During the four years Seattle entrepreneur Aaron Hallerman spent working in a Hong Kong-based design and production studio, he observed a pain point in the retail business. Hallerman and his team loved product development, but felt that the traditional retail model didn’t serve the customer.
“We were essentially part of the problem before we decided to fix it,” he said.
Breaking from the establishment, Hallerman launched and successfully funded a Kickstarter campaign for designer watches, and later launched and funded another campaign. Building on this momentum, he and his team founded the Vincero Collective, a menswear membership co-op with a unique business model.
Using a built-in crowdfunding tool, the collective uses member feedback to decide which designs to create. Then, relying on long-term relationships with manufacturers, Vincero produces a small batch of inventory sold directly to members at lower costs than competing retailers.
We caught up with Hallerman for this installment of Startup Spotlight, a regular GeekWire feature.
Explain what you do so our parents can understand it: “We sell premium menswear direct to men without the markups seen at premium labels. We do this by partnering with the same factories but eliminating all of the other wasteful steps that premium brands take before the product gets to the customer.”
Inspiration hit us when: “We saw the watches and other menswear products we made selling for 8X their cost! We knew what they cost and what these companies were marking them up for, and realized it was time for a change.”
VC, Angel or Bootstrap: “Currently bootstrapped, but we have interest in angel investment in order to scale a bit quicker. We’ve proved we know how to make amazing quality products and even run this kind of business model through previous crowdfunding campaigns on other platforms. Now it’s just time to prove we can do so successfully with our own platform rather than using others. Then it’s off to the races.”
Our ‘secret sauce’ is: “Product development. We are extremely agile and can quickly develop new products and styles in order to get them in front of our members, which is necessary with our business model. If our customers don’t like what we made, we throw the samples out (not literally) and get back to the drawing board to develop new designs.”
The smartest move we’ve made so far: “Create an in-house crowdfunding platform to launch our own products. Kickstarter simply isn’t a feasible business model; it’s a stepping stone and an awesome one. However, we needed to create our own platform to give guys one place to look for premium menswear, rather than one place to look for anything and everything (potato salad!).”
The biggest mistake we’ve made so far: “Many to choose from, but I would say timing. We launched our first product under the Vincero label last August, meaning we promised to deliver by the holidays. We were able to hit our deadline for most of our customers, but it was really tight and extremely stressful. Next year, we will be planning way in advance for the holidays. Retail, even online, is so crazy around that time and we didn’t give us ourselves an opportunity to have inventory and sell at the most important time of the year — a huge missed opportunity for us in our first six months.”
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: “With all due respect to the other greats, I’d have to go with Bezos 100 percent. With our focus as an e-commerce business with an actual product to sell (rather than solely tech) there isn’t any other person out there I would rather have in my corner. He not only revolutionized e-commerce, but led Amazon to adapt in so many ways to keep up with the market.”
Our world domination strategy starts when: “We launch our spring collection of designs next month. Our rolling releases of products start in mid-February and go through April. We have lots of amazing products developed and we can’t wait to see what our community thinks about them before manufacturing begins.”
Rivals should fear us because: “We’re different in an industry that doesn’t see much change in how things are sold. We are giving the responsibility of curation back to the customers rather than a few select designers and that’s a big deal. On top of that we are also sending products direct from suppliers to customers doorsteps and thus taking the ever-popular direct-to-consumer approach an extra step farther.”
We are truly unique because: “We let the consumers decide what gets made and what doesn’t. The fashion industry has always been like this: Designers design products, companies pay to make boatloads of said product, and then convince the customer to buy the product with absurd marketing campaigns.
We are making the process much more practical. We don’t waste money making products the customers don’t want.”
The biggest hurdle we’ve overcome is: “Bootstrapping. It’s tough to start a business without significant investment. It’s a catch-22: You can’t really have a decent marketing budget until you sell enough products. But you can’t sell enough products unless you can get them in front of customers, which is why you need the marketing budget.
Platforms like Kickstarter are changing this to some degree, but it’s still difficult for companies to get past that stage.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Use your resources. Whether it’s finding a mentor or simply doing research online, you can find people and information that will propel you forward so much quicker than trying to figure it all out yourself. People have tried the same things you have a million times before, in one regard or another. Use the mistakes they made and didn’t make to your advantage.”