Marc Worth is a fashion entrepreneur who started his online trend-forecasting business, WGSN, in 1997. In 2005 he sold the company to Emap for £142m.
Since then he has tried his hand at retirement (which didn’t last very long), invested in a couple of start-ups and tried and failed to resurrect seventies fashion brand Ossie Clark. Now, he is starting up all over again with design inspiration service Stylus. He spoke to Startups about his successes, failures and his advice for other entrepreneurs.
Ossie Clark was a disaster but it taught me a few lessons. When you sell a business for 150 million quid you think that you’re infallible, but I think that even after 30 years in business and a success like WGSN, you can still make mistakes.
The three mistakes I made were employing someone to run it who knew as little about that end of the market as I did (who also happened to be a personal friend – not a good idea!); not getting involved properly myself. Thinking you can pump lots of money into a business like that and just go in once a week – you can’t run a business that way; and…not asking myself: does the world actually need another fashion brand?
What I suggest to any start-up is ask yourself one question: does the world, does the industry, actually need this product?
I would say first of all, ask that question. Is it a product looking for a market or a market looking for a product? And if it’s a product looking for a market, don’t bother.
Where possible, try to avoid seed funding so you can maintain the majority share of your business. We were fortunate with WGSN because we had our family business and we were able to fund the start-up ourselves over the first 18 months. We could get the business to post-revenue stage so then, when we went out to raise money, we could do fantastic valuations.
At the worst we (my brother and I) probably owned 70% of the business, so our investors only had 30%. Businesses that are not as successful and their founders only own 10% of the business, you bust your guts for years and you don’t have much to show for it.
I had someone come to see me a couple of weeks ago with an idea for another of these online fashion offers – there is so much of this sort of stuff around. Everybody’s doing something slightly different, but how many more of these could you actually have?
I think you have to differentiate between business-to-business and business-to-consumer. In the B2C space there are so many businesses and it’s a very confusing and very competitive space.
I don't believe you can keep a totally unbiased position if you are accepting advertising dollars from a customer.
Some people say the product is expensive. Some say it’s nothing. When you breakdown the cost of £10,000 per year for three users, it's actually less than £10 a day – a small price to pay for the type of content that we provide and the difference it can make to a business.
Smart companies don’t see it as a luxury and are prepared to pay for trusted, well curated content. They don't have time to sort the wheat from the chaff.
We don't aggregate content - it's all proprietary and we have an opinion. WGSN became a must-have product for businesses after the first year of using it. It’s only when you start using it that you realise it’s a must have.
If it’s a good business and you can make your mark now, then when we come out of recession those businesses will be very, very well placed. You need nerves of steel and very deep pockets. Stylus will be loss making for two to three years.
The non-compete clause we had when we sold WGSN to Emap had expired and I put in the funding myself, so there were no problems there. Finding good sales people was not complicated, but then it’s a smart product. What was more challenging is trying to sell to 30 different sectors.
If you look at a big organisation like M&S, the top bit of the triangle – the four or five creative directors – really understand it. And the next level down probably also get it but the big group underneath, the designers, they don’t get it yet.
Everybody has WGSN, which has made it too easy for people not to use their brains and create – it’s made the industry lazy and we have a job to re-educate them. Stylus is not a prescriptive design tool – it’s an inspiration tool. The smart people within a company understand it.
I think it’s probably finding good people. I don’t think funding is such a problem – there is plenty to go around but only if your business is good.
In the current economy, certain parts of the world are suffering more than others. Find out where the growth markets are and follow the growth. Turkey is a serious growth market.
We brainstormed for months before coming up with a name. We played on VisualThesaurus.com, which allows you to type in a word and it creates a mind map of related words. We typed in ‘design’ and ‘stylus’ came up.
Your name is important, but more important is sticking to brand values. The best example is Burberry, which six or seven years ago was a complete mess. They brought in Angela Ahrendts as CEO and Christopher Bailey as head designer. Now, in every business within the business, nothing happens without it going past Christopher Bailey, so the brand is watertight.
With WGSN money was the motivator, as it is for a lot of younger entrepreneurs. But I’ve been in business for 25 years now, so it’s different.
To be honest, my motivation to do this again is – I was bored. At the end of the summer of 2009 I found myself aged 48 and retired and I just felt that I was too young to do nothing. I wanted to do something that I knew how to do and do it again.
I love the idea of the personal interaction. But more so, seeing something grow into something people love.