ModCloth – Susan & Eric Koger – 1 of 2

"Creativity & good judgement can trump experience." is an online fashion & decor retailer focused on independent and vintage-inspired fashion.

Matthew: Hi, this is Matthew Wise with FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies. So, I’m very excited today because I’m here with Susan and Eric Koger, who are the founders of ModCloth. ModCloth is an online clothing and fashion decor retailer that specializes in vintage independently designed goods. With that said, we’d love for you to give our audience a brief bio.

Susan: Absolutely. I can go ahead. Eric and I actually founded ModCloth back in 2002. So, we were 17 and 18 at the time. I’ve always loved vintage clothing. I’ve always loved fashion. It’s always been something that I’ve been really, really passionate about. We both actually grew up in south Florida. We were high school sweethearts, and I was preparing to go to school at Carnegie Mellon in Pittsburgh, basically preparing for my first winter ever.

I was thrifting a lot, and finding really, really amazing stuff that I just couldn’t pass up. So, my closet got bigger and bigger, and Eric suggested that I start a website to sell some of my great finds, and that’s really how ModCloth was born.

Eric: And two years prior to that, I started a web development consulting and hosting business. So, I had already built a few e-commerce websites by the time I encouraged Susan to start ModCloth. So, I was able to help her from a technical perspective, as well as I had some experience developing my markets, to help her get her first shoppers onto the site.

Susan: Eric was basically my tech department. We’ve basically being doing ModCloth our entire adult lives in some form or another.

Matthew: What is ModCloth, who’s it for, and why are you so passionate about it?

Susan: As you said, ModCloth is an online only retailer, independently designed fashion and decor. We work with over 700 independent designers from around the world. We are actually a buying teams, so I go out, I go to trade shows, visit markets around the world and sort of pick out the designs that are right for our customer.

So, we’re able to bring customers designs and pieces that they wouldn’t have found otherwise. For our customers, fashion is a really big part of their lives and their identities. So, I always talk about our girl. She’s very smart, and she’s very well educated, and fashion is such a big part of her life. We’re able to really allow our self to express her unique identity through the clothes that she wears.

We also empower our designers to get feedback directly from the customers, kind of in a new way. We have a program called, “Be the buyer” where we take designer samples that haven’t been put into production yet. So, either they’re dropped samples, or they’re exclusive designs that we’ve worked with the designer to create. We put them up on the site, and we get our customers to vote on them and actually give feedback.

This is the first time that these designers have really gotten feedback from their customers, rather than from just retail buyers like myself. It’s actually really powerful, and really amazing for our customer. Like she gets to participate in the fashion industry, and she gets to have a say in what’s made, and what’s produced, and sort of how it looks. And for our independent designers, they’re actually getting real feedback from their customers.

For me, that’s what I’m really passionate about, that’s what gets me up in the morning. I feel so lucky to be able to work in the fashion industry. It was something that honestly I didn’t know that I would be able to do. When I was 17 and starting this business, I just really, really loved it, and it was something that I just really loved doing. I went to Carnegie Mellon, I was a business major, I didn’t really know what I wanted to do. I was in the real world with a real job.

I think that, traditionally in the fashion world has been very top down, very kind of scary and intimidating. It’s very much like, we’re cool, and we tell you what to do. We’re working to sort of switch that, and the Internet has kind of flattened everything. That’s what makes me so excited about getting to work on ModCloth, and getting to sort of see this vision through is empowering the customers to actually be a part of the fashion industry.

Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?

Eric: We’re actually developing a lot of our own technology. One of the interesting aspects of the e-commerce space is that a lot of the existing platforms and technologies out there are really built around books and electronics paradigm. Those categories are really the first categories to really explode it online, Amazon being kind of being the dominate player in that space. So we’re building our own platform on Ruby on Rails, and it’s allowing us to do some really interesting things with the online shopping experience. Ruby on Rails is its own interesting movement in technology.

The ability for ModCloth to build its own platform really quickly and effectively, and actually do innovative things is something that would have been a whole lot harder to do ten years ago. We’re able to take a lot of things for granted from hosting to the actual development language, to the pace of development. The ability for us to pull a team together very quickly and effectively. So, there’s just a larger pool of web developers now than there was ten years ago.

I think there’s that. There’s a whole host of infrastructural things that are really interesting. The language that we’re using to develop the platform is interesting. And then, the emergence of Facebook and Twitter and smartphones is, I’d say, another interesting movement in the space that we’re a little bit behind on right now. Ultimately shaping the space we’re in, and we’re quickly catching up and we’ll be ahead soon.

It’s hard to talk about something you’ve yet to release. But I think that ModCloth is really sitting at the center of an evolution in the fashion supply chain. E-commerce online, the intersection of commerce and social, and ultimately mobile as well since we want to be wherever it is.

Matthew: So, we’ve covered your background and your story. We’d love to dig into how it started. Obviously, you guys are a married couple, and you are co-founders which is very unique. So, how long did it take from idea to product launch? And when did you actually launch the product?

Eric: So, we started in the summer between high school and college, and we incorporated the business in July. Susan had started sourcing a little bit earlier than that, but we really kind of got started in earnest in July. Then, we launched right in winter break, so it was in January. So, ballpark of six months from deciding we were going to do it to launching to the public. And we had a sale on our first day which was real exciting.

Matthew: Are there any unique metrics or social proof about ModCloth that you’d like to share with the audience?

Eric: Sure. One of the things we pay very close attention to at ModCloth is our customer’s engagement with the brand. And so, that comes through in a lot of different ways; the number of products that have reviews. How many fans we have on Facebook, and Twitter.

We really try to create an entertaining experience that gives her a reason to come back to the site every day. So, one of the things we pay close attention to is re-visitation rates. We have a really astounding stat that I’m going to misquote here. But it’s something like a third of our visits come from visitors who are visiting the site every single day, and visiting multiple times a day.

Susan: I think if you want to look at social proof around ModCloth and around our brand, it’s just really looking at our Facebook fan page, looking at the reviews, looking at how many customers are sharing their measurements, very personal information with their reviews because they want to help other members of the community buy the right product.

If you look at our Be the Buyer pages where we have our customers vote on products, we’re getting thousands of votes for products, hundreds, and hundreds of comments per product. I think that’s where the real engagement is. That’s why a lot of our customers are coming every single day. Because they’re not just coming to buy. Maud Cloth is about the community. We treat our customer not just like an open wallet. We know that she has other aspects to her than just the fact that she buys fashion, so we really engage with her through our blog, through our Facebook fan page.

Eric: We show her our appreciation and try to empower her to help drive a lot of those reviews and shape the inventory and shape the products.

Matthew: Since you’ve been in operation, what have you learned about your business and your users that you didn’t realize before you launched?

Susan: I can’t say that we knew very much before we launched. Thinking back to 2002, I know that I’m finding amazing vintage pieces that I really love, and I know that someone else will love them out there. I hope that some one else will love them out there.

When we got started with this, it was like, this will be a fun project. We’ve definitely both always been entrepreneurial, and I feel like we’ve learned so much about our customers. As Eric said, back in 2002 e-commerce was very much like books and electronics. It wasn’t about creative goods at all. One of the biggest things that I learned in the early days was that our customer really appreciates a personal point of view, and a personal touch.

So, thinking about not just naming this amazing vintage coat that I found, red vintage coat, but calling it Aunt Lynn’s vintage coat and writing a story about it, really bringing her in. Anyone who’s worked in retail, even like traditional brick and mortar retail, will tell you it’s about the story, it’s about the experience. But we sort of discovered that, and discovered how to do that online, how to create that online because we didn’t have any background in that. It was just something we were learning and figuring out as we went.

Eric: Along the way we’ve just done what seemed right.


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