At next month’s PulsoConf, Elizabeth & Clarke Co-founder Melanie Moore will take the stage and present her experiences in and outlook on the state of entrepreneurship and startups today. After speaking with her, no doubt remains that she will outline one of the most unique perspectives of the event.
An Entrepreneurial Calling
Moore described entrepreneurship as a calling, something that entails years of struggle that no one looking in from the outside would say, “Yes, that’s what I want to do.” Building a business that is sustainable and profitable is extremely difficult and takes years of work. It’s not for everyone. However, Moore explained, after experiencing the bureaucratic and hierarchical corporate environment of finance, she cannot see herself doing anything else.
The specific path Moore has taken is that of fashion. She described fashion as a complex art form that requires products that are both beautiful and functional. In turning art into a business, as fashion does, certain constraints arise surrounding creation, ranging from fit to price. Execution, Moore pointed out, is key.
We went on to discuss Moore’s specific experience in the world of entrepreneurship – namely, the conclusions she’s drawn in closing down one unsuccessful startup in order to focus on another.
Caught Up in the Startup Buzz
In June 2010, Moore launched ToVieFor, a handbag and accessories platform, with co-founder Eric Jennings. The business seemingly took off fast, winning the 2010 NYU Stern Business Plan Competition and going on to participate in and receive funding from TechStars NYC. However, just a few months after the TechStars Demo Day took place, ToVieFor closed down.
What went wrong? Moore explained that with ToVieFor, she and the rest of her team were focused on raising money, pitching and marketing, becoming so caught up in the buzz and excitement surrounding them that they failed to recognize that the product they were building was not in line with the needs and interests of consumers. While she acknowledged that marketing is, of course, good and necessary, she explained that there is a period in which it is most important to test and iterate in order to ensure the creation of the best product possible. This is something that ToVieFor missed.
With Elizabeth & Clarke, Moore and co-founder Sara Chipps are taking a different approach, this time focusing on product building and user experience instead of competitions and funding. Elizabeth & Clarke is entirely bootstrapped, and Moore learned front-end development and design in order to help build the product herself. Moore and Chipps are in constant conversation with customers, speaking on the phone or communicating via e-mail to receive feedback and improve their product.
Business, Technology and the Perfect Product
Moore emphasized the value of the decision to take charge of the technical aspects of the product instead of outsourcing the work. In general, startups in fashion, beauty, luxury, home and similar rubrics are headed by professionals with a background in the industry of the products they’re selling – not technology. If this is the case and there are no co-founders or key team members with experience in development, programming or user experience, the focus automatically goes to fundraising and getting capital in order to hire or outsource to others who can take care of tech-related tasks.
When this path is taken, development takes longer as the developer or agency likely has a number of projects going on at the same time. Moreover, outsourcing technical services can be extremely expensive.
Beyond logistics, Moore pointed out a more important issue posed by outsourcing development – product vision. She explained that when one outsources the entire first product, the optimal outcome is, essentially, lost. It is difficult, if not impossible, to hire a developer who exhibits the same drive and focus as the founder or entrepreneur at the head of the enterprise.
That said, Moore noted that this is a two-way street and that tech startups founded by developers and programmers face some self-imposed obstacles as well. She highlighted the case of social shopping apps and similar e-commerce platforms in fashion, home and beauty that, while technically robust, aren’t necessarily in-line with consumer needs. Essentially, she said, such startups are building solutions in search of a problem.
With Elizabeth & Clarke, Moore and Chipps hope to combine their experience on both ends of the spectrum and leverage lessons learned from previous endeavors.
A New Approach
Elizabeth & Clarke launched in October of last year and is currently focused on one product: the basic women’s shirt. Subscribers register to receive a box of basic neutral-colored shirts and blouses for each season.
The startup is aimed at two different demographics. The first is women in urban areas with a relatively high income (US$75,000 per year and up) in their 20s and early 30s. These are women who purchase from high-end designers that focus on the basics and are attracted by the possibility of purchasing the same apparel at a fraction of the cost. The second segment is women who value convenience and cost, busy moms or working-class women with little time to spend shopping or searching for options. Elizabeth & Clarke provides a convenient and wallet-friendly solution for women in this segment.
Elizabeth & Clarke is still evolving, and the concept behind it is being refined. Moore exhibited an attitude of prudence and constant assessment with respect to the product, an approach that has been formed by her past experience.
A Note on Investment Baggage
In closing, we discussed what PulsoConf attendees should expect from Moore’s presentation in Bogotá next month. She outlined plans to discuss the importance of focus on profitability and sustainability in business, of finding a problem and solving it in a way that works for a large segment of the market.
She warned against the culture of fundraising that has emerged in the startup ecosystem as of late in which capital is overly celebrated. Though an investment is, of course, something to be proud of, it is also brings with it a heavy responsibility that many young entrepreneurs don’t quite understand. In receiving a US$10 million investment, Moore said, entrepreneurs are essentially taking on that amount as a debt – a debt that they are expected to pay back three, four, even five times over. The minute the deal is made, the entrepreneur has a boss and a board to answer to, which isn’t always the best for a budding business.
Everyone wants to be the next Instagram or Facebook, but chances are it’s not going to happen. A strike of lightning, Moore explained, can’t be the expectation.