How fashion startups get accepted into tech accelerators
Key takeaways:
- Fashion companies are looking to invest in “enabling” startups that help them implement new business models or technologies.
- Venture capitalists and incubator executives like founders who don’t gloss over the challenges they face.
- Founders should have concrete data on the competition and potential consumers, as well as preliminary results of having tested their idea.
SAN FRANCISCO — When Neha Singh was accepted to The New York Fashion Tech Lab, a programme that connects fashion-tech startups with major retailers, in 2017, her virtual reality shopping startup Obsess caught the attention of Vera Bradley. The handbag brand, an NYFTLab sponsor, subsequently worked with Obsess on a heavily publicised project.
“Vera Bradley is not a brand that you think of being super tech-forward, but it was a big success for both of them,” says NYFTLab managing director Jackie Trebilcock. Singh, who had studied at the Massachusetts Institute of Technology before working for Google and American Vogue, later raised her first round of funding and partnered with Farfetch, Levi’s, Tommy Hilfiger and Ulta Beauty.
Graduating from a top accelerator or incubator can be as career-defining for a startup founder as an elite university diploma. The intensive programmes, which are often just a few months long, help startups refine and grow before a “pitch day” to potential investors and press. Such schemes provide mentorship, money and networking, often in exchange for equity in the company.
As legacy companies increasingly look to startups to inject innovation, the incentives to join one are heightened — but so is the level of competition. Here, leaders from top incubators reveal how to stand out. The following interviews have been lightly edited and condensed for clarity
“The more plain-spoken your pitch, the better.” — Dalton Caldwell, head of admissions and partner at Y Combinator, which has invested in Zyper and Spate.
We are looking for two really important things. One is the technical skills to build the product without any external parties necessary because hiring contractors or outsourcing the work ends up zapping time. The second is a unique perspective on the things they want to build because pretty much every idea has already been come up with and it didn't work. Lots of teams haven't done basic research.
We recommend having one co-founder versus doing it yourself. Avoid jargon — the more plain-spoken in your pitch, the better. And showing concrete action, like talking to customers or building a prototype, shows you are serious. For many people, the idea is 100 per cent theoretical.
Software that enables new businesses to be created — platforms like Etsy or Shopify — tends to work out really well. I’m excited to see people build enabling technologies — the platforms, the payments, the logistics — the unsexy part of things. There is so much opportunity.
After submitting an online application, some Y Combinator applicants are invited to an in-person interview. Y Combinator informs startups if they have been accepted or rejected on the same day. "We have a process that is easier than boarding a plane," says head of admissions Dalton Caldwell.
© Y Combinator
“Be candid with potential investors.” — Aaron Blumenthal, venture partner at 500 Startups, which has invested in The RealReal, Le Tote and Mejuri.
There are many factors that are bound to change throughout the startup lifecycle. But what doesn’t change is the founder and their vision of how they’re going to disrupt the space. As such, I look for founders who will be very candid about what they know and twice as candid about what they don’t know. The longer you take to tell me that something is broken, the longer it will take to fix. The problem then gets bigger and more complex and expensive to fix.
A trend I’m fascinated by is companies including payment platforms with their product. For example, some companies are now offering payment plans built into their platform. Extending credit, payments and transactions is becoming the new normal for retail.
My advice is to make sure whatever technology you work on makes sense for you and your company and that you have the skills internally to support the platform. Otherwise, you’ll find yourself in murky waters. If it’s not in your DNA, don’t take it on just because it’s what everyone else is doing.
“Research, and apply to, the right programme.” — Jackie Trebilcock, managing director, NYFTLab, which has worked with Eon and Narrativ.
We are looking for women-led B2B fashion and retail-tech startups, not physical apparel, DTC e-commerce companies or emerging designers. We are interested in third-party proprietary technology that uses things like visual search, analytics, AR/VR and fit-tech.
We are more of a business catalyst than an accelerator because we help startups connect with large multi-brand retailers and mono-brands. A lot of the startups we work with are already working with direct-to-consumer brands, but it’s the larger organisations that are harder for them. Investors don’t take equity; the lab is funded through corporate sponsorship by companies such as PVH and Macy’s.
We are looking beyond ideation stage to, at the very least, beta, and for companies that are corporate-ready. Retailers want to see it all, so they usually have not precisely identified one tech they want to focus on. Visual search and fit-tech are definitely trends.
There are now so many accelerators and incubators that entrepreneurs have more leverage. A lot do more than one programme, so we want to be careful if we see a startup that has done 10 and hops from one to another.
“If something is great, but for only one country, it will not have the impact we need.” — Laetitia Roche-Grenet, Director of Open Innovation, LVMH, whose La Maisons des Startups LVMH has invested in Heuritech and Alcmeon.
We try to find a startup that can work with many of the maisons in our universe. A startup needs to be able to answer the topics that interest us, like customer experience, sustainability, data, omnichannel, personalisation, logistics and delivery. We are not a technology group but a luxury group. What matters to us is what we can achieve, by working with a startup, for the customer, rather than the tool itself.
If something is great, but for only one maison or country, it will not have the impact we need. For example, we have been working on forecasting trends through social media and using AI that is able to recognise images. When you have a fashion show, technology can anticipate the trends right away. It’s really helpful from a business point of view to anticipate what you need to order.
The ideas that go far are the ones in which the people behind it are listening and open to being challenged. We organise conversations between the maisons and startups, and they usually come up with a solution and start collaborating. None of these conversations are planned on the road map. For the second season, we had more than 57 collaborations.
“You can be pre-launch, but not pre-data.” — Kirsten Horning, Principal, XRC Labs, which has invested in Hemster and ShopShops.
We look for founders who understand what their buyer profile is and how to reach them. It’s not enough to say we target men aged 18 to 65. I want you to call customers and ask why they have stayed with you for two years, and how can you get more of those?
It’s also important to be honest about the competitor landscape. The number one question I ask is, “How you are going to win?” And they should know that answer inside and out. It’s fine if version one is super simple and if the company eventually pivots. But tell me how this becomes bigger and the steps to get there. I want to know that they have thought through the steps.
Founders should also have a big vision on marketing and hacking their way to early data. You can be pre-launch, but not pre-data — show us that people want this product. Stryx, a men’s concealer and moisturizer brand, started a blog about men’s grooming products, so when they were ready to launch, they understood what customers were clicking on and had a large customer list.
“Test the idea — and show results.” — Carol Hilsum, Director of Innovation, Farfetch, whose Dream Assembly has backed Second Life and Thrift+.
We look for pre-seed to seed stage, and usually, that means you have built a minimal viable product. We are looking for not only a great vision and exciting ideas but also a bit of a reality check — have they been able to test the idea and had some results based on that test?
One mistake I see is that companies use the incubator application process as a sales opportunity, with the sales person driving content. We need to know what is going on under the hood — not the glossy version.
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