Tuesday, March 15, 2016
Why District2 Is Creating An Online Marketplace For The Fashion Industry
Story by Benjamin F. Kuo
How do you take an industry, the fashion industry, which is set in its old fashioned ways—even to the point of still wiring money through things like Western Union—and take it into the electronic age? We spoke with Cassie Betts, the founder of LA's District2 (www.district2.co), to learn District2 is looking to both create a marketplace, and a community, around independent fashion designers, helping them to find resources, vendors, factories, and contractors help them bring their designs to life, and help the whole industry move into the modern age.
Cassie Betts: We are a fashion-tech, B2B marketplace in the apparel space. We help apparel designers connect with factories. Designers go on to our platform, post a production project, and contractors and factories bid on those projects. Based on ratings, reviews, and price, designers are able to hire a factory or contractor from our platform. District2 solves three major pain points in the industry. Number one, is production line capacity is a huge problem in the fashion garment industry. There's a lack of information on materials, design, types of products, minimum order size, and other information on different producers, which makes it difficult for designers to find who can manufacture their garment. That information either is provided piecemeal, or completely unavailable. We aggregate high quality, vetted information on contractors, and they can also provide data points via our platform, to help smooth things out. The other is quality control, and quality in general. It's especially hard when producers are remote. Our uusers can use ratings and reviews, to know if they are working with high quality manufacturers. The third problem we solve, is pricing and payment. Right now, it takes too much time. Plus, everyone hates the system. Right now, when you are new to the industry, you actually have to send money to those contractors using Western Union. You feel like you're a drug dealer when you're sending thousands of dollars down at the Western Union office! We let designers get a range of bids, and will hold payments through escrow. We're also building a secure payment system, adapted for the fashion industry, which will take into account progress payments, milestone payments, shipping, customs, and things like that. Our platform also provides project tracking and customer relationship management. That's the gist of what it is. It's all about the apparel industry. I've been in this game a long time, and I think we can help the industry come into this century.
What is your background?
Cassie Betts: I have been in the fashion industry for, literally, forever. In kindergarten, when I was at Career Day, I said this is who I am going to be. I entered professionally in 1998, when I had my first real job, and I have been here now for a long time. Before that, going back to when I was a kid, I was also a super geek. I liked robots, calculus, and computers, and I even learned how to code at age 9. Even so, I knew I had a huge love for fashion, and funny enough the reason I learned how to code, was there was a computer game that I really wanted that my friends had, but to make it do what I wanted, to I had to code it myself. The only reason I learned how to code, was to learn how to change Vanna White's dress on that computer game. I want to say I was all for the girls code movement, but it was just about changing Vanna White's dress! The huge part of why I code now, is I want to help provide utility and help my industry. I think of them as my friends. We are makers, designers, pattern makers, they are my people. I laugh and say it's like Moses—These are my people, and I am in it to help in any way I can.
Fashion is my thing, and tech is the world we live in, and as an industry, we are behind. I created District2 to bring us into this century, so that we are growing, not dying. The apparel manufacturing industry is actually growing exponentially, globally, but the nine-to-five jobs are not in the U.S. As a result, the indie designers and entrepreneurs are increasing at a rate of 11 percent per year. Those are the people who had been working for fashion brands that had closed down, or have just started their own thing, and need these resources. That's why I came up with District2. For one, it brings people together, and it also provides utility to help people in our community.
The fashion industry seems to have as many entrepreneurs as the technology industry, why is that?
Cassie Betts: Every fashion students wants to have their own line. It's just the thing. I can't explain the psychology behind it, but that's what it is. No one goes into this industry saying they want to work for the man all their life. Everyone goes into it thinking they will have their own thing. That's what we are helping them to do.
What's the hardest thing for those independent designers to figure out?
Cassie Betts: It's finding a factory that will respect you as an independent designer. We actually have partnered with a group here in LA, Manufacture LA, the LA fashion incubator. We're here in downtown Los Angeles, and have started collaborating with other designers and makers in a small space. Designers like to try out small production runs, sometime only 20 or 30 pieces. It's very hard for those designers to find a factory willing to do those small runs and take them seriously. Those factories tend to put them on the backburner for six months, and sometimes they never get to them because a big company like Forever 21 might put in an order. It's about getting respect, finding those factories who cater to indie designers. More money is actually generated from the smaller businesses than the big boys, but I think it's just hard for independent designers to navigate that, because the industry is not used to it.
Given the lack of use of technology right now in the fashion industry, how has the reaction been to your marketplace?
Cassie Betts: On the designer side, they are excited. We have about a thousand designers who are visiting us every month, and about 35 percent of them are coming back very consistently, and this is before we've done any marketing. We've been working through bugs, and trying to make those thousand customers really happy. They've been very receptive and happy with things, and they've been giving us a lot of feedback. We've pivoted how we've done many things based on the feedback. For example, we didn't initially have ratings and reviews, and they really asked for that. On the factory side, U.S. factories tend to be a stodgy industry. Initially, when we got started, we actually had to populate all the information about those factories in ourself—they just weren't going to do it themselves. We actually had a group of youth—which is a whole other story—who we hired through a social community project. There was a grant to hire youth to do this, so we had them put all the manufacturers on our platform. At first, manufacturers were very skeptical, but since them, they have sent lots of emails thanking us, because of the business they have gotten from the site. I think, as the word spreads, things will grow. The thing about the fashion industry, is it's a small, tight knit community, and once something hits, it hits like wildfire.
What's next for you?
Cassie Betts: Now that we've done the R&D, and done hundreds of users tests, it's all about perfecting it and watching our conversion rate steady. You'll see us working on marketing and PR once we have a really steady conversion rate. Around that time, we'll be looking for funding. We haven't actually been doing that as of late, though we might start looking in the summer. I've noticed that either you are fundraising or building products, and it's very difficult to do both. Right now we've stopped fundraising to focus on the product, the people, the community, and the platform. I think as long we do what we are supposed to, the investors will come.
Thanks, and good luck!