When Aslaug Magnusdottir cofounded the luxury fashion e-retailer Moda Operandi in 2010, the timing was perfect.
Even though Net a Porter—another full-price fashion e-retailer with a decade’s head start on Moda—was gaining traction, Magnusdottir says the luxury customer was still being underserved online. Moda was all about closing the gap between closet and runway by offering designer pieces fast. “The customer was ready for that at the time,” she says.
And Moda was enjoying a wave of change in the luxury e-commerce space. A decade ago, the luxury customer hardly shopped online at all. “She would go online to browse and research and then go into the store to buy,” says Magnusdottir, who is originally from Iceland.
But then discount designer sites like Gilt and Rue La La emerged in 2007, opening up a platform for a whole new market to buy luxury items. “A lot of people made their first luxury fashion purchase, but at a discount. And that made it an easier purchasing decision,” Magnusdottir says of the web.
With more shoppers suddenly comfortable buying high-end fashion items online, Moda was enjoying success as an e-commerce brand, and in 2013, Magnusdottir decided to leave her position as CEO to pursue another fashion startup idea: customized designer pieces.
In the spring of 2014, she launched Tinker Tailor, which allowed shoppers to customize existing designer fashions or build their own pieces from scratch using special rendering technology on the brand’s website. It was aimed to be a couture experience for the e-commerce buyer.
“Customization is really the next big movement in fashion,” Magnusdottir told Fast Company. “I kept hearing, ‘Oh, I love this great piece but if only it were a little bit longer, if only the neckline was a little different.’ I so often heard from women that they saw this beautiful fashion, but it didn’t always work for them–whether it was cultural reasons, lifestyle reasons, body type reasons. So it seemed like in my mind there was a gap there, that women really wanted to be able to customize items to fit their needs and their tastes. And I do very much truly believe that that is the future.”
But the slow process of gaining approval from designers on altered items and the expense of producing luxury items from scratch proved too strenuous for the year-old brand, which had raised seed funding. Tinker Tailor folded a few weeks ago.
Here’s what Magnusdottir learned in the painful process of shutting down:
“I think maybe we were a little bit early with the concept,” says Magnusdottir, who isn’t shy about the fact that there simply wasn’t enough demand to support Tinker Tailor.
“There are pros and cons to being a first mover. We were the first multibrand platform for the customization of designer clothing. And it’s great to be a first mover if you manage to pull it off. You can have a great competitive advantage. But if you’re quite early, you’re learning a lot: both learning as a company, and the customer is still learning.”
She now knows there’s a difference between educating customers with a new product or service they didn’t realize they needed, and starting up before that demand is there entirely.
“I think we felt that the market was a little bit further along than it probably was and that we could ramp up a little bit faster than we ended up being able to do,” she says.
But that doesn’t mean customization in fashion is a bad idea. She’s confident that disruption in the manufacturing sector by 3-D printing and other efficiency-targeted technology will continue to make smaller-batch production and customization of designs more plausible. One day, customization will be viable for fashion at lower price points, too.
Tinker Tailor launched last year with two major arms of service: the alteration of select high-end garments from designer partners, and the made-to-order Tinker Tailor fashion line that allowed users to design pieces themselves online.
This goes against Startup 101: Start small and be focused.
“They teach this at business school: Start with just the minimum viable product and test it before you go and build out too much,” says Magnusdottir, who graduated from Harvard Business School. “I’ve always been a little bit torn about that, because when you’re dealing with luxury fashion, launching with a product that is very basic and doesn’t have the romance and excitement–is that really going to show you the results that can be achieved?”
She has a point. To streamline the styles Tinker Tailor offered to customize would be to cut out most of the high-concept, ultra-luxurious pieces that regularly sashay down designers’ runways.
But Magnusdottir struggled to choose between two directions, saying that she considered both services highly relevant to fashion right now. Still, she might have launched one at first and then endeavored to launch the other once she hit mile markers of success.
In addition to having to handle the conception and production of all of its made-to-order pieces, Tinker Tailor was working with more than 100 designer labels to create customized alterations for the website at the height of its operations.
“That was also one of the things we found: Not all of them are yet well equipped to customize,” Magnusdottir says.
The process meant coordinating specific customization options with designers, waiting for the designer to produce samples of these alterations, and then having to photograph the pieces and Photoshop other color options for each before loading them into the site. A selection of pieces from five to 10 designers’ collections were featured as capsule collections on the website at a time. But the fact that customers still had to choose from a set menu of garments and alterations meant that shoppers still weren’t really “customizing” their garments. They were shopping a list of special features. By the time Tinker Tailor closed, it was producing not only apparel but handbags, shoes, and other accessories.
“One model could have been to start with a smaller group of designers that were a little bit further along and go deeper in their selection. And that would have been lower cost,” Magnusdottir says. “Going into my next one, I would probably start at slightly smaller scale and more gradual.”
With Moda Operandi, Magnusdottir and her cofounder Lauren Santo Domingo went straight for venture capital.
“That meant giving a lot of control and a lot of equity early on,” she says. “But it also meant that there was a group there that was very supportive and could come in with larger amounts of money when needed.”
With Tinker Tailor, she raised only a seed round of funding and said that getting to the larger round of financing “proved to be challenging.”
“There are pros and cons to both, but it can be more challenging when you get to a place where, we need more cash than we thought we would, and who’s going to put that in? That was interesting, to live through that,” Magnusdottir says. “It got to the point that we felt like we couldn’t really execute on the vision as we wanted to, and couldn’t maintain the level of service that we wanted to.”
In hindsight, she says a luxury fashion business suggests higher overhead costs, and founders should probably gather more capital at the outset for things like premium materials and fashion photography. “It needs to all be beautifully done.”
In the luxury business, she says, it’s hard to stick to the business school mantra of a simple product.
“It’s definitely an interesting question: Do you need more funding to start a luxury business?” Magnusdottir says. “That’s something I want to think about a little bit more.”