The Lean Fashion Startup

Yesterday I was talking with a lady who is starting a business. One thing that came up several times in our discussion was the idea of ‘doing it right’: of having everything ready before launching at all — a great web site with a fully functional e-store, branding,  the product available for order in mass quantities, and staff at hand to handle distribution, etc.

At some point I think I surprised her when I told her that for Minku, I  had taken the exact opposite approach.

In April 2011, I had made about ten leather bags and gadget cases, uploaded photos of them to a free wordpress site (which you can identify with the dot wordpress dot com suffix), and sent out an email to about 100 of my facebook contacts, introducing my new business project.

From that facebook marketing campaign, I made one sale, my first sale, for 88 euros. I was super happy as I packaged and shipped that bag to Newcastle upon Tyne. Coming up with the logo, creating an online store with worldwide shipping, dedicating time to product packaging and branding, and buying a web domain… all these came later. I tested the core idea: make bags and sell them. When it worked (or seemed to, after the first few sales), I incrementally built the business behind it.

LeanFashionStartup-Minku

I have been reading the book The Lean Startup by Eric Ries. The author is on to something — something that cash- and staff- strapped business launchers from Nigeria to China have been doing for centuries. Granted, it is easier to be ‘lean’ when you are just one person with 24 hours in each day and only so much funding. It is harder to be lean when you have just scored angel capital and have investors who expect the levels of growth you promised in your business plan. Or when you have just hired people to fill the sales, customer service and tech divisions of a company that is yet to earn its first cent.

But the testing, the feedback and the direct-to-customer relationship built by lean companies (or by companies in their lean stages) is worth it.

Here is a fashion business idea I heard of recently, and how I would approach it using a lean philosophy:

– An company like Rent the Runway, for Spain.
Rent the Runway is an American company that rents designer clothing and bags to people for a fraction of the cost. For example you can rent a Prada bag for $30 per night to wear to Barcelona Fashion Week. You will look good, without having to buy a Prada bag.

My approach:  It doesn’t have to be Prada or Dolce and Gabanna clothing, at least in the beginning. I would follow the local Fashion Week circuit (attend the fashion shows and fairs, etc of the city, whether Barcelona or Madrid or Lisbon or Valencia). I will approach the designers. Many of the clothes you see on fashion show catwalks do not get manufactured or sold in larger quantities. They end up as prototypes in the designer’s archives.

Well, I would ask those designers if they would be interested in this ‘Rent-the-Runway’ concept. Better still, I would invest in five to ten quality pieces I loved from the runways. I would see if the designers are interested in some type of publicity-for-discount exchange. Once I have the clothes or accessories, I would have them photographed and placed in a classy mailing introducing my business idea. I would test the idea by mailing this document or web page to some friends or family members or third-party networks. Goal: to score a few initial customers.

– What are people willing to pay to rent an item, for example a Manuel Bolano limited edition hat or an Azabala coat to attend the Goya awards? 20 euros per night? 45?
– How much do I have to invest in dry-cleaning or transporting the item to the client (sometimes internationally, and I can imagine, often times, using express shipping, which is exponentially higher)?

– In what condition are the items being returned? How many uses can I expect the item to have before I have to retire it from my arsenal of clothing? If a dress gets stained, can it be effectively cleaned before the next wearer needs it?

This way, I would be able to plug numbers into the business plan, and have a more realistic idea of my business model. Hopefully I would even make some money (still not profit… remember I just spent on five designer dresses).

But at least, I would know if my business idea is realistic. I would also know this before I have spent say $100,000, loaned or raised, on clothing and warehousing only to learn that nobody is really interested for reason x or y, or that wine stains don’t ever really come off linen dresses.

The post has already been a bit longer than I wanted it to be. I want to see more fashion startups, but it would also be cool to test the business model before going all-in. The lessons to be learned from testing (by talking with customers, seeing at a smaller scale whether our assumptions about customer behaviour, the market, etc hold) are priceless.

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If you would like me to give some suggestions on launching a business idea using a lean approach, then please email me at minku@minkudesign.com. I would recommend the book by Eric Ries, but really, the name sounds cool but at its core, lean is about creativity. It is about divide-and-conquer: breaking a problem up into manageable pieces, focusing on each piece in its order of relevance to profitability and customer satisfaction, getting feedback from as many of your users as possible and using it to improve the core functions that are already working. Finally, it is about incrementally building a fully viable product or idea from a shell (MVP or Minimum viable product according to Ries) that has been proven to be viable.

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6 thoughts on “The Lean Fashion Startup

  1. I really could pick up 1, 2, 3 or more points from your idea. :) To add to it, we do always have to remember that we need to build our tribes. By tribes I mean fans and likes. This helps a lot in branding and spreading the word. Our tribes follow us everywhere we go and encourages us in anything we do. Though I don’t comment often but follow every single post on minku :). I also did 1 or 2 blogs on minkudesigns in one of my sites a while ago.
    I think fans like originality and people or designers who stay true to who they are, what they do or the approach they bring into the market.
    Your Lean Fashion Startup makes so much sense and I could relate to it 100%

  2. Hi BiKé, I woke up to your insightful addition to the conversation — thank you! And yes, I know Fashiongist.com :-) If it’s ok, I’ll add your email to our press contacts list so you receive Minku press releases directly. Cheers and best regards!

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