It should be any entrepreneur’s dream come true. But for some startups, a sudden, overnight explosion in growth can nearly bring the operation to its knees.
Such was the recent experience of Blank Label, a Web-based company that sells custom-made, user-designed dress shirts for men. After launching in October 2009, Blank Label enjoyed some modest initial success, selling a few hundred shirts in the first few months of business.
The online buzz generated by the startup’s unique service was enough to capture the attention of The New York Times and other prominent media outlets, whose positive coverage in mid-May quickly sent a flood of new customers to their site. Immediately following the press coverage, Blank Label’s Web traffic increased by about 4,000% overnight, and conversion rates nearly tripled.
For a brick-and-mortar store, a sudden influx of customers can result in long lines. Online, it can cause servers to go down.
The team knew there was a problem when they started receiving emails from would-be customers asking when their website was going to go back up, according to Danny Wong, co-founder and lead evangelist for Blank Label.
“There were massive problems with the site,” says Wong. “First images wouldn’t load, then pages stopped loading.”
They tried rebooting their web server, but found that the problems only accelerated. A few hours later, they moved their website to bigger, more capable server space.
The technical issues were only the beginning of the headaches.
Before long, it became apparent that the supplier they had hired to produce the shirts was unable to keep up with the sudden demand, despite assurances to the contrary. Orders started shipping late, sometimes with defects. Within a week of the initial influx, Blank Label switched suppliers.
A new payment processor was in order as well, because the one they had been working with was alarmed at the sudden and dramatic increase of orders and decided to end their relationship.
In addition to website stability and production issues, the company’s owners found that customer service was becoming too much to handle. To keep up with the requests, the company had no choice but to hire three customer support staff members, as well as outsource some technical work via oDesk.
Chocri
Another co-creation startup that experienced growing pains is a company specializing in custom-made chocolate bars called Chocri. For them, the scalability issues have been seasonal, as demand for co-created chocolate has typically peaked during the winter holiday season, causing Chocri to sell out of inventory two Christmases in a row. The overwhelming demand has required CEO Carmen Magar to make a number of changes, including expansion of staff, moving into a larger space and reassessing the company’s production practices.
When they first started out, Chocri would produce the milk chocolate, dark chocolate and white chocolate candy bars separately and then recombine orders. “That’s crazy when you make 50,000 bars a month,” says Magar. “So now we make all types at the same time.”
Today, things are mostly back on track at Blank Label and Chocri, although there is still a two-week delay on new orders at Blank Label.
“I always feel like there’s more work to be done,” says Wong, adding that his company is working on further streamlining the ordering process and hoping to speed up shipping times.
If he could offer any advice to budding entrepreneurs and small businesses, Wong says it would be to ensure upfront that technical infrastructure and production resources are prepared for potentially rapid growth.
When all was said and done, Wong’s company had hired four new people, and switched suppliers, servers and payment processors in order to cope with their sudden success.
These days, all it takes is a mention in a few high-traffic news outlets or some social media buzz to bring tens of thousands of people to your company’s door. As some entrepreneurs have learned the hard way, it quite literally pays to be prepared.
Disclosure: Danny Wong of Blank Label has written guest posts for ReadWriteWeb in the past.
