Posts Tagged: Indochino

Four founders share what they’ve learned

People say that hindsight is 20/20. After working knee-deep in the trenches for a year or two, you gain a better appreciation of where to focus, what to let go, and how you can do things (or should have done things) better.

There’s no shortage of advice out there for startup founders. But since entrepreneurs are usually the best qualified to give fellow entrepreneurs advice on how to deal with the challenges of the job, I’ve asked several portfolio founders to share the invaluable lessons learned from their own journeys. What follows below is a snapshot of insight and advice from these great individuals. I’ve divided their thoughts by topic: company focus, scaling the organization, firing, metrics, diving deep as a CEO, and listening to advice.

Enjoy, and feel free to continue the conversation in the comments area…

 

On product/company focus:

“One of the things I’ve learned is that as an early stage start-up, you have to do only one thing well and one thing that connects with the users. There is no need to build something that will overtake the world right away. The vision has to be there, but to get started you only need to get one thing right.”

– Ethan Song, Frank & Oak

 

“Don’t obsess over competitors. In the early days we used to panic when someone popped up with a similar offering. However, we can’t be everything to everyone and others will come in to pick up the pieces of the market that you are not addressing (or not addressing well). Rather than worry about this, obsess over your customers and stay focused on addressing your most profitable growing customer segments.”

– Rick Perreault, Unbounce

 

On scaling the organization:

“As we scale, I’ve realized how important it is to go from a founders led company towards a management led company by bringing the right guys on board. That’s where hiring guys that are smarter and more experienced than I am has made a huge difference.”

– Ethan Song, Frank & Oak

 

“You probably need to hire your Director / VP-level executive team members much earlier than you think. As the CEO, you are the least scalable part of your company, and if you’re in rapid-growth mode you’ll find your time will rapidly evaporate as your growing team seeks your input and advice on key decisions.

So, hire excellent lieutenants that you can trust as early as possible, and trust them to execute. Hire the best people you can afford in these roles, as you need to trust them to run with and execute on their mandate. Focus on high-level goals and vision, and trust your team to execute.”

–        Jack Newton, Clio

 

“Building a team and keeping the entire team motivated and aligned towards the vision is also much harder than it seemed. I wished that I had put more focus on this earlier on.”

– Ethan Song, Frank & Oak

 

On metrics

“I wish I had understood the importance of reliable business metrics earlier on (and I don’t mean Google analytics). We were in business nearly 18 months before we realized that we were losing money on one customer price plan.”

– Rick Perreault, Unbounce

 

On firing

“You may find that you’ve made a bad hire, and you’ll know it in your gut just a few weeks or months into their time with your company. First time CEOs (and managers in general) are much too reticent to part ways with bad hires, and err on the side of giving the new recruit too many chances to improve or change. I’ve found you rarely, if ever, see the turnaround you’re looking for – you’re much further ahead making a quick decision if it’s not working out, and part ways.”

– Jack Newton, Clio

 

On diving deep

“You don’t get to deep dive on things as a CEO, but you have to do everything to the right amount of depth.”

– Kyle Vucko, Indochino

 

“The most difficult balance to strike as CEO is deciding what level you need to be involved in various decisions – not micromanaging (because you can’t scale), but not completely abstracting yourself from key aspects of your business, or putting blind trust in your executives. As CEO, you need to deeply understand every area of your business: sales, accounting/finance, support, product, marketing, etc. You simply can’t afford to have any ‘black boxes’ in your org chart.”

– Jack Newton, Clio

 

On listening to advice

“You will be most successful if you lead from a place of self.  Everyone has opinions on what you need to do, where to focus, what to hire for, how to approach tough decisions, how much/little info to share, etc. Their opinions are generally true, but you have to put your unique spin on it. The ‘what’ can be learned from others; the ‘how’ is unique to you and must be honed and honoured.”

– Kyle Vucko, Indochino

 

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4 ways to compete in Amazon’s shadow

If it has a UPC code, Amazon will beat you.  Thanks to a bigger inventory, low prices, convenient return policy, trusty user reviews, and services like Amazon Prime, Amazon is the world’s largest retailer and doesn’t seem to be moving from that position any time soon.

But even in the shadow of Amazon, there are several opportunities for entrepreneurs to make a dent in e-commerce. Here are four ways:

1. Unique product line:

As I recently wrote in TechCrunch, a new generation of web-only brands are bringing their products directly to consumers without the bloat of the traditional retail value chain. Together vertically integrated retailers like Warby ParkerIndochinoStella DotChloe & IsabelFrank & OakEverlaneBonobos and J Hilburn will generate over a billion dollars in revenue in 2012.

By creating their own unique brand and offering products that can’t be found elsewhere, these retailers don’t have to worry about competing head-to-head with Amazon and Amazon prices.

2. Curated shopping experiences:

Like Google, Amazon offers an efficient platform for searching for a specific item. In a GigaOM article, Michael Schreck described Amazon’s platform: “One click and you’re out. Amazon’s anti-shopping model reflects the characteristics of the very people that built it — engineers — who quite frankly are not your typical power shoppers.”

With the rise of the iPad and retina display, there’s a real opportunity for e-commerce companies to build a visually engaging, glossy digital shopping experience that is more like window shopping than typing a product into a search engine and getting a bunch of product results back. Curated shopping experiences like Fab.com encourage consumers to sit back, browse and discover entirely new items – the very things they can’t do on Amazon.

3. “Second season” discounts:

Flash sale sites have become one of the fastest growing segments in e-commerce. Companies like GiltZulily, and One Kings Lane offer steep discounts on products for a limited time, promoting them via urgent emails. Most of the products failed to sell in brick-and-mortar stores the previous season. For shoppers, these sites feel more like a designer’s sample sale – they offer an insider’s price on designer goods if you’re there at the right time and are ready to act fast.

This is a rather mature segment with many verticals already being taken by strong players that are generating several hundreds of millions of dollars in sales. With access to unique inventory being the key success factor, newcomers in this space might face a tough time against those incumbents and their strong purchasing relationships with brands.

4. Marketplaces

Online marketplaces connect buyers and sellers of often unique products, filling a niche that speaks to a particular audience. For example, Etsy offers a channel for aspiring designers and crafters to get distribution. Threadflip offers a more personal version of eBay focused on buying and selling secondhand designer fashion goods. And tindie connects buyers and sellers of DIY electronics. While the chicken-and-egg problem of supply and demand makes marketplaces hard to build, they can scale very quickly once a network effect starts to develop. Due to network effects, marketplaces also create important barriers to entry.

In summary: while Amazon won’t be unseated any time soon and you can’t expect to compete on price, there are billion dollar opportunities waiting in discovery, curation, marketplaces, and vertical integration.

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Why I am excited about the online apparel and fashion vertical

On the day that Boo.com died in March 2001, not only did the Internet bubble burst but selling fashion and apparel over the Internet seemed dead for forever. So it is exciting to see that fashion and apparel is now one of the most exciting e-commerce categories where tons of innovation is happening. Think the success of private sales (vente privee) sites like the Gilt Group, the emergence of online-only brands like the “oh-so-cool-pants-maker” Bonobos or our own portfolio company Indochino that has developed into the leader for tailor-made suits. All these successes are based on 4 major advantages that the Internet has as a distribution channel for apparel:

  • Low or no inventory: one of the biggest problems in traditional retailing is the cost of carrying inventory that might not sell in time before the new clothing line arrives. Online apparel retailers not only have a much larger demand base (not needing to decide which clothes to ship to which store) but can also introduce “made-to-order” for higher priced items like suits (and therefore completely eliminate inventory risk)
  • Fast fashion: H&M and Zara have been very successful in driving customers repeatedly into stores by coming up with new clothes every 4-8 weeks and “fast fashion” has been one of the buzzwords in apparel industry since. Online apparel brands can speed up the process from clothes design to making it available to customer even more (e.g. Indochino only needs 3 days to design a suit until it is ready to be ordered online).
  • Customization: customization has been a driver in many categories but had been limited in the apparel category to t-shirts in the past (Threadless). Now sites like Indochino offer customization for suits from the size of pockets to the type of buttons.
  • Convenience: there are millions of people out there that hate shopping in a traditional retail environment. Purchasing clothes online can potentially be a much more convenient experience, especially if the customer has stored their preferences or measurements.

I am certain that we will see even more innovation in the apparel space in the upcoming years. Perhaps the next big apparel brand will be an online-only brand, perhaps new intermediaries will make shopping online an even better experience, perhaps every online retailer will offer some sort of customization. The advantages of the Internet as a distribution channel just seem to be too large.

New investment: Indochino brings tailor-made suits from China to you

Today we announced our investment in Indochino, a website that helps people to buy a tailor-made suit directly from a professional tailor in China. Together with a few other angels, I had been invested in the company since last summer and was very impressed what the founders Kyle and Heikal built up with very little money in very little time. The investment announced today will now give the team more resources to quickly expand their service.
So what do we like about Indochino’s business model? It is its simplicity: everybody who has ever traveled to Asia knows what great deals you can get by just walking into a tailor shop in China, Thailand or Vietnam and get a suit just made for you at prices that are below most of the suits you would buy in your hometown. This is exactly the experience that Indochino now brings directly to your doorstep – Indochino sends you measuring tape and swatches (if you wish so), you measure yourself (or get measured by a tailor around the corner), you provide these measurements and chose the suit style online and two weeks later the tailor-made suit arrives at your doorstep. And it becomes even easier once you start ordering a second time (which I have done)….Congrats to closing the investment, Kyle and Heikal – and good luck with building up the business between Victoria and Shanghai!