Teespring Says It's Minting New Millionaires Selling Its T-Shirts, Raises $35M

We are making entrepreneurs out of ordinary people, it's fking awesome.

1) Not sure why all the hate towards us. We can take a company from zero to millions overnight. I get that there are some shady stuff floating around but that's not 100% of the industry.

2) Facebook + Teespring is almost a perfect combination.

3) Aff. Marketeers have created some issues in FB using Custom Audiences (T-shirts that said stuff like "This was made specifically for Joe"). Those sold like hot-cakes but FB went down hard on them.

4) Everyone wants a piece of the action, that's why you see so much tutorials and stuff around it. It's also a great way to learn Aff. Marketing if you are into that.

I don't post much, but based on what I see here, many startups would be 10x more likely to succeed if they knew how to correctly leverage the affiliate channel for traction and growth.

One of many things Teespring did right was to build features into the platform that enabled affiliates/marketers to profitably test, optimize and scale their tee shirt campaigns.

For example, the ability for marketers to easily place their Facebook conversion/retargeting pixels on the Teespring site, meant that affiliates now had the visibility needed to profitably spend their own money promoting Teespring campaigns via paid acquisition channels (mainly Facebook ads).

I'll agree partly with you and say that there's a segment of the affiliate community that you want to stay away from, and I'm sure Teespring has their share of trouble affiliates. Unfortunately, the rotten apples are usually the most visible and make the whole community look bad.

Here's what I see is needed to help solve some of these problems:

1. More transparency into the affiliate marketing channel. Startups need to feel comfortable knowing that they are not working with affiliates that use unauthorized marketing methods and messaging.

2. Affiliates need to be more comfortable knowing that they are not going to be cut out once a business sees the successful methods being used by affiliates to drive sales, leads, growth etc. Teespring's model actually does a lot to protect affiliates and the designers that use their platform because the interests of both parties are closely aligned.

3. Startups need more education about the affiliate marketing community and the best ways to leverage affiliates as a traction channel. It's unfortunate, but the comment from @dsugarman is a perfect example of what can go wrong while Teespring shows what can go right. They basically turned every single person who designs a shirt on their platform into an affiliate, and gave them all the tools and support they needed to succeed.

Actually, with Teespring, the "designers" are affiliates.

Surprised that no one seems to have noticed this.

But this is great news for Teespring. Congrats to the team.

TeeSpring is kind of like a Kickstarter, you setup a picture of what the T-shirt would look like when printed and then no money changes hands until you hit your "funding level" of a certain number of shirts, and there's no excess inventory because they only print exactly the right number for the sizes that people ordered.

It's a really interesting model.

The obvious solution would be to set up another factory. Suppose for simplicity that this costs $25 million and allows a doubling of capacity. suppose further that TeeSpring is making a profit of $100,000 a week (a completely imaginary figure - I know nothing about their finances). Because it's near full capacity that weekly net isn't going to increase much. But saving up the money to purchase the factory outright would take 4-5 years - an organic growth strategy - is plenty of time for competitors to move against you and pull away customers.

So you have a couple of options. You could go into debt, either by getting a loan or issuing a bond that pays interest (effectively the same thing). Now some of your income goes on interest payments, but they're tax-deductible and after you've paid off the debt you'll still have the second factory. As long as the increased income resulting from the investment is greater than the cost of borrowing the capital then going into debt can be perfectly sensible - the same reason it makes good sense for governments to splurge on necessary infrastructure during periods of low interest rates, just like we're not doing now due to politics :-/

Another option is to issue equity, ie sell shares in the company to raise the money. For large firms this may not be any more attractive than debt, because shareholders will expect a dividend of some sort. For growing firms it makes a ton of sense because early investors are not so much interested in dividends as in the possibility for the shares to appreciate in value - who wouldn't have liked to invest $1 million in Google or any other large company back in the early days? This is ideal for a firm like Teespring that has a very simple and straightforward business model - manufacturing a basic consumer product like this is great from an investor's POV because it's so easy to analyze.

You could start by feeding the machine $1, waiting an hour, then feeding the $1.20 back in, and so on. But you'll get richer far quicker if you persuade somebody to lend you $1M and directly dump that in to the machine.

One example that was mentioned in the article was building a factory. Obviously that requires a huge chunk of capitol but will allow the business to grow to fill the market that they have confirmed to exist.

edit: typo