Rebecca Minkoff is well known for not only her line of designer bags and accessories but her high tech shops that blend interactive technology with tailored experience and fashion.
If you’ve visited Rebecca Minkoff’s store in Soho you’ve found interactive mirrors to help you pick the perfect outfit, along with your choice of drinks delivered right to your dressing room, where you are matched with the latest styles.
Rebecca herself recently joined me on the DealMakers Podcast to share some of her journey as a female startup founder, what it’s been like growing her own business, and the future of fashion.
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Around the age of nine, Rebecca’s family relocated from California to Florida. While an idyllic place to raise kids, it was hardly the height of social life and fashion. She saw a dress for sale she loved. Instead of buying it for her, her mother taught her how to sew.
She says it was her mom who “taught me lots of early skills that got me hooked in a way that I felt really confident that I could make something out of nothing.”
At 10 years old she enrolled in art and design classes. She made her own bar mitzvah dress and elected to go to a performing arts high school.
In the US, NYC is still the heart of fashion. For an aspiring designer, there was really no other choice but to go. With two suitcases and nowhere to live, Minkoff headed to New York City at 18 years old.
A minimum wage internship enabled her to make the leap and survive. At her aunt’s persistence, she enrolled in FIT. Though soon found she wasn’t learning much she hadn’t already covered in high school.
In her spare time, she began sewing her own line and then going down to local East Village boutiques to sell those goods. From her perspective, it’s not something for every artist to try. You have to be someone that doesn’t take no for an answer and is willing to compromise.
As Rebecca puts it, not all designers are comfortable with selling their own products. You have to have really thick skin. You really have to develop a filter for when you’re being the seller versus the designer.
Rebecca says “If you don’t have that kind of thick skin, then you’ve got to hire someone that does because they’re both crucial, but if you get hurt really easily, then it’s definitely not a pleasant experience.”
Building a Real Business
After Rebecca Minkoff launched the Morning After Bag, you could see the brand taking off in a way that was global. She realized the need to get really smart about the next steps to turn it into something really successful.
Her brother came in as her first partner and they organized the business. They began to hire people and made it a true company. He saw the demand, growth, and momentum.
Her brother already had a very successful tech company. He had some great business and sales experience to lend. He even mortgaged his house to help finance the venture and expansion.
At the time there was a noticeable gap in the market. No one was talking to this customer who was not able to afford the luxury but also didn’t want something off the side of the street.
Rebecca Minkoff filled that gap. She has proven skilled at having a creative vision for trends that are coming, that a woman doesn’t know she wants, but will eventually want.
The brand has developed a large social media following, with 900,000 people on Twitter, and 800,000 people on Instagram. Sales kept doubling, and it soon became a challenge to meet all the demands.
They now have over 900 points of distribution in owned stores within the U.S., and eight stores overseas, including one in Venice, Malaysia, Thailand, and Korea.
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Funding Your Fashion Startup
In addition to her brother’s financial injection, there’s a bank for the fashion industry called A Factor. They would advance a percentage of accounts that passed a credit check, like most large department stores. They would advance 80% of the invoice amount as working capital, and then collect the remaining 20% on the backend.
Then in 2011 Rebecca Minkoff took their first investment from a private equity firm, followed up with another fundraising round in 2014.
Storytelling is everything which is something that Rebecca was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
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Since then they’ve really been focused on growing the business with the money the businesses making itself.
Rebecca says that bringing in outside funding isn’t for everyone. Investors might make demands that could cripple your business.
Today, it’s trendy to scale your business with VC funding or private equity. Though this founder says “if you have a product, and you have momentum, and you have heat, there is nothing with growing organically and strongly with the heat of your own customers wanting it” When you then go to get PE or VC money, you’re that much stronger. You sell much less of your company, because you’ve held on for longer, or maybe you can qualify for small business loans or using a mix of credit cards and small business loan capitalization.
There are a lot of companies that fail because they’ve taken too much cash, too fast. They spent it, and their investors want a return.
So, those investors are going to want to optimize for things that will give them their return, not necessarily things that are in the best interest of the company, the customers and the founder.
Rebecca recommends to do your research first, and be careful about who you pick as partners if you do raise money.
Empowering Female Founders
Rebecca Minkoff has done a lot for female founders and empowering women entrepreneurs. Her tips for making it happen for yourself include:
- Hire for loyalty and hard work over paper degrees
- Build a startup culture based on what your employees want, even if that means Fridays end at 3:00, and Mondays don’t start until 10:00
- Listen to her podcast, Super Women with Rebecca Minkoff
- “Don’t be scared to take a risk and to carve your own path.”