A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz (Part 4)

Sramana Mitra: If I remember correctly, NexTag was a vertical search engine right? These half a million keywords were all within the domain of electronics.

Rafael Ortiz: Initially yes. We added other categories like home goods and clothing.

Sramana Mitra: How big a business did the tech product vertical search engine become?

Rafael Ortiz: By the time we sold it, the entire business was doing $200 million in revenue. The tech portion of that was over half.

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Video FAQs

A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz (Part 3)

Sramana Mitra: It’s important to figure out why it didn’t validate. What was your analysis of why the company failed?

Rafael Ortiz: In the end, the reason was margins were so tight for those retailers. They were in no position to issue dynamic pricing for their products. At that time, the whole sales channel was under a lot of pressure. Retailers simply cut prices to break even. There wasn’t a way in which they could do that. We could not deliver enough customers who were willing to pay different prices. The savvy shoppers would just play with our software. They did their homework and they would just hold out for discounts.

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Sramana Mitra: What dataset are you working with? In this example that you gave where somebody lost a job, where is that signal coming from that person who has lost a job? Are you expecting the person to report that they’ve lost a job? Where is that signal coming from?

Ed Wallen: It depends on the geography that we’re operating in. In the US, UK, and most of western Europe, we have different data providers that trigger or signal those cases to us that we’re able to ingest in real-time as that happens and then react to it.

A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz (Part 2)

Sramana Mitra: Could you describe the process of figuring out what you wanted to eventually build a startup on? What was the process of coming up with that problem?

Rafael Ortiz: What we did is counter to what a lot of people advise. A lot of people advise finding the problem and doing something that you’re passionate about. We didn’t do that. It was very much an MBA kind of exercise. The most important decision was deciding that we were going to start the company. Once you decide, everything then starts happening. The hardest part was making that decision.

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Sramana Mitra: Let’s do use cases. You talked about AI models. Where are you firing AI models to achieve what use cases?

Ed Wallen: It’s really on a number of different facets depending on the nature of how our client operates. Generally speaking, the most common are the propensity-to-pay models. They’re action-effect models. What actions are going to lead to the desired outcomes? There’s also mathematical optimization based on the characteristics of this archetype or account. What is the optimal strategy or treatment to put them on that’s going to lead to the desired business outcome?

A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz (Part 1)

As you know, I have a passion for personalized luxury fashion and ventured into that market early on in 1999 when the market wasn’t quite ready for it yet. Rafael is building a wonderful luxury fashion venture with unique personalization details.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?