The Anti-Unicorn Playbook That Beat Fashion's DTC Boom

**Sheena Butler-Young** (0:08)
Hello, and welcome to The Debrief from The Business of Fashion, where each week we delve into our most popular BOF professional stories with the correspondents who created them. I'm senior correspondent, Sheena Butler-Young.
Picture this, it's 2016 You're swiping on your Glossier bomb.com, pulling on an Everlane box cut tee, and slipping into your Allbirds before heading out the door.
Back then, these direct consumer disruptors weren't just selling products. They were selling the future of retail. One Instagram ad, one venture capital round, one minimalist logo at a time. Fast forward a decade and the picture looks very different. While many of those once high-flying DTC darlings have stumbled, a quieter class of brands founded around the same time, labels like Doen, Hill House, Kate, Laleen and Staud are thriving. So how did these brands stage their growth playbook to allow longevity while others ran off course? Today, I'm joined by BOF editor Diana Pearl, and we're asking what these brands got right, and what the next generation of fashion founders can learn from the class of 2016 Diana, welcome back to the debrief.

**Diana Pearl** (1:21)
Thanks for having me.

**Sheena Butler-Young** (1:22)
So we should start by laying out the counter narrative.
What exactly was the dominant playbook for brands like Everlane, Glossier, Allbirds, and Outdoor Voices in 2016? They were the ruling class. What did their founders believe they had to do if they wanted to build the next great consumer brand?

**Diana Pearl** (1:38)
Yeah. I mean, there was definitely a playbook at that point. It was raise a lot of venture capital, hire some fancy branding agency or creative agency to develop this very, like you said, minimalist, beautiful, oftentimes pastel-colored brand identity, and then use that money that you raised in venture capital to just pour into social media ads with the hope of just growing sales quickly.
The hope was that profitability would follow. That hope did not turn out to come to fruition, but that really was the strategy.

**Sheena Butler-Young** (2:15)
Then you had this other crop of brands that didn't do that to the letter. They did some of it though.
They all had some similar inklings of the same idea, but they definitely went against the grain. To what extent were they rebelling against that playbook? To what extent was it that they had their own limitations, not the least of which is probably to raise capital. A lot of these brands probably struggled to bring in the hundreds of millions of their counterparts who happened to be male-led.

**Diana Pearl** (2:46)
Yeah. I think that it was a little bit of both.
Yes, there were limitations. Some of these brands tried to raise money and it didn't happen. Nell Diamond, the founder of Hill House, said that she really viewed that almost as like a failure, that she wasn't able to raise much money before the brand launched because she had come from a finance background and an MBA, and that was what you did. You raised money and it wasn't happening. Then others made the choice to either not raise venture capital or just raise a small amount via friends and family or a small seed round. I think for some of them though, it was a choice. Molly Howard, the CEO of Laleen, told me she had come from also a finance background and she really was just like, we need to be profitable and we need to focus on profitability, which just was something that wasn't really in ether. At the time, there was really a thought that you could just buy your way to sales growth. Profitability was inevitably going to follow. Of course, like I said, that thesis really proved to not be correct. But I think it was a combination of having an inkling that it's better to start small, grow slow, but also limitations of maybe we couldn't raise money. Maybe they were new to the industry and just didn't have those connections or that sort of thing. It really, I think, was a combination of the two.

**Sheena Butler-Young** (4:05)
It's very true. I remember reporting on some of these brands 10 years ago.
It was almost like a competition with who could raise the most, like the big headline of the XYZ brand just raised 100 million, another brand just raised 200 million. It started to become its own competition for the biggest headline. And you're right, I think some brands would have counted that as a failure, that they couldn't get that headline. And then some were probably like, even if it was a failure in the end for some of them, it came together. I remember reporting on a lot of those brands around 2016, and it sort of became a headline getting competition. It was like XYZ brand just got 100 million, ABC brand just got another 10 million. And it felt like founders were competing for the big headline. And I think the ones that didn't get that money probably felt like they were, to your point, failing. And then it worked out in the end that all money isn't good money.