[Featured image provided by SYKY.]
Key Takeaways:
- Fashion incubators and accelerators are becoming increasingly popular as a way for both startups and established businesses to define and capture their slice of a complex and fast-growing market.
- These programs offer mentorship, networking opportunities, and investment to a diverse range of startups looking to develop new solutions and technologies – all short-term benefits that are banked against long-term success and scale.
- While some areas of fashion technology are primed for investment – especially digital product creation and supply chain / sustainability – fashion must be cautious not to over-subscribe to hot topics, which will require a blend of incubation and curation.
The last time I wrote for The Interline was August 2021 – at the time, fashion brands were coming to terms with digital assets, grappling with a supply chain crisis and bolstering their investment in social commerce – and in just shy of two years, little has changed.
Although, over this time, the intersection of fashion and technology has grown at pace, the fashion industry seems to face different iterations of the same challenges.
While many of us – myself included – enthusiastically sit back and watch the acceleration of technological capabilities and use cases day after day, businesses can be forgiven for getting swept away in the excitement of first the Metaverse and now Generative AI.
In the wake of Covid-19, openness to innovation and agility is something to be celebrated, but established fashion businesses may have learnt their lessons too well and prematurely charged forward without completely understanding the implications of new digital spaces and consumer sentiment within.
And, there is a palpable energy within the industry that now is the time to be serious as – in ironic twists of fate – Meta pulls back from the Metaverse, obituaries are written, and champions of digital disruption, Balenciaga becomes the source of fast-multiplying AI memes.
What has resulted today is a desperate need for maturity and nuance in approaching these nascent technologies to solve the ongoing and long-standing problems that the industry faces. Especially as potential regulations threaten to burst the AI bubble and a proposed EU law calls for fashion brands to eliminate greenwashing – businesses will begin to feel added pressure to take accountability for the impact of their operations on both people and the planet.
Over the past year, brands have been charged with abandoning this much-needed work to adopt glossy new Metaverse activations as consumer interest towards the space wanes. And instead of the click-bait projects, there are now calls to apply Web3 solutions in strategic and sophisticated ways that, above all, make sense from a brand, customer and employee perspective.
As a result, fashion brands are beginning to step back and deepen their understanding of the features of emerging technologies and foresee the long-term benefits as they evolve. As an ever-growing evangelistic industry, we already know and widely agree that improving products, workflows and supply chains is paramount. But for some businesses, the shift toward a more meaningful approach to technology is more complex.
When there are already a large number of B2B startups working hard to harness Web3 technologies — such as AR, Crypto and AI – and validate them as real solutions, it comes as no surprise that we are seeing the continuing rise of tech incubators and accelerators in the fashion industry. With the intention to develop and deliver support to ideating and early startup solutions, these programmes take our comprehension of innovation strides towards implementation with a heavy dose of realism.
And this as a concept is nothing new. For a long time now, established organisations have used incubators and accelerators to not only support the next generation of startups but also use these new solutions to strike a balance between the navigation of their own tech transformations, diversifying their offers with minimal disruption, and demystifying uncharted territory by testing their assumptions.
But what exactly is an incubator or accelerator?
While incubators primarily focus on early-stage startups in the idea phase, accelerators work with more mature startups that already have a minimum viable product. Both look to soothe the agonising pain points founders might have suffered if working independently.
However, in reality, enabling and informing the growth of young tech startups could provide just as much benefit to established businesses as it does to newer ventures.
Fostering Collaborative Relationships for Genuine Solutions
From Web3 to Industry 5.0, keeping up with technology’s shift from the fringes of fashion to the root of how the entire industry operates has been a challenge. So why wouldn’t the fashion industry use this tried and tested methodology to steer a more strategic adoption of advancing technology?
Farfetch has always been an industry leader when it comes to innovation. Their accelerator with Outlier Ventures – Dream Assembly Base Camp – exemplifies this. At the height of the Metaverse’s zeitgeist last year, Farfetch’s accelerator was reimagined and relaunched with Web3 centricity. The programme has just recruited its second cohort to further focus on building experiences, communities and, most importantly, commercial viability in the Metaverse. Many would say this was a strategic initiative to explore new digital realms in a measured way through third parties whilst creating their own ecosystem of connected solutions to make Web3 as viable as possible.
More recently has been the launch of SYKY’s incubator programme aimed at enabling digital fashion designers to build out their propositions – as a digital fashion platform that supports creatives to sell phygital products – this is an ingenious project that will help the business to create its own supply and fuel demand. Roxanne Iyer, the Chief Operating Officer of SYKY, explains, “The mission of the incubator is to….serve as a launch pad for the next generation of fashion houses. We believe that the next big luxury fashion designers, creative directors, and artists are all designing and building for virtual worlds today”.
These two programmes both attempt to build a more intrinsic and holistic approach to Web3 that allows them to walk the line between efficiency and excitement – two concepts that rarely go hand-in-hand. It’s understandable why these programmes are attractive rollouts for established fashion conglomerates and burgeoning startups who can reduce competition, build collaborative relationships with these new entrants, and simultaneously sure up their own propositions with new models.
As a startup themselves, SYKY has boldly leaned into Web3 “in the midst of a bear market,” admits Iyer. Yet the business has continued to succeed by raising “$10.5M in a Series A” funding round. One could argue this is due to their targeted offer that speaks authentically to communities of digital fashion champions – a rare achievement that, as Iyer informs me, has cut through the “noise that previously hindered the industry’s credibility”, and hopefully an accolade to be replicated with the creatives they incubate.
SYKYs programmes also find common ground in its vision to blur legacy with innovation. For example, Peter Jeun Ho Tsang, the Founder and CEO of Beyond Form – a venture studio that goes a step beyond traditional accelerators by partnering with founders to build, fund, and scale fashion tech startups – explains that they “exist to make a space for startups doing something with disruptive technologies and to give them a platform so that conglomerates, the big fashion brands, can see their own possibilities when it comes to technology.” Iyer echos this when describing the end goal of the SYKY incubator. “To me, success is SYKY launching 10 successful fashion houses and connecting these incredible designers with established fashion brands and fostering mutually beneficial relationships that are bound to disrupt the centuries-old paradigm of ‘how things work’ within the fashion industry.”
Even beyond these two programmes, however, it’s clear that fostering the relationship between startups and existing brands is key and equal value is an essential element to making the initiatives successful at solving problems and piquing the interest of consumers.
But as the startup ecosystem becomes increasingly complex and muddied, could these programmes run the risk of outputs that lack depth? Each incubator, for example, has its network in which it operates, partnering with companies to deliver programmes as they solve existing problems, enter emerging markets and create new business models collaboratively.
Today we are seeing incubators generated, driven and informed by every shape and size of organisation – from legacy corporates in the banking sector like Barclays, Higher Education Institutions such as IFA Paris, through to disruptive startups such as SYKY opening the door for others to follow behind them.
In their simplest form, incubator and accelerator programmes make for great PR stories for all involved and at their most powerful iteration, they are collaborative relationships that bring to market genuine solutions, especially when stakeholders leverage their own unique perspectives when they come to the table.
For entrepreneurs, on the other hand, incubators are often sold to them as the holy grail solution to their long list of woes, including lack of funding, proof of concept and brand visibility. Yet the genuine benefit that these programmes have on the startups they develop cannot be understated. Taking a quick scan of existing incubators and accelerators, their offers often overlap to consist of expert mentorship, office space, upskilling the founders and all-important investment.
And with so much choice, how do startups select the programmes they join?
I spoke separately with Juan Martinez, the founder of Virtual Apparel Solutions and Charles Wilders, the founder of OuttaWRLD, both startups working with Beyond Form. When I asked them why they chose a venture studio, Wilders highlighted how personalisation was vital when working with the studio. “They made a bespoke roadmap for us”. Meanwhile, Martinez explains, “At the beginning, it’s not about just money, but it’s also about support. It’s about being open to meeting people that may benefit you any kind of way…You build a bond that goes beyond contracts.”
For many startups, however, the decision may not be so simple, with founders often having to weigh up whether giving away equity in their business is worth what they will gain in return. It is vital, that entrepreneurs question if there is a cultural fit, aligned values, and a shared long-term vision before jumping into a relationship with a programme that takes a cut. Is this a win-win setup?
It is the sheer breadth and depth of the tech startup space and the individual needs of each founder that is why incubators take many shapes and forms today. From self-directed online courses to equity programmes, ‘the incubator’ is consistently a grey initiative, but for a good reason. Diversifying the setup of incubation also allows organisers to control their impact, objectives and outcomes more tightly and align them to their own goals.
As a business that invests and collaboratively builds startups, Jeun Ho Tsang takes great consideration when selecting the ideas they work on.. “I always think about it from a vertical, i.e. a fashion perspective. Is this a big enough problem for the industry to adopt? And is there a big enough opportunity?… I always look at the pain point within fashion first….” Looking at the broader incubator ecosystem, it is clear that this is mirrored extensively at every level. The design of many programmes already focuses on much-needed work in wickedly complex areas such as environmental sustainability, equity diversity and inclusion, and responsible technology.
For example, Fashion for Good’s Innovation Platform connects startups with sustainable propositions with brands, retailers, and manufacturers to pilot solutions that explore circularity, transparency, and material innovation.
Meanwhile, Bethnal Green Ventures, a tech-for-good VC, has supported startups such as Desyr – the self-declared TripAdvisor of fashion – and Nuw, a swap platform for pre-loved fashion. Features of their include expert workshops, design sprints and a demo day.
Additionally, we have seen an influx of much-needed programmes designed to support diverse founders, such as The Outsiders Perspective – an incubation platform developed to increase opportunities and representation for people of colour in operational, commercial and marketing roles in the Fashion and Luxury industries.
One could be overwhelmed by the statistics exemplifying a lack of diversity within the tech ecosystem, from the $3 trillion worth of missed investment opportunities suffered by female founders to three-quarters of London’s tech companies employing almost no BIPOC representation on their senior leadership teams. However, These kinds of programmes could act as great equalisers to this imbalance many founders suffer.
Across the board, there have been shifts to make entrepreneurship more accessible through incubation. For example, Station F – the world’s largest startup campus – is not alone in developing an online platform that guides aspiring founders on a self-directed course. Launch by Station F nicely sits alongside their rich portfolio of more advanced accelerator programmes like the one they run with LVMH entitled La Maisons des Startups and L’Oreal’s Beauty Tech Atelier.
Y Combinator – the programme that has supported household names such as Stripe, Airbnb and Faire – has similarly added an air of accessibility to their industry-leading accelerator with their Startup School dedicated to teaching aspirational founders how to begin a business – only this solution is an attainable point of entry for anyone with an idea and internet connection.
For these two organisations, the opportunity to open their methodologies and provide baseline resources for the development of new business ideas allows them to operate more selective, agenda focused and fast-paced programmes at the same time as generating their own pipelines and communities – according to the Y-Combinators website, “45% of the companies in their most recent accelerator cohort were former Startup School participants.”
This is indicative of why talent incubators are also on the rise. Take Entrepreneur First, for example, a programme that helps individuals that they see as having entrepreneurial potential to find a co-founder on their matchmaking programme that invests in the grassroots of startups and acts as catalysts for the ventures “that might otherwise not exist,” according to their website.
The background of founders, specifically on fashion tech programmes, feeds into a current topic of contention, as tech people are accused of taking fashion jobs. But understandably so – as the lines between fashion and technology blur, so do the professional journeys of the talent working in these fields. For Beyond Form, at least three-quarters of the founders they work with don’t come from the fashion industry, and the team view this as an opportunity to use their understanding of the space to operate as “a second or third co-founder”, explains Jeun Ho Tsang.
When I asked Martinez what the most significant single benefit Beyond Form provided them was, he emphasised the importance of working with others who maybe don’t know better but do think differently “before them I had a lot of people saying, oh my god, this is an amazing idea. Go for it, how much do you want? And all that stuff without questioning it. So with Peter probably the second question was like, where is the data, I thought that was very interesting. They have been challenging…why I’m doing things, why I’m moving in a certain direction….before I was building things based on the client and based on what I thought…but I didn’t have anybody questioning it….and I think that’s where they were very influential.”
Wilders was quick to give examples of how the programme has also helped them to pivot and refine their ideas “another great thing about Beyond Form is their connections, and one of those is their relationship with IFA Paris…because we’ve been able to be part of a marketing course with fashion undergrads, who’ve basically been using our app as a case study and reaching out to do their own consumer research about questions that we still were trying to find out ourselves. Obviously, it’s a really new and exciting space, and so there are a lot of unanswered questions, and Beyond Form realised that.”
For founders, the value of these programmes lies in timely touch-points, critical outside perspectives, and introductions to strategically mapped collaborators yet within this what is most apparent is the importance of those win-win moments when organisations come together to solve their own piece of a massive industry problem.
Building the future of fashion in challenging times
Looking to the future, there is a lot of opportunity in the business of creating businesses, with startups built by larger organisations predicted to generate $30 trillion in the next 5 years, according to McKinsey and Company. Recent research exploring x-tech – a consolidated term for different sectors working within the same industry – highlights the value of incubating new business models and working with founders to build isolated value propositions in unique partnerships that can be tested and scaled to keep a competitive edge. With global economies on a downward spiral and venture capital investment strained, a more direct approach such as this could be fundamental for entrepreneurs in getting the support to grow their ideas and allowing corporates to act more agile.
But for now at the very least, a voice in the conversation is vital to moving toward a better fashion system. As Iyer puts it, their cohort “will have the opportunity to learn from, network and collaborate with, and have a seat at the table with some of the biggest fashion industry players,” for many entrepreneurs and established brands, this is an invaluable opportunity to build the future of fashion technology together.
