01 May 2010, Posted by admin in 20 Questions,Fashion, 0 Comments

20 Questions With My Nines

Name: Apar Kothari

Job Title: Founder and CEO of MyNines

70% off is the new 20% off, according to Apar Kothari, the founder and CEO of MyNines. If you are one of the millions of savvy online shoppers who get a rush from scoring designer bargains (up to 90% off) through invitation-only private sale sites, but can’t seem to keep track of all of the best deals then get MyNines on your radar. The site launched in March 2010 and is a one stop shop for all of your favorite private sale auction sites, meaning you’ll never have to miss a great deal again. An avid shopper herself, Kothari tells us why she chose to get an MBA, what brands can do to stand out and why online sample sale sites are good for the fashion industry.

Jennifer Sung: What is MyNines and what value are you offering to your customers?

Apar Kothari: MyNines is the Kayak.com for private sales–we aggregate different sale sites that are out there and help you find them all in one place. Most people have heard of the top four (Gilt Groupe, Ideeli, Rue La La, and HauteLook) but there’s a whole bunch of others out there that most people don’t know about that have access to fantastic brands. They just aren’t being discovered because they don’t have the marketing budget that a Gilt Groupe does, so we’re also a discovery tool for people to find all of these fantastic deals out there. Our value proposition is that you don’t have time to open twelve or fourteen different emails so you can come to one place and find it all here. We will also have an online shopper strategy–if you are familiar with Shop It To Me (a free personal online shopper), it’s similar to that. If Prada is your favorite brand, every time something from Prada goes on sale, you can set up an alert and we will send you an email in real time so that you don’t have to monitor the sales.

JS: How will MyNines make money?

AK: Exactly like Kayak; we get paid whenever a person makes a transaction through MyNines.

JS: How was the idea for MyNines born and what makes it different from all of other sites out there?

AK: I was most recently over at Fox Interactive Media in Los Angeles in their corporate strategy group and I was doing a lot of work in the e-commerce space where we were trying to move away from ad revenues and looking more broadly at companies like Amazon and Zappos. We also started looking at companies like Gilt Groupe and Ideeli and Rue La La [because of] all the attention they were getting in the press. I was obsessed with them as a consumer and became personally interested in the space. I actually started interviewing with Gilt Groupe and Ideeli and Rue La La [for jobs]. While I was interviewing, I had the idea of aggregating the space given that it’s happened in every other industry like Kayak for travel, Mint for finance, Meebo for instant messenger, etc. It just made sense. So I ended up moving back to New York in August [2009] and have been working on this full time ever since.

Luckily, we are the only ones out there doing this right now. The barriers to entry are obviously very low for the consumer business. I think what it comes down to is mastering return on investment and the user experience. We actually have GSI Commerce [an e-commerce company specialized in running online shopping sites for brands and retailers] doing early usability testing for us. Usability testing involves looking at the website, allowing real people to use it, and then using eye tracking technology to see where users are clicking and where they are having trouble. It could be something as [simple] as the user not being able to find the search button and making it bigger. I think [user experience] is crucial for the consumer business. You look at a company like Mint–there were 13 competitors in that space but the reason Mint won out is that they had the best user experience and that’s really what we are aiming for.

JS: Why did you decide to take on this challenge now? What makes now the right time to launch something like MyNines?

AK: Why now? So first, it’s the market opportunity. People are not buying things at regular price. 70% off is becoming the new 20% off. I had a friend tell me that she was looking for a pair of Rock & Republic jeans a couple of weeks ago and she refused to buy them at regular price because she knew she would come across a sale on one of these sites.  So she signed up on a lot of different sites and she kind of opportunistically waited, checking these emails every day. She actually ended up buying a pair of Seven jeans that she saw on MyNines because they were 80% off. She was like, ‘Forget the Rock & Republic jeans. I’ll get the Sevens because they’re so cheap.’ So value is what really drives the purchase. It’s like going to a flea market. You don’t really know what you’re looking for–it’s more like show me what’s out there and if I find something at the right price, then I’ll buy it.

I also think there’s a very low opportunity cost. I started my career out at IBM and went over to venture capital after that. I always knew I wanted to do something entrepreneurial but was too risk averse back then to do it.  So I went off to business school, came out of business school, went to Fox and decided that the corporate world is just not for me. I kind of just waited for the idea [to come to me] and [MyNines] is something that’s been proven. Kayak is a proven model and these sites work. People love them.  So I guess it was pretty risk-free for a startup.

JS: You graduated from Harvard Business School in 2008. Can you share your business school experience and how that might have played a role in your decision to launch MyNines? Do you think an MBA is necessary to launch your own start-up?

AK: So for me, it was a personal choice. Especially as a woman, I always wanted to go back to school because I think that an MBA provides me with a lot of credibility. I went to NYU Stern for my undergraduate [degree] so I can’t say I [really] learned anything from a business perspective but the network, the connections, the public speaking skills, the way you just learn to think things through strategically before coming to a solution–those were the types of things I learned at business school. I think it helped me out in so many different ways and the biggest way [it has helped] is that it opened doors. I’m able to use my [HBS network] and everyone is willing to give you the time of day even if it’s just for a 15 minutes phone call. It’s also a fallback. One of my professors from business school told me, ‘When you graduate, go and do what you love. You have a wildcard now. For two or three years, you can join the circus if you want [because you have your MBA].’

JS: Given your background in media and venture capital, what elements from your previous work experience might we see reflected in MyNines going forward?

AK: A lot of elements. I used to make these power point decks all the time and it’s unbelievable how much that skill comes in handy. Also being able to present things in a logical and strategic format like the mock ups we’re doing for some of the publishers that we’re talking to right now. On the media side [from Fox], I’ve been able to carry over a lot of the hard skills like being able to manipulate data, create presentations, and analyze data.  From venture capital–we [MyNines] have been raising money for the last couple of months and it’s really interesting being on the other side of the table. The good thing is that I know exactly what they are looking for and I know what they’ll say.

JS: You have partnered with many retailers including Billion Dollar Babes, Ebay’s Fashion Vault, and the Guiltless Purse. How does MyNines benefit your partners? How were you able to convince them that partnering with MyNines would be a good idea?

AK: So believe it or not, it’s been pretty easy to get most of our smaller partners on board because our business model is such that we don’t make money until they make money, so it’s essentially free for them. And the reason why we did that is because a lot of the smaller sites have access to fantastic inventory but no one is opening up their emails. We’ve done some focus groups and it seems like a lot of people open their emails if they recognize a brand that they like in the subject line. And even then, there are so many emails flying around. Are you opening Gilt’s emails? Are you opening Rue La La’s emails? People are not even looking at them anymore. So one of the benefits is just getting more eyeballs on products, especially for the smaller sites. We’re taking a similar approach to what Kayak did where we are getting all of the smaller sites on board first and then going after the larger sites. We are obviously in conversation with the larger sites and we’ve [received] different reactions from each of them. I don’t think they will join until we reach some mass, whether it’s 50,000 users a month or whatever the number is.

Secondly, I think there’s a whole new demographic out there that these sites have not yet captured and that’s the baby boomers who are looking for deals. So folks like my mom who is not going to sign up for all fifty different sites out there. While I don’t think she would sign up for all of these different sites, she would come to one site where she could find all of the best deals across a whole bunch of great brands. We want to reach that demographic and we have some user acquisition strategies around that.

The last thing we can provide our partners with is detailed reporting analytics. We can tell them, for example, that [a customer] bought two pairs of shoes from Gilt but [they] also bought a pair of jeans from somewhere else. We can’t disclose where that somewhere else is but it’s information that they would find useful in targeting [customers].

JS: Have any online retailers turned you down and if so, why?

AK: Yes, the big four–so that’s Gilt Groupe, Ideeli, Rue La La, and HauteLook.  They refuse to work with us at this point and their concerns are all different. For Gilt, they have nothing to gain by joining us; they have over 2 million members and their concern is that [a site like MyNines] would cannibalize their existing user base.  Rue La La’s big concern has been that they don’t want their products featured next to their competitors’ products – I can’t argue with that.  That’s what an aggregator does.  And their other concern was what if [customers] stop opening up our emails and sign up for ours?  So that’s the reason why we actually don’t have a daily email because our whole value proposition is to reduce email traffic; we are going to have some sort of weekly or bi-weekly digest where if you clicked on a black Prada bag last week, then we’ll show you a black Gucci bag this week that you might be interested in.

I think these products are partially becoming commodities–that’s the largest sites’ biggest fear. [The larger sites are] offering a Prada bag for 60% off and one of these smaller sites [might be] offering the same Prada bag for 80% off. I haven’t seen the same product on sale on the same day yet. I know a lot of brands do some kind of exclusive [deal] where you can’t have products on sale if another site has it on sale as well but what I do envision happening is people not being as picky when they are shopping this format. If I see a black Prada bag on sale for 60% off at Gilt and I see a nicer Gucci bag at 80% off on Sally’s small sample sale site, I might buy the other bag [that is 80% off] because it’s cheaper. So it does threaten the larger sites’ business in that sense.  For the smaller sites, it’s great because they aren’t getting discovered so something like MyNines is good [for them].

[Ultimately] we need to prove ourselves and get [more] users–this is exactly what Kayak did. Kayak went after all the small guys first and then they went after American Airlines. They tried to coerce them to join and eventually American Airlines did because Kayak was just so big and that’s where people were going for travel. And there are certain airlines like Southwest that never joined. There might be certain players in this market that will never join.

JS: Have you found a big difference in the shopping patterns between the regular retail shopper and the online private sale shopper?

AK: A huge difference. When you go to a store, you usually go there with the intention of buying a dress for an occasion or a pair of jeans–you go there looking for [a specific item] whereas when people are shopping in the private sale format, they [have the mindset] that they are looking to find a deal. They don’t necessarily know what they are looking for. My partner Gil Moran who is based out in LA is a guy who had never even heard about these sites until we started the business. His favorite site was Ebay. He found a Reebok basketball on sale on our site the other day at 70% off and he was saying, ‘This is awesome. I would never have thought to go to the site and search for a Reebok basketball.’ So it’s eventually going to be all about exposing relevant products to a user. I’m curating the site right now. We’re working to get some bloggers to curate for us and others might dedicate a section of their blog for us where everyday they’ll promote a different product on sale from MyNines.

JS: Which products or categories are working best at the moment? What are some of the most popular brands and trends that you are seeing among your users?

AK: What’s interesting is that about 35% of our business right now is coming from guys. We don’t have great inventory in the menswear section [right now] but we partnered with Left Lane Sports that sells sporting goods and athletic wear, which has been doing really well with the guys. We also have some really nice Swiss Army watches from Billion Dollar Babes at 60% off that were really popular. So for guys, we’re probably going to get more mainstream brands whereas for women they like the higher end stuff–the Gucci and Chanel bags. Chanel bags sold out very quickly.  Coach started doing it as well. I remember reading in an article about six months ago where [Coach] stated that they would never do private sales because they [were set] on going through their own outlet stores, but one of our partners that we just signed on with just had a Coach sale last week. So even they are doing it now.

JS: Today, private sale sites are one of the fastest growing segments in retail and many brands are finally paying attention to the online opportunity. Following the lead of Gilt Groupe and Rue La La, a large number of flash sale shopping sites have popped up in recent months and even high-end department stores like Neiman Marcus and Sake Fifth Avenue are getting into the game. How many online sample sale sites are out there and what’s the market opportunity for these sites?

AK: We’ve identified at least 50 sites and there’s a new one launching almost every week. There are almost no barriers to entry in [the private sale] space. The reason why I say that is because one of our partners is literally made up of two women who came from retail backgrounds and have relationships with all these brands that have excess inventory to give away. So there’s one or two [private sale sites] popping up every week.  The market opportunity is estimated to be $2 billion based on Gilt’s estimate of $500 million in revenue for this year. The way that it will get a lot larger is through traditional retailers like Saks Fifth Avenue and Neiman Marcus and Nordstrom’s that are starting to move into this space. A lot of brands are also starting to do it [themselves]–brands like Nine West feature a pair of shoes on sale everyday for 80% off. Club Monaco also does some sample sales on its site.

We want all of these retailers to distribute their product sample sales through us. So retailers like Saks Fifth Avenue, which is still experimenting with [private sales], are seeing cannibalization of their existing user base because they have Seven jeans at regular price on their website and then they offer Seven jeans for 80% off for the next three hours. They are facing deterioration of their brands by doing that. So we want to tell them to distribute all their sample sale products through us and when someone clicks on a product on MyNines that is coming from Saks, instead of taking them back to Saks.com, which is what would typically happen, we would create a site that sits on our platform and the end user will never find out that the product came from Saks. That way Saks will protect itself from facing brand deterioration.

JS: Many of the sites have been able to secure great products due to the abundance of leftover inventory by many retailers due to the recession.  As designers scale back on inventories and limit production, do you foresee that as a challenge in future offerings?

AK: No, I actually disagree. When Gilt initially launched in 2007, people were not buying things at full price and all these brands had to find some way to get rid of their inventory and recoup some of their costs. Rather than going through a T.J. Maxx or Marshalls, they went through [the private sale] channel because it’s more hidden and more exclusive and for members only. Now, as these companies are realizing how well items are selling through this private sale curated format, a lot of them are actually manufacturing exclusive inventory to just go through this channel. And that’s why there’s room for all of these smaller sites to survive because there just isn’t a shortage of inventory anymore.

JS: Do you think online sample sale sites that offer designer products at steep discounts are good or bad for fashion?

AK: I think it’s a whole new source of revenue. Where is this revenue coming from? Is the revenue coming from people who used to shop at Saks Fifth Avenue and Neiman Marcus or are they people who used to shop at T.J. Maxx and Marshalls or are they people who just shop online?  I think it’s a new demographic–it’s the people that couldn’t afford a Gucci bag before.  All of a sudden, [brands] are making all of these aspirational products available to regular people. I think it’s healthy in that the market is expanding and more and more people are able to get access to these brands. The exclusivity of all these brands is going away. You know, Gucci isn’t as exclusive as it once was back in the day. When you owned a Gucci bag, you used to be part of this exclusive club but it’s not a huge deal now.

JS: What do you think will set apart the online retailers that thrive in tough economic times versus those that will fall by the wayside?

AK: It will be based on the brands that they carry and the deals that they offer [to customers]. That’s one of our major strategic initiatives. You have to be over 40% off; you won’t find anything under 40% off on our site except for wine and travel. I think anything 40% off and greater is considered a good sale. And then second, they have to have the custom limited time format because it creates that sense of urgency of get it now or it’s going to be gone (even though that’s not really the case anymore because you will find the same product coming back). But I think what it comes down to is brands. We need to start becoming more and more selective about the brands that we feature on our site. I don’t envision our site ever having more than 5,000 products. I don’t want our site to be known as the site that just has crap inventory. We need to focus on getting the best brands (not just necessarily high end)–brands that people have heard of and interesting emerging designers. I think Ideeli is a site that does a good job with emerging designers. They introduce all these great new designers and do a good job of curating around the designer.

JS: Can you talk about the debate surrounding full-price selling? If consumers get used to getting bargains for designer goods, what happens to full-priced goods? Will anyone pay retail price for anything?

AK: No, I don’t think so. I think it’s a new way of shopping and I think people have expectations now. People are just not buying things at regular price and I don’t think they will for several years.

JS: In these tough economic times, what can brands do to stand out and gain the attention of the MyNines customer?

AK: Great value and great quality. I do think that it’s unfortunate that some of the notion of exclusivity is lost. As I said in my previous example, a Gucci bag is not as great as it once was.  So the disadvantage to the brands is that they start losing that luster if they decide to go through the private sale format, but at the same time, I don’t think they have a choice at this point. They want to at least try and recoup some of their costs if people are not buying their products at full price.

JS: What are the biggest near term opportunities and challenges for MyNines?

AK: The biggest opportunity for us is that this market is so new and no one really knows where it’s going. We have enough to do right now with all of the new sample sale sites that are launching every week but as more and more retailers like Saks and Neimans start to use this private sale format as well, our market will get a whole lot bigger. And then as brands start doing it themselves, we can offer them our platform, which is a huge opportunity for us. There are also retailers like Nine West who see what Gilt Groupe is doing and are wondering, ‘Why don’t we just do this ourselves?’ But pretty quickly they are going to realize that they can’t offer the sale on their site–maybe at 30% off but not 70% off because they will cannibalize their existing customers on their site. That’s a huge opportunity for us.

In terms of overall opportunities, I’m sure you’ve heard of Groupon and other daily deal sites. We just partnered with a company called Cherry Deals based in the West Coast that offers ten different deals across eight or nine different cities a day. They have fantastic deals like spa and yoga deals and high end restaurants; that’s another way that our market could get larger. You know, it’s funny, a lot of these daily deal sites have been reaching out to us and telling us that the same demographic that is interested in private sales is also interested in these daily deals. I totally agree. I think these deals are great but I think they have the same issue as the private sale industry–there are too many to keep track of. You know Groupon is the one site I actually do open every day because I’m curious to see what they have, but I’m sure there’s a whole bunch of others that I’m missing out on because I don’t have time to open up all those emails.

The challenges are going to be user acquisition–how do we get people to discover us. Building up barriers to entry is another challenge. One of the ways I think we can build up barriers to entry is by locking in publisher deals and powering up sample sale sections on other sites. The good thing is that everyone wants to get involved in this space from Elle and In Style to Ebay, which just launched Fashion Vault. So part of it is just riding that wave and trying to get as many publishers as possible to get involved with us and allow them to offer their customers great valuable deals.

JS: What do you do in your role as CEO?

AK: The company is three people right now. It sounds so cliché but every day I wear different hats. The majority of my time should be spent on business development and that’s really finding [new private sale sites to partner up with] and finding publishers who can power up a sample sale channel for us. My role is also about setting the strategy and direction of the company.  Realistically, I should probably be spending 80% of my time on that but I don’t. I’m doing a thousand different things.  So this week I’ve been doing everything from getting sponsors for our goodie bags for our launch party in LA to choosing the venue to creating the invitations.

JS: What have you learned about yourself in your role as CEO of MyNines?

AK: That I need a lot less sleep than I used to think. What have I learned most about myself? Sometimes you just make decisions on the fly and you just go with your gut and most of the time, it’s actually worked out really well.  I come from a corporate background where everything takes so much time and that was one of my biggest frustrations–when I was looking at all of these cool deals and thinking about all these cool ideas, by the time I would got through the ten layers of bureaucracy needed to implement something, [the idea] would either be lost or there was no accountability. Here, I can make a decision right now and see the results in eight hours. For example, we just signed something with Cherry Deals two days ago and tomorrow we’re going to have their feed start coming in [on our site].  So it’s amazing how quickly things move and just how much progress you’re able to make.

JS: What is the best piece of career advice you’ve ever given or received?

AK: To follow your passion. I don’t think you’ll be happy until you do that and like I said, I’ve always wanted to do something entrepreneurial. I just didn’t have the guts to go and do it. Even my parents tell me, ‘We’ve never seen you so passionate about anything before in your life.’ This is the first time where I am doing what I actually really want to do–there’s always risk involved but it’s so worth it. I haven’t been taking a salary for the last eight months and that’s been tough while living in New York but it’s been the most rewarding experience. So I would encourage everyone, if they can, to truly follow their dreams. A friend of mine last Sunday said to me, ‘Oh man, it’s Sunday night. It’s so depressing because I know I have work the next day.’ And it’s been a really long time since I remember saying that. I just love what I do and [I love] coming in everyday. It’s a 24/7 thing. I don’t sleep. You have to know what you’re getting into. It’s hard but I absolutely love it.

Photos from top: Screenshot of MyNines.com, a photo from the MyNines LA launch event and a screenshot of a D&G slingbacks listed on MyNines for 60% off

Visit MyNines.com for more information

–Jennifer Sung