Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko (Part 3)

Kyle Vucko: A smaller handful of my mentors got very engaged with the business planning process, providing feedback every few weeks. After being unsuccessful in getting the money in the business plan competitions, I went back and told one of them that we want to raise money and take this to the next level. He agreed immediately and offered some terms. I also talked to some other people and put together a mini-angel. Within a month of that first meeting, we had raised $40,000 to get the idea from concept to reality, build a website, and prove that we could sell a single suit over the web through customer measurements. That’s how it happened. The actual process of raising money in my case was very easy, but it was actually the result of months of relationship building.

Sramana Mitra: This $40,000 that you raised, was this a convertible note?

Kyle Vucko: No, it was equity.

Sramana Mitra: Are you at liberty to disclose what kind of terms you get in Victoria for a $40,000 seed round?

Kyle Vucko: No. Seven years ago, the situation was very different. There were fewer resources available. The idea of funding a kid out of college was very different. I actually think that what we did back then and what we would do now is very different. Today, there are so many ways to get funding that didn’t exist before.

Sramana Mitra: With that $40,000, you managed to launch the site. What was your customer acquisition strategy?

Kyle Vucko: Initially, I don’t how much of strategy we had. The biggest one was PR. What we didn’t realize at that time is that the easiest way to get coverage in the media is a cool idea doing something new and disruptive. We were able to get a lot of growth with that. Also, finding online influencers and building relationships with people in fashion and style. The company really grew from that. We also had word-of-mouth publicity. We then had a second round of funding.

Sramana Mitra: In terms of runway, how long did the $40,000 last?

Kyle Vucko: It lasted us until end of 2007. Then we raised about $250,000 in early 2008.

Sramana Mitra: What did you accomplish with the $40,000 by the end of 2007?

Kyle Vucko: The goal with that money was to figure out how to measure somebody sight unseen, figure out how to do that via website, build that website, and then pair that up with manufacturing from back-end. We launched the site in September of 2007. The site naturally acquired some orders through media and through people signing up. We had a series of orders over the fall. That was enough of a data point to prove that we could do this. Then it was about how we were going to scale it.

Sramana Mitra: So it was a proof of concept with actual customers.

Kyle Vucko: Correct.

Sramana Mitra: $250,000 early in 2008, right?

Kyle Vucko: Yes.

This segment is part 3 in the series : Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko
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