Billion Dollar Unicorns: Web 3.0 and E-Commerce Investment Thesis of 3 VCs

Last fall, we had three VCs participate in our 1M/1M roundtables to discuss their Web 3.0 and e-Commerce investment thesis. These interviews cover as well as build upon the themes discussed in my two recent books, Billion Dollar Unicorns and From E-Commerce to Web 3.0. If you are looking to build a Unicorn company in the Web 3.0 / e-Commerce domains, I strongly recommend you listen to these three interviews. In each case, listening to just the first 30 minutes would be adequate.

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Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 7)

Sramana Mitra: What are you able to do? What strategies do you follow to make that an instant fit in some sense on the mobile phone?

Darren Hill: If you think about products, products have attributes and tags. The consumer uses those tags to find products on the website. The biggest thing we’re doing is tagging the customer. We look at searches that the customer makes based on past purchases, the last place the customer has been, or even the way they shop. Some shoppers are shopping for something very specific. Some shoppers are shopping to fill their closets. Some shoppers are buying gifts. We’re doing a lot of work to identify what type of shoppers are here. Those shoppers actually respond differently to different page layouts. Someone who’s buying just a pair of jeans is much interested in seeing those jeans >>>

Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 6)

Sramana Mitra: One question on Nasty Gal and the scalability point, what are the issues? What are we trying to solve?

Darren Hill: The issue is making sure the site is up. It works for all of your customers and they’re getting the environment that they’re expecting. For us, it’s really a technology play. Our systems are built on Ruby on Rails with a MongoDB database on the back-end. That technology allows us to rapidly scale in a virtual environment so that we can add new servers very easily. We can handle insane amounts of traffic almost seamlessly.

Sramana Mitra: Talk to me about pricing. I know the pricing of some of these other players that are serving much larger number of customers. You seem to be serving 100 customers that are much larger. I imagine your pricing is very different from theirs. Talk to me a bit about how you charge.
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Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 5)

Sramana Mitra: How do you do the recommendation on what goes with what? Is that a manual recommendation system or is there technology that enables scaling of something like that?

Darren Hill: It’s a mix. There are several data points that go into it such as what people have bought and what they have looked at. That’s the easy one and something that everybody’s been doing for years. The shoppers can put products together in their own category. They’re being a stylist, if you will, on the site. We use that data as well. We are able to see which customer is the best stylist based on how much sales is generated through what they’re suggesting. Then we have professional stylists who work there. They’re also putting this information in. We essentially take those data points and make the suggestion based on all of that. >>>

Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 4)

Sramana Mitra: I see it.

Darren Hill: It’s quite powerful. People share them like crazy. Our site allows hearting and comments and the customer base is very active.

Sramana Mitra: Interesting. When you put something up on the website, I’m sure you are seeing huge amounts of social media sharing.

Darren Hill: Absolutely. That is the key. That was almost a by-product of allowing people to upload their information. The big value was that these girls are excited that they’re on the Free People site. >>>

Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 3)

Sramana Mitra: Besides geography, what other parameters do you personalize on?

Darren Hill: For a lot of our fashion clients, we personalize on sizes. For instance, if you have come to the website and you’ve looked for a specific pair of shoes, we’ll actually tag your account and we’ll know what shoe size you are. So the next time you look at shoes, we will filter and sort that specific shoe category. We will make sure that the shoes at the top are available and are in sizes that you indicated that you were interested in. That simple little tweak can increase the conversion rate by about double for specific clients. That is pretty significant.

Sramana Mitra: What else in fashion is interesting in terms of personalization? I’ve started one of the first Internet fashion companies about 15 years ago. I know this category cold. What are you seeing in terms of trends? I’m a big believer in online >>>

Thought Leaders in E-Commerce: Darren Hill, CEO of WebLinc (Part 2)

Sramana Mitra: Let’s fast forward to 2014. What is your business today?

Darren Hill: 2014 is an interesting transitional year for us. We had been in business for 20 years. All of the growth that we had, which was pretty significant, was organic. We invested all of our profits back into the business and never took any outside investment up until last year [2014]. Last year was the first time that we did take outside investments.

Sramana Mitra: What is your business?

Darren Hill: We have an e-commerce platform. Companies hire us to use that e-commerce platform for their business. It controls everything that their online store is doing. It controls the front-end—what the customers sees and what the customer interacts with. >>>

Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko (Part 7)

Sramana Mitra: Does that mean that San Francisco and New York are your two major customer bases?

Kyle Vucko: Not exactly. They’re part of our top 10. Because we are still looking for shorter term real estate, we’re looking simultaneously at 10 cities. Once we find the location that’s the right price, we’ll move in. We’re taking any place that comes up first. New York, San Francisco, and Toronto are very much bigger markets for us. San Francisco is very much as well.

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