Constraints = Opportunity

Constraints breed creativity

Like Henry Schuck, Katrina Lake struggled to raise money for her company. Investors did not understand the market opportunity for Stitch Fix’s online personal styling service.

So, out of necessity, she had to charge customers $20 just to order from her. When a customer signed up for Stitch Fix, they would be charged a fee and receive a box with five pieces of apparel, footwear, and/or accessories chosen personally for them based on a variety of lifestyle choices (work from home or in the office, parent, budget, environmentally friendly options).

If they kept even just one item, the $20 was applied to the sale. If they chose to return everything, the money was not refunded.

That fee more than covered shipping. In fact, it allowed Katrina to substantially improve her cash flow in the brutally capital-intensive game of inventory management. By funding more of her business with revenue, she ended up owning more of the company when it IPO’d for $1.6 billion.

What constraints have you pinned down?

Can you invert those constraints and turn them into strengths?

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