STARTUP HAS A PROB­LEM MOST WOULD ENVY: THE FOUNDERS CAN’T KEEP UP WITH DE­MAND.

NEXT-DAY SHIP­PING IS STILL ACHIEV­ABLE

National Post (Latest Edition) - - FINANCIAL POST - Denise De­veau

Omar Shah­ban and Fahd Javed are fac­ing a chal­lenge that would be the envy of most star­tups. The cousins are co- founders of Gravid, de­sign­ers and sell­ers of weighted blan­kets that have been con­sis­tently sell­ing out since the launch of their on­line site in May.

As a for­mer phys­io­ther­a­pist, Shah­ban saw a main­stream mar­ket need for a prod­uct that had typ­i­cally been used for peo­ple with autism or anx­i­ety dis­or­ders.

“These have been around for sev­eral decades. We just re­pur­posed them.”

The up­scale, aes­thet­i­cally pleas­ing mod­ern de­sign def­i­nitely struck a chord with buy­ers yearn­ing for the com­fort and se­cu­rity of this type of prod­uct.

Growth was al­ways some­thing they con­sid­ered in their plan­ning, Shah­ban says.

“Even at the ini­tial stages we had a l ong- term goal in mind and a line of sight into how to scale. We never wanted bot­tle­necks in the busi­ness flow.”

But long- term plan­ning quickly turned to short­term catch- up, Javed says. “We cer­tainly didn’t think it would scale as quickly as it did. The prod­uct was mar­ket fit from the get-go. Ev­ery month was dou­ble what we fore­casted the pre­vi­ous month.”

They al­ready had a re­li­able man­u­fac­tur­ing part­ner in China. The next step was out­sourc­ing ful­fil­ment to a warehouse part­ner. With t he es­ca­lat­ing de­mand, how­ever, l ead t i mes got longer, with some cus­tomers wait­ing four to six weeks for de­liv­er­ies.

Now the fo­cus is on worki ng with part­ners to get their lead times down and even­tu­ally achieve next- day ship­ping, Shah­ban says. That in­cludes shift­ing to an­other ware­hous­ing fa­cil­ity that of­fers bet­ter in­te­gra­tion ca­pa­bil­i­ties with their tech­nol­ogy.

“We should be able to get to the point where we can fund in­ven­tory prop­erly with­out tak­ing on debt. That can re­ally work out well as long as we have cal­cu­lated ev­ery risk.”

Tara Bosch, the 23- yearold founder of SmartSweets in Van­cou­ver, started a com­pany and also had to face sky­rock­et­ing de­mand sooner than ex­pected. She be­gan the busi­ness in re­sponse to a mar­ket need for a “smart sweet that kicks sugar.”

She came up with the i dea and recipe while at uni­ver­sity, where she was se­lected to join The Next Big Thing ac­cel­er­a­tor pro­gram. By the sum­mer of 2016 she had launched her prod­uct on­line and through re­tail­ers.

“It was just my­self with my own recipe. It was funny be­cause dif­fer­ent men­tors told us don’t be too pie- in- the- sky with fore­casts, and to be re­al­is­tic. But my fore­casts were com­pletely blown out of t he wa­ter. Within t he same month of launch­ing, I had re­ally un­der­es­ti­mated my fore­cast­ing.”

With t hat kind of de­mand, sup­ply couldn’t keep up, she ad­mits. “The in­ven­tory and sup­plier side took time to catch up. That was my largest pain point.”

Bosch says she man­aged to find some “re­ally great man­u­fac­tur­ing part­ners” and was able to fo­cus on how to cre­ate ef­fi­cien­cies and shorten lead times for raw ma­te­ri­als and other sup­ply chain needs. Af­ter the first year, she has im­proved over­all lead times con­sid­er­ably. That’s a good thing, given she is on track to have signed up 2,000 re­tail out­lets in Canada by end of 2017, and pos­si­bly 10,000 by the end of 2018.

Hav­ing the sys­tems and pro­cesses in place helps con­sid­er­ably, s he adds. “That has al­lowed us to scale sig­nif­i­cantly. We now work back­wards from our end goal, and de­velop a roadmap from that, iden­ti­fy­ing po­ten­tial road­blocks and hur­dles through part­ner­ships and in­vest­ment in sys­tems and pro­cesses. We make sure we have the tac­ti­cal mea­sures in place so our in­ter­nal team and our part­ners can act on it.”

The big­ger con­cern for most star­tups is lack of de­mand for a prod­uct or ser­vice, says Dan Kelly, pres­i­dent and CEO of CFIB. “But one of the big­gest prob­lems for a startup that hits on some­thing, is their abil­ity to scale up. That puts all sorts of pres­sure on them when they are caught by sur­prise.”

Too many de­lays, and a com­pany stands the risk of los­ing cus­tomers. “Busi­nesses al­ways need to look at the ‘ what if ’ ques­tions,” Kelly says. “What if this does go re­ally big, re­ally quickly? Of­ten the first ques­tion in­vestors ask star­tups is how their i dea can scale. Yet most en­trepreneurs never even think of that at first.”

Find­ing re­li­able part­ners to help you scale can be in­cred­i­bly im­por­tant, he adds. “It of­ten means l ook­ing over­seas for goods man­u­fac­tur­ing. Get­ting the right part­ner­ships is time well spent.”

Even with that, if you do find your­self short on in­ven­tory, there are a cou­ple of things a busi­ness can do, Kelly says. “You can spin it as a good news story. If you do it right you can build ad­di­tional ex­cite­ment for the prod­uct and peo­ple will be keen to get it. And awe­some cus­tomer ser­vice can also go a long way to en­sur­ing cus­tomers hang in there with you.”

NEVER WANTED BOT­TLE­NECKS IN THE BUSI­NESS FLOW.

PETER J THOMP­SON / FOR FI­NAN­CIAL POST

Gravid.ca co-founders Omar Shah­ban, right, and Fahd Javed show off their new de­sign of weighted blan­ket in Toronto last month.

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