This is Karthik. He turned 500 bucks into 10 million dollars by building four different e-commerce companies. What's even crazier is that he built these companies with no funding and he had a full-time job. I'd go in at, you know, 8 a.m. and I'd get off around 5 36 and then I'd be working until midnight. I'd do it all over again. This guy is a hustler. One of the hardest working people I've ever met. We were actually starting a bunch of other businesses. So we had a promotions company, a discount card, a storage company, and then we had this apparel business. In this episode, he invited me into his New York City apartment to show me exactly how he's made millions. He also told me the secret to why his newest company has become one of the biggest brands in college sports and it's got something to do with changes to the NCAA. Karthik also told me how he's made millions in sales without spending a dime on ads. Get into these marketplaces, right? That's free marketing. You guys are going to love this interview. It's a masterclass of what it takes to build a $10 million online business. I'm Pat Walls and this is Starter Story. Alright, Karthik, you're running multiple businesses right now. Can you give us a breakdown of everything that you've built? Yeah, so we actually started off doing custom fraternity and sorority merchandise. Custom is the key word, right? At the end of the day, we went after one niche market, which was serving fraternities, sororities on campus, but we were doing custom stuff for their events. Which then led into doing custom stuff for the colleges and departments on campus. We went ahead and got essentially 300 college licenses to do all that merchandise for the campus organizations, departments on campus, and then naturally, as we started growing out our sales team, we started getting ancillary business to do custom merchandise for businesses. So then we launched Threadly, which is our custom apparel business for businesses, fundraisers, nonprofits, and then in the last year, with us kind of building out these other businesses, we built Tech along the way to kind of manage these different brands and all the back-end processes. And us being in the licensed space for so long, we actually saw an opportunity when the name, image, likeness, Supreme Court ruling came out where student athletes can monetize on their name, image, and likeness. So with that, we actually got into making merchandise co-branded with the college and the athlete, which is the brand is Athletes Thread. And so really focused on custom branded merchandise and licensed merchandise is the two buckets that I would put it in as far as what we do as a whole. But it is kind of a nest within four brands. So you got Greek house for fraternities and sororities, college thread for all the departments and organizations, Threadly for corporate companies, and then now athletes thread for athletes and colleges. So essentially, you know, different niches within the apparel industry. And these are all websites where people can buy merchandise like Shopify websites or... Exactly. So one is custom right. You would come to us and say, hey, we want this custom design or product made. We would design it and produce it for you on a kind of like a bulk basis or bulk order basis. So that's a little bit less on the direct to consumer side. It's more business to business. But then, yes, for athletes thread, you're coming on and you're buying one item for that athlete in college and just use that through Shopify. Tell us a little bit about your life before athletes thread in your businesses that you're running. What's the journey that brought you to building this business? Yeah. So one of my fraternity brothers and I, we just saw a need to fill the market with just a better vendor on the customer apparel side. And this was back in 2013 when, you know, technology was really kind of coming to the forefront of every business. We really rode that train hard and we started building out an order management platform as well as a customer portal. But as we were figuring out this business, Luke and I, my co-founder, we were actually starting a bunch of other businesses. So we had a promotions company where we threw concerts. We had a discount card that we would sell to students, student organizations to raise money. And then we had this apparel business and, you know, Luke also started a storage company, a storage and retrieval company for college students. So we had multiple tries at entrepreneurship in college. But this one, it happened, you know, the first year we did 50,000, second year we did 100,000. And this was us kind of working on it part-time in between school, doing all the stuff that a student would do. And then also our other businesses, we were trying to stand up and get running as well. And then upon graduation, I actually got a full-time job at Amazon. You had a full-time job and you were working on this on the side. Yeah. I mean, it was, you know, what was crazy about Amazon was I had to work from Wednesday night to Sunday morning. So I'd come in Wednesday night at literally 11 p.m. and I would get off between 11 a.m. to 12 p.m., go home, sleep, and then I'd wake up in the evening, start working on Greek house, then go into Amazon, do it all over again. And then Salesforce, same cycle, but I had a little bit of a more normal schedule. I'd go in at, you know, 8 a.m. and I'd get off around 5.36 and then I'd be working till midnight and do it all over again. And then weekends, you know, typically got maybe one weekend day off Saturday, but yeah, it was pretty much six days on and one day off kind of deal for a good two and a half years. What gave you the motivation to do all that for so long? Yeah. So my family's an immigrant, you know, have really humble beginnings since we moved here. You know, we immigrated from India to here. I was born in Bangalore when I was 7 years old. So I think one, we've, you know, I've always seen my parents work hard and I think that's always hard work has always been instilled in me. But two, you know, my parents give up everything from a family perspective to move my brother and I over here. And now my sister is here as well. But, you know, we just, you know, we're very fortunate to have the opportunity to live in a country where the opportunities, you know, you can go out and get it. And so, you know, I think just wanting to make my parents proud would be like number two and just like really, I think that supersedes almost everything. But three, you know, I think ultimately, you know, every time I go back to India or, you know, we have employees all over the world. I just like realize how fortunate I am and we are to live in a country like the U.S. to be able to build startups without barriers. So yeah, you know, I think it's just, it's just what I've always known. You know, I have entrepreneurship all throughout my family. We have, you know, over 24 restaurants in India. So it runs all throughout our family as well. So I'd say it's a combination of all that. And I'm just very fortunate that I get to do this every day. All right. So you started Greek House in your dorm room or your college basement with 500 bucks. What did that look like at the time? Yeah. So we were basically at our fraternity house. And so we would literally meet in the common areas and basically get a sales plan going. And, you know, a lot of what we did to start our business was, you know, just savvy college kids. And this is before, you know, we had Instagram and different ways to reach the different folks there. We would just go out and start texting our friends and in different sororities and fraternities, trying to figure out who's making the decision to buy t-shirts and just we're out there hustling and kind of working through our networks, meeting people on campus, going to different, you know, the student organization meetings, going and pitching to them there on, hey, you should use us to buy your shirts. And that was kind of our edge was we were these young hustlers that could go out and just, you know, we were we were sharp. We really liked sales really just going out and pitching people. And, you know, we probably sucked at sales in the beginning, but, you know, over time, you get better and better. Your pitch gets refined. But, you know, putting yourself out there and just going for it. It's the best thing you can do as a college student. So I always tell students to just go for it. If you're in college, you know, there's no reason you can't be starting a side hustle or a business while you're in school. I know building a licensing business can be complicated. Are there any really scary moments while building this business or any big obstacles that you had to get through to get where you are today? Yeah, actually, when I went first month full time with the business in 2016, you know, moved all my stuff down to Los Angeles where my two other business partners were one of my co-founders was there. You know, we're we're three months in and things are going great. You know, sales are picking up. We're seeing a lot of growth, working a lot of hours, but having a lot of fun working our living room at this one middle desk in a really small apartment in LA. Just really working and grinding away. But, you know, about a month about four months in in April. We get a notice from one of the licensing organizations saying, Hey, you're not paying royalties and we're finding out that there's all these sales that you're basically not reporting on. And we were like, What are you talking about? And so we started looking into it and ended up finding out, Oh, wait, licensing is the whole thing. We have to get approved. We have to pay royalties. And so we basically got audited and long, long story short, we had a $40,000 bill four months into it, which, you know, at the time, we were doing just under a million in sales and that was really scary, right? That's like 4% of our costs. And we didn't even have 40K in the bank to roll with. And so, you know, we went back to the licensing agency and said, Hey, you know, we want to be in this industry for the long term. You know, we will make it right. Give us some time to make these payments. We'll give you one lump sum now and the rest over the course of, you know, 12, 14 months. And so it was a very valuable lesson. But, you know, at the time, you know, I thought I was going to have to go back to work full time working in corporate America. I know you probably have a million SKUs. How do you ship out all this, take orders and manage this whole operation? Yeah. So we've, we built out a supply chain. So we don't manufacture anything in-house, but we work with amazing print and production partners all throughout the U.S. And so that's been accumulation of just us building relationships over the last 10 years. But in most industries, right, on a distributor level like us, it's easy to find manufacturers. It's hard to find good manufacturers or great manufacturing partners. And so these are relationships we've had to develop over the years. But in managing that, right, one is we've built out a vendor portal so that they can manage all their orders effectively. So in some cases, you know, we've come into that shop that we work with the printer production partner and said, hey, you know, we want to work with you. These are our prices, but we are also going to provide you tech so that when you service our account, it takes one-tenth of time to service us as then it does for your other customers, because we're going to keep everything so organized and so clean for you so that, you know, you don't have to manage a hundred other aspects of the admin side of the workload. And so that's what's really kind of led us to having great partners is being able to build out, you know, systems and processes for them that makes their job easy so that, you know, there's no question when an order comes through on what needs to be printed, who it needs to go to, we give that to them in an organized fashion, and we've helped automate and streamline their workflows on the production line. All right, let's talk about competition in the e-commerce space. Anyone can start a Shopify store and I know that 90% of Shopify stores fail. So how do you differentiate yourself as a brand and how do you look at competition? One, from a, like, just a company and landscape perspective, what's great about being in the licensed industry, right? There is a lot of hurdles to get to where we are. First and foremost, you need to have licenses for the colleges and then you need to get rights from each athlete. So that hurdle alone, 99.99% of companies will not get through that hurdle. So that really slims down, you know, the vendors and the competition in the first place. The second area that we've really been focusing on is building a true brand. So, you know, we went from doing custom merchandise to now doing our own brand with athlete's thread, right? And how we've been differentiating from building a brand. I mean, one is amazing customer service and turnaround time, right? When we ship product out, you know, that is the first kind of, like, way that we differentiate. It is making sure that each customer, when they reach out to us, they're getting a response in less than four hours time. They are also, you know, products are not shipping out in the two to three business days, we guarantee. We harp on our vendors to really get those out and making sure that we meet our SLAs. And so that's the first area where our brand is really strong is good product and good product delivery. The next area I would say is that we've been doing a lot of things around our brand. So we're doing neck labels, we're doing custom packaging. So really starting to build a brand there. And then the third is from a social media perspective, right? We have a fairly young team who loves sports. So we're really trying to lead into that. And so really put out really engaging and cool content that not just the students vibe with, but the athletes vibe with and also the sports teams, the individual teams, right? They all vibe with. Marketing is the hardest thing to do as a business. Seize you start a business, hard to grow it. What is your marketing strategy look like and what's all the ways that you get sales and reach customers? Yeah. So when we first started, we went deep into a few different channels. We originally started with outbound email marketing, which is one to one emails, cold outreaches. And then that turned into outbound sales. So we're going much more of a direct response route. And that's what really worked for us. It was cost effective, scalable. We were able to find a lot of emails and contacts online. The second approach that's really worked for us is building out an affiliate or an ambassador program. Right? What's great about those kinds of programs is that you're not just spreading your word about the product. You're finding advocates that are selling your brand on your behalf, right? Whether they're posting content, they're sending it to their friends or posting their discount codes. You know, what's great about that is, you know, if you do send them free product, yes, that's some initial investment up front, but they can also give you content on the back end, right? So that you're able to reuse it, repurpose it and start building your brand further. And then it's kind of like, you know, kill two birds with one stone. They're also going out and promoting it. So you get content and you get promotion of your product. And then third, right, is paid marketing. You know, we love paid search because when somebody is searching for Google for a Bryce Young t-shirt, right, they are really looking for that specific item. So there's there's very high level of intent, right? People are looking for these items. Whereas social media, you're trying to just get more products in front of them based on interests or based on different demographics. And so we found that paid search on Google has been highly effective. And then lastly, get into these marketplaces, right? That's free marketing, meaning if you can get your product on Etsy, get it on Etsy. If you can get it on Google shopping, get it on Google shopping, right? These marketplaces go a long way because, you know, I found that a lot of people now, they just go to they click on shopping when they Google something and they're looking for products to purchase. They're literally clicking on that shopping tab so that it aggregates all the sites that Google might be connected to on the shopping side. Hi, Karthik. What would you say are the most important skills to building a business like yours? Yeah, so I think first being remote, right? Communication is so key. That's the speed of communication, the quality of communication, the clarity. I think communication is just a huge undertaking and there's different forms of communication, right? Written, verbal, even recording videos and sharing it with your team, creating that kind of asynchronous harmony within the company where you don't have to meet to figure out these issues, right? I think is what has really led us to be successful on the internal side. And then externally, right? I are communicating with customers and clients. That's really, really key. So I think communication is very top there. Written, verbal, and just even recording videos that would say it's its own form. Then number two is like the ability to learn anything or teach yourself something, right? There's so many resources online. You know, everything is a Google search away from you learning it on your own. And oftentimes, you know, I think even I see it in our employees where they'll get stuck on a problem and they'll come to me and I don't know the answer to the problem. What do I do? I go to Google and I search it, right? So trying to get in that mindset where there is always an answer out there for your problems. And then third, I think surrounding yourself with either a good co-founder and or advisor, right? Or mentors that have done it before and have been in your position, right? But also they can be very blunt with you and very critique it. So I don't know if it's necessary as much of a skill or as a tactic, right? Is getting and hiring good people around you, whether it be advisors, co-founders, employees. I think really getting that skill down is really, really important. And just kind of getting getting getting a good team under under you or behind you is really, really important. What advice would you have for someone who's just starting a Shopify or e-commerce or anything in the retail and merchandising space? Yeah. So I think the first is like just get started. I think like a lot of people overthink how and when or what to do to get started, whether it's writing up a business plan and strategy, right? And I'm not saying go write a 50 page business plan, but develop parts of a business plan and then start implementing some of that right away. You're going to learn more on the job than you will just kind of reading stuff and articles online. And then lastly, I'd say humility, right? And just making sure like you don't know everything and kind of having that learning mindset and that just really wanting to engulf yourself in the industry. Your market and learning from the ground up. I think that's a really key aspect of entrepreneurship is just having that intellectual or that genuine curiosity. I think it's really key to success as an entrepreneur.
