Globe Incubator panel tackles Koi Swimwear
If you’ve ever pitched VCs for capital, you know that the experience can range from being useful and uplifting to downright maddening. After I had attended a few meetings of The Globe & Mail’s ROB Incubator Panel, I was heartened to realize that the assembled team was dispatching a wealth of useful ideas and course corrective perspectives — all in the space of 45 minutes.
We tackled Koi Swimwear yesterday, and I believe the majority of the panel (Mark Healy, Jordan Banks, Dan Macdonald and I anyway) could see how the founder could take the business and grow sales by 5x over the next couple of years.
Easier said than done, of course, but the fact that Jennifer Bharti had been able to get her designs into stores in Toronto’s Yorkville as well as Florida struck me as passing the first test. The second test was that Ms. Bharti had been able to sell enough through her handful of outlets to get the stores to agree to have her back the next year, and sales grew by 33%.
All good signs to those of us in the investing business.
The obvious questions arose:
– does the world need another mid to high-end swimsuit producer?
– are the models on the Koi website too stick-thin to generate sales from what Marina Strauss referred to as “normal” women?
– where are the 2008 styles?
– should Koi try to attract outside investors?
– who is going to play the role of “Angel Advisor”?
– are there some good marketing ploys that Koi could pull off without spending a lot of money?
Our firm sees something like 500 opportunities each year. And while our investing stage is later than Koi is at just yet, there were a few things to note:
Amy made that point that Shan swimwear has been a great success since it was launched in Montreal in 1985, and the reason is fit and quality. For my money, that’s not a reason to pass, as the success of Spanx, Lululemon and the Bugaboo prove, just because someone is already making a stroller or a tracksuit isn’t a reason to stay away from a product category. Amy, our resident expert for all things related to retail busines, certainly thought the market had room for another designer.
In tech investing we see the “me-too” stories, and they do get frowned upon unless there is a stark improvement in the technology already being deployed. But most consumer products aren’t a novel idea, which appears to make the marketing and design elements that much more crucial.
The fact that Koi is already on the map mattered to many of us, and most of the panel’s time was spent trying to course correct, rather than pronounce that the business would soon be hitting a dead end. That it won’t.
And that’s one of the pleasures of this panel (the energy and feedback is positive), versus some of the bile-producing splenetics you will see on the CBC’s Dragon’s Den, where “Simon” takes it upon himself to snuff out the entrepreneurs’ spirit for the preverse delight of 1.2 million Canadian viewers. And then stomp on it for good measure, with that “I live in Rosedale and you don’t” smirk. For a guy who has never run anything in his life, at least not successfully, you might wonder what the well of experience is that “Simon” draws upon to “teach” these prospective CEOs how to succeed. It might be good television, but it certainly doesn’t reflect how Canada’s merchant bankers and VC’s treat entrepreneurs when they pitch them their ideas.
For those who know me you might wonder what I know about swimwear or retail for that matter. Fair enough. That’s why the best piece of advice one can give in these situations is for the entrepreneur to find themselves the right advisor, someone with the industry experience to make for a great mentor-mentee relationship. Few entrepreneurs can succeed without these people in their lives, and it is always comforting for folks in the venture capital world to hear that a CEO has developed a network of people that he/she can rely on for a variety of things: raising capital, sales, branding, human resources, production, etc.
For Koi’s founder, Joe Mimram’s your guy. Get to him and many of your questions will be answered. Joe’s success starting Club Monaco, Pink Tartan and Joe Fresh (not to mention the assist with Alfred Sung) is unparalleled in the Canadian market.
Wishing Koi every success.