Jessica Alba Eco Friednly Fashion New York Times
Building Start-Ups via Stars' Ties to Fans
Yous might take heard Jessica Alba on daytime Idiot box talking almost her new e-commerce company, which sells diapers and other infant supplies, or seen Kim Kardashian pitching her online shoe shop in the tabloids.
The man behind the companies, Brian Lee, is far from a household name. Yet in the world of tech starting time-ups, he is an emerging force.
Mr. Lee, a lawyer turned entrepreneur, has a simple formula: partner with a celebrity that fans acquaintance with a certain production, whether stilettos or baby supplies. He outset did it in 1999, when he cold-called Robert Shapiro, O.J. Simpson's lawyer, and persuaded him to bring together him at his start beginning-upwardly, LegalZoom, for creating your own legal documents.
Hiring a famous face to represent your brand is the oldest marketing trick in the book. But Mr. Lee is doing it with an Internet twist. He uses celebrities' social media connections with fans, coupled with recent innovations in e-commerce, to sell things in ways that were not possible only a few years ago.
The Honest Company, Ms. Alba's starting time-up selling eco-friendly babe supplies, has raised $27 million from investors, including Lightspeed Venture Partners. ShoeDazzle, Ms. Kardashian's shoe company, has raised $66 million from Andreessen Horowitz, Lightspeed and others. Simply despite this investment, it has recently struggled, replacing its principal executive, laying off employees and raising bigger questions near the new breed of subscription e-commerce companies.
E-commerce is going through a shift, equally retailers motility beyond publishing impress catalogs online to creating new business models for the Web. According to the National Venture Capital Association, venture capitalists invested $2.ii billion in e-commerce start-ups last twelvemonth, almost iii times equally much as the twelvemonth earlier and more they take invested since the beginning Internet blast, which created Amazon.com and eBay.
Mr. Lee's companies tap the latest e-commerce trends, including selling monthly subscriptions, using software algorithms to determine personal style suggestions and eliminating middlemen by designing products in-house and selling them direct to consumers.
"Given the choice betwixt shopping at a boutique or warehouse, if the styles were correct, which would my wife choose?" Mr. Lee said, describing the strategy behind ShoeDazzle and Honest. "A large group of women would choose that kind of curated boutique."
At Honest, customers sign up for monthly deliveries of diapers festooned with anchors or hearts every bit well as items similar shampoo and detergent, each formulated in-house to reduce chemicals. Ms. Alba conceived the idea, along with Christopher Gavigan, sometime principal of the nonprofit Healthy Child Healthy Globe, and turned to Mr. Lee for a business concern model.
When ShoeDazzle was founded in 2009, it was the start of a flurry of subscription due east-commerce start-ups. The shoes, generally $39.95, are suggested based on the results of a way quiz the customer takes. They are designed past ShoeDazzle and manufactured at the same factories that big shoe brands use.
But ShoeDazzle has been struggling with that model, and analysts say that could foreshadow bug for its many imitators, which, in addition to Honest, include Birchbox for cosmetics, Wittlebee for children's clothing, JustFab for shoes and handbags, and BeachMint, which has sites for jewelry, T-shirts, skin care, shoes, home décor and lingerie. Earlier this calendar month, Walmart joined the trend, introducing a monthly subscription box of food called The Goodies Company.
"Subscriptions were the hot tendency in the terminal year, but I think some of that free energy has really flattened," said Sucharita Mulpuru, an due east-commerce analyst at Forrester.
While subscriptions take worked well at companies like Amazon.com and Diapers.com for necessities similar toilet newspaper and diapers, shoppers might discover it harder to justify a recurring credit-carte du jour accuse for colorful suede booties.
ShoeDazzle switched to a nonsubscription model this yr, so shoppers log on whenever they are in the mood to shop instead of receiving monthly boxes. In September, the company replaced its chief executive, Bill Strauss, with Mr. Lee. He laid off 20 of its 220 employees and cut expenses like corporate apartments. Both Honest and ShoeDazzle are capital letter-intensive considering they design, store and ship their ain inventory.
"We lost our style," said Jeremy Liew, managing manager of Lightspeed Venture Partners. "But there's real value in this company and customers love the product."
Mr. Lee said ShoeDazzle would approach $100 million in revenue this year and become profitable next yr. Honest is not yet a year old, merely its founders say it has proved pop with shoppers. Mr. Lee is the right person for the job, Mr. Liew said, because he has a Hollywood sensibility that Bay Area executives lack.
"He'southward a eye-aged, slightly out-of-shape Korean guy who got Jessica Alba and Kim Kardashian to starting time companies with him," Mr. Liew said. "That is similar sheer force of will and personality. This guy has go the person that Hollywood goes to when they want to talk about starting companies."
Many Silicon Valley veterans write off celebrities flocking to tech as a sign of a bubble. But Mr. Lee has a keen understanding of how to take advantage of their fame in social media, Mr. Liew said.
His glory co-founders are non but pretty faces. Instead, they use Facebook and other sites to make direct sales, and it works because their fans think they have some authority in the items they are selling.
"Information technology's non a picture of Tiger Woods wearing a Rolex in a magazine," Mr. Liew said. "This is Kim saying, 'These are great shoes, you'll beloved them, you can get them for $39 a month, try it now.' Information technology'south directly driving a response, non just an abstract make halo."
Ms. Alba said her piece of work on Honest was almost a full-time job (in addition to gun training for "Sin City two"). "Beingness the face of something and not having control and input on the manufacturing process is not something I'm interested in," she said.
The most successful Bay Expanse companies have also relied on celebrity, if not as obviously, Mr. Lee said. Twitter'south popularity soared after Britney Spears and Ashton Kutcher competed to go the most followers, and Lady Gaga'due south 53.6 million Facebook likes bring people to that site. It is a rare Silicon Valley party that does non include Mr. Kutcher or M C Hammer.
Mr. Lee has go an practiced at bridging the worlds of Hollywood and Silicon Valley. Ms. Alba said she tried for three years to find backing for her company before he agreed to join her and accompanied her to pitch venture capitalists.
"I was just turned down by then many people because information technology wasn't sexy," she said. "I think when you walk in with Brian Lee, y'all're pretty much golden."
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