put most of it into action for my own.

6 – Distracted by my Comfort Zone – when I started stripedshirt, the idea was to leave an 18 year PR career and do something completely new and different. That lasted one month. 30 days into it all and I had already taken on a client on the side. Generally, for the past 5 years, I've been doing PR consulting for upwards to 6 clients at any one time. I hold it to about 20 hours a week. But we all know a start up is a 110% commitment. Between time with my girls, and PR consulting, stripedshirt kept taking a back seat. It was far too easy to fall back to my comfort zone, to do what I was good at, versus trying to figure out this new stripedshirt world that was hard, and complicated, and not showing any signs of success. Doing PR consulting may have kept my ego secure and my confidence up, and my wallet not completely empty of spending money, but helping others with their businesses majorly distracted me from focusing on my own business.

And so, now, 5 years later, I've broken up with stripedshirt publicly and I'm turning back to the PR consulting I know well, including, it turns out, PR for the stripedshirt failure. Perhaps the best PR I've ever done – for a failure, for the closing of a business. Not exactly something you want to do a case study on to share with future clients, unless they too want to shut down their businesses!

Again, these past 2 weeks have been so amazing, very liberating and freeing to admit defeat – a relief to come clean about my failed business. Most everyone has been very supportive, and amused. Seems there are a lot of kindred spirits out there who also gave entrepreneurship a go and didn't have smashing success. I appreciate the people who have reached out to cheer me on, even to thank me for sharing my story.

There have been some hecklers, and negative comments, make no mistake. People who said I had no business starting a business, and of course it failed, what a bad idea, and bad execution. There certainly is a lot of truth in what they say as you can see from the six mistakes I've detailed above. I remain proud to be public in my failure and again, hope my sharing can support others who've gone through this, or will go through this. Or, maybe, my stripedshirt Kickstopper, and the lessons learned, will give some guidance and tips for others of how to give their own business a better fighting chance!