⚡ How this Start-Up is Making High-Performance Cycling Sustainable

Morning Innovators ⚡ In less than 5 minutes, we’ll cover…

🥳 The best funding opportunities, events and jobs in the Start-Up world this week
📰 This week’s biggest news stories in the Start-Up world
🚲 How this Start-Up is making high performance cycling sustainable
🃏 How to use April Fool’s Day to go viral
🧑‍🎨 A tool that transforms Figma designs to user stories in minutes

✨ Last weeks most clicked link was this link that takes you through to pitch 20VC after they’ve just raised their new $400m fund to invest in Seed and Series A stage companies.

Happy hustling,
Rich

🎤 Events/Opportunities

🧪 Chemistry VC have just closed their debut fund of $350m to invest in Seed and Series A stage companies. You can connect with the team here.

😇 Hubspot are hosting a demo day enabling you to refine your pitch in front of multiple top-tier VCs and Investors. You can apply here.

🧑‍🏫 London Business School are hosting a webinar talking about how Founders should be thinking about funding stages, from funding to exit. You can register here.

💼 Start-Up Jobs

🧑‍💻 Senior Marketing Specialist, SKRYBE
👷 Software Engineer, Adaptify
🔢 Product Manager, Casual

📈 Resurge Growth Partners is raising €120m to turn around VC orphans. Sifted

💸 Vinted hits $5.4bn valuation amid wave of secondary share sales in Europe. TechCrunch

💰 LinkedIn fined $356m in EU for tracking ads privacy breaches. TechCrunch

🚗 Motorway drives down losses as Co-Founder steps down. UKTN

Kostüme: High-Performance, Sustainable Cycling Apparel

Kostüme is a technical cycling apparel brand that produces the best performance gear in the market while eliminating the waste typically found in traditional apparel manufacturing. Their small batch, direct-to-consumer (DTC) pre-order model minimises excess inventory and waste, allowing them to reinvest savings into innovative fabrics and sustainable manufacturing. Each collection includes exclusive artist collaborations, making every product feel unique and special.

Kostüme prides itself on using the latest recycled materials across its range, aiming to be the most sustainable brand in the cycling apparel category. Unlike traditional brands constrained by retail and supply chain limitations, Kostüme's model is built for innovation and sustainability, and its ultimate goal is achieving true circularity and systemic change in the industry.

Acquiring First Customers: FOMO-Driven Hype and Specialist Press

The brand's strategy focused on creating FOMO (fear of missing out) by producing the best products at competitive prices with limited availability to ensure sell-outs. They aimed to stay underground initially, using a word-of-mouth approach rather than paid advertising. Their first collection was launched with an artist collaboration and featured creative content from partners like Surgeon’s Girl (music) and Sola (light painting). Instead of relying on ads, they used a PR push, along with a behind-the-scenes short film and social media teasers.

Though the initial launch was a success, sales tailed off faster than expected. Luckily, positive reviews from respected cycling outlets like road.cc and Rouleur reinvigorated interest. An invite to Rouleur Live helped Kostüme showcase its products in person, maintaining a limited and aspirational vibe. One of their first customers went on to build a prominent cycling club, for which Kostüme later designed a custom kit—further fuelling word-of-mouth growth.

Scaling Beyond Initial Customers: Reviews and Word-of-Mouth

Initially reluctant to incorporate customer reviews, Kostüme eventually set up a Trustpilot account, which helped boost trust and visibility without cluttering the website. The founder, Ed Bartlett, also leveraged word-of-mouth marketing by supporting influential cycling clubs and local riders, leading to dual benefits of increased sales and organic promotion. They also did some nice collabs, including with a highly respected specialty coffee company, and even a pop-up with Porsche!

Their model relies heavily on the mailing list, so they did some very select social media competitions to increase those numbers quickly and significantly for the cost of some kit. 

Customer feedback led to the creation of plain cycling shorts to meet the demand for versatile kit options, and the first own-brand version almost sold out via the waitlist alone. As a result of these efforts, the company saw a 200% year-over-year sales growth—all without a single paid ad.

Key Lessons and Learnings: Focus on Organic Growth and Structure

One of the key lessons was the realisation that there are many low-cost, organic growth opportunities that don’t rely on paid performance marketing. However, these methods require significant time and effort, making it crucial to balance growth aspirations with the available resources and structure.

Another insight was the importance of momentum and consistency in scaling. Missteps can be damaging in the consumer space, and as the business grew faster than expected, the founder recognised the need to have the right infrastructure in place to support that growth.

Funding the Start-Up: SEIS and Bootstrapping

Kostüme raised an initial £250k through the SEIS (Seed Enterprise Investment Scheme) based on the strength of the concept and the founder's previous experience. This capital covered the e-commerce site development, launch product range, and initial supply chain setup. After the initial funding, Kostüme has been bootstrapped, with the pre-order model helping to generate cash flow and mitigate financial risk by having customers pay up front.

However, the business is now at a critical stage where lack of resources is hindering further growth. As such, the founder is in discussions to raise another round of investment under EIS (Enterprise Investment Scheme) to scale the business.

Raising Investment: Timing and Trust

The founder attributes the success of the initial SEIS investment to being the right person with the right idea at the right time. With nearly 25 years of experience and long-standing relationships with early investors, there was a high level of trust in the founder’s vision and ability. Many of the investors had also taken up cycling during lockdown and resonated with the issues Kostüme sought to solve.

Biggest Challenge: Raising Scale-Up Funding

The biggest challenge to date has been the difficulty in securing scale-up funding. Although Kostüme has demonstrated strong product-market fit, growing revenues, and high customer engagement, the challenging economic environment has made it difficult to close the new funding round. As a founder, it's essential to take responsibility for finding and convincing the right investors, even in tough markets.

Key Lessons Learned: Strategy and Execution

The founder reinforced several key lessons:

• Zig when others zag: Be different and find your niche.

• Cash flow is king: Managing finances is crucial.

• Consistency is key: Maintaining customer satisfaction and brand momentum is essential.

• Avoid relying on investment: If you must, plan for triple the runway you think you need.

• If you have a killer product, your customers will find you: Word-of-mouth and customer advocacy are invaluable.

• Balance research with intuition: Trust your instincts, as people don’t always behave as expected.

If starting again, the founder would have built the e-commerce site more affordably, rather than over-investing early on, given the confidence in raising additional funding—something that was disrupted by unexpected market challenges.

Carta is a platform that helps people manage equity, build businesses and invest in the companies of tomorrow. Our mission is to unlock the power of equity ownership for more people in more places. Carta is trusted by more than 40,000 companies, over 8,000 investment funds and a million employees for cap table management, venture capital solutions and more. In the UK, we support founders who are raising money through SEIS/EIS, helping with Advance Assurance, round modelling and more. To find out more, take a look at their website, or get in touch with [email protected].

April Fool’s Day provides a once a year opportunity to go super viral; McDonald’s took advantage of this.

The McDonald’s marketing team were fully aware of the controversial habit that many of their customers have. This habit being dunking your food in their milkshakes. 50% of people love doing it, the other 50% hate the thought of it. So, on April Fool’s day, they decided to come out with milkshake dips. This, of course, got EVERYONE talking about it on social media. People across the globe were heading into the stores to see if it was real as mass debate sparked across the internet.

All this discussion and curiosity lead to huge sales and footfall for McDonald’s. So, how can you use April Fool’s Day to create a controversial offering that gets people talking? You’ve got half a year to prepare!

Each week we highlight our favourite tools - either something we’ve been using in our businesses, or tools that our innovator community have recommended.

Figflow is your product team's AI companion, transforming Figma designs into user stories in minutes. It cuts down on bulk work, so you can focus on refining ideas with your team.

Next week I’ll be highlighting another awesome Start-Up, as well as sharing all the usuals including funding opportunities, Start-Up news, plus plenty of awesome tips, tricks and tools.

P.S. Connect with me on LinkedIn…