Wed, 28 August 2019
265: Battle-Tested Lessons on Scaling a Fast-Growing Global Company, With Printful CEO Davis Siksnans
Success On Demand
How Printful co-founder Davis Siksnans rose to the top by helping entrepreneurs custom print and ship products with greater speed and ease.
Davis Siksnans’ motto as an entrepreneur has always been, “If you can’t find it, build it.” It’s led him to some fascinating and quirky pursuits, from building a business that sells customized friendship bracelets to launching an ecommerce store that creates motivational posters for startups.
Having spent much of his career working at a startup incubator, coming up with ideas and helping to bring them into reality, much of Siksnans’ expertise has involved smoothing out and speeding up that business-building experience. He’s especially excelled at improving the fulfillment process, allowing businesses to whip up clever ecommerce product ideas and then ship them out to eager customers in a heartbeat.
While not all of his ventures took off, they were critical stepping stones to Siksnans building his most successful business yet—Printful. This leading drop-shipping, fulfillment, and printing business has mastered the process of creating on-demand ecommerce products. As a result, Printful has grown exponentially since its launch six years ago and now has a 500-person team across the U.S., Mexico, and Europe.
Survival of the Fittest
Long before his days as Printful’s CEO and co-founder, Siksnans always knew he would end up doing something in tech. Fascinated by technology from a young age, he taught himself to code, saved up his allowance to purchase his first computer, and built custom websites for his friends and neighbors. In the process, he realized he had a knack for turning ideas into businesses.
So it came as no surprise when Siksnans secured his first job as an IT administrator with Draugiem Group, a startup incubator and one of the most exciting technology companies to work for in his home country of Latvia.
Over the course of 15 years, Draugiem Group funded over 100 business ideas. Today, only 12 of these businesses remain, which is the nature of entrepreneurship, Siksnans says. What makes Draugiem’s model unique is that it doesn’t source ideas from outsiders—only from its own founders and employees. This means that everyone at the company has the opportunity to come up with the next big idea.
“At Draugiem, if you do good work and gather trust, you’re given more opportunities to step up in your career,” Siksnans says. “I was given the chance to work on business ideas based on the fact that the founders thought I was doing a good job.”
Timing was also on Siksnans’ side, as Draugiem Group was just starting to focus on the US market for the first time. He had previously completed an exchange program in the United States for one year and was familiar with the market, so Siksnans officially began his career as an entrepreneur.
Take Your Vitamins
After experimenting with a variety of ideas under the banner of Draugiem Group, Siksnans hit gold with Startup Vitamins, a company that sells, no not vitamins, but motivational posters.
Siksnans and his team initially came up with the concept when they moved into a new office space that had ample wall space and wanted to put up some posters. But they couldn’t find any designs they liked. That’s when his motto of, “If we can’t find it, let’s build it” came into play, and Siksnans decided to launch a Shopify store to meet this need.
Initially, the Shopify store sold posters with motivational sayings such as “Life is short. Don’t be lazy.” He and his team started off with one printer in the Los Angeles home of one of the founders, which made it convenient to produce posters on-demand and was also low-cost.
After seeing promising growth, Siksnans decided to expand by taking on the biggest category in ecommerce—apparel. He liked selling posters because they could be easily printed on demand and didn’t require inventory. He wanted to replicate that model with apparel, so Startup Vitamins started working with a fulfillment partner that could produce on-demand products.
This turned out to be a horrible experience. The fulfillment partner’s website was clunky; it took one-to-two weeks to fulfill orders; the quality of products was subpar; and there was no public API—no way to automate the orders that were coming into Startup Vitamins.
That got Siksnans thinking.
Siksnans realized that there was a significant gap when it came to services that could produce on-demand and high-quality products at a reasonable speed. He also recognized the lack of a powerful API that could integrate with ecommerce platforms like Etsy, Shopify, and Storenvy. He decided to test this theory, and that’s how the idea for Printful came to life.
The key difference was that, with such an API, his company could allow clients to automatically receive and process orders for their online business instead of serving as the middleman.
“When we launched Printful in 2013, we didn’t even own the domain printful.com because we didn’t know if this idea was going to work or not," Siksnans says. "Maybe it would fail and we would have to refocus. We used Startup Vitamins’ mailing list as our first marketing channel to push out Printful’s services because our customers overlapped—startups that were likely to be open to using print-on-demand in their respective niches."
Printful found product-market fit immediately. Its combination of drop shipping (when an ecommerce store purchases inventory from a third party and has it shipped directly to the consumer) with a custom print API and other services made it easy for anybody to sell posters, t-shirts, canvases, and other merchandise, seamlessly. As a result, Printful made around $800 in revenue in its first month, then $1,600 the next, and the business only kept growing from there. In under six months, Printful had become larger than Startup Vitamins.
Lessons on Scaling
Since its launch, Printful has seen impressive growth. The company now has a team of more than 500, locations in four geographies, 6.83 million orders fulfilled to date, and $540 million in products sold by its customers.
Of course, with growth comes growing pains, which Siksnans says has been one of the toughest aspects of his job. He has turned to certain resources to help him navigate the challenges around scaling.
“I recommend the book Scaling Up by Verne Harnish," Siksnans says. "Whenever I see a person in management struggling with growing pains, I give them this book and discuss it with them. It contains so many great practices and tactics, and it shows that this is a normal process that many companies have dealt with."
Siksnans also emphasizes the importance of collaborating across cultures. At Printful, they make a point of educating team members about cultural differences. The company also invests in resources to make sure its employees have the opportunity to travel between Latvia and the United States to conduct knowledge and culture transfers.
While it’s important to acknowledge the differences among Printful’s various locations, Siksnans believes it’s critical to maintain a thread of consistency throughout every employee’s experience.
He once sat in on an onboarding process for an employee in Riga, Latvia and noticed it lacked many of the helpful components found in the US process, so he connected both HR departments to make sure they were added. That’s why Siksnans stays involved in all of Printful’s HR processes—from running new hire trainings for employees once a month to being involved in the recruiting process.
Siksnans has several thoughtful predictions for the future of the print-on-demand and drop-shipping industry.
For starters, he envisions decreased reliance on advertising. As Facebook ads become more expensive over time, Siksnans believes it will become increasingly important to build microbrands. This means becoming less reliant on advertisements and turning more to influencers, who have powerful audiences on social media and promote products organically to their user bases.
Siksnans also anticipates potential policy changes around shipping. Consumers are already demanding faster shipping speeds as companies like Amazon set a new standard. He’s keeping an eye on what happens with the Universal Postal Union, the UN agency that coordinates postal policies among different nations. They’re experiencing many issues, for example, the fact that it’s cheaper to ship a mug from China to New York than it is to ship a mug within New York. As a result, some countries are already taking steps to limit the influx of cheap drop-shipped goods coming from other countries.
Finally, Siksnans is focused on understanding ecommerce algorithms. A growing base of users is leaning into newer marketplaces such as Etsy, which have less advanced ranking algorithms to figure out than sources like Amazon or Facebook advertisements. As a result, Siksnans is noticing a lot of people finding success by learning the ins and outs of various internet marketplaces.
Regardless of which direction the market goes, Siksnans believes Printful is well positioned to continue growing. All of this success came as a result of him identifying a need and deciding to go for it—a mindset he believes all founders should emulate.
“I have a lot of people asking me when is the right time to start,” Siksnans says. “There’s no right time when someone is ready to start anything new. You will never feel ready, so just start now.”
Davis Siksnans’ 4 Tips on Scaling Company Culture
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee
Tue, 20 August 2019
264: How Revolve’s Founders Went from Finance and Engineering to Running a Billion-Dollar Fashion Brand
Where Data Meets Denim
How Revolve founders Michael Mente and Mike Karanikolas, a duo with backgrounds in finance and engineering, used data to take the fashion world by storm.
You would think that finance, computer engineering, and fashion have nothing in common.
But Michael Mente and Mike Karanikolas, the founders of the wildly popular online clothing company Revolve, would beg to differ. It’s true that when they first met each other at a software startup, they never thought fashion was in their cards. After all, Mente was a finance guy and Karanikolas was a computer engineer. They weren’t exactly cozying up to the catwalk.
And yet, a series of unfortunate events led Mente and Karanikolas to the retail business, which ended up yielding quite the fortunate outcome—together, they built a billion-dollar business that serves as inspiration for any entrepreneur looking to get into the online apparel game.
Using their respective strengths in analytics and number crunching, they developed a hunch that there was a gap in the market when it came to places young, millennial women could buy fashion brands online. Their hunch proved to be correct.
From there, it was Revolve's famously prescient marketing strategy — in particular, the company's influencer marketing — that set them apart from other online clothing brands coming onto the market.
"We had first-mover advantage and recognized power of social early on. We’re been working with influencers before they were even called influencers — before instagram even existed," Karanikolas says.
With their near-perfect product-market fit and the love of influencers like Chrissy Teigen, Chanel Iman, and Jessica Alba, the California-based company has grown from being a small online store to an iconic billion-dollar business.
Challenging the Mainstream
Mente and Karanikolas were both working at the software startup NextStrat when the dotcom bubble burst, kicking off a recession that eventually led to the company’s collapse. That’s when the duo started to brainstorm ideas for a new venture. They knew they made a great team and had a feeling they could achieve big things together, it was simply a matter of finding the right opportunity.
Given their math and engineering backgrounds, they approached the research process of finding that new endeavor in a very methodical way. Ecommerce was on the rise, and after digging into keyword search data, they noticed there was growing interest around online apparel. There were other attractive aspects of the apparel business too, such as the fact that it promised high gross margins and was a relatively untouched market in the late 90s and early 2000s.
“There were a lot of questions about whether apparel made sense online at that time,” Karanikolas says. “But any time there’s a new space, that means there’s room for innovation. We recognized that online represented a wealth of opportunities, and it was just a matter of figuring how this new medium worked for apparel and how to make it appealing for consumers.”
It didn’t take them long.
From Denim to Dominance
Mente and Karanikolas launched Revolve in 2003 with $50,000 of their own savings. That meant carefully watching cash flow was extremely important, which forced the duo to be highly disciplined about how they made decisions. Even early on, they leaned heavily on data to inform what products to sell. The core of their business model was to sell clothing from other brands, start with existing numbers, and then test and iterate as they identified what worked and what didn’t.
For instance, they initially assumed denim would be one of the hardest types of clothing to sell online, since fit is so important and there are lots of size variations. Through data analysis, however, they discovered that people actually did shop for jeans online and even returned them less frequently than other clothing categories. So for the first year or two of running Revolve, denim made up a majority of their business, which led to their first wave of success with the company.
They also weren’t afraid to go against the grain in how they ran an online store. When they realized the inherent risk that came with buying online due to fit issues, they instituted a policy of free shipping and returns. Mente and Karanikolas also quickly recognized the importance of having big, high-quality photos of their apparel—so they kicked standard web guidelines to the curb and covered their site with beautiful images, even if it meant it took a little longer to load.
“There were all sorts of different ways we approached retail and online fashion that ended up working out really well for us,” Mente says.
“Eventually, we came to understand the creative and aesthetic side of things more and become expert in areas we weren’t before. That piece took us many years to develop, and it wasn’t easy because it didn’t leverage our initial core strengths. But building that expertise on top of our existing strengths helped us become really powerful.”
Struggling to Survive
Mente and Karanikolas’ journey wasn’t without difficult times. They were still self funded when the Great Recession hit in 2008. Demand plummeted, and they saw that competitors were responding with extreme discounts, which made it challenging to make money.
Despite the fact that they were fighting for their lives, Mente and Karanikolas agree that this period actually led to incredible personal and professional growth. It also showed them they had the right company culture and people to get them through these challenging times.
The duo recalls one particular memory with fondness. Since Revolve also had to offer discounts to make sales during the recession, they had to ship a massive volume of product to remain profitable. During this time, every single employee voluntarily came out to the warehouse on weekends to help get all the products out on time. That’s when Karanikolas and Mente knew they would survive and come out on the other side as a stronger company.
Revolve is now a major player in an incredibly competitive online apparel market. But Mente and Karanikolas aren’t worried because they’ve come to deeply understand one of the most important lessons in marketing: You’ve got to stand out from the noise.
The way they do this is by leaning into the authenticity of their brand. Everything, from the events they host to the people they work with, is saturated with a genuine desire to grow relationships with consumers. It has never been about trying to outspend their competitors.
This type of commitment to their consumers is also what led the founders to start Revolve’s own line of clothing back in 2010.
Through data and conversations with their audience, they knew that there were products they either didn’t have a big enough selection of, or weren’t stocking fast enough. They realized they had the ability to provide a better product and have since launched an array of new clothing lines to meet the different needs of their customers.
Next Level of Growth
Karanikolas and Mente are optimistic about the future of Revolve.
“There are more opportunities today than ever, and we’re the best positioned we’ve ever been in the history of our company. We’re trying to build one of the biggest fashion and apparel companies out there,” Karanikolas says.
The duo plan to continue focusing on their core business of building a better experience for their target consumers, youthful women in 20s-30s looking for premium fashion. They’re passionate about getting better at everything they do, from improving their data to creating better products. Thoughts of further international expansion are top of mind for the founders as well, given that more than 40% of their social media following is international.
When it comes to the secret of success, the duo say there isn’t one—it’s simply about putting in the hard work, grit, and perseverance.
“There’s so much chance involved in the short term, but if you keep making the right steps, over the long run you’ll go in the direction you want, even though there are periods of time where it feels like things aren’t working for you,” Karanikolas says. “It’s a lot of hard work, but it’s going to be more rewarding than anything you’ve ever done.”
Mente agrees and leaves aspiring entrepreneurs with an additional piece of wisdom.
“Hard work and dedication are 100% important, but another aspect is to take care of yourself and your life,” he says.
“Your physical, mental, friendships, and relationships are all important as well. When you’re living well, you’re thinking clearly, healthier, and more productive over the long run. You need to recharge and have some balance in your life. It’s something I’m still trying to learn.”
3 Tips to Build a Powerful Consumer Brand, From Michael Mente & Mike Karanikolas
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Sophia Lee
Wed, 14 August 2019
263: From Food Writer to Digital Entrepreneur: Ed Levine’s Journey to Launching an Award-Winning Culinary Website
In business, everyone wants to win.
But sometimes it’s the people who refuse to lose who end up finding success. This is the mindset that food writer, author, and founder of the website Serious Eats carried with him throughout the ups and downs of his career. This tumultuous journey is also the primary focus of his latest book Serious Eater: A Food Lover’s Perilous Quest for Pizza and Redemption.
In this interview, Levine shares the details of how he got into food writing, experimented with media platforms to diversify the way he told stories about food, and ultimately bootstrapped the money needed to launch Serious Eats. From struggling with being profitable to testing his tolerance for risk, Levine shares the sacrifices he had to make to keep his company alive for the eight years leading up to its sale.
If you want an unflinching look at the challenges of entrepreneurship, this is your chance. Levine speaks with candor about the toughest aspects of launching a startup and dispels the most common myths around starting a business.
Wed, 7 August 2019
When Nir Eyal has a burning question (which he frequently does), he goes on the hunt for an insightful answer.
That curiosity is what led Eyal to publish his first and wildly popular book, Hooked: How to Build Habit-Forming Products. He was inspired to delve into this topic after launching a startup in the advertising and gaming industry, where he observed that product design had the powerful ability to change human behavior. Eyal wondered why some companies were so good at it while others failed.
In this fascinating interview, we chat with Eyal about his early days as an entrepreneur, the behavioral model behind forming habits and get a sneak peek into Eyal’s upcoming book Indistractable: Mastering the Skill of the Century.
Plus, Eyal uses Nathan as a live case study and shares his best tips for breaking bad habits!
Whether you’re an entrepreneur who wants to better understand the link between product design and human behavior, or you’re an individual looking for tangible ways to build better habits, this is an episode you don’t want to miss.