“I’m not a big believer in just technology for the sake of technology.”
At an event covering the intersection of fashion and technology, you may expect this quote to come from a designer. But this was said by venture investor Lawrence Lenihan of FirstMark Capital, a New York firm that’s invested in companies such as Sycamore Networks, StubHub, and Pinterest. So Lenihan is no stranger to technology. He sat on an investor panel at Decoded Fashion, a full-day conference held last Monday at New York’s Lincoln Center.
A conference that draws an audience ranging from sequin-jacket-clad fashionistas to jeans-wearing venture investors from Brooklyn could potentially be a bit harder to wrap your head around than your average tech event. But the insights the speakers offered into what’s happening in fashion tech are not all that different than themes you’d see among Internet startups more broadly.
Here are some ideas I picked up from Decoded Fashion: In the fashion tech world, great products that solve real problems and really engage customers are the most promising businesses. Building on that, there are plenty of companies that aren’t doing anything but adding to the noise, and also plenty of problems that don’t have a real strong solution yet. Finding great angel investors is just as challenging in the fashion space. And no one seems to want to use Google+ for marketing and connecting with customers.
Read on for more takeaways.
—The quote from Lenihan that opened this story was such a gem that I followed up with him after the event for more insights on what’s driving him nuts as an investor in the space. “There’s been an overinvestment frankly in companies that are technology for technology sake—that don’t do anything other than create some sort of gimmicky approach to commerce,” he said. I agree. There are far too many apps that claim to be an Instagram for outfit sharing, even though Instagram is already an Instagram for outfit sharing. Lenihan shows similar concern for platforms urging customers to create virtual closets or ones for social shopping.
“I’m not sure the world needs another virtual closet—I’m not sure the world needs a virtual closet period,” Lenihan said.
—This feeds into a point Charlie O’Donnell of Brooklyn Bridge Ventures, (the aforementioned jeans-wearing VC, who previously worked for FirstRound Capital) made about all the copycat startups in the fashion tech space. “There’s always one little tweak, but that tweak is not enough to make it a successful business,” he said, pointing to the 100s of flash sales that have sprouted up a few years ago, many of which have since folded. I’d expect to see a similar contraction among many of the purely social fashion tech startups.
—But there’s plenty of hope. Startups that that are taking work away from traditional giants and getting in the middle of the supply chain to develop a more exciting end product for customers are the ones piquing investors’ interest. What does this mean? The companies focused on making a better shirt or pair of pants or stylish sunglasses for a lower price point are more promising than mobile apps and Web communities.
Karen Gryga, investor and co-founder of the media and events company Fashinvest, noted this shift in
