Growth strategy for Impact fashion and beauty startups. And the metaverse conversation.
FAB — Fashion & Beauty Tech London — 26th May 2022
Growth strategy for Impact fashion and beauty startups, and investors' insights
- Jessi Baker — Provenance
- Alexandra Tymann — Hedoine
- Angela Chou — Investor — Felix Capital
- Eva Lagarde — re/sources
- Chantal M’Biki — House of Lilah
Is it possible to measure environmental impact? How do you go about it ? and how to talk to consumers.
Provenance. Jessi Baker.
“It’s important to measure and to know what we measure, and what matters in terms of climate impact, and in terms of consumers understanding.
Transparency is key beyond measure. What do measure, why, or to what purpose”.
Chantal M’Biki — House of Lilah
“Carbon footprint remains the key metric to measure environmental impact. So, it’s critical for businesses to have a clear understanding of their supply chain and industrial processes if they want to make a real impact. “
“ Large businesses tend to focus on growth as they’re accountable to investors and other stakeholders but it’s not necessarily a relevant metric as it’s not a guarantee of profitability.”
Alex Tymann — Hëdoine
“Yes, it is, and it all starts with your fundamental business decisions: where do you produce your products, where do you source your packaging, how long are transportation distances, what is the impact on the environment and workers etc. Choose your partners, suppliers, and production methods according to your values, and bring transparency to your supply chain to measure the impact. You might not get to a 100% instantly, but continue challenging yourself and your partners and you will get there.”
Eva Lagarde — re/sources
There is no standard for environmental impact. Companies measure different things nowadays and this can lead to greenwashing if you compare figures that are actually not similar in essence.
We can measure the impact of product making called Life Cycle Assessment, but there is a big unknown which is consumer usage. It’s really complex to measure but it’s estimated to be 80% of carbon emissions for shower gel or shampoos for instance.
We are still in a transition phase, and whatever we measure we need to be fully transparent with consumers about the process we chose.
Today we are focused on growth? Do we keep seeing a report about Quarterly or Annually results increasing from the previous or exceeding the forecast? But what about the waste generated while creating profit? Is growth a real measure of success?
Jessi Baker — Provenance
“Should we be focusing on growing at all. Maybe we should change the meaning of growth or what we see as success.”
Chantal M”Biki
“Focusing on growth or scale is very sensible decision for small businesses to make, especially when they are purpose driven as they need to stay true to their DNA and values (i.e. mass production and sustainability issues associated)
For small businesses, geographic expansion seems to be the way forward to scale up, but it comes with challenges (i.e. regulatory and compliance requirements, supply chain management). Finding a local partner that has a deep knowledge of the market, and able to bring their vision to life + replicate their processes can be an avenue.”
Alex Tymann — Hëdoine
Even if businesses were measured by sustainability KPIs, in the end, it is also a partnership between companies and consumers. We have created our own monster in a way, for example by expecting products to be delivered instantly, and as long as consumers are not willing to compromise on convenience, businesses who truly care about the environment will always have a disadvantage.
Angela Chou — Felix Capital
Growth matters, but again, what do you consider growth? For instance, we choose not to invest in certain market categories. And it”s not just about selling more, but putting better products on the market, and replacing detrimental models with conscious and/or impactful businesses.
And what about local versus global? Local sourcing, manufacturing, and market are way more sustainable than global sourcing and shipping … but how do you manage when you are a global brand, do you develop manufacturing in each market? Is it realistic? and can we keep brand consistency in this localized commerce? What are your expansion plans?
Eva Lagarde
“When expanding, especially in a global digital when you can hire people from anywhere. I would be wary of still hiring people locally for work regulation purposes so that you know there is no potential labor exploitation, and if you hire from elsewhere, look at traceability. Don’t just hire cheap as a start-up.”
Angela Chou — Felix Capital
“Workaround constraints that are more sustainable in scalability. Packaging sourcing is complex, that’s why you need to push boundaries as a start-up and search beyond. Be more creative”
Alex Tymann — Hëdoine
It is definitely realistic, but it requires effort. If you are willing to put in the effort, you will find a way. In our case for example we plan to expand to the US atin a few years, so when we chose a fulfillment center in Europe, we chose one that has subsidiaries in the US. That way we have less complexity as they run on the same advanced tech-system, and we fulfill locally instead of shipping single orders across the sea. We are already looking for tight producers there who we will train, and maybe we will need to get a few new machines that they might not have yet. It is an investment and it requires preparation, but it is possible.
Chantal M”Biki — House of Lilah
“ Creativity is key when it comes to sustainability but it doesn’t necessarily mean developing breakthrough innovations. Circularity and upcycling can be part of a sustainability strategy but they have to be integrated upfront and be part of the brand DNA (i.e. encourage customers to repurpose candle jars, refill services, etc…)
Consumers are more and more sustainability savvy, so they expect more and more transparency from businesses.”
In terms of investment, what VCs are looking for in a sustainable business model?
Angela Chou — Felix Capital
“ We are looking for Teams & Creativity.
People and Creativity are really important in sustainability. Sometimes you have to re-engineer the way we do, so we’re looking at founders that have this mindset. And teams that work well together can go the distance and develop interesting innovations.”
Talking about creativity? As far as I know, there is no “rupture” innovation on the market when it comes to sustainability.
Jessi Baker — Provenance
“I think on the good news on the consumer side, we are definitely seeing a huge change. Working with Provenance, we have engaged with our transparency experiences. About 2 million shoppers a week and we’re seeing huge shifts and engagement. So before it used to be quite like vanilla sustainability terms that people would engage with the good.
We’re really seeing people hunting out products now based on the Net Zero recyclability of packaging. You know, people are becoming sustainability nerds. It’s still niche, but it’s really amazing, like the shift during COVID I do think it was like maybe the only silver lining to come out of that period was just amazing engagement and it’s great. It’s having a knock-on effect on the brands like they really are. The business case for investing in sustainability is now not just a risk-based business case, becoming a marketing brand-building business case, which is a huge shift. Because quite frankly, that’s what the budget is in these brands. So it’s really encouraging.”
Eva Lagarde — re/sources
“The market is still focused on convenience. Even when big brands invest, they implement the new sustainable solutions, they still want to make sure that it’s as less disruptive as possible to people’s lives, so they will adopt the new solution. It makes sense. But is it realistic if we want to change the impact we have on the planet? Life is not always easy”
Angela Chou — Felix Capital
“Creativity is important to bring about new things and new ideas and break the mold.”
Fireside chat
Metaverse & co-creation for a deeper connection with consumers
- Aileen Carville — SKMMP
- Thomas Grynbaum — Angel investor & Startup Advisor
What is the metaverse?
Metaverse is still under construction, and it means the immersive experience across the digital and physical realm.
What does the metaverse mean for fashion brands?
Fashion brands can provide better and more interactive user experiences in the digital realm. At the current stage, it is still very early for fashion brands to explore the metaverse, like in 2000 for e-commerce.
What does web3 mean for the fashion industry?
Web3 or NFT technology will facilitate creator ownership. In web2, meaning the social media time, users do not own the content they created.
Is NFT technology really eco-friendly vs. producing physical garments?
Yes, as Ethereum keeps improving in efficiency it should be more sustainable than shopping for physical garments. A pair of jeans will take 1,800 gallons to produce.
What would be the overlap between fashion consumers and gamers?
As of now, fashion consumers are less familiar with technology (esp. video games), however, when we look into the next generation of fashion consumers (as they spend more and more time online), they are getting familiar with the virtual goods, and NFT can facilitate the ownership over digital assets.
Next meeting and webinar?
June 23 SAN FRANCICO. The metaverse panel
Join the conversation, subscribe to the free quarterly newsletter, follow us on social media, we are now 15,000 founders and VCs
