Pod Insights Equity Podcast Special Episode: Who's betting on fashion tech? About this episode Today on Equity, we’re bringing you two bonus conversations all about sustainability in fashion from TechCrunch Disrupt 2023. First up you’ll hear our very own Harri Weber sit down with three guests: Jim Ajioka from Colorifix, Beth Esponnette from unspun and Julie Willoughby from Circ. They are all powerhouses in sustainable fashion and they all happened to join Harri on the Sustainability Stage. Watch their full conversation here.
In part two, we have a great conversation between TechCrunch’s Morgan Sung and Jemima Bunbury from BLEND, a curated fashion app that is changing the way we shop online. BLEND uses AI-powered personalized recommendations to help customers quickly and easily find products that suit their style, size and budget. Their goal is to prevent impulse purchases, and of course, make it possible to stay trendy and shop sustainably.
Here's what our guests are diving into:
Fixing the fashion supply chain so all the materials are created in a sustainable way
Helping consumers find products that will last
Enticing larger brands to shift to sustainable practices
Why a holistic approach to sustainable fashion is crucial when trying to eliminate waste in the industry
That's all for us today, but we'll catch up again on Monday!
For episode transcripts and more, head to Equity’s Simplecast website.
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Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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Transcript 0:10 Speaker 00 Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. My name is Alex Wilhelm and today we have a very special episode for you. We are bringing you not one, but two interviews all about sustainability in fashion from TechCrunch Disrupt 2023. First up, you'll hear from our very own Harry Weber as she sat down with three guests, Jim Ajioka, Beth Esponnette, and Julie Willoughby. They are all powerhouses in sustainable fashion and they all happened to join Harry on the sustainability stage. In today's conversation, they attempt to answer the following question: Is sustainable fashion possible? And if you want to hear their onstage interview, we have a link to that in the description.
0:55 Speaker 00 And be sure to stick around for our second fashion-forward conversation with Morgan Sung and Jemima Bunbury from Blend. Let's go.
1:05 Speaker 01 My name is Harry Weber. I'm a senior reporter at TechCrunch. I'm here with three innovators in fashion tech and we're going to talk about sustainability in fast fashion. This is a follow-up from a panel discussion we had onstage at TechCrunch Disrupt 2023, where we talked about the same topic, fast fashion. This panel will be posted. We'll include a link with the podcast. Be sure to check it out. Let's take it away. Beth, could you introduce yourself and talk about your company for about a minute?
1:36 Speaker 02 Absolutely. Thanks so much for having us here. My name is Beth Esponnette. I'm one of the founders of Unspun and we are an on-demand fashion technology company. So the industry right now produces over 100 billion garments per year. A lot of that really shouldn't be made because it never sells. No one really knows the real numbers, but some companies have told us that up to 30% of what they make never sells. And we just know, just looking at photos of landfills, even some photos we can see from the ISS of trash piles in the Atacama Desert, there's too much. We know there's too much. So Unspun was started in order to create technologies that would allow for the equation to be flipped. Instead of producing and then selling,
2:19 Speaker 02 we said, is there a way we can sell and then produce? So we've built software and hardware to try to answer that problem so that we can sell a product and then make it on demand. And 3D weaving is essentially how we are answering that question.
2:33 Speaker 01 Jim, could you introduce yourself?
2:35 Speaker 03 Right. I'm Jim Ojioka. I am the co-founder and CSO of Colorificx. What we do is we engineer microbes to produce and deposit pigments onto textiles. And in short, that's what we do with the aim that current textile dyeing industry is really very toxic, starting with the chemical synthesis of the dyes down to the dyeing production itself. So we address both of those things because we can engineer microbes to make pigments instead of chemically synthesizing them. And then we can also use the microbes' ability to deposit and fix pigments onto textiles. So we do both sides of the equation, and hopefully this will,
3:17 Speaker 03 in time, help displace what is currently a really toxic and not very nice process.
3:23 Speaker 01 Thank you. Julie, could you do the same?
3:25 Speaker 04 My name is Julie Willoughby. I'm the Chief Commercialization Officer at CIRK. And what we're doing is we're changing the way that you think about your closet. So we're powering the clean closet so that we can recycle the textiles that are no longer of use, either going into the system or out of the system.
3:43 Speaker 01 Thank you so much. I want to kick this off by talking about what are the obstacles to making fashion, and in particular, fast fashion, sustainable? We've talked about this before. One of the obstacles is corporate adoption of yours and other sustainable practices. But another is the shoppers themselves. The sustainable ways of doing business compete with convenience and price and accessibility when it comes to just how widely available, very cheaply mass-produced clothes are. So to that point, would either of you like to take us away and talk about what the big obstacles are to embracing sustainability in the fashion industry?
4:25 Speaker 02 Yeah, this is a massive topic for the industry and I think it's something that has come about over really like the last century. We in the industry have become so efficient that it's going to be hard to break out of where we're at right now. Basically, with globalization, we searched for the cheapest places around the world. And once we got those cheapest places, we wanted to get to economies of scale. And so we were making each particular piece of the supply chain at really big quantity, but kind of breaking it up. So when you look at the garment, that's the whole supply chain, it's just lots of little pieces that are completely optimized for just that one thing. And I think it's been really tricky for us to get out of the rut of like, this one supplier makes the cheapest yarn
5:09 Speaker 02 in the world, this one makes the cheapest buttons, this one does the cheapest seams. And to rethink the bigger problem, it's scary to try to get out of that because that's how we've been doing things forever. So fortunately, all of the brands that we've been speaking with, and I think, and even the smaller ones have innovation departments, they have people kind of set to the side who aren't stuck with the current model of selling a lot of product, and they can think differently about it. Those ones are able to think, like, how can we, if we were to build a production facility today, what would that look like? So those are the people that we're really targeting.
5:47 Speaker 01 Can you name some of those brands?
5:49 Speaker 02 Actually, yeah. And I think that they would surprise you. It's the really, really big brands in the world have separate ones. So Walmart, H&M, Zara, like, you name a big brand, they will have a separate department that is thinking big about this. Are they moving fast enough? No. But the fact that they are putting some resources behind it is really promising. And then I would say, the smaller brands, like, they care even more, but they don't have the budgets that the bigger brands have to, you know, support maybe like the capex that you would need to see a different, or like, build a separate kind of supply chain.
6:24 Speaker 01 I'm curious, Julie and Jim, I want to talk about the consumer side, but before that, could we talk a little bit more about the obstacles and opportunities in corporate adoption of your technologies in particular?
6:39 Speaker 03 Yeah, I mean, I think this is a really multifaceted problem, as has been described already. And it's going to therefore take lots of different solutions at different points in the system. For us, our real goal is to try to eventually displace the chemical dye process, which is a long process to try to do that. Unfortunately, I think we do need to make some quicker wins on these things than perhaps what we do. Because we're trying to displace 150 years of industry, it's tough. But talking about things where you go and try to do it on demand, these things already exist, but they're at a very small scale. Like, you know, people I know in Brazil, for example, in their village,
7:24 Speaker 03 bespoke clothing is what they do because they don't have a choice. Okay, so there are people there that just, you know, measure you up, you know, will then sew your clothing and do all that kind of thing. But it's how you try to scale that process up in a reasonable way globally. And then maybe scale down or try to improve not making stuff when you don't need it, or not having to recycle when you don't need to. And these are, again, things that need to happen within the industry at this point. Otherwise, I think we're in trouble.
7:55 Speaker 01 Jim, your company in particular, we're talking about Colorific. You're brewing bacteria that deposits dyes onto both natural and synthetic fabrics, which is, I remember the first time I brought it up, I was like, that's so cool. And also, does anyone think it's gross? And I don't want to stigmatize it because it's just fascinating and so much less gross than the way that chemical dyeing works and what it does to waterways. But could you take us into the room with some of the conversations that Colorific has with brands? Are they excited to talk about this kind of tech?
8:28 Speaker 03 So, yeah, I mean, when you describe the process, initially, people sort of have some hesitancy whether it's going to be, because it is, you think it's gross, right? But actually, when you say, look, your clothing already is covered with bacteria and fungi and even worms. Okay, so when you tell them that and you say, look, you just kill everything, wash out the biomass, is what laundry detergent does, you have a clean piece of clothing again. So it's not really different than that. And so when you explain the process in that way, people are gonna, okay, you know, they're not really disgusted by it at all.
9:06 Speaker 01 Julie, could you weigh in on your experience trying to work with larger fashion houses, brands? How do you win them over to, what's it called, to the opposite of the dark side?
9:19 Speaker 04 Right. Well, I think, I mean, if you look at what is happening today, there's a tremendous amount of recycled polyester, R-PET, into our clothing. And what CERF can do is we can take the polyester from the cotton and separate it. So that's a really difficult textile blend to recycle because it contains a natural polymer and then a synthetic polymer. And they have different characteristics, which is why they're used so frequently in apparel, because they give two different aesthetics. So there is an awareness out there and the brands do have a responsibility and with EPR and the regulations coming through with Europe making the lead of banning, say, R-PET into textiles by 2025.
10:00 Speaker 04 And that means that all those companies that are trying to meet sustainability goals by using R-PET from bottles need to switch to textiles. And the PepsiCo's and Coca-Cola's need to keep bottles as bottles. And I haven't met a brand that doesn't want our solution. It's more of, as being in the chemical industry, a chemical engineer for 30 years, it's, it's never been a stronger marketing pool, but it's even more beyond marketing. It's a sustainability pool because it's what we need to do for the planet. So Zara or Inditex invested in us in our last round. Zalando invested in us. We have a really great partner in Maribane.
10:41 Speaker 04 They're one of the largest traders of lifestyle and, and they have their own fashion brands. And they've been with us from our A round. Patagonia led our A round. And with that, it's just been a tremendous awareness for textile recycling that needs to happen. I mean, as Beth mentioned, you can see the amount of textiles from space and that's really, really sad.
11:02 Speaker 01 It is quite a downer of a, of a subject matter, depending on your outlook and if you're not focusing on the solutions. I'm curious, obviously, companies have some sort of fiscal responsibilities to their investors, their shareholders, but how much of this is willpower? You know, how much of it is up to willpower versus regulation? When it comes to the brands being willing to take a hit upfront, maybe to their profit margin in order to embrace potentially more expensive, but much more sustainable practices?
11:32 Speaker 04 Well, I think that's interesting the way you phrase that because it's really about the early adapters. So when I say we don't, we can't make it fast enough, there's just not enough capacity built yet. And so when you're looking at early adapters for these technologies, you need the leading brands, the ones that can really use their brand power for good to join you on this journey. And that, and that is exactly what Index has done. And, and by promoting Cirque by co-branding in the, in the label, and that's a really hard thing to do. But they're committed by 2030 to have all recycled materials in their clothing. And how are you going to do that if you don't have the capacity? And so it's exciting as an engineer, a scientist and technologist
12:14 Speaker 04 to be able to build what we should have built back in the eighties and nineties when we thought we had unlimited resources. And now we know we don't. But fortunately, we have all these resources that we're all wearing every day that can be converted into new materials for new clothes.
12:34 Speaker 02 Yeah, we're actually, we're working with a brand that has a really fascinating model internally where their employees are not only measured on metrics of how much finances they save, but also how much carbon emissions they're saving with the decisions that they're making. And so there's a lot of incentive. I think there are actually bonuses tied to these numbers. And yeah, it's been really interesting to work directly with each of these employees and to see their numbers and to have them show us like, oh yeah, since we signed Unspun, this is how much I can put behind my name. And so there's incentive there. And I don't know that the reason is financial here. I think that, you know, since they're Europe-based, they see policy coming very, very quickly and there's a fear there.
13:16 Speaker 02 But I think even more than policy, they are like deeply fearful of what's happening in the climate. And so that's been a big driver for that particular company.
13:26 Speaker 01 Let's zoom out, though. So Europe has led, it seems as if it has led the way in terms of regulation of sustainable practices, environmental damage from industry. What's the rest of the world looking like? Jim, would you start us off here on this?
13:40 Speaker 03 Yeah, this is again a multifaceted problem because we are technically in Europe and we are close to where a lot of the major brands are based. We have had an opportunity to work with brands that perhaps, you know, people based in North America are not, do not have that same opportunity because we can work directly with mills and dye houses that still exist in Europe. We have the opportunity to try out some of our technologies. So it's a slightly different way into the process, but like Julie was saying, at the end of the day, it's going to turn out to be, can you scale at a level that's going to be suitable for the fashion houses like H and M, like Zara? Okay, so H and M, they're definitely interested. They're one of our funders and they
14:24 Speaker 03 do have a very serious program in trying to understand all of their supply chains and everything else to go towards more sustainable manufacturing overall. But again, if you don't reduce what you make, or you don't recycle what you make, then you have to also figure out what you're going to do in between. And that's kind of where we sit, trying to make a process that will be more environmentally friendly and socially friendly. Okay, the social side of it is also something that we really need to address to make sure that the consumers themselves understand what the different processes do and why they're important and why this isn't a simple solution. It's not a one silver bullet. It's going to be multiple silver bullets.
15:08 Speaker 01 In the US, is there enough pressure on brands through legislation to adopt cleaner practices?
15:18 Speaker 03 Well, from my limited perspective, I think Europe is much more conscious of what's going on than in the United States. Having said that, you know, what Beth and Julie are doing is going a long ways towards trying to get both legislation and the consumer better educated about what they're buying and what they need to do.
15:38 Speaker 01 Beth, I saw you shaking your head now.
15:40 Speaker 02 No, I don't think legislation is far enough yet here to push for our solutions. But I think here I'm sensing more of a geopolitical fear, specifically for what we're working on because supply chains are all over the world right now. Unfortunately, sometimes they are centralized in Southeast Asia or sometimes Northern Africa, you know, particular parts of the world that we might not have the best relations with or could just drop off. And so there's a lot of risk there. A lot of these bigger brands, some of the smaller brands as well, they're wary of that. And so nearshoring and maybe even onshoring for some of them has become a huge topic. Are they willing to pay more? For about a year, they're willing to take maybe like a 20% extra hit.
16:25 Speaker 02 But after that, they want to be kind of at cost parity. So we're not seeing brands able to really take much more than that.
16:32 Speaker 04 Yeah, I think you need to show them the path to scale, right? So we're in the midst of engineering our flagship facility that will be able to recycle 66,000 tons a day. And we're really excited about completing the engineering and doing it in such a way that we're really committed to finding a site locations that can use renewable energy or has a pathway to renewable energy so that we can have that zero carbon facility. Now, that may be an oxymoron when you're producing, but it's possible, especially in Europe with the renewable energy is there's such a commitment to it. And you see, and it's unfortunate that it's being forced
17:16 Speaker 04 because they experience it firsthand about the constraints in resources. And so in different parts of the US, we have our demonstration facilities that aren't fully integrated. So this flagship facility will be completely integrated end to end. And that will be at one scale, but it's still just a drop in the ocean of the amount that we need to produce and recycle. And as Jim said earlier, you know, if you can avoid recycling, we want that to happen. So clothes need to be built to last and consumers need to be incentivized to buy things that are going to last longer. And, you know, I remember my days up in Michigan where, and this is in the 90s, 10 cents deposit on bottles.
17:59 Speaker 04 You darn right, we saved all our bottles and brought them back to the store or we ensured that they went to people who wanted to take them back to the store to get that money because it was significant.
18:08 Speaker 01 Before we continue talking about these opportunities, where is the factory? What's the progress made being made on this flagship facility?
18:16 Speaker 04 We're in our final throes of picking the finalists for the site location. And then we will take the top finalists to do what we call front end loading engineering. And that is critical to do in order to really shore up your capital estimates and to be able to execute in a timely fashion. So that process, let's just say it will likely cost like $1 million. We need to be really confident that we picked the right site, but at the same time are doing it in such a way that, you know, if we get to the end of the negotiations and it doesn't work out, this is not what we want to happen because it will delay us that we can go back. And that's why we're really holistically looking at the whole picture of selecting that site.
19:00 Speaker 01 The tech is innovative and it's super interesting. Do people care? Gradually, we're seeing more people focused or, you know, hopefully not completely discouraged by the climate news that they're reading. But to what extent are you seeing that people care and that they're willing to change their behavior?
19:16 Speaker 03 I think it depends on who you talk to and where geographically you are as well. I think in Europe, to some extent, people are more aware of the problems and therefore are more willing to change their habits. But, you know, again, coming back to Julie's issue about where you're going to site a manufacturing plant, we have a slightly different issue in that sense that we have to put our hardware and everything else in a dye house. So by the very nature of that, we have to have a distributed model of manufacturing. Okay, so it changes the equation because we can test things out at a small scale in actual dye houses. So you can prove to your investors that the model works and then you try to scale it from there. But again, scaling is hard.
20:01 Speaker 03 So, you know, you start in Europe where there's a little bit more friendly. And then you try to go to the really big places in Southeast Asia, where the real action is happening and where you really need to make an impact. So again, I kind of hope that there is some level of patience. Because you know, education and educating the public and the consumer is going to be a time consuming and multiple strand effort across everything that we do. So I guess for me, it's just sort of hoping that we can do that fast enough that we can all get traction in our various sectors because otherwise, you know, if any one of them fails, it's probably not going to be great.
20:42 Speaker 01 Julian Beth, more on this education topic. We highlighted that on stage as one of the biggest obstacles, but with TikTok, with Shein, even some of the other fashion brands that have been on my mind for longer, such as H and M, it's so easy to buy something and throw it away later because it's $5 or something like that. So what are your views on this obstacle of getting people to change their ways when I don't know if everyone's ready? And so I'm curious what your thoughts are.
21:09 Speaker 02 Yeah, I think that people really have the potential to care a lot about their clothing, but I think one problem is that globalization really hit us in the 80s and really it's continued to today and we have become so far removed from the production process and we don't know enough where it came from, right? We, it's not our fault, like it just happened. And so we saw production double and the amount of consumption double from 2000 to 2015. It's just gotten worse from there. It's not getting any better. And I think one of the reasons is that people just started to lose the value of their clothes because they couldn't see, they weren't part of the process of it being made. If we can connect people back to where their clothing comes from,
21:52 Speaker 02 back to all the processes involved and even seeing it be produced, then maybe we can start to close that gap and people might not need that next thing because they want to reach for that same beautiful jacket all the time because it's really meaningful to them. So I think there is a lot of potential there. If Shein continues to exist, if Fashion Nova, if these, what we call ultra fast fashion companies continue to exist, then we need to design sustainability into it. How do you do that? How does nature do it? Nature does it by making sure that When you create something, it has the same exact value as that material at the end of life, right? Growth and decay. I just think it's such a beautiful, obvious thing that we should try to chase.
22:33 Speaker 02 And I think your solutions very much play into that because they're very biologically based. And they think about things on a molecular unit kind of basis where things retain value. So is there a way that we can build that into the system from the start? I think we can. And for better or worse, then we could support an ultra-fast fashion model.
22:54 Speaker 04 Yeah, that's fascinating what you say. I totally agree with it. I think when I look at the ways that consumers adapt is you have to create the experience. You have to understand, like, you buy something because there's actually been proven when you buy, you feel good. And you may have buyer's remorse, but there is a dopamine hit. And so how do you create a consumer experience to do good? How do you make it super easy to give your clothes back? To get some kind of incentive to recycle, to buy goods? So for instance, Madewell is giving $50 back per pair of jeans, and it can be any pair of jeans. That makes me want to take all the jeans that no longer fit, that I think I may fit into one day,
23:37 Speaker 04 and bring them back because then I can get it. And it's almost like you feel like you're getting it for free because of that experience. It's a great way to get consumers into Madewell and to feel really good about what you're doing.
23:52 Speaker 01 Last question for everyone. What are you wearing, either today or on stage yesterday?
23:57 Speaker 02 Yesterday, I was wearing Unspun Vega pants. So Vegas are 3D weaving technology. So those pants were woven straight from yarn on our machines. We have micro factory in Oakland, just across the bay here, where we produce those products. And we're also starting to plan a micro factory in Europe as well.
24:16 Speaker 01 Jim, you know I'm talking about your jacket, right? I'm talking about your jacket.
24:19 Speaker 03 Yeah, okay, so the clothing I wear is generally pretty old because I wear things till they wear out essentially. But one piece of clothing that I'm wearing now that is 50 years old, I bought it when I was 14 years old. So you can tell how old I am and it has lasted because it was something that I chose because was even then was a design classic. And it was something that I knew if you took care of it, it would probably last a long time and demonstrably it has. And it's a jean jacket from Levi's that was made in the early 1970s.
24:52 Speaker 04 Well, I'm actually wearing, it was just made with our lyocell filament produced by our partner Ace Green. And it's a, it's a 3D woven dress or not woven knit it, excuse me. So I'm thinking, how do I get one of these 3D woven outfits from Bath with our materials in there? And then I want to dye it with Jim's molecules. So it'll be just completely an elegant gorgeous piece because our minds are behind it.
25:22 Speaker 01 I mean, I'm now thinking, how do I get that? Obviously we'll include links to your company's page, the podcast. But Julie, Jim, Beth, thank you so much for being here and I look forward to seeing how everything evolves and how your companies evolve.
25:37 Speaker 04 Thank you. Thanks so much, Harry.
25:42 Speaker 00 All right, all right, this is Alex. I'm back. And now I cannot stop thinking about how much I want a 3D printed tank top because as I know, there's no such thing as too many tank tops. But if you want to hear the first part of Harry's conversation from that sustainability stage, check out the link in our description. Next up, we are keeping the conversation rolling with TechCrunch's Morgan Sung and Jemima Bunbury from Blend. Blend is a hyper personalized fashion app. It focuses on helping customers quickly and easily find products that suit their style, preventing impulse purchases, and of course, making it possible to stay trendy and shop sustainably. Let's listen.
26:21 Speaker 05 I'm Jemima. I'm the founder or co-founder of Blend, which is a very personalized fashion shopping app using AI to basically help make the online shopping experience a lot quicker and easier.
26:34 Speaker 06 Awesome. So I want to hear more about Blend. We talked about it a little bit yesterday, but you know, that was a happy hour, super loud. Here we are. Can you actually like, give me the rundown of what this app is and like what it feels like to use it?
26:46 Speaker 05 Yeah, absolutely. So I guess, starting from the beginning, the problem that we're trying to solve is just the overwhelming amount of choice when you're shopping for fashion online. It's a real problem that we discovered through working on a previous version of the app and then doing 100 customer research interviews. And the resounding feedback was just that it's overwhelming to shop online and it's not a fun experience. So we decided to build Blend, which is basically providing almost a mix of the kind of experience that you would have on social media in terms of giving you a very personalized content feed with shopping. So as a user, you would either be scrolling through product imagery and product details that have been pulled from different retail
27:27 Speaker 05 sites online, or influencer kind of video and influencer style videos that you can directly shop from. So you're getting the benefits of being able to see user-generated content and kind of more organic imagery and videos of people wearing things and how they've styled it, as well as having that seamless experience from discovering the product all the way through to actually buying it.
27:50 Speaker 06 Apps for user-generated shopping or influencer-driven shopping, like they exist. We've had them for decades, almost. But how is this different than, you know, an app where an influencer is like, hey, shop my closet?
28:01 Speaker 05 Yeah, exactly. So I think there have been a few different waves of how creators are trying to get involved in commerce. So the most obvious way in which people do this is using kind of traditional social media channels, so Instagram or TikTok. And then in those experiences, it's quite a disrupted experience from discovery through to purchase. So you might see something on Instagram and then send a message to the influencer saying, where did you get your top from? And then you hear back from them and then you go and try and track it down. And maybe it's out of stock in your size and you have to go to a different retail platform and then eventually you purchase it. So that's one, that's one model. Sometimes there are platforms like Like to Know It, which will help you track down the item. So that's kind of an incremental innovation to try to help make that experience easier.
28:44 Speaker 05 And then we've seen other waves of innovation in this space. So things like livestream shopping. There was a big kind of wave of that in the past couple of years as it really took off in Asia and then people in the UK and the US and Europe were trying to recreate that. But ultimately, it's it's great for impulse shopping. So low price items where you want to buy them in a split second. And that's worked fairly well for TikTok as they've started to develop out their shopping at the moment. But what it isn't great for is for discovering higher end products where you're spending a larger amount and it's kind of a more thought through decision making process or kind of branded products. Whereas with Blend, we're combining the kind of social side of the discovery
29:28 Speaker 05 experience and being able to get a style inspiration from real people and influencers with the ability to kind of shop directly in platform to make it very seamless. And in terms of our first partners, we have over 250 brand and retail partners. And that's everything from major luxury retail platforms like Net-a-Porter, Yoox, The Outnet, some really well known brands like Sandro, Marge, Sonia Raichel, and then everything down to emerging designers and secondhand platforms. So we're really getting that full range, but we are focusing on brand and kind of design led companies rather than it being kind of dropshipping cheap products from who knows where.
30:08 Speaker 06 Right. Like, so TikTok Shop just launched this summer. And like you mentioned, a lot of it is, you know, cheap items that are under $10, easy to impulse purchase. But Instagram's integrated shopping is actually shutting down. Why do you think that is?
30:22 Speaker 05 So we did quite a lot of research into this, obviously, because they had come before us and tried to do something fairly similar. We actually even spoke to the person who headed up Instagram shopping to get an inside look into why this didn't work out for them. And ultimately, it really just came down to consumer behavior and consumer perception. And people just don't see Instagram as a shopping destination. So whilst they would go onto Instagram to be entertained and to discover new things and even to discover products, ultimately, they didn't want to transact on Instagram. They would always go to the brand site in order to Purchase that product. And I think that's why it hasn't worked out and why we really need a purpose-built
31:00 Speaker 05 social shopping platform for this and one that's personalized because in a lot of cases, people do rely on Instagram ads to help them find products that they like. And it can be very effective and it's more effective than just scrolling through a general retail platform. But you only get a fashion ad every now and again. And if you're really looking to buy a product, you want somewhere where you're getting those personalized recommendations at the time that you want them.
31:22 Speaker 06 Yeah, absolutely. I also want to go back to what you had mentioned before about like impulse shopping and how TikTok shop and other integrated social platforms shopping experiences really rely on that impulse to buy something, get a dopamine hit, all that. I would love to hear the sustainability standpoint that you had mentioned yesterday on like why that intentional shopping is so important.
31:42 Speaker 05 Yeah, exactly. So we were actually born out of a different product. When I first started working with my co-founders, we were working on an on-demand marketplace, so making products made to order in the fashion space. We ended up pivoting, but I think that kind of ethos has stayed very true to us and we are very passionate about sustainability in the fashion industry. And I think one of the big drivers of, I guess, the lack of sustainability in the fashion industry is people impulse purchasing or buying low-value products that they don't value and they don't hold on to for a long time. And so what we really want to help users do is really understand what their style is and buy products that they're going to value for a very long time.
32:22 Speaker 05 So through our platform, you can follow influencers that you like and you can kind of get increasingly personalized recommendations to help you work out what you really do want to be buying and what you don't. You can then save those products into your wishlist and get alerts when they're coming to the end of stock or when there are discounts. And so what that means is that hopefully it's a much more thoughtful process and you're really curating products that you're going to love and you're going to wear for a long time. So whilst it isn't our, sustainability isn't our central purpose, we do think it's really important and we think that being able to help people think through those decisions more is what's going to ultimately help them value the products that they're buying more.
32:58 Speaker 06 It also seems like there's a real, I guess, lack, not lack of, but you know, there's a real limiting amount of fashion retail in the startup space and it seems like they're really missing a market here. Why do you think there are so few fashion retail startups?
33:13 Speaker 05 Yeah, so I mean, it's obviously a huge, huge market currently valued at over $821 billion. If you're looking at fashion e-commerce, so it's huge and it's growing. It's predicted to reach 1.2 trillion in 2027. So we know that there's a huge market to go after and there hasn't been much innovation. You're totally right. I think since Farfetch'd kind of spearheaded the dropshipping inventoryless model, there hasn't been a real innovation in the fashion retail space. There have been a few incremental advances, but I wouldn't say there's been anything genuinely transformational. And I think it's because it's often an area that's quite overlooked by investors, particularly speaking to male investors who maybe don't have as much experience in the fashion industry. They may not identify with the kind of problem that we're trying to solve.
33:56 Speaker 05 Because I think it is quite a female problem of or female fashion wearer problem that you might have is if you're shopping online and you're trying to keep up to date with trends and you're trying to balance that with all of the other demands that there are on your time. It can be very difficult to kind of keep up to date with what's going on. And then where I think what we're doing is quite interesting from an innovation perspective and actually more from a business model innovation rather than a technical innovation. There's loads to say on the tech side, but to focus on the business side for now. It's really that current retailers have this kind of inherent challenge whereby the main thing that differentiates them is their product mix and their curation. So if they scale too much, they lose that ability to have curated a set of products for a target audience.
34:40 Speaker 05 And if they scale too little, then they obviously have problems in terms of revenue and growth. Whereas what we can do with Blend is have the widest product range and the largest target audience, all whilst offering each user a perfectly curated set of products for them. So they're only seeing the 1% of products that is most relevant to them at any one time. And so that's kind of fundamentally shifting the business model that you get in fashion retail. And so that's one of the kind of business model innovations I'm most excited about.
35:08 Speaker 06 Do you think there are any other blind spots that, you know, VCs may be missing when it comes to fashion and beauty tech?
35:16 Speaker 05 Tough question. I'm sure that there are. I mean, I've seen lots of great innovations in sizing and fit and virtual try-on and even virtual fashion. I'm sure that they are missing some things, but I think actually why they may have missed startups that are doing something in personalization up until, hopefully up until this point, is that it has been seen as just a very difficult challenge. And I think the way that it has been approached previously has almost been over-engineered. So the kind of data inputs that people have been looking at in terms of personalization have been things like trying to tag all of the different characteristics on a product
36:00 Speaker 05 and then from there, looking at the kind of fit of it and determining whether someone would or would not wear that fit and having a lot of rules around what someone would and wouldn't like. Whereas in reality, it's incredibly dynamic and you need to be constantly updating that because people's circumstances change, their body shape changes, their taste changes. And so what we're looking at instead is our dataset is really around what are different users interacting with in a positive way. So are they liking things? Are they looking at them for a longer period of time? Are they engaging with them in more depth? And by looking at that across the whole user base, we're able to track trends and we're able to kind of do things like predict what sorts of products people will be buying at what times and therefore engineering our recommendations around that.
36:44 Speaker 05 So I think it might have been missed because previously it's just been such a big technical challenge. And also, I would say that previously, a lot of the people who have tried to solve this challenge have been men who maybe don't have as much consumer insight into their target audience because there have frequently been marketplaces or apps that are actually targeting women but are founded by male founders and have an all-male technical team as well. And so I think there might have been some consumer behavior insights behind that that have led to those apps not doing as well as they actually had the opportunity to do.
37:13 Speaker 06 It's very like Barbie movie boardroom.
37:16 Speaker 06 I would love to hear about, you know, in your research, in your dataset that you had to pull together, was there any insight when it comes to fashion and shopping? And, you know, what mostly women want when shopping? Was there anything that you were surprised by?
37:31 Speaker 05 I think probably one of the things that surprised me most as someone who has always been quite interested in fashion was actually how many people really lacked confidence when it came to their style and really wanted a best friend to help them find things that they liked or someone to give them advice. And I'm really hoping that's part of what we solve is actually as well as helping people who know their style really well, find products, also helping people who maybe aren't as confident in their personal style, identify what that is and begin to feel more confident in that. Because I think what you wear can be incredibly powerful and can be a very big form of communication and can be something that brings you a lot of confidence. And so, yeah, I think it was a bit disappointing to hear that there is a massive amount of people out there who don't have that confidence and would like an additional help when it comes to shopping.
38:16 Speaker 06 It sounds super exciting then that blend exists.
38:18 Speaker 05 Well, thank you so much. This has been great.
38:20 Speaker 00 Thanks again to Harry, Morgan, and our expert guests for making today's interviews possible. We actually have a lot more footage in the vault that we might bust out, including my interview with a couple of Ukrainian entrepreneurs that I thought was really, really cool. So stay tuned to Equity. Keep up with us on both X and Threads, where we are active under the name EquityPod. And we'll talk to you next time. Bye. Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Anne Azvedo. We are produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator. And a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.
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