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STYLUS The Fashion social network

Stanislav Rost Justin Ashton Sherife Abdel Messih. STYLUS The Fashion social network. Apparel Retail Market Facts. Stylus narrows the gap between apparel retailers and consumers. Average US consumer spends ~$250/year online on apparel (30% annual growth)

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STYLUS The Fashion social network

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  1. Stanislav Rost Justin Ashton Sherife Abdel Messih STYLUSThe Fashion social network

  2. Apparel Retail Market Facts Stylus narrows the gap between apparel retailers and consumers Average US consumer spends ~$250/year online on apparel (30% annual growth) Apparel retailers / designers spend >$1.2B annually on market research US Retailers spend tens of millions more on excess inventory / management costs

  3. Vision • Bridge the gap between fashion retailers, designers, manufacturers and consumers • Convert fashion-aware to fashionable customers • Provide fashion democracy, direct feedback to the industry • Channel the power of a fashion social network towards online purchases, quality market research

  4. Stylus For End-Users • Fashion-oriented social network • Upload your own photos, label your apparel • Get peer and expert review of your style, suggestions for new clothes • Any suggestion is annotated with photos, links to buy • Photomagazine of attractive new fashions • Earn authority, capabilities, and priority in giveaways with participation and friend invites

  5. Stylus For the Industry • Integrate your clothing database into discussions, one click away from impulse purchase • Targeted advertisements based on user profiles • Worldwide exposure and word-of-mouth advertisement • High-quality market research and pricing estimation • Demographics, geographic coverage, confidence

  6. Competition

  7. Projected Revenue Streams • Ads Affiliate Apparel Sales • - Banner - Large, brand-name retailers • - Featured content - 3.5% avg. commission • - Fashion Integrator Tool • Market Research Direct Apparel Sales • Automated report delivery - Featured small designers • $1K/per item minimum - 10% fee commission Stylus’ model includes no inventory costs * Commission is the cut taken from partner apparel distributors/retailers

  8. Market Social Network (SN) Users Fashion Conscious Consumers • Woods and Poole (US) • 26% of all in the target demographic are fashion-conscious • Pew Research (US) • 75% teens are SN users • 30% 20-35 yr old SN users* • 50% SN users check once/day US Fashion Conscious/SN users = 26% * 30M SN users = 8M users Target Demographic: 15-35 year olds, fashion conscious, social network users * Very conservative estimate, no exact data available for entire age range

  9. Market cont. • 2008 Online Apparel sales to hit $12B (Jupiter) • As of Jan 2006, people spent $243/year on clothing purchases online. • Fastest growing online segment (25-30% CAGR) • Our total apparel market • 8M consumers (5% commission) spending $243/year • $97M annual market for apparel sales on Stylus • In 2004, $1.2B was spent on apparel market research • Goal is to capture >2.5% by year 5, earning >$30M/year

  10. Assumptions on growth • Took middle of the road growth projection • Bounded at 5M users • $1K/item under market research • Average apparel sale of $80/year/user

  11. Revenue Projections

  12. Operating Expenses

  13. Cash Flow • Average quarterly cash burn rate: • Year 1: $145K • Year 2: $390K • Year 3: $277K Cash flow positive in Year 3rd Qtr, FY3

  14. Marketing • Primary goal in first 3 years is to grow the SN user base • Target demographic is 15-35 fashion conscious, SN users • Create online buzz through ads in SNs, fashion forums, groups • Beta launch parties in key cities • Target college campuses heavily in first 2 years • Industry trade shows • Demonstrate power of showcasing new designs on Stylus • Create excitment among up and coming designers • Market Research • Start by letting select partner retailers (Guess, Gap) use our functionality for free • First target retailers / designers with huge research budgets Goal: Highest quality website / easy interface that will attract users

  15. Competitive Advantages • Lower cost market research • Unique domain-specific search, review tools • Inherent switching costs of SN users • Involved and committed user base • Deep integration with the fashion industry

  16. Team • Justin Ashton, Acting CEOMBA Candidate, MIT Sloan School of ManagementAir Force Intelligence, 6 yearsElectrical Engineering Background • Stan Rost, CTOPhD Candidate, MIT CSAILComputer Networks & Systems • Sherife Abdel Messih, VP Business DevBachelor Degree Candidate, MIT Mechanical Engineering/International Development

  17. The Offering • $600 thousand seed round • Series A: $9 million • $7 million: operating expenses • $1 million: marketing / Biz Dev expenses • $600 thousand: legal and patent expenses • $1 million: unforeseen expenses

  18. Summary • Goal: • Provide quantum leap into Web 2.0 for designers • Become technological cornerstone of the industry • Offer one-stop-shop for fashion / apparel consumers

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