Sunday, April 13, 2008
Saturday, April 5, 2008
"I’ve heard start-ups need four key elements to be successful.
One, a great team. No question, I think Moniker has the best team. From Ivy League scholars to award-winning professionals, the four of us are the best at what we do.
Two, a great idea. We think we’ve got a great idea in open-source luxury and a great partner in Trinity Apparel to make our idea become a reality.
Three, cash. We’ve all been serious savers throughout our working lives and have been able to self-fund to this point, making cash an non-issue to date.
Four, luck. I believe luck is in the eye of the beholder. One person will fall down the stairs, break their leg and lament over their bad luck. Another person will fall down the stairs, break their leg and feel lucky they didn’t break their neck.
So yes, I think we're lucky and have all the key elements in place to be successful."
In reality, I think there’s a missing element from this story, a fifth element.
Before I “officially” became an entrepreneur I remember chatting to a young couple, Dan and Garnet, who started up a Web-based focus group business. They were telling me about their business and how they got started at their kitchen table with one computer.
The hours Dan and Garnet put in at their “day jobs” to keep their household running meant they had to spend evenings and weekends at their kitchen table working on their business.
At the time I thought they were crazy. When did they have fun? Weren’t they drained from a day of work already? To put in another eight hours of work before starting the insanity all over again was inconceivable to me.
And yet Dan and Garnet did not look burnt out at all. In fact, they were energetic and glowing with pride talking about their business, which was just beginning to take flight.
I now know I was looking into the faces of people with a true passion. And this story has now become my reality.
I work a day job to help keep the household running, and when I arrive home I start my second day of work. Weekends are not spent going to movies, Sunday afternoons are not spent on coffee dates with friends.
Nope, I’m at my kitchen table with my computer working on Moniker.
To prove the point, here I am, at 11 pm on a Saturday night. My husband is out with friends and I’m at home working.
Everyone thought I was crazy to turn down a fun night out on the town.
That’s exactly what I used to think...until I found my passion.
NB: Dan and Garnet's hard work and dedication did pay off. It's been eight years since that fateful conversation and Dan and Garnet now run a wildly successful business called iTracks.
I know they have office space now, but I'll bet they can still be found at their kitchen table most nights, working.
Friday, April 4, 2008
Wednesday, April 2, 2008
“We make money so that we can give it away.” Ratan Tata, Tata Group.
That’s my view, too.
“Doing good” is a big field now. So big, in fact, that analysts and academics have begun to break it down into sub-categories. In last month’s issue of Foreign Affairs, Klaus Schwab (chair of the World Economic Forum) lays out four: corporate philanthropy (i.e., writing cheques); corporate social responsibility (taking care of the people affected by your business); corporate social entrepreneurship (making products that save the world - e.g., Muhammad Yunus’ microcredit program); and global corporate citizenship (making long-term investments in social issues like education, health and the environment). This fourth category is Schwab’s own contribution to the taxonomy, and I think its doom is to be another one of those buzzwords that sounds nice, that everyone agrees with, but which nobody can define.
Right now, it’s a race to show your caring credentials. It’s hard to find a start-up that isn’t trumpeting its own efforts to ‘save the world’.
But I’m skeptical. It feels insincere.
In Moniker’s own industry of custom apparel, there’s one, Indochino, that tells a good story about going to Shanghai, and finding a community of stay-at-home women tailors, and building them into a production network with improved wages. But I have to wonder: did the founders go to Shanghai with the intent of improving the lives of stay-at-home seamstresses? Or did they go to Shanghai with the intent of finding cheap garments they could export back to North America at a profit? I can’t help but believe the latter.
If the former, it’s an exceedingly odd humanitarian cause to take up, for two reasons. First, their quality of life is already excellent vis a vis the developing world generally. Any Shanghai resident is already enjoying the top 10% of health care, education and infrastructure that China has to offer -- and the top 1% of the developing world as a whole. More help is always appreciated, of course, but no one with a serious agenda to fight poverty sets up shop in Shanghai. That’s like taking the stairs instead of an elevator and telling people you’re a mountain climber. (By the way, anyone who IS serious about it needs to read The End of Poverty, by eminent American economist Jeffrey Sachs. I had a sit-down with Sachs’ research director, John McArthur, at Columbia University last week. He’s never been to Shanghai (although he’d love to visit); there’s too much urgent work in Africa. (Another must-read I just finished is The Bottom Billion, by Paul Collier.)
But back to Shanghai for a moment, if your mission is to advance the lot of self-employed seamstresses in China, then rather than help maintain their self-employed labor condition, one should invest money in skills training for them and help them gain employment in a good garment house that adheres to international labor standards -- where in addition to ongoing skill development, they would enjoy more stable wages, cleaner work environments, improved access to medical care, child care, and education. (Of course, that would undermine his own business model, which depends on cheaper self-employed labor.)
(Side note: A good example of positive employment in the Chinese garment industry is Peerless Clothing. Peerless Clothing is the largest suit-maker in North America. They own the North American licenses for Calvin Klein， Ralph Lauren, and Chaps (among others): if you live and North America and own a CK suit, it’s made by Peerless. It’s not quite Moniker quality, but for ready-made off-the-peg stuff, it’s good.
I had a sit-down with the North American VP of Peerless Clothing, Eliot Lifson, earlier this week. I found out that they do 70% of their manufacturing overseas, mainly in China (in a city called Dalian). It turns out Peerless has some impressive labor policies -- most notably, to hire office staff from the pool of factory floor workers.)
I’ve got a different solution to the challenge of corporate caring: give away equity to the people who need it more.
My inspiration for this is Ratan Tata, chairman of India’s Tata Group. Tata is one of India’s biggest and most respected conglomerates. In addition to automobile and telecom divisions in India, they own some big brands in global markets: Tetley Tea, Jaguar, Land Rover.
But what’s special about Tata is that it’s 2/3rds owned by a charitable trust. In other words: when you buy a Jaguar, 2/3rds of the profit goes, ultimately, to charity.
To me this is a new, fifth, category of corporate do-gooding：giving equity. And I think it’s the ultimate form. It offers longer-term stability than writing a cheque. And it offers opportunities beyond cash, such as corporate governance experience. It also demands the greatest sacrifice on the part of the giver -- and thus, the greatest commitment to the cause.
I’m going to continue fleshing out this idea in the weeks and months to come, but already a clear intent is forming in my head: to gift a significant equity stake in Moniker (say, half of my personal holding) to a separate charitable trust, administered by a separate board and set up with a mandate to, for example, end extreme poverty in Africa.
That way, when I buy a Moniker suit, I’ll know half my profit is going to the people who need it most.
If I'm serious about corporate giving, isn't this the logical move?
Tuesday, March 25, 2008
There are two women and two men on the Moniker Executive Team. I am part of the former duo, and so, naturally, I wanted to check out the other half of the female compliment. (That's Victoria on the left, me on the right)
Until last week, I had only met Victoria over the phone and via e-mail, and knew her only by her bio. We are truly a global team, each of us living in a different country: Canada, China, Australia and the United States. We meet weekly as a team on a conference call, and these calls have become the highlight of our lonely work weeks.
But there’s something about meeting in person that can never take the place of technology, no matter how good the connection, picture or e-mail. And so my husband and I booked a working holiday and headed off to Moniker’s head office in Santa Monica to meet Ms Victoria Wu, COO of Moniker.
Victoria’s bio is nothing short of impressive. She has a Bachelor and Master’s of Science degree in Chemistry from top US universities, is a former Miss Asia USA, has worked for one of the top two global consulting companies and has a fabulous personality to boot.
And that’s only the incredibly brief highlight reel.
So I had no idea what to expect when I actually met Victoria in person. Was I dressed OK? We only arrived a few hours before and I didn’t have time to re-style my hair. How would I measure up to a model of beauty without a trip to the salon and a day at the spa? Would I be able to make intelligent conversation? What’s one of those really obscure elements from the Periodic Table so I can show an interest in her discipline?
I was almost dizzy with questions by the time Victoria called to say she was in the lobby of our hotel.
I watched the numbers light up and go out as we descended the eight floors to the lobby. The doors slid open and my eyes squinted from the glare off the polished marble floors so I didn’t see her right away.
Then I heard my name, in that turned up questioning voice I use when I’m not sure if I’ve got the person’s name right.
Before I could respond I was surrounded in a hug from this person I had never met, a stranger turned instant friend.
Very few times in my life have I met someone I felt like I’ve known forever. In those experiences, the other person and I immediately start talking as if we’re old friends catching up from years lost and don’t stop until the wee hours of the morning.
I’m happy to report I was lucky to have one of those rare experiences with Victoria.
As the days and weeks turn into months of working with the three other people on this team I have a recurring thought that’s becoming a reality:
Moniker will succeed because of its people.
Thanks Christopher. Thanks Kham. But today I’m most thankful for Victoria, who adds fun and kindness to my life. These experiences are so special because they are gifted to me from an amazing and accomplished person I respect and admire.
And this is only the beginning…
Tuesday, March 18, 2008
Menswear is a mature industry with many business models in play:
(1) Online importers. These are simple e-commerce operations that source mass-market quality garments cheaply from one-stop Asia-based manufacturers. Their founding stories often parrot the open-source luxury concept, but their product likely could never make the shelves of a serious menswear label. It is priced fairly for the (low) quality offered.
(2) Mass-stige. These are well-liked mid-market consumer brands that offer a line of professional wear. The product quality is poor in industry terms, but nonetheless attracts good prices due to overall brand appeal and popular styling.
(3) Traveling Tailors. These are good-quality tailor shops who claim a value proposition similar to open-source luxury. There is some legitimate overlap at the lower end of Moniker’s garment quality, however their prices are higher for equivalent construction. These tailors have failed to establish attractive brands or web experiences and have little reputation for style or design innovation.
(4) Big Luxury. These are globally-recognized menswear brands. The majority of their product is mass-manufactured, ready-to-wear and considered by custom tailors to be only average quality workmanship. However they maintain strong margins through heavy investments in styling, branding and (especially in Zegna’s case) fabric development.
(5) Honest Luxury. These brands are well-known but without the star power of Big Luxury. What they lack in brand appeal they make up for with garment quality, and the final price is in-line with Big Luxury. Honest Luxury product is usually full-canvas construction or equivalent, often with details worked by hand.
(6) Bespoke. At the top of menswear quality is Bespoke, or fully hand-sewn garments. These are shops owned or trained by legitimate master tailors. The emphasis is less on product innovation or brand, and more on experiencing exclusivity. Pricing at the top-end is wide-ranging: in the case of Brioni, a single suit may range from $3500 to $5000 or higher.
(7) Open-Source Luxury. By allowing consumers to bypass traditional retail channels for upper-end menswear, Open-Source Luxury occupies a dominant, best-price position vis à vis Honest Luxury and Bespoke. Yet Open-Source Luxury product rivals these leaders in quality terms, and could legitimately sit on their shelves.