Updated: Dec 21, 2018
“The world is becoming digital. It’s not about pure plays or just e-commerce anymore; it’s about unicorns, […] online to offline (think about Warby Parker, Bonobos or Farfetch taking over Browns), and multichannel, which is not a buzzword, it’s our reality.”
Says Thomas Bucaille, former HRD at Condé Nast International, who I invited to lead the latest "Fashion Tech meets the Investors" breakfast in London on October 28th at Balderton Capital’s offices.
My team at HVO Search and I brought together start-up founders and CEOs as well as early-stage investors (see end of the article for a comprehensive list of our guests) to discuss challenges during fast growth – Managing and Attracting Talent within a Hybrid Context (online / off-line).
A bullet point summary can be found at the end of the article.
To get the ball rolling, Thomas Bucaille, shared his insights on the topic.
He believes that we live in an increasingly hybrid world and that fashion tech is the future, however, getting diverse groups of people to work together poses a number of challenges:
Attracting a diverse range of talent from ‘old-school’ retail professionals, digitally-aware and market-savvy fashion and design professionals, to technical experts is essential to company’s success, but difficult to implement. What can fashion tech enterprises do to ensure they cover all of their talent bases?
Traditional fashion people and engineers often “don’t speak the same language”. So how do you ensure people from these two very different worlds communicate effectively and are able to pull together to ensure success?
As companies experience ‘hyper growth’ retaining company culture becomes increasingly hard. So how can companies preserve culture in times of fast growth?
These questions guided the rest of the discussion.
COVERING ALL OF YOUR TALENT BASES
Fashion tech companies depend on blending different skills, experience, and levels of seniority. But attracting these different demographics can be difficult.
Alessandro Magnani, Principle at NEO Investment Partners, points out that
“really successful entrepreneurs and CEOs are those that, from the beginning, surround themselves with strong people; successful people delegate their weak points.”
In order to attract such people, Alessandro claims that young companies need to have a simple yet powerful proposition. As he says,
“You have to be able to describe yourself in one tweet.”
This will let potential hires know what you stand for and create a desire in them to work for you.
“Get [the proposition] in your internal team and it’s so powerful.”
Retailers depend on having good relationships with their customers. Customer is King. However, this focus should also spill into the hiring process. Potential hires should be treated exactly like customers.
For Dan Murray, Co-Founder of Grabble it is imperative to build relationships with potential candidates before he needs to hire them. He believes that simply paying a lot of money to attract the best or most senior talent from other companies will often not work since those people will not have an emotional attachment to your company and are not likely to be motivated in the same way that someone who buys into your brand – and your proposition – is. Shoppa, Dan says, who “hired the all the best people – their CMO from ASOS, their CFO from elsewhere […]”, ended up in a situation where they had a fantastic senior team who are not emotionally invested in their brand. And this was problematic.
Diversity is essential when it comes to building successful teams, for Dan it is not always about bringing the most senior talent. He believes that people often underestimate the value that less experienced people (especially interns) can bring to a new business. Junior members of the team soak up culture quickly and spread the word about your organisation to their friends and associates on social media and through word of mouth. This can lead to new hires, and acts to bolster your brand at the local level.
Hal Watts, Co-Founder of Unmade Studio agrees, but it is important to treat interns fairly
“we don’t hire interns unless we can [eventually] offer them a role”.
Peter Williams, Chairman at Boohoo.com understands the need for diversity being an example of a “hybrid” himself, having started out “in brick and mortar – or marble, in the case of Selfridges”. He adds to Alessandro’s point that successful entrepreneurs are also good at “refreshing the team”
“Nick Robertson, who founded ASOS was good at refreshing the team. The team who grew the business from £5m to £200m was not the same as the team that grew it from £200m to £500m or even from £500m to £1bn. And some were. And he [Nick] is a good example of someone who grew with the business.”
FACILITATING COMMUNICATION BETWEEN TWO WORLDS
Daniel Waterhouse, General Partner at Balderton Capital, talks from an investors perspective and what makes tech startups successful is an understanding of both the tech and consumer worlds. Daniel claims that, from his experience,
“the companies that have managed to scale […] and develop well have had a very strong tech focus from the early days, […] and have married this with an equally strong understanding of the consumer market that they operate in.”
Yoox, Daniel says, were completely “in sync with the fashion world” from the beginning. However, even though none of the company’s founders came from the tech world, they focused on tech from a very early stage (for example, investing in a state-of-the-art backend systems), which granted the company “a long-term competitive advantage”. In Daniel’s opinion, the most successful companies have always given equal weight to both the tech and retail aspects of their business.
Dan Murray adds that the need to balance a good consumer understanding with excellent tech is essential and warns against the dangers of leaning too much toward either. Dan again points to Shoppa, “who raised £7 million in Series A funding and 50 million in Series B funding.”Following Series A, Dan says, the company’s “whole proposition […] was built around building the best tech”, and so invested the majority of their Series A funding in creating cutting-edge backend integration. Diverting the majority of their focus (and capital) toward one area, in this case technology, the company, to its detriment, failed to attract enough customers.
I ask Dan how Grabble plans to avoid these problems, to which he replies that
“users are needed to validate tech”.
At Grabble, the team constantly experiment with new tech ideas, which they release to a select group of users. Some of these work, some of these don’t. But the company is able to grow by learning from its mistakes, and balancing the experiences of real users with tech innovations. In short, Dan says,
“it’s about equilibrium.”
So how do you ensure both worlds are talking to each other?
“at the crossroads between two important businesses – one is e-commerce, and the other one is beauty.”
In order to tap into both, the company needed
“two core competencies at the top. It was almost impossible to have this under one head”
“so a team of two people, a CEO and a COO, were appointed.”
Joël, whose background is in the big beauty industry, was made CEO and was paired with, Jim Buckle, whose background is in e-commerce. By combining these two profiles at the most senior level, the company was able to reassure the team and establish essential connections within both industries.
Sasha Astafyeva, Head of Business Intelligence and Strategy at Lyst, shares some insights about how her company tackles the communication issues. Although, as Sasha says,
“about half of our people are engineers – and we think of ourselves as a tech company”
communication between the tech side and the fashion side of the business is essential. To facilitate this communication, Sasha explains that Lyst offers a “shared visibility” platform. This means that, once every two weeks, a meeting takes place between all relevant parties so that everyone knows where everyone else is in terms of revenue, KPIs, and so on.
It is an informal way for people to come together and enables the company to marry the tech side with the fashion side. With so many employees, and offices in two continents, it’s a fantastic way to ensure everyone speaks the same language and preserves culture.
PRESERVING CULTURE IN TIMES OF FAST GROWTH
A company’s unique culture can often play a huge role in whether it succeeds or not. For that reason, as startups grow, it’s important that they are able to protect their approach and ethos and communicate this effectively to the whole team.
All startups in attendance, Unmade Studios, Dressipi, Grabble and Stylect agree that communication is an important part of building strong bonds between the two worlds as well as what helps to foster strong company culture.
Hal says that, when it comes to establishing and preserving culture, his problem has been a failure to make that culture explicit. When the company started, all of those involved had an implicit understanding of what the company’s values and objectives were. Not least because, Hal says,
“we have a founding team of three people, so it’s quite broad; two of us are engineers who went on to study at the Royal College of Art, so we understand design, the third person is a fashion knitwear designer – but that’s actually surprisingly technical knitwear, so she gets the engineering side too”.
But as the company grew, from five to 23 since February, new recruits often didn’t soak the company’s culture up as quickly as Hal thought.
“I think we waited too long to be explicit about [our culture]. We made the mistake of thinking it’s obvious. But it’s not obvious when you don’t speak to one of the three founders on a daily basis.”
To address this problem, the company now has daily stand-ups, in which each of the company’s employees explain what they will be doing that day and why. Even this apparently simple gesture has helped to consolidate the team, and gave employees an understanding of the company in its entirety, as well as their own role within it.
From an investor’s perspective, Daniel agrees that those companies, which make their culture explicit tend to be more successful when growing.
“When scaling works”
“the founders have a clear and strong set of values that are pushed into the organisation.”
This culture then imbues every aspect of the business – from hiring to product development – which ensures that the company has a consistent offering and proposition. Daniel’s advice is to focus on values early, and then, as expansion takes place, to make sure that everyone on the team is completely aware of what they are and why the organisation holds them.
Susie Stanford, Investment Manager at Lewis Trust Group, whose mandate is to invest in digital tech independently of (though always looking for synergies with) River Island (which the Lewis Trust owns), talks about the need for larger organisations – “big bricks-and-mortar, old-school, retro businesses” – which have their own clear ambitions in the digital space to open themselves to new ideas.
“is, actually, once you get people, at both an operational level and also at the C-suite level, to buy into the view that we can build something exciting together […] it’s amazing how much you can get from people in very little time.”
The point is, then, that culture, even at larger organisations, is critical to an organisation’s growth within the digital space.
Sarah McVittie, Co-Founder at Dressipi, talks about her own company’s culture, and what she does to make sure that it remains at the heart of her organisation. Dressipi employees a small team of 14 people. One of the crucial elements to the company’s culture is the belief that fashion recommendations cannot be fully automated –
“we believe very strongly that fashion recommendations are not something you can just throw data at.”
For this reason, the company always starts with its two senior stylists, before the tech team integrates their recommendations for various types of consumer. Such clear priorities guide the organisation, and, with daily stand-ups and clear communication between different teams, Dressipi employees have a well-defined idea of what they are trying to achieve and of what their role is in doing so.
Giacomo Summa, CEO and Co-Founder at Stylect, spoke about how his past experience informed his approach to growth. The first company Giacomo founded did not have anyone with technical expertise, and this caused problems –
“we outsourced tech completely, which wasn’t sustainable.”
For Stylect, it was imperative to bring technically minded co-founders. The company’s current approach
“is to stay small for as long as possible.”
Stylect employs a team of 10, and Giacomo isn’t looking to expand this just yet. “As long as you can stay small, stay small”, Giacomo says, and
“if you can build a profitable business out of a small team, that’s fantastic”.
By ensuring that everyone has a clear role, and that they feel valued, it’s possible to get everyone on the team working at their full potential. By placing trust in employees, and making them feel satisfied in their work, Giacomo’s approach is to make the existing team work harder with the expectation that this will feedback into the culture in a positive way when the company starts to scale. However, as people take on more specialised roles within an organisation, Giacomo notes it is important to remind people of what the bigger picture is – in his case, to create the best digital woman’s footwear company in the world – so that everyone is working toward the same goal.
Fashion tech is still in its infancy. And that means that many of those operating in the sector still have significant hurdles to overcome. Also, the dynamic nature of fashion tech means that, in order to succeed in the industry, companies need to remain flexible and creative. And all of our delegates shared the belief that, not only is fashion tech an exciting place to be, it is one that will continue to grow, with the best yet to come.
Surround yourself with strong people
Delegate your weakpoints
Describe your business in ‘one tweet’
Treat potential hires as customers
Senior is not always best - focus on diversity
Balance tech with consumer knowledge
Focus on values and purpose early
Make culture explicit
Facilitate communication between teams
Make sure everyone is working towards the same goal
Alessandro Magnani: Principle at NEO Investment Partners
Now Principle at NEO Investment Partners, Alessandro previously worked as an Associate at Macquarie Capital and as an Analyst at Morgan Stanley. He is a Non-Executive director at Comitec, VUARNET, Pierre Marcolini, and VALEXTRA.
Chloë Last: Analyst at Balderton Capital
Since joining Balderton Capital in 2014, Chloë works closely with the Talent Director to help build and grow the companies in the Fund’s startup portfolio. Chloë has a strong research background and, prior to Balderton, worked with global teams to produce the United Nations Report on the State of Women in Cities 2012/13.
Dan Murray: Co-Founder at Grabble
Dan is a highly-motivated and sociable entrepreneur with experience in creative advertising, digital marketing, sales, management, and strategy. Having previously worked for brands including Bacardi, Amazon, Spotify, and Intel, Dan now puts his experience to good use at Grabble.
Daniel Waterhouse: General Partner at Balderton Capital
Daniel is an experience investor and strategic operator in digital media companies, having spent six years in Yahoo!’s strategy and M&A team. He has covered opportunities in Europe and has been an investor in a number of fast-growing companies.