It’s time for the third edition of Elevator Pitch, where one exceptional fashion-technology start-up pitches its business idea and receives valuable feedback from a panel of fashion, technology and investment experts, as well as the wider BoF community.
NEW YORK, United States — The fashion technology scene continues to explode, and one of the epicentres of activity is New York City. Following in the footsteps of Gilt Groupe, Moda Operandi and Warby Parker, Stylitics is a New York-based fashion technology start-up founded by Rohan Deuskar and Zach Davis which signed up more than 10,000 users in its private beta. Now Deuskar and Davis are looking raise their Series A round of funding.
What do you think of their business model?
What is your business idea and what problem is it solving?
Stylitics is a behavioral data and analytics company that provides a live, interactive view into the full cycle of clothing choices by consumers. We’re like Nielsen for clothing, providing fashion brands and retailers with insights on the consumer actions that most impact their sales and marketing decisions on a daily basis, something that can be difficult for them with current data. As an SVP at Li & Fung shared, “Stylitics takes the consumer’s passion for fashion and translates that into real time data. It’s like having a real time focus group at your fingertips.”
We gather data and information through a compelling consumer platform, where consumers actively share and store clothing information, including what they are wearing and buying. Users receive benefits including rewards from brands, personalized style recommendations as well as smart, virtual wardrobe and outfit planner.
What market does it address and how big is this market?
There’s a global market for our data, though we are mostly focused on the U.S. for now. In the U.S. alone there are about 55,000 companies that have immediate applications for Stylitics insights. Companies in our pipeline include clothing brands and retailers, agencies looking for rich behavioural data, and media companies who want better audience analysis to drive ad sales. Of these, about 7,000 companies are a good match in terms of audience/customer base and budgets.
Who is your competition and how are you different/better?
The current analytics market for consumer fashion is heavily fragmented with no market leader. Competitors include: 1) market research players like NPD, who focus primarily on retail data, 2) fashion sites like Polyvore, Pose, and Snapette that are not designed from the ground up to be market research platforms, 3) fashion insights providers like WGSN who focus on qualitative trend forecasting, and 4) high-cost, one-off research performed in-house or by agencies. Our difference is that we were designed from the ground up as an analytics provider, both to clients and consumers. The data we provide is behavioural data (vs. just intent) on the consumer’s actual choices from purchase to outfits to occasion.
What is the revenue model?
We have a straightforward monthly subscription model, where clients have access to rich behaviour data on the top categories and segments that matter to them. We also do custom projects to support market entry, product launches, ad campaigns, and more. We also allow clients to selectively engage with Stylitics members for deeper insights. As our user base continues to grow and our platform gets more sophisticated, we will generate advertising and affiliate sales revenues through targeted recommendations and offers.
Who are the team that will make your idea a reality?
Our management team has award-winning expertise in relevant areas: consumer engagement, product development, game design, analytics, and B2B sales. Our CEO previously helped build a $15M/year interactive marketing business and designed the largest SMS adventure game in the U.S. for Disney. Our other co-founder has led many blue chip client accounts and has deep experience selling business services to agencies and media companies. Our product team consists of several talented developers and designers, and our advisors are analytics experts, fashion executives, professors, current and former CEOs of successful, publicly traded companies.
How much funding are you seeking and why?
We’re currently raising $1.8m to grow our technology and enhance our product. The majority of funds will go towards headcount. We have half of this round currently committed for.
Ben Lerer, Founder, Thrillist and Partner, Lerer Ventures, New York
At scale, the real-time closet inventory information that you’re after is no doubt interesting, but I worry about the approach. With consumer-facing applications that are essentially being built for brands and agencies in mind first, the major concern is sustained utility and incentive at the user level. Without a critical mass of engaged users, this data set is useless, so the focus here must be on the consumer side and not the other way around. If the consumer piece is wildly successful, the valuable reports you reference will follow. Asking users to recreate their closet online and update with some frequency sounds like a big ask – out of the starting gate, how can we ensure that the user benefits will be extremely compelling and the product experience near frictionless?
Frederic Court, Partner, Advent Venture Partners, London
I like the business premise a lot. If you can create a marketplace for real-time actual opt-in data from an hyper-engaged panel sharing what they wear, how and when they combine items, that’s clearly valuable. I can see lots of ways to monetise, from selling market intelligence to brands to offering targeted promotions for merchants. I would love to see the metrics from the beta site panel. How many users? How engaged? How do you plan to grow the user base?
The big challenge I see is that the barrier to adoption is high. Why should I upload all my closet and manually enter my look of the day (I tried and found it quite time consuming)? For instance we previously backed a data business called Fizzback with the ambition to provide real time customer feedback to brands, using mobile phones. They succeeded thanks to a very low barrier to adoption, i.e. all that was required was to send feedback via a text message. How are you planning to address this challenge?
Also you refer to being an alternative to research but how can you ensure that you build a panel that represents the market as opposed to mainly super-fashion savvy early adopters? Maybe you could work directly with brands to encourage and reward customers to use your independent platform as a way to share this information across brands and accelerate your development.
Sonali de Rycker, Partner, Accel Partners, London
Stylitics is pursuing an interesting market; the consumption of fashion is moving online and is therefore trackable, and industry innovations – like fast fashion – are creating a need for real time customer feedback and analytics. That said, the space is becoming crowded and it is not clear from the pitch as to how Stylitics really differentiates itself from companies like Polyvore, which have attracted large consumer bases and mindshare. It seems like this business requires a certain critical mass to provide meaningful analytics. To strengthen the pitch, I would focus on the key differentiating features that the site will use to attract users – what is Stylitics going to do to get above the noise?
Rachel Shechtman, Founder, STORY, New York
I really like the idea…in theory. Data and analytics – bring it on! However, I do question the time intensive and potentially cumbersome process of uploading and cataloging your wardrobe. I understand your b2b market for data, but who is your consumer market – the guys and gals who will upload their closets? I may not be the market, but when I signed up it wasn’t clear what benefits I would get from this as a consumer; and when I see the feature “plan an outfit based on the weather,” why wouldn’t someone just look on their phone? Excited to see how you develop!
Imran Amed, Founder and Editor, The Business of Fashion, London
I’m a data junkie, so the idea of more data for fashion companies to make informed decisions is very appealing, especially in a sector where so many decisions are still made by gut feel alone. While intuition will always be an important part of the fashion game, having a data set as another input to consider is very exciting indeed. I also really like your on campus engagement initiatives, as I think they get to the very heart of the community that so many fashion brands are so eager to learn about, but are amongst the hardest to reach.
However, like the other panelists, my biggest concern is that users, who are now inundated with opportunities to join countless new websites and social communities every day, will balk at the idea of manually uploading every image in their closet. For those users who are the most obsessed with fashion (possibly a key target market for Stylitics) the barriers for adoption are even higher as these individuals are likely to have many more items of clothing than the average person. I encourage you to think carefully about how to streamline this sign up and uploading process.
WHAT DO YOU THINK?
Now, it’s your turn. What do you think about Stylitics and its potential? And what advice would you give its founders, Rohan Deuskar and Zach Davis? Let us know in the comments section, and join the conversation.
Send us your Elevator Pitch: If you have a promising business idea in the fashion-technology space or are already working on a start-up and looking to raise your profile or attract funding, send us your Elevator Pitch. We are accepting Elevator Pitches on an on-going basis, by email only, and will review the first 500 words you submit. For detailed instructions on how to submit your pitch, click here.
Elevator Pitch is a recurring feature on BoF, co-curated and developed with Rachel Shechtman.