Source: Fashionista, Feb 2012
A few things factor into what makes a fashion tech startup viable. Macala Wright, an established consultant for fashion brands, founder of FashionablyMarketing.Me and Mashable contributor, says that the keys to success for a fashion tech startup are the intuitiveness of the technology, ability to mature and change as the way people use technology changes and a focus on doing fewer things better. “The problem with lots of startups right now is they have 5-8 components to them,” she said. “They need to do about 1-3 things well.” She cites Polyvore as an example of a startup that does one thing well. And Pose, because it focuses specifically on fashion, even if it is similar to Instagram.
That’s another problem: spin-offs. Part of the reason there is such an overwhelming number of startups to weed through is that many of them do essentially the same thing. For every Pinterest there’s a Svpply; for every Warby Parker there’s a Mezzmer. So do these spin-offs have a chance? “Fundamentally a lot of the spin-offs haven’t been the ones that stay around,” Wright said.
However, ones that can improve upon a model whose originator is slow to adapt may have a chance. “If they don’t mature and change to the way that online users have become more sophisticated in their social behaviors they’re going to find their traffic falls off and they can be replaced by someone else.” Brand identity is also very important.
Regarding what investors are looking for in a startup, he said, “They’re looking for the value proposition that the company offers them–if it’s a valuable entry into the market with limited barriers of entry with little competition and what a lot of people like to call a company’s ‘special sauce’ or ‘secret sauce’–that differentiating factor.”
Of course, a good idea has little value without a plan, an experienced team, and maybe a little help from Fashinvest. “Investors won’t invest in a concept; they want to make sure things are in place and that their investment is sound,” Fioravanti said.
The amount of money a startup can raise depends on what stage it’s in. A brand new startup will usually get a smaller-scale seed investment of $250,000-$1 million to start the companies. According to Fioravanti, these have been the most popular types of investments lately.