Five start-up lessons from Net-A-Porter’s Megan Quinn
Earlier this week, Megan Quinn took to the stage at a lunch hosted by the Victorian Employers’ Chamber of Commerce and Industry to share the highlights of her incredible start-up story.
Quinn is the co-founder of UK-based fashion website Net-A-Porter, which began back in 1999 when online retail was largely a foreign concept for consumers.
Net-A-Porter started off with a turnover of 18,000 pounds in its first month of sales and doubled turnover each year until it was sold in 2010 for 350 million pounds.
Quinn was there from the start, after being approached by Natalie Massenet to assist in the founding of the business. She directed the brand development of the site until 2003.
When Massenet came up with the idea for Net-A-Porter, after discovering American online fashion store Girl Shop, her and Quinn, along with both their husbands, linked up to launch the online retailer.
Here, Quinn shares five of her essential start-up secrets:
1. Be the customer
“There is an enormous, enormous power in truly understanding the customer,” Quinn said.
“Knowing who they are, where they are, what they need, what they think, how they feel, what they want and when they want it.”
“We completely understood [our customer] and I really do think this is one of the keys to our success. I think the fact that we completely understood our market put us in very good stead.”
“Our target market was initially cash-rich, time-poor [consumers]… We wanted women to be able to shop from their desks, coffee shops, airport lounges, anywhere.”
“More importantly, I was a consumer. I was able to turn this guilty pleasure into a business asset.”
2. Design can be a game-changer
“I realised – and this was a crucial game-changer for me as a designer probably – that this needed to be a site for women designed by women,” Quinn said.
“We wanted them to experience the equivalent of Vogue – flicking through a beautiful glossy magazine – but being able to click on the image, buy it and have it sent to wherever they want.”
3. Respect investors’ money
“So many good concepts go out of business just because they run out of funding,” Quinn said.
Net-A-Porter faced the same issues as many businesses in getting funding to start-up.
Quinn said it was “quite clear” that the male financiers they approached “never understood the shopping power of women”.
She recalls the financiers saying “women wouldn’t pay 400 pounds for a handbag” while Quinn and Massenet kicked their 400 pound handbags under the table.
“So we went down the friends and family route,” Quinn said, recalling asking her father for an investment of 100,000 pounds.
He refused, and today Quinn likes to remind him that if he had invested the money he would have received 4 million pounds on the sale of the business in 2010.
Other family and friends were tapped for money until the four co-founders achieved funding of 850,000 pounds, but as the money didn’t come easily, Quinn said they were very careful with it.
“We were enormously respectful of our investors’ money and we didn’t squander it on high rents or airfares,” she said.
“We paid ourselves 20,000 pounds a year each, so we were earning less than we paid our nannies.”
4. Come one, come all
“The internet, back then, was associated with mediocrity and discounting – high street, not high end,” Quinn said.
“Natalie had a tough time convincing designers that we would nurture them, that we respected their brand, and that we would present it in a new way.”
“We explained that we wanted it to be like a high end fashion magazine. Their reach could be global, which would be hugely advantageous to them.”
“Whilst Natalie had a number of refusals, the people who decided to come on were key.”
“We had Anya Hindmarch… and, as luck would have it, Tamara Mellon from Jimmy Choo decided to come on board in our second season, which was hugely advantageous.”
“They were a locally known brand and they certainly helped open doors.”
5. Use social media as a real-time dashboard
“I think [social media] has been a game-changer in every industry,’ Quinn said.
“It’s the new order, and it’s much more bottom up than top down. And as it should be – we can all vote with our feet, with our fingers,” Quinn said.
“It makes us all as businesspeople better at what we do. It keeps us on edge. We used to have to do surveys and focus groups. We don’t have to do that anymore. We’ve got it all the time.”
“It’s there in front of us, daily. It’s updated. You can see what they like. You can see what they don’t like. Respect their opinions, follow their lead – they’re your customers.”