This Entrepreneur Explains How He Survived 150 Rejections From Investors
Introducing our new podcast, Problem Solvers with Jason Feifer, which features business owners and CEOs who went through a crippling business problem and came out the other side happy, wealthy, and growing. Feifer, Entrepreneur's editor in chief, spotlights these stories so other business can avoid the same hardships. Listen below or click here to read more shownotes.
Sam Sisakhti had an idea for an e-commerce company called UsTrendy. It would sell clothing made by talented, unknown fashion designers from around the world—acting as a marketplace for great styles that could be found nowhere else. It didn’t matter that he had no experience in fashion or building a brand. It didn’t matter that he had just quit his first job out of college after only four days. What mattered was that he believed that this idea could be huge. And to get it there, he figured, he needed to raise money. A lot of money.
Initially, it seemed easy. On their very first pitch, Sisakhti and his associate landed a $500,000 offer. “Crazy,” he says. But there was a catch: The VC required them to move to Silicon Valley to receive the money. Sisakhti’s right-hand man didn’t want to move. Sisakhti decided he’d just godo it himself.Related: How the Founder of Baked by Melissa Recovered From Her First Holiday Sales Disaster
So he moved, failing to understand that investors buy into a team, not just an idea. He promptly lost the funding.
No matter, he thought. He’d just go get more money.
Thus began Sisakhti’s real journey. He started pitching anyone and everyone, regardless of their field of expertise. It went badly. By his count, he was rejected around 150 times in a row over 18 months. Worse, he kept revising his business plan based on their feedback, reducing it to an ever-changing muddle that made it even harder to sell.
This beating culminated with a meeting with a VC who, humiliatingly, was a family friend. “He threw my business plan in the trash, right in front of me,” Sisakhti says. “And I just remember thinking, Man, what am I doing?”
Entrepreneurs hear a lot of noes. In fact, it’s probably the word they hear more than any other, especially starting out. It can come in torrents. It can get crushing. The key, as Sisakhti learned, is twofold: to survive it, and to learn from it.
And here’s what Sisakhti realized: He needed to stop pitching. Not every business needs funding, nor is every business ready for funding.
“I was spending all my time pitching, and I wasn’t spending any time building the business,” he says. So he scaled back. “I went from wanting to create the next Amazon to just saying I wanted to grow a business organically,” he recalls. “I just wanted to pay for a modest, middle-class lifestyle.”
Freed from the ceaseless need to fund-raise, Sisakhti drew on his natural creativity and resourcefulness. He’d always thought he needed funding to help recruit young designers. But now he started to get creative. He recruited them right out of design school—using student brand ambassadors to get around rules about recruiting on campus. Soon he had a thousand. Then he linked up with London Fashion Week to do a show for emerging designers. He pitched a design competition, and that got him 3,000 more, along with a bunch of press coverage.
Now he had inventory, revenue, and exposure. He was feeling good. One night, over dinner, Sisakhti sent a magazine piece to mega-investor Tim Draper, who had rejected him twice already. Fifteen minutes later, Draper responded, saying he wanted to talk. Eureka.Related: What Happens When You Can't Deliver Your Kickstarter Project to Backers?
“I think the reason he was interested was that I’d shown I was going to do this with or without the money,” Sisakhti says. He even got a little cocky. “I told him that it’s just a matter of time: ‘If I have your money, I’ll get there faster, but if I don’t, I’ll still get there. And then the valuation’s just gonna be that much higher to get in.’”
Draper invested $1 million in a first round, then came back for a second round. In total, UsTrendy has raised more millions since, grown by 300 percent annually in its first few years, and has worked with more than 20,000 designers from more than 100 countries. It has attracted more than two million followers on social media and other digital media channels.
Now when Sisakhti reflects on all those noes, he thinks not of rejection—but of how it changed him. How it showed him the way.
“It was awesome,” he says.
In this episode of Problem Solvers hosted by executive editor Joe Keohane, Sisakhti takes us through the mistakes he made, and the big lessons he learned -- about himself, his company and entrepreneurship in general -- that drove him to become the success he is today.
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