Dec 23, 2021
Feeding the Flywheel and How to Get it Started in the First Place
Steven Borrelli, CEO & Founder of CUTS, didn’t have an easy road getting his company off the ground. He explains all the lessons he learned and how other brands can create an efficient and constantly-growing business by using the well-known flywheel method.
Stop if you’ve heard this before: in business, you always need to keep the flywheel spinning. Okay, wait, don’t actually stop reading! It sounds cliche, but it’s true, to have a successful business, you need to be constantly churning out products, bringing in customers, making sales, lather, rinse, repeat. That’s the part everyone knows. What so many founders and business owners can’t quite figure out is how to actually get that wheel spinning at all, let alone continuously.
Steven Borrelli is the CEO & Founder of CUTS, a lifestyle ecommerce fashion brand that celebrities, entrepreneurs, athletes, and everyday folks love. He has some firsthand experience in the struggles of getting his company off the ground and into the hands of consumers — and his story includes an early $20,000 loss and a nine-hour journey through China.
“Those first two years were really just learning the process of getting the flywheel working,” Borrelli said. “And I think the illustration of a flywheel moving that first two years, a lot of people just can’t get it moving consistently. And then their business just can’t can’t get going and can’t move. At the time, we didn’t have fundraising or anything, I was taking out 20K, zero APR for 12 months credit cards to fund this stuff. So it had to work. And so we funded it with our profit. We didn’t pay ourselves until we got to about a $10 million business. None of us worked full time, all the money went back into the business. Cause that’s the only way we could do it without raising money.”
Borrelli and his team kept pushing through doing everything they knew how to do, and learning all the things they didn’t and adjusting along the way. Through perseverance, iteration, marketing, and staying focused and lean, CUTS has been able to grow from a team of four to a team of 50, and nearly nine figures of revenue. What was once hard — raising money — is now old hat.
“There’s always different seasons of life, where you’re going to have to adjust to the times and, and the early days, that’s what we had to do because we didn’t have lines of credit,” Borrelli said. “Now, tons of banks want to give us money. We’ve been in business for five years and, when you hit that four year mark, people realize you’re not a fad, you’ll be around for a while. So then you can start leveraging debt and things like that.”
But getting to this place meant figuring out how to build a team, what it actually means to be a successful manager, and it also entailed tapping into a community to test, iterate, and build loyalty.
To hear more about that, and to learn how YouTube, influencers, and NFTs play a role, tune into Up Next in Commerce.
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