Friday, February 17, 2012

Veeral Rathod, J. Hilburn

"There is no magic bullet."
Lesson 1: Don't play the odds, you'll never take risks.

Pain Points in the Market for Italian Suits

  • Expensive
  • Men don't like going to stores
  • Men don't know what to wear
Their steps:
  • Quality - at a time when many people were cutting corners with materials - this deceased prices for the luxury goods.
  • Making it easier for men to shop - each shirt is custom made but the price is lower because there is no middle man. 
They currently have 1540 style advisors! Since their founding in 2007, they have raised $20 million!

Lesson #2: Keep and Open Mind - Follow fast and fail fast 
This is easier to do as a startup than when the company gets bigger, but each time you hear a good idea, you need to think about how you can apply it to your company. If it works, that's great, if not, then move on and choose a different idea.

Why Direct Sales?
Actually inspired by Warren Buffett. Direct sales is "the ultimate 'social commerce' model and it's ubiquitous." This is because direct sales can be anywhere. Example - Avon - which realized that many cosmetics companies had distribution issues. Luxury retailers are attached to stores and are limited in distribution. 

"Direct sales = social obligation = transaction"
Low customer lifetime value, but J. Hilburn's goal was to change this and build trust with the customer over time. This creates multiple transactions and a lifetime customer. 

One model they look to is Starbucks - the atmosphere builds longer term customers. 

"Don't chase the paper, chase the dream. Your vision will be the biggest impact on success."

Wow! They don't do any paid advertising! The company is built on referrals. 

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