Style Mavens on Fashion 2.0: It’s About Great Products, Not Tech
“I’m not a big believer in just technology for the sake of technology.”
At an event covering the intersection of fashion and technology, you may expect this quote to come from a designer. But this was said by venture investor Lawrence Lenihan of FirstMark Capital, a New York firm that’s invested in companies such as Sycamore Networks, StubHub, and Pinterest. So Lenihan is no stranger to technology. He sat on an investor panel at Decoded Fashion, a full-day conference held last Monday at New York’s Lincoln Center.
A conference that draws an audience ranging from sequin-jacket-clad fashionistas to jeans-wearing venture investors from Brooklyn could potentially be a bit harder to wrap your head around than your average tech event. But the insights the speakers offered into what’s happening in fashion tech are not all that different than themes you’d see among Internet startups more broadly.
Here are some ideas I picked up from Decoded Fashion: In the fashion tech world, great products that solve real problems and really engage customers are the most promising businesses. Building on that, there are plenty of companies that aren’t doing anything but adding to the noise, and also plenty of problems that don’t have a real strong solution yet. Finding great angel investors is just as challenging in the fashion space. And no one seems to want to use Google+ for marketing and connecting with customers.
Read on for more takeaways.
—The quote from Lenihan that opened this story was such a gem that I followed up with him after the event for more insights on what’s driving him nuts as an investor in the space. “There’s been an overinvestment frankly in companies that are technology for technology sake—that don’t do anything other than create some sort of gimmicky approach to commerce,” he said. I agree. There are far too many apps that claim to be an Instagram for outfit sharing, even though Instagram is already an Instagram for outfit sharing. Lenihan shows similar concern for platforms urging customers to create virtual closets or ones for social shopping.
“I’m not sure the world needs another virtual closet—I’m not sure the world needs a virtual closet period,” Lenihan said.
—This feeds into a point Charlie O’Donnell of Brooklyn Bridge Ventures, (the aforementioned jeans-wearing VC, who previously worked for FirstRound Capital) made about all the copycat startups in the fashion tech space. “There’s always one little tweak, but that tweak is not enough to make it a successful business,” he said, pointing to the 100s of flash sales that have sprouted up a few years ago, many of which have since folded. I’d expect to see a similar contraction among many of the purely social fashion tech startups.
—But there’s plenty of hope. Startups that that are taking work away from traditional giants and getting in the middle of the supply chain to develop a more exciting end product for customers are the ones piquing investors’ interest. What does this mean? The companies focused on making a better shirt or pair of pants or stylish sunglasses for a lower price point are more promising than mobile apps and Web communities.
Karen Gryga, investor and co-founder of the media and events company Fashinvest, noted this shift in interest toward physical product startups. “If you look at fashion tech companies that existed 18 to 24 months ago, they were largely driven by technology,” she said. “There’s now a joining of forces of those with traditional operating expertise with technologies to bring real solutions to the marketplace.”
—A huge part of that is creating an experience for consumers. Andy Dunn, CEO and co-founder of New York-based Bonobos explained how he built his brand with the mission of creating a better fitting pair of pants for men, with the key pillars of “fit, great service, and fun.” The company launched as an online brand, but has worked its way into the brick and mortar world with a partnership with Nordstrom (which invested $16 million in Bonobos) and a new Boston store that’s serving as an e-commerce showroom. “This Web piece is a piece of the equation, but people still want to touch and feel clothing,” Dunn said. “We built a company on a better customer experience, and we couldn’t do that without affording at least some people the ability to try the clothing on.”
Melisa Goldie, executive vice president and chief creative officer for Calvin Klein, spoke to this point when discussing how brands should be using social media. “The end game is not getting people to click the like button, it’s getting them to click with the product,” she said.
—There seems to be a dearth of knowledgeable angel investors in fashion tech startups. “What I’d like to see is people from the fashion world who are running some of these brands to get involved as angel investors in your space,” said O’Donnell. “We need more expertise on the angel layer to come in really early.” Those who understand the fashion industry will best be able to tell which tech startups are most likely to disrupt it, he and the other investor panelists said.
—Big Data is promising. Now I was one of maybe ten people in the entire audience (which was purported to be 400 people or so), who raised my hand to indicate I had heard the term big data before. But the technology—which pulls, processes, and analyzes loads of complex information—could have a big impact on how fashion houses create lines each seasons. New York-based Stylitics analyzes how factors like award show red carpets impact what people are wearing the very next day. And there’s Editd, which is looking to be the Bloomberg of fashion by capturing what consumers are purchasing and using that to drive forecasting. “Design is less about doing something creative, but more something that will match customers’ requirements,” said Geoff Watts, co-founder of the London-based company. “That’s not very sexy, not very designer focused.” I wonder how much traditional couture designers will buy into this idea.
—Location technology is also hot, particularly when combined with augmented reality, according to Chuck Goldman of Boston’s own Apperian. He moderated the panel on streamlining checkout. “Augmented reality is largely kind of gimmicky to start, but then we started seeing some real applications, when you combine augmented reality and location, and your phone knows what you’re near in terms of retail,” he said.
—Designers and others in the fashion industry said they rely heavily on Twitter and Instagram (and sometimes Facebook) for marketing and connecting with consumers. Google+ not so much. “God forbid we have to start Google Plus pages, I don’t know what we’re going to do,” said Aliza Licht, senior vice president of global communications for Donna Karan International.
—Speaking of designers, they seem to be the really underserved market when it comes to mobile apps. It’s impossible to count the number of apps and websites allowing shoppers to share outfit photos and get advice, but the real opportunity seems to be in developing mobile tools that will ultimately make a designer’s job easier. Kate Spade New York president and creative director Deborah Lloyd said she’d like an app that would allow her to take a picture of a garment, modify it on her phone, then automatically update the pattern with the new measurements and adjustments. That sounds to me like something that could come out of Boston’s wealth of CAD talent.