Thought Leader Debrief
Phil Rooke is the CEO of Spreadshirt, a multinational, German-based middle-market company that designs self-expression t-shirts and captures more than $100 million in annual income. Rooke joined the company in 2009 and became CEO in 2011. Since 2009, the company has tripled in size. Rooke recently told our middle-market listening audience that simplicity is perhaps the company’s most coveted business concept and employee empowerment is a key contributor to the company’s rapid growth.
The Path to Growth
People enjoy dressing in their own personal style and decorating their clothes, phone cases, and bags with designs that they like. “Sometimes it’s artistic, sometimes it’s funny, sometimes it can be very political,” says Rooke. Whether they love or hate President Donald Trump, people have a lot to say about him on their t-shirts.
What makes Spreadshirt stand out is that they sell self-expression in three different ways. Customers can create a t-shirt by adding designs and ordering it. Talented folks can put their own designs up for sale in the marketplace to sell around the world. The third model allows groups to create a shop that looks and feels just like their own shop but has designs from Spreadshirt that they’ve chosen, allowing them to set up a merchandising shop and sell directly to consumers.
The third option is mostly used by Youtubers, political parties, campaign groups, and school teams. “It’s completely free,” says Rooke. “You set up your shop, you put your idea up for sale, and if one of your customers buys it, we take the money, we do the whole fulfillment and the whole customer service, and then we send the profit to the person who owns the shop.”
The three models must be working, because they are in 18 countries and counting.
Difficult to Replicate
Other companies have tried to replicate Spreadshirt’s unique model, but most fail. The system is complex, and it has to have a critical mass of ideas in it to make it work. It’s also hard to copy Spreadshirt’s multinational, multicurrency, multilingual service.
While other companies struggle to reach around the world with their business, Spreadshirt is everywhere. “We deliver to 150 countries, even outside of the 18 in which we offer services,” says Rooke. “We still do deliveries.”
Another benefit of Spreadshirt’s model is that unlike start-ups that buy t-shirts and then attempt to sell them in an e-commerce shop, Spreadshirt has no stock risk. “Because we use print-on-demand, the person selling never has to take a stock risk,” Rooke explains.
The German Advantage
Germany has a robust middle market with a good economy for companies to grow in. “Germans work extremely hard, and they tend to concentrate on producing good results,” says Rooke. The good infrastructure also allows middle-size companies to be competitive with larger companies, without necessarily having the same cost constraints, as in the UK, that lead to a middle-size company struggling.
Many companies move to Germany during their second or third round of funding when they want to start scaling. In the UK, the commitments to scale your company become too high in terms of legal agreements and employment agreements.
Spreadshirt’s biggest obstacle is complexity. “Complexity, complexity, and complexity,” says Rooke. With three different models, multiple languages, multiple currencies, all of the different marketing channels, all of the different printing processes that they use, and all of the different products on which they print, they have a very complex business. To combat that, they focus on simplicity.
“The number one company value on which we concentrate is simplicity,” Rooke says. “How can we make everything simpler? How can we make it simpler for our customers so that they don’t have to experience the complexity?”
Although it’s their number one obstacle, Rooke also refers to all of that complexity as an opportunity to keep improving.
Building and Retaining a Great Team
A great team fuels great growth. Rooke builds a good team right from the hiring process. During interviews, he turns it around to tell the interviewee more about the company—the good, the bad, the fun, and the not-so-fun. “And then I ask them to go away and think about whether they really think that they’re going to fit in,” he says. Then they can turn it into a two-way discussion about how that person may fit in. “I would say that one in five people declines the job after that, because you’ve had a very honest conversation about what success would look like and how people work together,” says Rooke. It’s a better way to hire people, because otherwise he could interview for days and still not know how a person would work with his team.
After he’s made a hire, he treats them well. “German companies don’t pay top executives as much as American companies do,” he says. “I’d rather put the money that I could be getting paid into having a better team. It matters a great deal to me that I have the right level of team and that my team is well paid.”
In addition to good monetary compensation, Rooke also empowers employees. Spreadshirt’s number one value is simplicity, but their number two value is employee empowerment. “In order to hang on to good people, we work very hard to empower the people at every level to be in charge of their job, so that they have some control and they enjoy their job,” says Rooke. “That way, the team is motivated. They enjoy their job more, and if they’re enjoying their job more, you tend to retain them and you get better results.” Harnessing the knowledge and experience of the team also allows the business to go much faster than he could ever make it go himself.
The Outlook for Growth
“In the next 12 months, we expect to have about 30% growth, and, in particular, we are concentrating on profitable growth,” says Rooke. They plan to grow in the regions they are already in, but are also set up for global expansion and acquisitions.
Guest: Phil Rooke, CEO
Headquarters: Berlin, Germany
Contact: www.spreadshirt.com @spreadshirt