It’s a pretty safe bet that ‘perseverance’ has been on the list of useful entrepreneurial traits since people first started founding companies.
That’s good news for Mark Fishman and his cofounders because they’ve been through a lot.
Their app, Craze, is launching this September, but it’s been a long road to get them to that point. They’ve had to endure software bugs, missed deadlines, the loss of significant investment money, and even a name change, all before pivoting to their current structure.
Fishman was bored and unhappy in his job at a financial firm when he concocted the idea for the company initially known as Frockhub.
“I don’t want Craze to be associated with Frockhub but it’s very important for the conversation,” said Fishman, bemoaning the many bugs and high costs that were endured when Frockhub launched.
Beginning The Conversation
While reading about the tech industry, Fishman kept seeing articles about how many new warehouses Amazon was building.
The popularity of online shopping had been growing steadily, outpacing traditional retail growth every year. But that popularity was also creating a problem for online retailers: According to Morgan Stanley, the return rate for online apparel retailers is about 50 percent.
This has given traditional brick-and-mortar stores an advantage in the retail game so far. According to one study, complicated return policies are the number one reason some people refuse to buy online.
With respect to clothing, Fishman believes part of the problem is that buyers can never be sure how they will look in an item when they buy it online. So when their order shows up and they don’t like how it looks, it gets sent back.
So Fishman set out to do for fashion retailers what Grubhub did for restaurants. His idea was to advertize clothing from all the different brands and stores in New York City, and when someone ordered something, his company would pick it up and deliver it to them.
“It would be the easiest way to get something super-fashionable, super-fast. Three hours delivery guaranteed. There would be a guy outside [your door] waiting for you to try it on so you know it fits and you wouldn’t have to go through the whole hassle of returning it,” he said.
The First Hurdle
Turning a profit from e-commerce is difficult even for the giants, and when Fishman and his team began running their own numbers they realized the company’s break even point would be ridiculously high.
“There’s a reason Amazon isn’t profitable,” said Fishman. Until recently, the world’s largest retailer posted razor-thin or non-existent earnings each quarter. Its profits have only been buoyed recently with the introduction of its cloud services division.
According to Fishman, the only way for Frockhub to turn a profit would be to fulfill “tens of millions of orders” and just hope people started to notice the company.
That’s when the team made its first pivot. Their new idea: an app where you can shop for anything your heart desires, not just clothing, and rather than shopping from one source like Amazon, you could buy from any store you wanted using a single app.
“There would be a universal shopping cart. You wouldn’t have to go through five different apps; you wouldn’t have to get sent to a bunch of different department stores and fill out your credit card information,” which Fishman pointed out is especially tedious on a mobile phone.
They would build their brand by reaching out to bloggers and have them promote items through their site. If someone clicked the blog link and bought something, those bloggers would earn a commission. It was a win-win.
Another Bump On The Road
The team began emailing bloggers about their idea and received positive responses, which gave them the confidence to start investing their own money. They hired a programmer who promised he could deliver the app at an affordable price.
But after months of delays, Fishman began to grow concerned when the product wasn’t delivered. He eventually learned that the programmer had contracted out the work to other developers. That’s when the programmer told Fishman he was burnt out on the project and no longer interested.
Fishman and his partners continued to invest in the technology, spending hundreds of thousands of dollars of their own money. They hired another developer to rebuild the platform, who began building on top of what the contractors had already put together.
“I think I was just relying on a miracle that when we launched it would actually work,” he said.
They launched the app in the beginning of 2016. The number of downloads continued to grow but the team was discouraged to realize the app was buggy and barely functional.
“By day five we already had close to 5,000 downloads and the complaints were coming in: ‘I can’t find this,’ ‘This doesn’t work,’ ‘That doesn’t work,’ ‘I can’t log in,'” said Fishman.
Finding The Positive
Fortunately, the number of downloads proved that their strategy of appealing to bloggers worked. The bloggers they reached out to promoted the app despite the bugs. That helped the team prove they could generate downloads without spending any money on marketing.
So if they could put together an app that worked properly they assumed it would be a success. But that would require another pivot.
That’s when Gigster entered the picture.
Fishman knew a programmer who he was working with on a separate venture. That programmer also happened to be part of the Gigster network. He repeatedly told Fishman that the company could solve his problems. Fishman eventually listened and reached out to Gigster to help build the app.
With this third iteration came a new name. Craze became the culmination of the best ideas of each of Fishman and his cofounders’ previous iterations. Their team could generate downloads at no cost, cut down on the return rate problem, and use a universal shopping cart to buy from multiple distributors, all while concentrating on what initially appealed to Fishman: fashion.
Using what Fishman calls cutting-edge technology, Craze allows customers to use 3D images to see what they look like in an item of clothing. If you want a blue shirt you can scroll through images of people wearing a blue shirt. Once you find someone who looks good in the shirt you can buy it.
Or better yet, you find “the person that you see yourself looking most similar to, and he looks good in the shirt. Then you’re able to make an educated decision whether to purchase that shirt,” said Fishman.
By offering up as many pictures as possible, powered by a social media feed of people uploading pictures, customers are able to make informed choices about what they’re buying.
Keep On Keeping On
So how did Fishman and his team persevere through all those hardships? Fishman gives much of the credit to his cofounders, Molly Hurwitz and Ari Bregian.
In order to get Craze up and running, the team had to meet with a number of higher-ups at some of the world’s biggest retail companies. They spoke with Peter Nordstrom in Seattle, met with executives from Neiman Marcus, and chatted with Terry Lundgren, the COO of Macy’s.
Fishman attributes these connections to Hurwitz’s drive and determination. “We met all those people. She just believed that she was able to get to them and that was it,” said Fishman.
Bregian takes care of the logistics. “He saved me hundreds of thousands of dollars on consultants that I didn’t have to hire,” Fishman said.
Fishman also says the flexibility of Gigster’s team helped them get through the hard times.
“We’re very, very proud that we have Gigster building our product and we definitely appreciate the tremendous amounts of patience and transparency,” he said.
If you need a professional team to help you smooth out your project, contact Gigster today.