Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

On-demand merchandise startup Teespring is profitable (and has been for a year) after seven years in business, but it didn’t come easy — the path there included layoffs, CEO changes, a recapitalization that slashed its valuation to a mere $11 million, and other tough business lessons over the last couple of years.

The big picture: Teespring's saga inverts the usual garage-band-to-billionaires startup story. The company began as a Silicon Valley darling, attracting the early backing of Y Combinator, other top investors and media attention. Then the trouble began.

Teespring was founded in 2012 by Walker Williams and Evan Stites-Clayton after they crowdfunded t-shirts to commemorate a beloved bar that was shutting down near their college.

  • Teespring, which let users design t-shirts and sell them at cost or for a profit, participated in the Y Combinator startup accelerator program in 2013, jumpstarting its fast rise.
  • In 2014, it raised a total of $55 million via two rounds from top VCs like Andreessen Horowitz and Khosla Ventures. The latter round gave the company a valuation of a reported whopping $650 million.

But beneath headlines that Teespring was minting millionaires, the reality was more worrisome: a majority of its business came from a small number of entrepreneurs generating sales via Facebook ads.

  • Users were designing 120,000 new products every day, but “the incredible growth wasn’t necessarily being reflected in the revenue,” Chris Lamontagne, who joined in 2015 and recently became CEO, tells Axios. The average users didn’t have the know-how and tools to turn those design into sales, he says.
  • Teespring’s business naturally took a hit as Facebook’s ads became more expensive and competitors with lower costs began to attract its sellers, according to Lamontagne and former execs.

In mid-2017, after multiple rounds of layoffs, the company underwent a painful recapitalization while raising new funding.

  • Teespring raised a new $5 million, mostly from existing backers Hydrazine Capital and Khosla Ventures, but also cut its valuation from a reported $650 million post-money in 2014 to just $11 million, according to the Wall Street Journal.
  • “We were focused on channel diversity and profitability from 2015 onwards, but our burn was too high and our early efforts to diversify fell flat,” Williams tells Axios. “We were bullish that the company still had a future, but getting investor buy-in was tough, and in the end, the only viable option to keep the company going was the recap."

At the same time, the company was already working to shift away from its dependency on a small number of sellers and Facebook ads.

  • It created what it calls its “Boosted Network,” a suite of tools and services to help users advertise and sell the products they design. This includes listing the items on marketplaces like Amazon, eBay, Wish, Etsy and Walmart, for which Teespring adds a small fee to the cut it takes from sales. Boosted Network quickly rose to generate nearly 40% of Teespring’s sales in the first few months, according to Lamontagne.
  • Teespring is also expanding in new directions: it inked a partnership with YouTube to help its popular video stars design and sell merchandise, and it has teamed up with JD.com, Tmall and Rakuten to sell products in Asia.
  • Of course, these initiatives also came with growing pains, such as a few incidents of inappropriate shirt designs cropping up via its service.

Today, Teespring is a smaller but healthier company. It has moved beyond just selling t-shirts, offering 150 different items, and says that this year it will reach $1 billion in sales since its inception. Both Williams and Stites-Clayton remain on the company's board, though they ceded their executive roles in early 2018.

The bottom line: Finding quick success as a startup doesn’t always mean a company has built a solid and sustainable business.

Go deeper: Reflecting on My Failure to Build a Billion-Dollar Company

Go deeper

WHO warns against travel bans on southern African countries

Matshidiso Moeti, World Health Organization regional director for Africa. Photo: Sylvain Gaboury/Patrick McMullan via Getty Images

The World Health Organization called on countries Sunday to not impose travel bans on southern African nations amid concerns over the new COVID-19 Omicron variant.

Why it matters: The U.S. and countries in Europe and the Asia-Pacific announced travel restrictions in response to Omicron, which was first detected in South Africa. It's since spread to several European countries, Canada, Israel, Australia and Hong Kong. The WHO noted in a statement that only two southern African nations have detected the new variant.

Updated 4 hours ago - Health

First North American Omicron cases identified in Canada

COVID-19 testing personnel at Toronto Pearson International Airport in September. Photo: Steve Russell/Toronto Star via Getty Images

The first two cases of the new Omicron variant have been detected in North America, the Canadian government announced Sunday evening.

Driving the news: The World Health Organization has named Omicron a "variant of concern," but cautioned earlier on Sunday that it is not yet clear whether it's more transmissible than other strains of COVID-19.

8 hours ago - Health

WHO: Not yet known whether Omicron leads to more severe disease

Photo illustration: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The World Health Organization on Sunday said that it is not yet clear whether the newly discovered Omicron variant is more transmissible than other strains of the COVID-19 virus.

Why it matters: The agency's statement comes as the variant, discovered in South Africa, has already been detected in European and Asian countries.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!