• Karthik Shanadi and Luke McGurrin started their first business in college with $500.
• They've expanded to four brands in the apparel space and are projecting 8-figure revenue in 2024.
• Investing in tech from the start enabled them to scale multiple brands and disrupt the market.

Growing up in Bangalore, India, Karthik Shanadi remembers spending weekends at the restaurants his family owned and operated.

"I would go and hang out with my uncles and my dad at their restaurants on Saturdays and Sundays," the 32-year-old cofounder and CEO of merchandising platform Threadly, which owns four brands within the apparel industry, told Business Insider. "So I was exposed to entrepreneurship from an early age."

His family immigrated to the US when he was seven.

"We were fairly poor," said Shanadi, who spent his adolescence in Orlando. "I got free and reduced lunch all throughout grade school."

His parents couldn't afford to give him an allowance, so he started mowing lawns and doing yardwork for his neighbors as early as 10. By the time Shanadi started his freshman year at the University of Florida, he had nearly a decade of work under his belt. Naturally, he started thinking about ways to make money.

"I originally had a T-shirt brand idea. I wanted to do my own brand around the music industry," the New York City-based entrepreneur said. He looked into apparel production, how to get bulk pricing, and how much he'd have to sell one to turn a profit. "I started looking at the pricing and margins, and I was like, 'Wait a minute, this T-shirt idea is cool, but if I sell merchandise and custom apparel on campus, I could make like $100,000 in sales. And if I do this on 100 campuses, I'll do $10 million in sales.'"

His first brand, Greek House, while "a little bit of an accident," admitted Shanadi, was set in motion.

Launching Greek House with a fraternity brother and a $500 budget

Shanadi pitched the idea of doing custom fraternity and sorority merchandise to a few of his fraternity brothers, and one was sold: Luke McGurrin, the social chair at the time and "very well connected on campus," said Shanadi. "Luke jumped right in, and we just started brokering deals through text messages."

They reached out to groups and organizations on campus and pitched affordable custom merch.

"When we started, we really competed on price," said Shanadi. "Over time, we realized you don't want to be the ones competing on price because I think everyone can do that, so we had to figure out other ways to drive value."

Their first order came from a sorority that needed custom shirts for an upcoming social. It was a $3,000 order, which they didn't have at the time, but Shanadi worked out net terms with a local vendor, meaning they could purchase goods without paying upfront.

It allowed him and McGurrin to launch Greek House with the limited savings they had.

"We'd get the orders, submit the POs to the vendors, the vendors would fulfill it, and we would get paid," recalled Shanadi, who said they started with about $500 to incorporate, launch a website, and have some cash in the bank. "We would take our cut, we would pay the vendors out, and we just did that 100 times over."

The first payday was memorable.

"I got paid a check for more than I ever made in my life for what felt like a couple hours of work," he said. "That's when I think it really hit me: what entrepreneurship is and what the opportunity looks like."

The friends continued fulfilling custom merch orders for organizations on campus. Greek House did about $50,000 in sales in year one, said Shanadi, who credits their early success to niching down, and a business philosophy from Airbnb cofounder Brian Chesky: "He always says, 'Make the experience for 100 users perfect. And then see what happens after you do that.' We really focused on making sure that 100 of the Greek customers had the perfect experience, versus trying to go after everything, and honing in on those 100 customers led into thousands."

In year two, their sales doubled — they also graduated that year and landed full-time jobs in California.

Shanadi took a job with Amazon in the Bay Area, while McGurrin moved to Los Angeles. They dedicated weeknights and weekends to growing Greek House.

Quitting corporate America, living on $1,000 a month, and learning from a $33,000 mistake

In 2016, Shanadi quit his job to go all-in on Greek House. He was working at Salesforce at the time, and keeping up with a day job and the business wasn't sustainable.

"I was staying up until 2 a.m., waking up at 7 a.m. to go into the office, getting off at 4 or 5 p.m., and then starting that cycle all over again," said Shanadi. "I remember a team meeting that I had to show up for at 8:30 a.m., and I was literally dozing off, falling asleep."

He moved to LA to work alongside McGurrin, who also quit his 9-to-5 in 2016. They lived and worked out of a small apartment and paid themselves just enough to live on so they could reinvest nearly all of their sales back into the business, whether it was to expand their team or improve their technology.

"It was not very much money: $1,000 a month, at most," said Shanadi, adding: "Going from getting a nice paycheck every two weeks to getting $1,000 a month was very humbling."

Even more humbling was a notice they received in April 2016 from a licensing agency they owed royalties from previous years.

"We got like a $33,000 bill," he recalled, and they didn't have the cash to pay it. "At the time, I thought our lives were over. I thought, 'How are we going to pay for it? Should we shut the business down? What do we do?'"

They worked out a payment plan, and the experience ended up being "a blessing a disguise," said Shanadi. "We were not only able to pay that and move ahead, but understand the value of licensing and why we're paying the the licensing agencies and where the opportunity lies. So, yes, it sucked at the time, but in the long term, that's been the backbone of our business: licensing as a whole."

Expanding to four brands and projecting 8-figure revenue in 2024

In 2017, in response to requests from colleges and departments on campuses wanting to work with them, Shanadi and McGurrin launched an offshoot of Greek House called College Thread.

"A lot of the college organizations, believe it or not, didn't want to be associated with a fraternity or sorority brand," explained Shanadi, whose second brand works with over 300 college licensing departments.

In 2020, when the pandemic halted campus life, Shanadi and McGurrin added a third brand in the mix to further diversify their revenue streams: Threadly, which did a lot of face masks, hand sanitizer, and general personal protective equipment in 2020 and now focuses on merch and apparel for businesses and non-profits.

Their most lucrative brand as of 2024, Athlete's Thread, emerged in response to a 2021 Supreme Court ruling allowing student-athletes to monetize their name, image, and likeness.

At that point, "We had a lot of the relationships with the colleges already, so a lot of the distribution was already set up," said Shanadi. "Naturally, we were thinking we should get into this market because it's going to be big. There are roughly 450,000 college athletes that are in Division 1, 2, or 3 sports. We just did some rough numbers and were like, if each athlete brings in $100 in product sales, you're looking at a $45 million market. And if they bring in $1,000, that's a $450 million market. It was a no-brainer for us to dive in."

Athlete's Thread, which makes merch that is co-branded with the college and athlete, technically launched in July 2021, but Shanadi and McGurrin spent a little over a year navigating compliance and strategizing the best way to go to market. The brand hit its stride in late 2022 and did low six figures in sales. In 2023, it did seven figures in sales.

Shanadi expects to bring in eight figures in 2024 from Athlete's Thread. As of March 2024, the brand is licensed with 150 colleges and has about 14,000 student-athletes on its platform alone.

"It is an emerging market, we're adding on more schools, we've finally gotten the strategy down, and we're also working with retailers," he said, noting that they work with the on-campus bookstore Follett and Lids. They are also getting onboarded as a vendor with Dick's Sporting Goods, the Amazon Fan Shop, and other big box retailers.

Investing in tech early on — building out an order management platform and customer portal — allowed the cofounders to scale multiple brands, stand out from the thousands of other companies doing apparel and merch, and ultimately build a seven-figure company. Threadly's third-party accountant verified the company's seven-figure revenue numbers from 2021, 2022, and 2023.

"That was a big investment we made from the get-go and that led us into continuing to invest in tech and continuing to really optimize our business through technology," said Shanadi. "Whereas, a lot of the old school companies in the industry were either manual or slow. We were able to automate and do it with speed, so we were really able to disrupt the market with the tech."

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