Death by SKU?

Laura Beck founded stripedshirt five years ago. In many ways, her’s is the epitome of a human scale business. As Dan McGinn tells the story in yesterday’s HBR.org article, Laura launched stripedshirt after spending 18 years in public relations in order to pursue her passion as a “big sports fan” and to spend more time with her young daughters. So, it’s particularly sad to learn of the death of this business dream.

I have to wonder whether there were ways to test stripedshirt’s concept with a more focused set of SKUs.

By their very nature, startups are uncertain. You never really know what is going to sell until you try. This uncertainty, magnified by the minimum order quantities required by manufacturers and the desire on the part of wholesale customers for a more-or-less complete product range, often compels entrepreneurs to offer as many product variations (product “stock keeping units” or “SKUs”) as possible. Don’t like the red and blue striped shirt? How about the red and white striped version?

In Laura’s case, this apparently translated into an order for 14 different color combinations with 15 different sizes, which translated into a whopping 210 SKUs and 10,000 units. That’s a tremendous amount of complexity for a startup as well as a major investment in inventory.

I think I understand how she got there. (I once walked a similar path.) That said, I have to wonder whether there were ways to test Laura’s underlying product and business concept with a more focused set of SKUs. Kickstarter and Indiegogo, for example, may not be panaceas as crowdfunding platforms, but they represent interesting avenues for pre-selling a concept before you write the big inventory check. For a given level of uncertainty, you reduce the overall risk of a business by minimizing the upfront investment of time and money.

The Mom Test BookIf you haven’t read it, I highly recommend The Mom Test by Rob Fitzpatrick. Those of us involved with manufactured consumer products can learn much from the lean startup ideas that have evolved from the tech world. Learning how to ask better, high gain questions during the (low cost) R&D phase is a critical skill – and one that can save us a lot of money and heartache.

Whatever the ultimate reasons for stripedshirt’s failure, Laura is moving on. “I’m going to clean the shirts out of my garage, continue doing part-time PR work, and have more time to be an active mom. I figure have another five years before my daughters want nothing to do with me.” If you are looking for a cute shirt, now is a good time to buy.