Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko (Part 7)

Sramana Mitra: Does that mean that San Francisco and New York are your two major customer bases?

Kyle Vucko: Not exactly. They’re part of our top 10. Because we are still looking for shorter term real estate, we’re looking simultaneously at 10 cities. Once we find the location that’s the right price, we’ll move in. We’re taking any place that comes up first. New York, San Francisco, and Toronto are very much bigger markets for us. San Francisco is very much as well.

Sramana Mitra: In the meantime, you can continue to do your popup store strategy so it’s not like you’re not able to be present there in physical locations. What kind of scale are you at right now? How many customers do you have? You said you don’t disclose revenues, that’s fine. Give us the range.

Kyle Vucko: We’ve got nearly 130,000 customers in about a 100 cities right now. Mostly in North America.

Sramana Mitra: The average annual spend per customer is a significant amount, right?

Kyle Vucko: Yes. It’s not as much as you think because a lot of our business is still built free – SEO, word of mouth, PR. It is significant compared to probably lower price point companies but we’ve been pleasantly surprised and are lucky that our business has been able to grow.

Sramana Mitra: My question there is about average spend by the customer.

Kyle Vucko: By the customer, I apologize. It is quite large. Our primary product is the suit. The prices range from $449 up to $800. Most customers are buying suits from us first and then move to other products.

Sramana Mitra: Interesting. You’re over $10 million a year company at this point?

Kyle Vucko: We are.

Sramana Mitra: What is the total venture capital you’ve raised ?

Kyle Vucko: $18 million.

Sramana Mitra: Is it mainly from Madrona?

Kyle Vucko: We actually did another round in February of 2013 with a fund called Highland Consumer Fund out of Austin.

Sramana Mitra: This is a bit of an industry question. How come none of the consumer funds from Silicon Valley, San Francisco, or even Seattle are not part of this? I’m surprised Maveron is not part of this.

Kyle Vucko: It was a toss between Maveron and Madrona. Madrona is actually a consumer-centric fund. I know the guys at Maveron quite well. By the time we were going around for our 2013 raise, we were outside of their sweet spot. Maveron usually invests earlier in the game. Silicon Valley companies generally have a bias for companies closer to home. I think if you want to be invested by them and you’re not in the area, it’s a little harder. We were using a very unique premise. It was an apparel company with lots of logistics. Software and technology is a big part of what we do, but it’s an important piece and not the sole driver of the company.

Sramana Mitra: It’s going to be in any fashion company. Technology is only a minor portion of it. I believe fashion is a gigantic venture scale opportunity scale right now, but it’s not clear that Silicon Valley is going to be the leader in that space for that reason. You do need to understand merchandising, logistics, and brand – not just the technology business.

Kyle Vucko: The brand piece is a lot more important than folks realize. It’s an interesting challenge. That’s why we ended up going with Highland. Their background includes a number of really great consumer brands both apparel and otherwise. They understand how to run a big company directly to consumers outside of e-commerce technology. They’ve actually been a great complement to our Board and how we think about how we grow this kind of business.

Sramana Mitra: Very interesting. I’m very glad we connected. It’s fun to hear your story. Good luck!

This segment is part 7 in the series : Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko
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