One of Australia’s most prominent tech startups - custom footwear-maker Shoes of Prey - has filed for insolvency.
Helpfully, co-founder Michael Fox has explained why in a Medium post.
The TL;DR: even though it had a loyal fan base among well-heeled women who appreciated its shoe customisation service, the company was never profitable and couldn’t find a way to get there.
Shoes of Prey’s schtick was an online shoe design tool, focussed on stylish women’s footwear. The company was hailed as a pioneer of personalised and customised apparel. It won a stack of awards from the retail and startup industries to attest to its early splash. Its founders were asked to speak at conferences to describe their insights into the future of fashion retail.
But while the company successfully executed that vision, and won plenty of customers and plaudits, it continued to burn cash and discovered that its business model was flawed.
“Despite all the right trends towards personalisation and our success within the customisation niche, contrary to our market research the mass market fashion customer just didn’t respond as we expected,” Fox wrote. “The customisation niche are creative people who enjoy spending the time to create something unique which they can wear. We learnt the hard way that mass market customers don’t want to create, they want to be inspired and shown what to wear.”
“They want to see the latest trends, what celebrities and Instagram influencers are wearing and they want to wear exactly that — both the style and the brand. They don’t want to invest time in creating a product themselves, and attempts to have them do this, even in small ways, leads to the paradox of choice kicking in causing decision paralysis, in turn lowering conversion rates.”
In search of a profitable model, the company tried to use its customisation expertise to deliver new shoe designs to big retailers in a matter of weeks, in decently-sized batches. It also ventured into “customers who have small, large, wide and narrow feet” in the hope of explaining to them that they were wearing ill-fitting shoes. But that plan delivered “a big education problem coupled with a complex manufacturing business.”
None of it worked. The company ceased operations in late 2018 and on Monday filed insolvency papers, with FTI Consulting handling the windup.
The company received at least $27 million of funding, according to CrunchBase.