20VC: How SHEIN Got So Big So Fast: Behind the Scenes at One of the Fastest Growing Companies in History with Donald Tang, Executive Chairman @ SHEIN

Donald Tang is the Executive Chairman of SHEIN, with oversight of public affairs, business strategy, corporate development, and finance. Donald began his career at Merrill Lynch & Co. He later joined Bear Stearns & Co. Inc. in Los Angeles as Senior Managing Director of Investment Banking. At Bear Sterns, Donald quickly rose to become the Vice Chairman of the firm, as well as Chairman and President of Bear Stearns International Holdings, Chairman and CEO of Bear Stearns Asia, Ltd, and a member of the board of directors at Bear Stearns & Co. In Today's Episode with Donald Tang We Discuss: 1. How SHEIN Became a Global Giant: As specifically as possible, what did you and the SHEIN team do that enabled you to be one of the fastest-growing companies on the planet? Real-Time Retail: What is this? How is it the core of SHEIN's growth and efficiency? Supply Chain Innovation: How did SHEIN innovate on the supply chain to give them such an advantage over the competition? Price King: How does Donald respond to the statement that SHEIN wins due to price, not quality? Social Media: What social media tactics allowed SHEIN to grow so fast? What did not work? Paid Media: How have SHEIN approached paid marketing? What works? What does not? 2. The Big Questions: IPOs, Impact on Climate and Worker Conditions: IPO: Why does SHEIN want to go public? Is London the right place for the company to go public? Climate: How does Donald respond to the common idea that "SHEIN is bad for the climate" and encourages fast fashion like never before? Tariffs: How does Donald respond to the common question around tariffs and SHEIN benefitting from being under a certain tariff threshold? 3. Marriage, Fatherhood and Happiness: Marriage: What have been Donald's biggest lessons on how to have a successful marriage? Fatherhood: What does being a great father mean to Donald? If he could call himself up the night before his first child was born, what would he advise himself? Happiness: How does Donald think about happiness today? What does everyone get wrong about happiness?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  If you want your business to thrive on a global scale, you have to become a local community business. In Great Britain, you want to be a UK company. You want to be part of the fabric. You don't want to be some company parachuting in just making money. That's not the trend anymore. You are profitable, you are growing insanely fast. Customers love the products. Why IPO? We wanted to embrace public diligence. We're operating in more than 150 countries. Once you're a public company, transparency is no longer an option. It is a responsibility. How do you answer the question that people always ask, which is that you are bad for the climate?

• 0:39Harry Stebbings?

  Today's show is the show that every journalist wants. Shein is one of the fastest growing companies in history. Thirty-two and a half billion dollars in revenue, 100 million shoppers and 1 million items produced per day. There are so many questions to ask. And today, we sit down with Shein's executive chairman, Donald Tang, for his first ever podcast episode. But before we dive in, this episode is presented by Brex, the financial stack founders can bank on. Brex knows that nearly 40% of startups fail because they run out of cash. So they built a banking experience that takes every dollar further. It's a stark difference from traditional banking options that leave your cash sitting idle while chipping away at it with fees.

• 1:23Harry Stebbings?

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• 2:07Harry Stebbings?

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• 2:51Harry Stebbings?

  And finally, before we dive into the show, I want to recommend a book, The Road to Reinvention, a New York Times bestseller on mastering change. No time to read? Listen to 20VC now, then download the Blinkist app to fit key reads into your schedule. With Blinkist, you can grasp the core ideas of over 7,500 non-fiction books and podcasts in just 15 minutes, covering psychology, marketing, business and more. It's no surprise 82% of Blinkist users see themselves as self-optimizers and 65% say it's essential for business and career growth. Speaking of business, Blinkist is a trusted L&D partner for industry leaders like Amazon, Hyundai and KPMG UK, empowering over 32 million users since 2012.

• 3:35Harry Stebbings?

  As a 20VC listener, you can enjoy an exclusive 25% discount on Blinkist. That's B-L-I-N-K-I-S-T. Just visit Blinkist.com/20VC to claim your discount and transform the way you learn. You have now arrived at your destination. Donald, I am so excited for this. I've been looking forward to this one for a long time. So thank you so much for joining me.

• 3:57Speaker 00

  Well, thank you for having me.

• 3:59Harry Stebbings?

  Now, I would love to start. I heard that you worked in a series of restaurants to finance your education in the early days. Can you just talk to me about that? Where was it? How old were you? What did you learn from those early days?

• 4:12Speaker 00

  I was 17. I was lovestruck. I came to the United States to chase a girl and I had no place to live. That's a joke. So went to a restaurant to beg for a job and succeeded and I washed the dishes and the bus tables. And I went on the tables, but I wasn't very good at it because my English was terrible. But I persisted and I continued to climb the ladder to become assistant manager. So that was my career. It was a pretty good one. It was in Santa Ana and I got shot at. But that trained me to be tough and resilient. But that was one of the early experience or experiences that I had.

• 4:52Harry Stebbings?

  I was not expecting that. That was not in the research. Can I ask you, when you look back to that time now? I think a lot of the time we look at incredibly successful people and we say they were kind of always destined for that. When you were working in a restaurant, a bus boy, climbing that ladder, did you always know that you'd be successful?

• 5:09Speaker 00

  The definition of successful is situation dependent or personal. It's very personal. You know, for me, I just wanted to be with the girl I love. That was success. If I can survive and continue on that path, that's great. I never really thought about making money or anything else.

• 5:27Harry Stebbings?

  How has the definition of success changed for you?

• 5:30Speaker 00

  Oh, it's the same. Every day you live your life happily. That's a success. I don't need a lot.

• 5:35Harry Stebbings?

  And so then how does the first job in finance come to be? Because you have this incredible career at Best Burns. You know, fifteen years, you were chairman and president of Best Burns International. How did the job at that happen and how did you get into finance?

• 5:48Speaker 00

  My wife had a good job. I had a restaurant job. And then after I graduated as a chemical engineer, I couldn't find a job. So therefore I didn't find a job because I quit my restaurant job. And I interviewed for a job fifty-eight times and was turning down, turning down every single time. And I knew the reason why now, but at that time it was devastating.

• 6:12Harry Stebbings?

  What was the reason?

• 6:13Speaker 00

  If you actually thought you're better than the person who's interviewing you, it shows.

• 6:21Harry Stebbings?

  That's a challenging starting point.

• 6:23Speaker 00

  Right. You know, when you have a chip on your shoulder, that's not a good thing.

• 6:27Harry Stebbings?

  Do you not think a chip on your shoulder is a good thing? In our business adventure, we say, you know, chips on shoulders, put chips in pockets. And a lot of VCs say they want the founder with the chip on the shoulder, the vengeance to build something.

• 6:39Speaker 00

  Depending on what job you want, as a venture capitalist, yes. Or as an entrepreneur perhaps. But if you're applying for an engineer's job, you know, you want a job for at that time. I was lucky enough to have a mentor who taught me everything and who I can actually go back to saying, how should I look at this? What should I do? I was mentored, not only one, a couple of them told me what to do and shared life experiences and the collaboration, the trial and error, and if I made mistake and I was forgiven and continue to be on that journey to do better. So taught me how to make constant improvement every single time. When you look back, your last minute, last day, last hour.

• 7:22Speaker 00

  So these are lifelong lessons and and I was taught about how you are going to figure out some ways to know that every day is a good day. And when you are looking at your daily life, you complain about how boring and mundane it is. But that's how life is. Not every day is a home run day. Not every day is exciting. Most of the days are kind of boring. But if we believe in competitive world, every day, you know, everybody's day is similar. My mentor was a champion in bridge. You know, he's the smartest guy in the world in my dictionary, right? So all of the bridge hands are played by all the competitive teams,

• 8:05Speaker 00

  except that sequentially probably is different. You play, you know, this deck first and the other guy follow that. But all the hands are played fairly and squarely. That's just like life. You might be born something as somebody who's great in the very beginning from a family with resources and then you're going to go through your challenges. Don't worry, those challenges will come for you. And if you had early challenges and your homeland day. Your your great days will come after so you know all these things they're just sequentially different but as long as you treat every day as your last day every day as the day that you wanted to do better and you will win.

• 8:43Harry Stebbings?

  How do you think about the balance between skill versus luck?

• 8:48Speaker 00

  Hard to answer that question because in a different stage of life it's different. The answers ought to be different. In a way, luck is always most important thing. I'm a fatalist and I believe in fate, I believe in luck. But if you wanted to do better than your own luck or your own fate, you have to work hard. You have to be appear to be full of confidence and actually do have full of confidence but not to go too far to get into arrogant mode of yourself. So all these things are dynamic, you know, there's no one answer to that.

• 9:20Harry Stebbings?

  How did Shein come to be? When we look at the last few years, it's been incredible, but it's also a different role. I mean, we had a couple of years also in media world. It's a different role. How did that come to be?

• 9:31Speaker 00

  In almost everything I have done in a capitalistic world in America, there's a clear distinction between doing good and doing well. And I kind of believe that you have to do well enough and then you started to do good. Do not mix the two too early and too mixed up. And if you look at the Shein's business model, yes, we try to do well, but the definition of doing well, you must do good first. Let me explain to you what I mean by that. In our business, everybody says that the customers are the most important thing. What do you really do with that philosophy? It's very different. Retail business is such

• 10:13Speaker 00

  a business that is connected with the customers the most, but yet very few of us actually listen to what customers want. And we have observed that there is a significant wholesale change of a customer psychology. The kids, not a kid, well, you're not a kid, but the people in your generation or younger, they really have a lot more self-confidence. They really wanted to wear their expression on their Whatever the form it is, whatever belief it is, they are not afraid of expressing it, and they're very good at that. So the fashion statement itself is becoming very diversified. It's no longer just listen to a few designers say, okay, this is what you should wear.

• 10:57Speaker 00

  They wanted to have their own say in it.

• 10:59Harry Stebbings?

  Can I ask, is that different from historical fashion? When you look at, you know, the roots of Chanel or the roots of Hermes and people would buy them because it was an expression of themselves, it was maybe what they felt they were or what they wanted to be.

• 11:13Speaker 00

  Sure.

• 11:14Harry Stebbings?

  Is it not actually the same?

• 11:15Speaker 00

  I think it is the same, but I think it's more individualized. In my generation, I listened to my parents a lot more.

• 11:23Harry Stebbings?

  I think my mother wishes I did.

• 11:26Speaker 00

  It's a little different today, and in the future generation, it will be more different. As a result of it, you have to have more styles in display in the world. And if you manage to listen, that's part of doing good, because you listen, you adjust, you respond instead of you dictate. And then, once you actually listen and make the things they want you to make, then you have less unsold inventory as a result of it. And then you have a lot better efficiency of taking out all the middle layers and unnecessary waste and all that. And then you all of a sudden have a lot more savings, cost savings.

• 12:08Speaker 00

  As a result of it, you can translate that to lower prices to your consumers. Now, you listen to the consumers, you give back to the consumers, you contribute to less waste to the planet, you also contribute to less pricing for that particular client, customer. So therefore, you know, we do a lot more business in the rural areas, villages in UK than London, for example, and Paris and the like in America. The people who are living in the countryside do not have the time to travel to the city because they don't have the stores in certain areas, and it takes money to come to the city, it takes time, and also they have less resources to dress themselves up. prettier and trendier.

• 12:52Speaker 00

  So these are all the things about doing good. As a result of doing good, we can continue to grow and be profitable. That's doing well. So if you really look at all these things, how you sequentially executing all these things, all of a sudden you find yourself doing good first and doing well later. So that was a difference in Shein.

• 13:12Harry Stebbings?

  Can we start at the beginning of that funnel, which is actually identifying user trends, identifying what they love, listening to customers. You know, one of the biggest pillars of the success that you've had is kind of this element of real time retail, spotting trends that consumers love and then being able to move fast on it. How does real time retail work specifically for you? How do you spot trends so efficiently? And what does that look like?

• 13:37Speaker 00

  As you search, as you discover and reflect yourself, that you leave a trail of color mutations and style preferences. And most of the styles are no more, no less than all the mutations of such in different times. If you can reimagine the supply chain now is as a mass industrialized production factories. If you imagine the factories are all networked, small, medium sized. And if you can actually receive signals from the customers real time, connecting with the factory's software platforms.

• 14:16Speaker 00

  If you do that, if you're connecting those things and when you have a hundred, two hundred pieces of garments with hundreds of millions of active customers worldwide and then you test it and then you started to see demand signals surge and then you started to network the factories to produce similar things. And then once you see the weakening signal, you shut them down. So that's how you control your inventories to such a degree of significantly less unsold inventory.

• 14:49Harry Stebbings?

  So you will literally test with as few as a hundred to two hundred of a new style?

• 14:53Speaker 00

  It's not test, we actually make them and we sell them. If you sell them well, you pump it up. If you don't sell them well. You shut them down.

• 15:01Harry Stebbings?

  And that differs drastically from traditional, which was much larger non-network bases, which basically produced thousands and thousands to then sell.

• 15:09Speaker 00

  I would say in a traditional apparel model would be mass producing the styles a few designers want you to wear and we literally micro producing the styles that you want us to make. So that is the difference. It's very significantly different.

• 15:27Harry Stebbings?

  How do you think about that relationship with the supplier who gets what, how they work together with you to work so closely in that very fast moving environment?

• 15:37Speaker 00

  We like to think ourselves as a empowerment company, you know, we are, we have partners. We don't have transactions. Everybody's a partner, fulfillment, chain of operations, distributors, distribution platforms, the supplier factories, and most of them have been with us for, for a long time. We grow together. It's not a big factory. Big factories won't take 100 pieces order. It's not enough. Smaller factories, they can grow with us.

• 16:06Harry Stebbings?

  When it comes to actually the supply chain management software, one of the big elements of your business is that all of your suppliers also need to be on this supply chain management software. Why is that a necessity and what does that allow you to do?

• 16:19Speaker 00

  Then you can allocate orders. If you don't know the capacity, also where they are on the last order, you know, you cannot network, you cannot, you cannot reorient your orders, right? Order allocation, if you think about Uber command center, it's basically connecting all the pieces, the demand supply. And then our job is to match the demand supply to make sure there's no wastage. Our DNA is about eliminating wastage and improving efficiency to the hill.

• 16:50Harry Stebbings?

  How quickly do you know when something's a hit? Is it immediate? So you have these 100 or 200 and you do sell them. Is it very obvious when you have big winners on your hands?

• 16:59Speaker 00

  It's automated. The signals, the data would, you know, the signal, you will receive the signal, you're, you're do accordingly.

• 17:06Harry Stebbings?

  Do the suppliers have any other partners?

• 17:09Speaker 00

  We have exclusive. Exclusive suppliers, we also have non-exclusive suppliers. But all of them, if you wanna onboard with us, you have to be on our supply chain software platform. So we are able to actually conduct our on-demand business model as a result of it. Otherwise, we couldn't do it.

• 17:29Harry Stebbings?

  I'm a venture capitalist for my sins. The reason I ask that is because I'm thinking about margin compression. And what I mean by that is, are you then able to say to the suppliers, we are your sole provider? We would like it at this price, and you have much more ability to squeeze on price because of that relationship.

• 17:46Speaker 00

  The whole thing is, is not about, you know, for us, the partnership is not about squeezing. For us, partnership is about how to grow together, how to make money together. So we are empowerment company. We have no debt, we have no assets. And what we own is really partnership. What we really wanted to do is to make sure that that customer is really happy. You know, however the size, however the color, preferences or style that he or she would like. Whichever country that he or she lives, we just wanted to be the empowerment agent for the freedom of choice.

• 18:20Harry Stebbings?

  How else have you innovated on the supply chain? Because that is a very different approach. But that is also just one stage of a very kind of multifaceted funnel. How else have you innovated on the supply chain from factory to consumer?

• 18:33Speaker 00

  I think the model itself is the core. Everything else, we try to refine it, tune it every single day.

• 18:40Harry Stebbings?

  What's the biggest thing that's broken for the model? A lesson that you've had from something that didn't work? Oh, we actually didn't anticipate this. Oh, this thing didn't go as planned.

• 18:51Speaker 00

  Well, as far as the customers are concerned, sometimes you call it follow the money. You know, we follow the customer. We had younger generation, Gen Z, as our main customers. They grew up, and then they get married. Now we have kids, they have houses, and now we have pets. And we have home goods, arts and crafts, and we have many. So we follow the trajectory of our customers. And sometimes, the business itself is the customer always get to choose. They can, you know, they they have all the choices in the world, all these online companies, all the physical retail, you know, they choose us. There's a reason they do, and they also wanted to continue to come back to do more with us. But we can't possibly make everything we sell.

• 19:36Speaker 00

  So these apparel things, we do make everything, not everything, most of the things we sell. But if it's a refrigerator, if it's a whole bunch of other things in electronics. So we're kind of getting to that.

• 19:49Harry Stebbings?

  Do you mind if the summary is made that people choose you because of price? You are very, very affordable for a wide range of people, which is fantastic. Is that okay with you when you hear that? That the primary reason that people choose you and your apparel is because of price, price king?

• 20:07Speaker 00

  Well, I I I think, you know, there are many reasons people like to buy things. Uh, it could be somebody's selling dreams. And that's a good thing. I like to live in my dreams, so I buy things from a dream factory. Some people are selling for very low prices. And sometimes I see the prices at low enough and I like to try without really thinking through. We like to think our brand is selling for choices. If it is the choice you're making and we actually match that choice, then you'll love it. The ultimate is bespoke, but bespoke is for very, very, very well-to-do people. It's not for everybody. So we do approximate.

• 20:51Speaker 00

  When you approximate, you actually can get to very significant part of what people really wanted at the lowest price possible. So we're talking about here, the availability is your choice, accessibility is the online part. And then affordability is because it's on demand and you listen to customer as a virtual cycle coming back to give you the affordability. So they're connected, all these three A's.

• 21:16Harry Stebbings?

  I have to ask, I spoke to my mother before this show. And she said, oh, thank Donald, I bought three dresses from them and they're wonderful. And I said, that's great. And she said, yeah, they were nine pounds. I said, they were nine pounds each. Question to you is, how do you make enough money on such low AOVs, average order values? When you look at the supply chain from, you know, being made to delivery, just where's the margin in it for you?

• 21:43Speaker 00

  We're profitable, we have growth. The unsold inventory part, the way you have to deal with it, you have to market, you have to do all these kind of things is a headache. And management of the supply chain in the most efficient way is a headache.

• 21:56Harry Stebbings?

  What percent of yours is unsold inventory?

• 21:58Speaker 00

  It's very low, single digit.

• 22:01Harry Stebbings?

  Compared to market, what is market?

• 22:03Speaker 00

  You know, traditional thinking would be like twenty five to thirty five percent.

• 22:07Harry Stebbings?

  Wow. And the way that you do that is because of your small sample sizes on the first sale that you do before you wrap it up?

• 22:13Speaker 00

  It's on demand. On demand is basically, you know, supply chain ought to be on-demand supply chain, shouldn't be on-supply supply chain. It doesn't rhyme very well. It just doesn't make, you know, it doesn't make sense. It makes sense if everybody responds to your vision. I think that ship has sailed.

• 22:32Harry Stebbings?

  I love that in terms of I wanna buy from a dream factory.

• 22:36Speaker 00

  I do.

• 22:37Harry Stebbings?

  I do too, but I think it's a great statement. Chris, you mentioned very kindly, buckling me in this age of young people. Social media has been a big driver on the customer acquisition side. You have Shein Halls, and you've dominated social in a lot of ways. When you look at social media and how you've approached it, how do you think about what you've done that's worked well and how that's contributed?

• 23:00Speaker 00

  I think we are a grassroots business, or you can call it grassroots movement company. And, you know, every time you have grassroots and you would like to have some grass tops, you know, that's what we've got. And they have intimate relationship with the group of like-minded people. That makes them very, very engaging and powerful. And if we work through that, that's quite effective.

• 23:24Harry Stebbings?

  Some of the social posts which go very viral are halls, which I learned in this research, which is where they buy lots and then try it on very quickly. And a lot of people say that you're in the fast fashion business. Is that fair? Or are you not fast fashion?

• 23:41Speaker 00

  I would call us, you know, I repeatedly calling us on-demand fashion company. Because we, you know, I think the image of fashion conjures up the change. If you have

• 23:56Speaker 00

  Change and you have too fast of a change. That kind of represents fickleness. And if you change your mind before you actually can wear them or wear them often, that becomes issue to a lot of different groups and myself included. So if you can actually.

• 24:14Harry Stebbings?

  What if the customer wants that? Sorry, I don't mean to interrupt you, but I'm just. It's such an individual expression of someone that they go to a bachelor party and they want to dress like, I don't know, whatever they want to dress like, but it's almost one and done. And actually, we are so individually expressive that we actually change so quickly. That actually, what if the consumer wants fast fashion?

• 24:36Speaker 00

  The Harris Poll that we commissioned recently, the UK and the US, came back exactly that. Our customers wear our products longer and more often than others, other brands. Okay, so there's something there that we should dig in. They believe that's their style. And for example, I, before I came over here, I was in the office of JD Sports. His assistant was there or his chief of staff was there. She said she's a, she's a big fan of ours. I said, what is the most important thing? Why is that? Why do you like us? You know, I always find the style I love on your site. They always have the same answer. It's their choice.

• 25:21Speaker 00

  Okay, when you're selling choice, it's powerful. Because at the end of the day, it's the customer who choose you. Okay, they have all the choices around the world. They choose you because you have their choice.

• 25:33Harry Stebbings?

  How do you think about the paradox of choice? I think about this a lot, which is like, sometimes if you give humans too much choice, they don't know where to go. The great Matthew McConaughey talk where he says too many choices will make an enemy of us all.

• 25:45Speaker 00

  It's only for the people who are kind of privileged. If you're talking to very resourceful people and successful people, yes, you're right. But we're not serving just that, these people. We're serving everybody. Our mission is to make fashion accessible to all in every corner, every country, every community. And these are the people we'll address. We want to improve their self-confidence to have a better tomorrow because they're confident. The freedom of choice is not free. How do you lower the price of freedom of choice to make sure people feel lack of resources, not a a.

• 26:20Harry Stebbings?

  Hindrance.

• 26:21Speaker 00

  A hindrance. Exactly. Thank you.

• 26:23Harry Stebbings?

  You said there about kind of being global to everyone in every corner of the earth. Where is your biggest market today?

• 26:28Speaker 00

  United States.

• 26:29Harry Stebbings?

  How do we think about global expansion? And when you review the last three years, how do you think you've done?

• 26:35Speaker 00

  We don't think ourselves as a globalized company. We think ourselves as a localized company with emphasis on the localizing. It's global local. Global local, as far as I can see, is a trend. People are looking more inward as a trend, whether we like it or not. If you want your business to thrive on a global scale, you have to become a local community business. So in England or in Great Britain, you want to be a a UK company. You want to be part of the fabric. You want it to be everything as part of the community. You don't want to be a some company parachuting in just making money. That's not, that's not the kind of a trend anymore.

• 27:15Harry Stebbings?

  How do you structurally set up for that? Because I I agree with you and I think that's absolutely true. But then do you have CEOs of the independent companies in each nation that you expand into? How do you structure the organization for that?

• 27:26Speaker 00

  You spend appropriate amount of time, resources, efforts to think about it and doing that. And no one has the formula. It's a fairly new thing that we all have to chart our own uh own trajectory to do the right things. And this is the right thing to do.

• 27:42Harry Stebbings?

  When you review the American expansion, it's been an amazing success. When you review the American expansion, what do you think you did really well? And what do you think with the benefit of hindsight, you'd do differently if you had the time again?

• 27:53Speaker 00

  It it's the same thing. You listen to your customers. You know, if you are David, not a Goliath, you always listen, adjust and respond. You you continue to improve your response time. And you continue to figure out the ways to better service that customer. So their choice of you become more resilient or more solid.

• 28:12Harry Stebbings?

  How do you improve your response time, improve your speed? With the increasing size of your company and with your transitioning into Goliath, you know, businesses always become slower as they get bigger. How do you get faster as you get bigger?

• 28:26Speaker 00

  Because you treat every single customer as the customer. If you are dictating a trend, then you sell the same thing, same way, all over the world. We sell different things differently to different people in different countries. And then the trick, obviously, to automate everything.

• 28:45Harry Stebbings?

  What mistake did you make on entering the US? Something that you didn't know, didn't see, didn't do?

• 28:50Speaker 00

  In today's world, we're morphing into something a little different as I have learned in the last years. The stakeholders are just as important as the customers. You have to keep the communication channel open. You have to keep on learning from the stakeholders, what they're thinking about, what they think you should do. You should solicit and encourage feedback so you can constantly do better on real time. Let's say if if the impression is correct, that we're not doing something good and that we should correct it. If the impression is not correct and that we're actually doing something great, people misunderstood, we should share it to have the community to embrace it. So all these things ought to be done in parallel as you grow your business.

• 29:32Speaker 00

  So you become more stable and more accountable and more responsible.

• 29:36Harry Stebbings?

  And you didn't do that?

• 29:38Speaker 00

  Well, in the very beginning of the time, that we paid more attention to the consumers. And I think to paying attention to stakeholders is a very important thing to do. And we should do it earlier, more often, and we still haven't done enough.

• 29:50Harry Stebbings?

  And when you say stakeholders, that is the supply side?

• 29:53Speaker 00

  No, stakeholders would be your mayors, your governors, your MPs, your representatives in your districts and your prime ministers, you know, so a lot of regulators. So all the people and also to some degree, you know, we don't really have exactly the competitor do same thing as we do by definition because our model is so unique. But people will say, okay, if these guys are taking wireless shares, therefore they're taking part of my market share. That's true, but we should share the business model. All can do better.

• 30:27Harry Stebbings?

  My question to you is, when you look at market expansion, paid is quite a significant part of it and you are everywhere in London for sure and in a lot of international markets. How big a role has paid been in dominating local markets?

• 30:42Speaker 00

  It's also the stage dependence, right? So when it first entered, you know, you do differently in terms of marketing. As you become more mature, you also adjust your paid. So all these things.

• 30:55Harry Stebbings?

  Is that controlled by the local company or is that controlled by head company?

• 31:00Speaker 00

  It's by collaboration. You have to look at all parts of the business and data and then you make decisions. Principles are the same, I guess, or similar in all data-driven business.

• 31:11Harry Stebbings?

  What does great brand mean to you? With paid, you can put brand in front of people.

• 31:16Speaker 00

  We believe our brand is your brand. You know, if you buy things from us in UK versus people buying things from us in Saudi Arabia. By the way, we have a huge, very, very grateful that we have a very good following in Saudi Arabia, for example, and they think of us differently.

• 31:33Harry Stebbings?

  So how do they think of you differently? I'm fascinated by that.

• 31:36Speaker 00

  Because the style that you want us to make is different than Saudis want us to make. It's just different. So if we are provider of your choice, so you think of your brand as, okay, you have my stuff. It's not like, oh, you have the things that everybody else is buying, so therefore I'm buying. No, that's different. It's your style. So if it's your style, it must be individualized or localized or groupized or individual groupized.

• 32:04Harry Stebbings?

  I mean, there's many different things I want to move into. When you think about like where you're not, but where you want to be, you know, we spoke about geographies and expansion there. What are the biggest growth factors for you today that you have not capitalized on yet that you're excited to?

• 32:18Speaker 00

  I would say if you just look at the TAM, the different people have different answers. The TAM is so big.

• 32:25Harry Stebbings?

  How do you define the TAM?

• 32:27Speaker 00

  Maybe apparel of all price range.

• 32:30Harry Stebbings?

  Who is your biggest competitor, do you think?

• 32:31Speaker 00

  I think ourselves, right? So if we become complacent, do not. Continue to improve our business model. We should try to refine and fine tuning our business model every single day to do better, not to be complacent.

• 32:45Harry Stebbings?

  How could you improve it from here?

• 32:47Speaker 00

  Improve the speed of time, delivery time, improve localization or globalization to have, you know, unique hubs for the continent. So you can shorten the time or you can have better relationship with the consumers or closer. Develop better relationship with the stakeholders because you're closer. Make your products more planet friendly because you're closer. There are a lot of things you can do to be on that journey to be a better, more accountable business. So I talked about availability, accessibility, affordability. Now it is about accountability becoming a very significant, important focus to focus on compliance, to make sure that we're not only complying with local law.

• 33:30Speaker 00

  Hundred fifty countries, a lot of different type of laws we have to comply. It's an effort that we have to do that to be more transparent.

• 33:37Harry Stebbings?

  Speaking of local and compliance, how do we think about tariffs in the ability to go beneath certain price points and what that means for where you're able to pay? I think there was a recent thing which was because of the price points of your products, they're under a certain point, which means you don't have to pay tariffs. How much of your success is on going underneath tariffs to avoid that?

• 33:59Speaker 00

  You know, let's take a look at why people want to reform. Everybody wanted to have a level the playing field because that helps fair competition. Fair competition is benefiting the consumer. You want consumers to continue to receive things on a timely manner at the same time to enjoy their trendy clothes. All these things, if you consider them all together, that comes to perhaps a thoughtful way to elevate the disclosure, a thoughtful way to actually not to slow down, but speeding up the process. And perhaps certain things ought to be paying taxes to be fair, like TSA Pre. Whoever willing to share all the data, let's go fast. People don't want to share data, go waiting line.

• 34:41Speaker 00

  So things like that can be resolved if we can resolve it in the right way. I think it helps the consumer protecting the business, also protecting not only consumer, also business and merchants.

• 34:53Harry Stebbings?

  I find young people very confusing today. And now I sound old, but you absolutely have this individualism, this wanting to express themselves in a way that they never have before quite. And then you also have climate change being very important to them.

• 35:11Speaker 00

  Yes.

• 35:11Harry Stebbings?

  And it seems like they kind of go in contradiction. And I have this problem with young people because they all march and they all don't quite understand a lot of the consequences of what they do and buy. How do you answer the question that people always ask, which is that you are bad for the climate?

• 35:25Speaker 00

  Sure. So let me answer the we're bad for the climate first and I get into the question you asked earlier. You know, if we are on the pre-consumption side of the equation, for lack of an inventory, that must be pretty good. So that's good. And we should continue to do that on demand, not to have too many things, you know, you have, let's say if you have four seasons, one hundred styles and twenty five for one, and you have five great ones that you picked right, and then twenty didn't do well. And five of them, you only found out you have not made enough. And the other twenty have made too much.

• 36:04Speaker 00

  That's imbalance. That's not a good business. The on-demand is every single time that you actually just sold or sold enough, very little left over.

• 36:12Harry Stebbings?

  And then your response to, and people just use it once and throw it away, is that's actually factually incorrect? We have the data to prove that?

• 36:18Speaker 00

  We have the data to, the survey to say that's incorrect. But that doesn't mean that people don't throw it away. There are still that ten percent of people, they still do. That's still bad. How do we, the question is, how do we make people, before they buy, make sure they actually will like it? Not is somebody else telling you to buy. That's one. Number two is, how do you actually love what you've got, right? In life, it's all about love what you got. If you love what you got, you're not going to be unhappy. You know, typically people go out to buy some more or have wandering eyes or whatever, is because you don't love what you got.

• 36:56Harry Stebbings?

  It's so funny, you say that, probably the biggest problem facing, you know, retail today in this world is returns. And it's actually this consumer behavior. Of people buying ten things and then keeping one.

• 37:06Speaker 00

  Well, if it's on demand, it will be less because it's yours, you know. If it's not on demand, you give me ten things, let me try it and I try ten of them and none of them I don't like, it just return. And when that happened, so if actually this resonate with me instead of a you're saying I should buy it. Now I wanna buy it, then it reduces return theoretically.

• 37:27Harry Stebbings?

  Your success has been unbelievable. And when we look at natural financial mechanisms to achieve liquidity and the natural progression of the company. I spoke to, you know, some of your investors too, who we mentioned before. And they said the IPO is so important for the restart of the China tech ecosystem and it's a big responsibility. How do you see your role and your role model status for global companies with Chinese roots?

• 37:53Speaker 00

  It is a, it is a heavy burden, you know, if you put it that way, it's a lot of responsibility. I'm not sure if we that kind of in that kind of center stage, if we are that we shouldn't be. And we really, you know, it's a, it's a heavy responsibility, heavy burden. But at the same time, if we do well, I, I think we'll have impact.

• 38:14Harry Stebbings?

  Do you not feel that burden? I mean, you are, whatever the price is, a huge company. And your ability to price on a global market, whether that is NASDAQ or London or wherever it is. That will dictate how a lot of people think about a lot of maybe Chinese rooted companies. Do you not feel that?

• 38:31Speaker 00

  I, I feel that, I do. I, I, I think at the end of the day, the market would decide. If it's an open capital markets, the market ultimately will decide whether this concept is right or not. You know, the consumer today decided they wanna be our fans. They like our approach, they voted. So now this, here's another test to see if, if the capital markets think this is a good, a good business model, good approach.

• 38:56Harry Stebbings?

  Why is IPOing a good idea? You are profitable, you are growing insanely fast, customers love the products. Why IPO?

• 39:04Speaker 00

  We wanted to embrace public diligence, embrace scrutiny. We wanted to make sure we are not at a certain scale. We're no longer a brand new startup. We're operating in more than one hundred fifty countries. What would be a better exercise to have to go IPO if you wanted to have public diligence and scrutiny and to seek total transparency? Once you're a public company, transparency is no longer an option. It is a responsibility, it is a requirement. And as we are doing this exercise, we are doing everything we can to make the company accountable.

• 39:45Harry Stebbings?

  Five years' time, if I said, hey, you can project out what success would be for the business, where would you be then as a business, both public, private, verticals, growth? Where would the business be?

• 39:57Speaker 00

  You know, we think about how we're going to solve problems every day. We think about how big is the TAM, how we're going to organically grow. And so far, we still have significant growth. So far, we're still profitable. And we're worrying about one step at a time and to really look at the consumer's needs as the most important need and to satisfy her and him and to do better every single time.

• 40:21Harry Stebbings?

  I hope it's okay, but I think you're an incredibly wise person, Donald, and they would be foolish of me to not take advantage of your wisdom in another way, which is you've mentioned the importance of the pick being your wife. You've been married for many, many years, very happily. When you look back on the marriage, what are some of your biggest lessons on what it takes to have a very happy marriage?

• 40:43Speaker 00

  That's pretty easy for me. If you're a younger person, you have the L is a different L. And then later on, obviously, any kind of relationship will have challenges and you have to overcome it with love, right? So you have to be powered by love. You know, that's a different L. But truthfully, everything about a successful marriage as an outcome, always have luck.

• 41:09Speaker 00

  We have eight billion species. You know, how do you have two people to be the best kind of match? It it is not scientific. If you're a a a science-based person, you say that's not very genuine. But it is genuine because if you are actually have the best pair, that means there's some luck involved. And then you powder with love and then in the very beginning you're attracted by certain type of L.

• 41:35Harry Stebbings?

  So with the very happy marriage, you also have children. That's a very important part of your life. But you are so busy and you have a very full-on working life. What have been your biggest lessons? And I worry and think about this as I look forward. What have been your biggest lessons on how to be a great father and crush it at work?

• 41:54Speaker 00

  Probably impossible. And unless you are extremely lucky. Human being, we're not machines. We don't allocate just perfectly.

• 42:05Harry Stebbings?

  Can you take me to a time when work got out of whack and you felt like you were not being the father you wanted to be?

• 42:11Speaker 00

  All the time, all the time. I haven't been as a good father to my kids, of course. But that's, you know, your better half comes in and, you know, fulfill the responsibility I haven't fulfilled.

• 42:24Harry Stebbings?

  Does that weigh on you?

• 42:25Speaker 00

  Oh, yeah, absolutely, absolutely, all the time.

• 42:29Harry Stebbings?

  Do you have regret or do you just have the forward-looking?

• 42:31Speaker 00

  Oh, I, you know, I have regrets. I think I have regrets in thoughts, not having regrets in motion.

• 42:39Harry Stebbings?

  What does that mean?

• 42:40Speaker 00

  Yeah, I I don't overthink that, you know. So you can joke about regrets, but you don't drill on it. You know, everybody has regrets. Some people talk about it or think about it all the time. Some people have their thoughts and move on.

• 42:54Harry Stebbings?

  I got told the other day that the heaviest things in life are not iron or gold, but unmade decisions.

• 43:00Speaker 00

  Oh, that's interesting.

• 43:02Harry Stebbings?

  And I thought about that. And then I got asked, what is your unmade decision? And my unmade decision was very clear. I had the chance to move to San Francisco ten years ago and be a US venture capitalist and a US technologist. And I chose to be in London. I don't know if that was the right choice, the unmade decision that I think about.

• 43:22Speaker 00

  I see. I would say if you keep on making decisions, right or wrong, and you have less of burden of unmade decisions because you don't allow that pile up. So you don't have a lot of them, so it doesn't weigh on you. So the truth is, if you have a made decision, don't think about it. It's already gone. You're not going to go back and make another decision. And it could be better, it could be worse, who knows? Why even think about the things you haven't done? Why even think about the things that never happened? So just keep on making decisions going forward, moving forward.

• 43:53Harry Stebbings?

  Final one for you before we do a quick fire. I have also kind of thought a lot about relationships to money and how we think about kind of wealth accumulation. What have been your biggest lessons on your relationship to money? And what would you advise me, Donald?

• 44:06Speaker 00

  You're a wise mind. You don't need advice. If I had to tell you something, don't let money get into your head. Meaning that money is just another tool. The focus is doing things meaningful and stay focused and stay happy and be nice to the people around you. I think that's about it. You cannot be nice to everybody in the world because now you're overthinking or you're giving yourself too much credit. In your court, and you keep on doing things and making decisions, like you said, don't leave decisions unmade.

• 44:39Harry Stebbings?

  You can call yourself up the night before the birth of your first child and say, Donald, you should know this. What would you say to yourself?

• 44:47Speaker 00

  Oh, when you actually look at your child for the first time, it is the most memorable moments in your life, bar none. And I can bet anything with you, once you have that moment, that will be the most memorable moments. Now, the tough part is after that moment, then it becomes very challenging. It's probably the most challenging project, if you call it that way, or the most rewarding project. Okay, and then they come hand in hand.

• 45:18Harry Stebbings?

  What is the most challenging element of being a parent?

• 45:21Speaker 00

  You just have to let it go. You're not directing anything. You're not owning anything. You just want to be on demand.

• 45:30Speaker 00

  You wanted to do what this precious being want you to do and do whatever you can to make this thing as good as she defines as it is, not what you define.

• 45:41Harry Stebbings?

  I love the full circle there. I'd love to move into a quick fire. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Number one, what is the biggest misnomer that people have about the business?

• 45:52Speaker 00

  Not necessarily about us. I think in life, I'm guilty of that too, is good must be expensive, inexpensive must be bad.

• 46:01Harry Stebbings?

  Don't ruin LVMH's business model.

• 46:05Speaker 00

  I love, I love the brand. I do love the brand, but I'm saying the inexpensive, not necessary is bad.

• 46:13Harry Stebbings?

  What do you believe that most around you disbelieve? So mine, for example, is the only way you can be truly successful is if you're obsessed. And when you say successful, I mean professionally successful and achieving your goals and ambitions. This idea that you can have the weekend off every weekend and go home at seven and watch TV and chat to your partner. No, you have to get back on your laptop pretty much every night after dinner and work. And every weekend you work and there is no time off. There is no phone in a drawer and I'm done. If you're running a business and building a business to be a huge outcome, billion dollar plus, obsession is the only way to do it.

• 46:49Speaker 00

  I disagree.

• 46:54Speaker 00

  That's one, the obsession is a good thing, but you cannot just generalize it. If you generalize everything, then that's why we have identity crisis. You know, there are a lot of these kind of things. Obsession is good in certain parts of your life, in certain period of your life and in certain way of you doing things, but it cannot be good for everything, everything you do.

• 47:14Harry Stebbings?

  A hundred percent. Can you name a multi-billion dollar company that's built without obsession?

• 47:18Speaker 00

  I haven't thought about that. So if you're saying the obsession of Shein is about the consumers, I agree with you. That doesn't necessarily translate into everybody has to work many hours.

• 47:30Harry Stebbings?

  No, but the founders do.

• 47:32Speaker 00

  The founders do doesn't mean he doesn't enjoy it.

• 47:36Harry Stebbings?

  Oh, totally. You can enjoy. I love what I do.

• 47:39Speaker 00

  And then go for it. And then you don't call it obsession. This is your fun. It's like you're chatting. Now you're saying, okay, I have to work. I have to chat your friend. You know, you have to chat with your friends. You have to watch TV. It makes me to think that you're actually making choices and they have equal weight. They're not equal weight. And for some people, this is like really preferred. For you, this is really preferred. So you have already made the decision. So that's not an obsession.

• 48:04Harry Stebbings?

  What have you changed your mind on in the last 12 months? So an example for me here would be that people say we have this company culture and it's X. Your company culture depends on the person. Some people respond to the carrot, which is the reward.

• 48:19Speaker 00

  Right.

• 48:19Harry Stebbings?

  Come on, we can do this. Let's build together, Donald. And some people respond to the stick. If we don't do this, we're going to be in trouble and we're going to lose to this competitor. You have to be plastic with how you apply company culture to get the best out of your team. I've changed my mind on that.

• 48:34Speaker 00

  When I, um, when I talk to people, this is like a life experience I've learned. When I talk to people, I felt, sometimes I felt I have gone through my logic and come with my supporting data and then collapsing with skepticism to facts and then moving beyond that and the like. So I thought, case closed. It's not that simple. It's far more complicated than that. How do you overcome certain age old conviction and changing people's, not only their mind, their hearts? For example, the world is flat. I always believed the world is spiky. And how do you convince people of that?

• 49:18Speaker 00

  The upward mobility is really difficult to obtain. And downward mobility is like having lunch. And that's what people do. If you have different resources when you are born and you come to the world differently. The ability to use the resources to acquire education, technology, all that. All of those tools becoming a. The equalizer actually is disequalizer.

• 49:46Harry Stebbings?

  What advice would you have to someone leaving university today, entering the workforce for the first time?

• 49:51Speaker 00

  And that's something I have learned from Xi'an. You just have to be on demand. You you you have to figure out some ways to think who you are and what the marketplace or the world of demand of you. And then you kind of fulfill that demand. That's the way to fast becoming useful and valuable.

• 50:08Harry Stebbings?

  What's the kindest thing anyone's ever done for you?

• 50:11Speaker 00

  I I think my my girlfriend married me as a dishwasher, you know, no, I take it back. That's a kind, that's a very kind thing. It's not the kindest thing, but to actually listen to me and and having having no sense of logic at all and just believing in my own BS and and keep on talking a a great game and then still feeling that, you know, wanna give me a benefit of the doubt. And that's the kindest thing. My girlfriend did, and a lot of other mentors of mine have done that.

• 50:42Harry Stebbings?

  Why, I'm sorry for this not being on schedule, but I'm sure you've been asked many times to do podcasts, to do interviews. I'm so touched that you did this. Why did you decide to do this one?

• 50:52Speaker 00

  Well, I had a great walk with you and you're very unconventional and you've become a friend.

• 50:58Harry Stebbings?

  I really appreciate that and I I love the walk and I love the wisdom. So final one. What question are you not asked or have I not asked that I should have done or people should have done?

• 51:09Speaker 00

  You know, I would ask you, how do you stay focused and then treating every minute kind of productively? How do you do that? What's your answer?

• 51:21Harry Stebbings?

  I always remember Danny Reimer, who's a very famous investor in London, says, you have to remember to keep the main thing, the main thing.

• 51:27Speaker 00

  Yes.

• 51:27Harry Stebbings?

  And the hard thing I find with success is that there's many shiny things.

• 51:31Speaker 00

  Yes.

• 51:31Harry Stebbings?

  And the more successful you become, the more shiny they are. And the importance of understanding two vectors. What drives ultimate progression towards goal? And then also does that correlate to happiness?

• 51:44Speaker 00

  Danny is very, very lucky to know what the main thing is, but most of us don't know what the main thing is. So if you wanna keep the main thing, main thing, what is the main? Thing for you.

• 51:53Harry Stebbings?

  For me, the main thing is to build the best early stage investing firm in the world. And we use media to do that.

• 51:59Speaker 00

  I see. I got it.

• 52:01Harry Stebbings?

  You know, maybe for you, it's to provide customers with the most incredible products. And you use an incredible supply chain and fantastic apparel to give them that.

• 52:10Speaker 00

  Right. Now we actually have significant advantage of the scale. And then we can continue to scale it. Or, you know, in this stage, do we want to steer it to the right choice, right? So it's about choice. It's about your choice.

• 52:25Harry Stebbings?

  Donald, listen, I've loved doing this. Shows like this are why I love what I do and get so much energy from doing it. So thank you for being such a great guest.

• 52:34Speaker 00

  Thank you.

• 52:36Harry Stebbings?

  I have to say, I'm so touched that I got the chance to do that show with Donald. He's really turned into a great friend and I really appreciate him giving me the chance to sit down with him today and ask some of those questions. If you want to watch the full episode, you can on YouTube by searching for 20 VC. That's two zero VC. But before we leave you today, this episode is presented by Brex, the financial stack founders can bank on. Brex knows that nearly forty percent of startups fail because they run out of cash. So they built a banking experience that takes every dollar further. It's a stark difference from traditional banking options that leave your cash sitting idle while chipping away at it with fees to help you protect your cash and extend your runway.

• 53:16Harry Stebbings?

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• 53:56Harry Stebbings?

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• 54:41Harry Stebbings?

  And finally, before we dive into the show, I want to recommend a book, The Road to Reinvention, a New York Times bestseller on mastering change. No time to read? Listen to 20VC now, then download the Blinkist app to fit key reads into your schedule. With Blinkist, you can grasp the core ideas of over 7,500 non-fiction books and podcasts in just 15 minutes, covering psychology, marketing, business, and more. It's no surprise 82% of Blinkist users see themselves as self-optimizers and 65% say it's essential for business and career growth. Speaking of business, Blinkist is a trusted L&D partner for industry leaders like Amazon, Hyundai, and KPMG UK, empowering over 32 million users since 2012. As a 20VC listener,

• 55:26Harry Stebbings?

  you can enjoy an exclusive 25% discount on Blinkist. That's B-L-I-N-K-I-S-T. Just visit Blinkist.com/20VC to claim your discount and transform the way you learn. As always, I so appreciate all your support and stay tuned for an incredible episode coming on Wednesday with Brett Taylor, former co-CEO at Salesforce and now the founder of Sierra AI.