Why Creative Founders Flounder

Why Creative Founders Flounder

It is 10am on Sunday during London Fashion Week. The collection is ready, the models are dressed. The VIP have arrived, the PR reps are scribbling furiously in their notebooks, and the buyers are seated front row.  Thephotographers are snapping away. Months of dedication to prepare for this moment, and it has finally arrived. And in a breath, it is over. The show has come and gone. And after all of the effort and creative energy has been expended, the designer waits.  Yet nothing materialises.  No orders are placed. The clothes, the handbags, the jewellery, the shoes; it all stays on the shelves, in the studio.

 The designer is devastated and starts to wonder why she started her own brand straight out of school. She knows her product is good, she’s been told that her work is reminiscent of early Alexander McQueen, that she is talented and that she will be a success. So what went wrong?

 The designer reflects back to when she first started her company. Reminiscing, she realises that in fact talent and creativity have almost nothing to do with the fashion industry’s measures of “success”, at least not anymore. Sales, margins and profitability are the metrics that are used. Banks, investors, and retailers take it as a given that designers are creative, and they expect more. The brand cannot simply be about the designer’s talent. It must be commercially viable, operationally efficient, and more recently, digitally translated.  The problem is – none of these skills have been imparted to the designer prior to her launching her brand.

 I have been working in the creative industry since 2003, and have witnessed this blind spot first hand. Not only does it affect the young designer who cannot define who her customer is, but also the large multinational brand who has lost its creative identity but still expects to sell.

 On its own, designer talent is necessary to warrant recognition in any creative industry.  But it is not sufficient to ensure success. Business experience, or at least expertise, is the catalyst that transforms a creative expression into a commercial success. Therefore, it is clear that both elements are required in order to ensure the longevity and scalability of a creative business.  

Designer founders often start their brands like they create their pieces – with passion, flair and dedication. They live by the adage “make it and it will sell.” But when they go to market, many face a series of challenges that they are in no way prepared for: stock commitments, margin analysis, channel strategy… to name but a few.

Established retailers on the other hand forget that good design is key to attracting customers.  They believe a slick operation and sound business practices can make up for a product that is poorly suited to their ever-changing market. They believe that skilled marketing and PR techniques can rescue an ailing brand without working on the product. Neither the young designer, nor the established retailer, have it right.

Let’s go back to the designer I mentioned at the beginning of the story. She epitomises the challenges that I have seen working in fashion and for start-ups over the last few years. The designer-founder is what Marcello Bottoli called, at one of the LBS Retail and Luxury Club events, the “golden goose” without whom nothing can happen but really is just the beginning of the story.

The metaphor is an interesting one. I remember sitting down with one of the designers I was mentoring a few years ago, and telling her that while her pieces were strong and original, did she have any idea who would buy them? I was alarmed (but not entirely surprised) when she admitted she hadn’t given her customer much thought. I wasn’t expecting a customer segmentation analysis or even a marketing 101 take on the question, I simply wanted her to describe her customer to me, who was the woman she was designing for. It was a rather painful discussion during which I tried to steer her away from the garments, her pride and joy, the expression of her individuality; her golden egg, towards a more commercial understanding of her work and how she would sell it. It was clear that there was no selling strategy, no route to market, no marketing plan, just her blind faith in the product.

 A few weeks later, we sat in her studio for a whole morning and put together the bare bones of a plan which included finding 10 independent stores where she would want her product sold; that was the beginning of her wholesale strategy. We also made a list of the celebrities who had worn her dresses, which became the foundation of her PR campaign.

 We looked at how long it took her to produce her pieces, and realised that she could never be profitable if she didn’t make radical changes to her operations and logistics.  

 Within 3 hours a real business plan was starting to take shape. We both knew the business plan we had put together would change, and that the words on the pages weren’t written in stone. But the act of planning itself had become a game changer for the designer and her brand. It revealed gaps in her existing business that she never would have considered otherwise. It made her realise that she had been acting as business owner, creative director, manufacturing director, marketing director, and sales director simultaneously, and that this was an impossible path to sustain alone.

Not having worked for another designer before launching her own brand, the designer did not have many industry contacts who could help her. She had no junior merchandisers to help her plan her stock, sales and margins. She didn’t know any contacts at the fabric mills to lean on and get the best prices possible. She wasn’t aware of who the best and most ambitious young marketing executives were to work with on a creative strategy. Moreover, she had no guidance, nowhere to learn best practices, nowhere to make her mistakes and learn on the job and most importantly, nowhere to learn that cash flow is as important as creativity. As I had to gently remind her,  cash flow is the most important part of any business. When the cash runs out the brand is deprived of oxygen, and isn’t likely to survive, whatever the level of creativity!

 In addition to this lack of a support network, the designer was not ready to share her business with anyone. She thought that her designs, her golden egg, were hers alone and without them there would be no business. She was reluctant to find a partner. She did not believe that she needed anyone else.

 This, ultimately, is how brands come undone. The vast majority of designer start ups fail, not because of a lack of creative talent but rather due to a lack of commercial knowledge and acknowledgment of business support needed to sustain the growing enterprise. More often that not the companies that do become successful do so because they recognise that business and creativity must go hand in hand. Within the fashion industry this can be seen in the likes of Tom Ford and Domenico de Sole at Gucci, Muccia Prada and Patrizio Bertelli at Prada, Yves Saint Laurent and Pierre Bergé at YSL, and Christopher Bailey and Angela Ahrendts at Burberry to name but a few.

 Designer founders should find not only inspiration from these power teams but also practical learnings. Designers need strong business acumen to sell, market and grow their businesses, and if they do not possess this expertise themselves then they should look for it in a partner they can trust. Designers may lay the golden egg, but only through collaboration will it hatch and produce a viable company. While these partnerships do not always mean success, having the support of a business minded partner can greatly reduce the risks a new designer faces when launching their brand.

 First Published in LBS’s London Entrepreneurship Review (2016)