Custom-made for success
By Rebecca Knight
Published: March 17 2009 19:22 | Last updated: March 17 2009 19:22
At 6ft 3in and 190lbs, Joseph Skerritt is taller and lankier than the average man. For many years, it was his lot in life to be unable to find a well-fitting dress shirt.
“For jeans and T-shirts it’s not a big deal but dress shirts and suits? That is a pain,” says Mr Skerritt. “Either the neck is too big, the sleeves are too long, or it’s way too baggy around the waist.”
Two summers ago, during an internship in China, Mr Skerritt (pictured above) visited Shanghai’s Fabric Market where hundreds of stalls peddle fabrics, threads, patterns and anything else needed to make clothes. He chose some colours, got measured by a tailor, and within a week he had a set of new, perfect-fitting shirts.
“That’s when I got my first taste of custom clothing,” says Mr Skerritt, 29, who recently finished an MBA from MIT’s Sloan School of Business. “I thought, ‘This is cool. What if I started a company that sold these over the internet?’ ”
Today, Mr Skerritt is the founder of Proper Cloth, a New York-based e-commerce dress shirt company that allows shoppers to mix and match fabrics, using computer-generated tailoring for the right fit. Its early success largely derives from being one of a growing number of start-ups that use blogging and social networking websites in place of conventional, more costly marketing. Revenues since launch last year have grown at a rate of 40 per cent a month, and it is on track to be profitable by July, with earnings of about $30,000 a month.
Mr Skerritt emptied his personal savings, scraped together about $50,000 of leftover student loan money, and racked up his credit card debt before raising about $100,000 in seed money from friends and family. He says that the use of social media, as well as being a less expensive form of marketing, provides an easy way for customers to interact with the company and each other. “We want to hear what our customers have to say,” he says. “It’s useful to us and lets our customers feel connected to and engaged with Proper Cloth.”
On Facebook, the company has more than 150 “fans”, which means that whenever the company posts a bulletin, or uploads a picture, it displays on the fans’ Facebook pages. “It is convenient for them to see this information,” he says. “It’s also easy for them to ‘share’ anything they find interesting on Proper Cloth – such as shirt designs they like.”
Hustle, hard work and learning not to focus on VC funding
Joseph Skerritt, who goes by the diminutive of Seph, invested much of his own money in Proper Cloth because finding investors was difficult at first. Most venture capital and private equity firms he pitched to wanted to invest in pure technology-based companies. So his advice to budding entrepreneurs is to not pay too much heed to venture capitalists. “VCs are looking for the next ‘game changer’ and they’ll be unimpressed with your ‘small’ $100m opportunity,” he explains. “That’s OK. Not all start-ups are right for VC funding.
“The time you spend obsessing over each letter in your pitch deck is time you take away from building a real business. Success is not raising capital. It’s creating a profitable, sustainable business. If you can demonstrate the ability to do that, you’ll have plenty of interested investors. Meanwhile, prepare to bootstrap.”
He also stresses the hard work required. “Starting a company is not a nine to five activity. Get ready to work really hard – all the time,” he says. “And it’s about getting stuff done – not hanging out at the office – so learning how to stay focused and productive is critical. Your hustle is your edge.”
Twitter, the mini-blogging service that allows users to send and read other users’ real-time updates, also attracts prospective customers.
More unusual is the company’s own blog, written by Mr Skerritt and guest bloggers, which focuses on work, life and men’s fashion. It receives about 6,000 hits a month.
Rachel Eisenberg, a business-school friend of Mr Skerritt who took on the company’s marketing plan, says it has used catchy, actionable blog post titles that have a good chance of coming up in a typical Google search – an example of search-engine optimisation.
A post last month, for instance, “What to buy your boyfriend for Valentine’s Day” had 900 direct views, while “What to wear on New Year’s Eve” had 700 views.
Other e-tailers that have had success with company blogs as marketing tools include Las Vegas-based Zappos.com, which sells shoes, clothing and other accessories, and grossed about $1bn in revenue last year. Last November, when the company laid off 124 employees, Tony Hsieh, chief executive and a popular Twitter user who has nearly 30,000 followers, broadcast the cuts – along with details about a generous severance package – in an e-mail, on his blog and with Twitter.
Mr Hsieh won plaudits from the blogosphere for the comprehensive way the lay-offs were explained to workers and customers. This level of engagement with customers usefully blurred the line between corporate communication and marketing.
Wine Library TV, which promotes straightforward wine tasting and links to an e-commerce site that sells wines by the bottle, has also used social media tools. The company’s zany chief executive Gary Vaynerchuk – dubbed a “social media sommelier” – runs a video blog that daily attracts more than 80,000 viewers, from sophisticated oenophiles to those with untrained palates. Devoted followers also convene on Wine Library’s active online forum. Last year, the company made about $55m in revenue, according to industry sources.
Meanwhile, the Student Loan Network, a website offering financial aid advice and student loan services, has increasingly used social media to its advantage. The company’s popular Financial Aid Podcast, a six-days-per-week show available on iTunes and other distribution services, gives advice on topics such as credit cards, international student issues and scholarships. According to industry observers, the podcast is responsible for generating about $10m in loans for the company.
Mr Skerritt, who has an undergraduate degree in electrical engineering, knew that the key to his business was the website. He needed to create an engaging online shopping experience with detailed graphics, lush pictures and interactive 3D models. He hired software developers in eastern Europe to help build the applications.
With his website under construction, Mr Skerritt hooked up with a fabric supplier in North Carolina and enlisted advisers including social media entrepreneurs and Bill Sand, who ran Brooks Brothers’ domestic custom shirt production for 20 years.
Nevertheless, corporate lay-offs in the financial sector and downsizing at other companies have been hitting Proper Cloth’s target demographic hard: young, professional males.
“Obviously, if this were 2006 and everyone who graduated from business school was signing on to jobs that paid $250,000 a year we’d have a lot of low-hanging fruit,” says Mr Skerritt. “We don’t have that.”
However, he says, the recession has expanded his customer profile, so that now “I’m selling shirts to government workers in Louisiana, and school teachers in Ohio”.
If the company is profitable by July as planned, Mr Skerritt and Ms Eisenberg will draw modest salaries. The business is in the process of securing an additional round of financing from an angel investor and plans to branch out into women’s clothing, men’s suits, and accessories within the next two years.
“Once you have a custom-fit shirt, you will never go back to off the rack,” Mr Skerritt says.
Copyright The Financial Times Limited 2009
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