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The Downside of Popularity: How This Company Dealt With Overnight Success

When a menswear rental startup unexpectedly took off and sold out of its entire stock, its founders were forced to tackle a crippling supply-chain issue -- and angry customers.

This story appears in the May 2017 issue of Entrepreneur. Subscribe »

Most new owners worry about getting customers through the door. Not Andrew Blackmon, co-founder of online tuxedo rental service The Black Tux. He was worried about getting trampled by them.

Carlos Rice & Laurie Joliet/ The Black Tux
The Black Tux tuxedo is not your average rental rig.

When The Black Tux launched in June 2013 -- born out of Blackmon's own "terrible" wedding experience with the tuxedo rental industry -- the company was equipped to fulfill roughly a thousand orders per weekend. But then GQ magazine gave The Black Tux a positive mention, triggering a surge in demand. Overnight, they sold out for the entire fall wedding season. And the orders kept coming.

Related: Don't Buckle Under Success: 7 Ways to Survive an Overnight Boom

"I remember my co-founder, Patrick Coyne, and I sitting in his apartment, just looking at each other in horror, wondering what we were going to do next," says Blackmon. "It felt like we had reached the pinnacle -- and then the ship was slowly sinking."

The co-founders decided to approach their problem from two sides: First they personally reached out to any disgruntled customers to explain the situation and set up a waiting list for those who wanted to stay in the loop. About 20,000 signed up.

Then they went looking for more suits. As newcomers, The Black Tux team didn't yet have the pull to speed up their , which involved fabric makers in and suit makers in factories throughout the world. At the time, their manufacturers could ship new suits only every three months, an eternity in the startup world. Typical wholesale suits might have been faster, but they weren't an option for a company specifically devoted to avoiding their shoddy look.

Related: 3 Keys to Developing a Sustainable Supply Chain

So the co-founders pulled the one ace they had in their pocket: potential investors they'd met before launching but had decided not to work with until they were further along. These investors, encouraged by the booming demand, quickly and enthusiastically filled the startup's coffers with $2.6 million in funding, and The Black Tux bought thousands of new suits. Crisis averted.

Or so they thought. Once the crisis was solved, and stellar reviews rolled in from their earliest customers, they received another wave of positive press -- which, in the fall of 2014, once again wiped out their inventory. But by January 2015, Blackmon and Coyne, now flush with $10 million in Series A funding, were able to respond by tackling their core problem: the supply chain. They set out to negotiate better deals with their manufacturers and shrunk the turnaround time for new product down significantly, to a matter of a few weeks.

"So much of being an entrepreneur is proving yourself in little steps to achieve your dream," says Blackmon. "We had to prove ourselves to a factory to get better terms and a better supply chain."

Related: Online Reviews Are the New Social Proof

Looking back, Blackmon says that had he been more knowledgeable about suit manufacturing from the beginning, he would have invested in logistics and inventory earlier. "You're assuming that your problems are going to be marketing, storytelling and getting more customers to the brand," he says. "My advice would be to take more risks on inventory and be ready."

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