Hybrid Start Ups: Where Innovation Meets The Real World

In less than two hours after posting yesterday on Hybrid Start Ups I received over 35 emails from artists, independent tee shirt fashion lines, and various promoters of the plus sized movement.

I have only been blogging for a month now along with the fact that I have been on Linkedin and Twitter the same amount of time, 35 responses in an awesome amount of responses.

I call myself an "innovation cockroach" because I cannot innovate but I can analyze innovation and trends and figure out real quick how we can benefit from it; how it will allow us to sell more tee shirts and make more money!


Referring back to the article, Take The Red Pill: The Rise Of The Hybrid Startup, I wholeheartedly agree with the following:

"...hybrid businesses have little or no competition: technology companies want nothing to do with the real world, and real-world companies struggle to develop competitive technology.

This divide prevents us from making things fundamentally better, or cheaper. The divide between the virtual and the real also prevents the basic ideology of Silicon Valley from reaching other professions. The Valley’s emphasis on empowering consumers and employees—on innovation, transparency, even idealism —isn’t just good for building software, it’s a universal good. There are thousands of bankers, realtors, doctors and lawyers who would love to practice their craft, but in a company run like Google. Our culture can be Silicon Valley’s second gift to the business world."

When I sat down and decided to reinvent my company I not only went out and studied what other successful companies had done but I also studied how these companies did it; an antiquated organization cannot innovate.

Success is not only an idea, its a culture; I have seen great ideas and promising companies come and go over the years; in fact I can name off at least 10 household names in the world of screen printed tees, all of which are history today and all for the same reason;  they could not adapt to change.  In fact, most of them hastened their own demise by assuming that once their sales peaked and started to drop that what they needed was more of the same designs!  Thus, they ended up competing with themselves in a shrinking market.

The best way to "know" your market is to let your consumers speak and decide!  The best way to to "know" your company is to let your employees speak and decide!   

Hybrid Start Up

I came accross the term "Hybrid Start Up" today and it was definitely a 'Eureka' moment!  For over six months I have been seeking funding for a company that I started five years ago but has a product that has been successfully sold in the marketplace since 1991.

Now, I will admit that I had absolutely no idea how to raise funds; with over 22 years of experience in my industry where we established start ups and successfully financed turnarounds we always did so with our own funds.  So, the process of seeking funding kind of started off on the wrong foot; which was my fault because I was confused by the terms.

Now, I realize I am actually a hybrid start up, "...with one foot in the virtual world and one foot in the real world" which is exactly what we are attempting, we have the foot firmly planted in the real world, with over 200 retailers and 67,000 loyal consumers who shop our website regularly.  We manufacture big and tall tee shirts and we also offer various lines of  big and tall screen printed tees,  but the future belongs to those who can create a consumer centric/customization business model and we are ideally positioned to fill this opportunity in our niche market.  We can provide the plus sized consumer the same opportunities that firms such as Threadless, Cafe Press, and Custom Ink to name a few, have successfully pioneered in the regular sized market. 

After 22 years in the industry I have never seen an opportunity that excites me like this one does!  We would continue to build and expand our retailer based market but we would also be creating an all new market by bringing consumer centric/customization to the plus sized market.  This addition allows us to now expand from exclusively big and tall males into the plus sized female market.  It would allow us to create a synergy between our loyal retailers and our loyal consumer community which would then feed the growth of each other.

I do love my niche because I am tall and have been all my life;  I have spent my life shopping at my competitors like King Size Direct, Casual Male, JC Penney, and the retailers that do carry our product line.  I understand the psychology of the plus sized consumer and I can relate to it; I know what its like to see something on someone else and know you won't get it in your size.  I want to change that for the 76 million Americans who are obese and I want to do it by creating what they want created!

"A hybrid business is built entirely from scratch, to be innovative in its online technology and its real-world operations."  That is exactly what I did, when I got tired of constantly running out of inventory because I was undercapitalized, I stopped and said, "Lets quit working ourselves to death attempting to make do in a market that is overhwelming us and lets start over and create the ideal company to meet the opportunities of the plus sized market."

Now, "innovative" for us means to seek out the models created by others in the regular size market and basically duplicate it for the plus sized market; copy that in the mass market which has been the most successful and just redirect it to a niche market.

I have spent months explaining the vision, and I can go on for hours, but I never felt I was conceptualizing the vision correctly; a 20 year old start up that just wants to do what everyone else is already doing but in sizes 2X to 8X and XLT to 6XLT and build its existing retail base.

Now, I can claim to be a hybrid start up!   Once you get the terminology right you are half way home!

Oh, and I have met some really great people during this funding adventure,  I have focussed on seeking out those in the technology arena because I want to ensure that I have as mentors, the best and the brightest!  Yes, you CAN teach an old dog new tricks!  For that I thank everyone.

Big And Tall - The Future Of Business Funding (Poking fun at the investment community)

"Getting funding for your business has had me totally perplexed.   I mean, folks are throwing bucks into sinkholes but why they won’t consider a company that has a great market and the goods is beyond me."

A quote from a friend of mine, with 10 years of experience with some of the biggest names on Wall Street, and another 15 years experience with the technology industry who in his spare time writes for Forbes.

Exactly how does one begin to answer that question?

Most Venture Capitalists have blogs and you can read them on a daily basis, you can visit Angellist, Quora, and or Kickstarter and basically you will find the same things being said a variety of different ways....and still not be able to answer the question.

I think the most interesting information comes from the Designer Fund where the mission is:

"If you're an early stage startup with a designer founder, we'll help you get to the next stage of funding and growth. If you're a designer looking to take the leap into entrepreneurship, we'll match you with hacker engineers and business hustlers to get your ideas off the ground. We collaborate with multiple accelerators and funds to build a solid foundation for your business and get you the best deals."

So, basically a bunch of designers are angry because the techies and the finance folks are cutting them out of the loop and they feel underapreciated.  Basically, their argument is that, "It's about giving designers a seat at the startup table that engineers and MBAs already have."  They believe that the focus on people with tech and finance backgrounds creates an investment climate where, "Most startups fail because they make things that people don't actually want!"  You can read more about this new venture capital fund here.

Hmm....

I guess if you have a business proposal you better have a techie or a designer as a founder or no one is going to be interested.  Or you could be like Bonobos, a company that was founded by two roommates who were graduate students at the Stanford School of Business to basically provide men with pants that make their butts comfortable!  Pants for $88 to $188 dollars a pair and a business model per selective quotes from the NY Times:

• "The Bonobos pants, which come in straight leg and boot cut, are best for those with athletic builds, although it is developing pants for slimmer and bigger men."
• "Mr. Dunn is well aware that manufacturers could easily replicate Bonobos pants, so he is trying to distinguish the company with customer service, convenience and technology."
• "Bonobos also offers free shipping both ways along with lifetime returns, and encourages people to buy and return several pairs of pants to find the right fit."

That business model is enticing enough for a major VC firm to invest $18 million dollars in?  I cannot help but wonder if the decision to invest in this start up was made by a group of young, unmarried, fellow MBA's?  I wonder what Bonobos will do once their current loyal consumers get married and have kids:  Married men with kids are not 'fashionistas' and dramatically limit their apparel purchases.  Their was once a great retailer, Castner Knotts, that had the absolute best customer service and return policy and they ended up being bought out by Dillards because of their liberal return policy!

I notice that since they received funding they have dramatically grown their product line, in fact, the whole business model has changed as they now, "...we pair our offerings with hand-picked brands to bring you an expertly curated lineup of better-fitting men’s apparel."

Hey, if that works then I can add Fatheadz sunglasses, which is a great product from a great company which Forbes has highlighted in their "20 Million Dollar Businesses That You Have Never Heard Of."  Or, I can add Sanuk Sandals in big and tall sizes!  What a great combination, big and tall tee shirts, big and tall screen printed tees, sunglasses, and flip flops!  THAT is one awesome product mix for a sized centric community!

But since most venture capitalists are young, health consious, water drinking, exercise fanatics they probably avoid at all costs noticing that the vast majority of Americans are overweight slobs who are more concerned of finding a shirt that covers their "crack" when they bend over than they are with ensuring that their pants give them the male equivalent of "butt."

Let me know when a television show is produced for "Guys With Comfortable Pants" that has more viewers than "Say Yes To The Dress - Big Bliss."

My sense of humor is getting the best of me....

How about this line from a Bonobos ad: "“When you wear the world’s best-fitting pants, women tend to stare. Even gawk. If you can handle being seen as a sex object, visit bonobos.com and order a pair.”  In a world where over 50% of the adult males are overweight?  Get the guy a shirt that fits, sunglasses, and a comfortable pair of flip flops!