When we first covered Garmz, the site was a place where anyone with a sketch and a bit of vision could see their idea actually put into production. Today, they’ve rebranded and relaunched as LOOKK, with backing from a few notable investors and an expanded offering for (slightly) more established designers. {Signature9 Mediawire}

One of the investors backing the demand driven production model that LOOKK offers is Carmen Busquets, one of Net-a-Porter’s earliest investors. Busquets’ bet on e-commerce as a place for luxury brands was so early, in fact, that she ended up with nearly one-third of the company by the time Richemont acquired it for £350 million (nearly $570 million at current exchange rates).

In a statement provided to Signature9, Busquets explains why she thinks LOOKK could be the next Net-a-Porter.

“LOOKK felt to me like the natural evolution for technology in fashion – something I wanted to explore following Net-a-Porter,” she said. “Its power is in its ability to help designers start and, crucially, sustain their fashion career – not only paying them a commission on their designs, but also covering production costs and helping them to market themselves.”

But it’s the opportunity to use votes and comments as indicators of future sales success that appeals to her as a matter of business.

“The detailed market data available through LOOKK means we can predict demand for pieces much more efficiently than with a traditional model,” Busquets explains. “This, coupled with shorter production cycles, means we can produce smaller, demand-driven, batches – significantly reducing waste, and therefore costs.”

When we first covered Garmz at LeWeb, we noted that funding and production are two areas designers can struggle with. As LOOKK, the site expands to designers who may be advanced enough to have samples and some knowledge beyond conceptualizing a product. Not that there’s anything wrong with concept – one of our favorite pieces was conceived by someone with no formal training at all – but it opens the process to a group that’s still largely unorganized when it comes to sales and marketing.

There are challenges to success for LOOKK though: while Net-a-Porter struggled to find receptive brands at the start, they have the benefit of promoting clothes from well known designers who have large sales and marketing machines behind them. For emerging designers, who don’t have the benefit of celebrity placement and million dollar advertising and publicity campaigns, LOOKK has to drive the sales and marketing machine online, but that’s tough enough with one brand – nevermind 5 or 6 (or more).

Plus, while being first isn’t easy, Net-a-Porter was essentially proposing a different channel for an existing model (they buy, and sell). Consumer feedback and voting, while exciting from a business perspective, doesn’t fit within the normal fashion cycle. It will likely require a few breakout hits before being fully embraced by aspiring designers who find it easier to understand a straightforward purchase order.

That said, the fact that LOOKK offers production and feedback is a significant incentive for designers, and a significant challenge to competitors. LOOKK could also grow to be an incubator of sorts for fashion –  think Y-Combinator or Seedcamp (which funded the company in 2010) – an area where there’s almost no competition, and an area that’s ripe for disruption.

Other investors include Dave McClure, a noted Silicon Valley angel who also founded incubator 500 startups, Kima Ventures and Eden Ventures among others.

Disclosure: I served as a marketing advisor to LOOKK prior to launch. This post was not submitted to or reviewed by LOOKK prior to publication, and solely represents the opinions of the author.

I show the same collection in February and December. I think itâ€s crazy and I think the clothes are being shipped to the stores far too early for the consumer. So I think we should go back to where we were 25 years ago. Thatâ€s my honest feeling. – Donna Karan

FashionStake's new voting booth feature

It’s too late to put the genie back in the bottle, but an increasing number of websites are betting on the wisdom of crowds to close the consumer gap between when shoppers are first introduced to a garment, and when they can buy it. While the exact model continues to shift and there are variations, the crowds and important investors are betting on the ability of those companies to do it.

We were first introduced to FashionStake through a series on the Business of Fashion where co-founder Vivian Weng chronicled the path from funding to launch. Originally conceived as a fashion focused Kickstarter-like site where fans could invest in designer collections by purchasing shares, they quickly shifted to a pre-order model upon finding that the majority of customers were more interested in the ability to pre-order pieces, rather than make a general investment. The site recently pivoted again by adding a voting section that changes daily alongside a more traditional online shop.

Catwalk Genius, a UK site with a similar model, still offers the ability to fund collections but has also shifted to include a more traditional e-commerce shop focused on emerging designers.

This doesn’t mean that crowd funding for fashion doesn’t work – it just doesn’t work in the same way as other industries.

Moda Operandi, the recently launched site from Aslaug Magnusdottir and Lauren Santo Domingo, skipped the investment aspect altogether and is building on a model of limited time runway and trunk show pre-orders. It’s similar to Burberry’s practice of allowing customers to place orders within hours of seeing pictures, and increasingly visible video broadcasts, of the runway show. The difference is that Moda Operandi will continue to operate year round by making the less visible, but often more wearable pre-fall and resort collections available for pre-orders as well.

Skeptics will say that pre-ordering isn’t the same as crowd funding, but we disagree for a few reasons.

Pre-Orders Attract Investors

Moda Operandi's Pre-Order Sales

With pre-orders that totaled $60,000 in their first month, FashionStake provided enough of an indication that the general concept was solid to attract more traditional investors to support the model. Gilt Groupe co-founder Alexis Maybank became the most recent investor in FashionStake, and while it’s obviously a bigger win for FashionStake than any individual designer, it’s also a good indication that the smaller group of people who are interested in more traditional fashion investing are looking to crowdsourced websites as a viable indicator of emerging talent.

Garmz, the company we first covered at Le Web, started with a model that makes garments available for pre-order after gaining enough community votes. When asked what previously held assumption about crowd sourced fashion had been most challenged, co-founder Andreas Klinger says that so far that the most surprising thing about the model is how well it has performed.

“Until now, the biggest assumption that we held that’s turned out to be different than anticipated is an underestimation [of the interest] in a positive way on our side,” he says. “We were truly unsure about the real interest of customers to be involved with the process. We are very happy that the interest has surpassed our hopes, and the engagement we see between designers and users is absolutely great.”

Garmz is crowd sourcing part of the selection for a €25,000 award that will result in the production of an emerging designer's collection

(Going on some of the finished products, we think the process is working pretty well too.) It’s working well enough, in fact, for Garmz to power a fashion award with Range Rover that includes a €25,000 prize that includes production, distribution and a runway show for an entire collection. {Evoque Fashion Award} Traditionally the domain of reality television shows or retailing behemoths, it’s one of the first programs we’ve seen that includes a significant amount of crowd participation (user voting makes up one-third of the jury) for such a comprehensive award.

Even on the high end, Fashionista editor Lauren Sherman pointed out that in addition to providing a way to capitalize on the push from all of the Fashion Week coverage while it’s fresh in shoppers’ minds, simply breaking up payments for expensive clothes makes them somewhat more accessible without taking away from the ability of brands to sell at full price. In essence, creating a pre-order incentive in addition to giving designers a solid indication of where demand is strongest.

Pre-orders have the potential to create efficiencies in production for designers, and inventory for retailers. At the moment, designers produce collections based on orders from store buyers, buyers place orders based partially on a history of what’s sold in the past and what they think customers will want in the future. What happens when bets on either end are off? Look at the success of Gilt, Hautelook or RueLaLa. That’s what happens when companies create efficiencies at the end of the buying cycle, pre-orders look like part of the way that companies will be able to create efficiencies at the beginning. Unlike the flash sales sites, pre-orders create efficiencies by not only using demand to influence supply, but by providing the funding to kick things off in the first place.

The takeaway: Even the biggest crowd funding success to date came about largely as a result of pre-orders. Those that provide pre-order platforms and find new ways to make that model work at scale will become increasingly attractive to traditional investors. Crowd funding isn’t the same as crowd investing, but the first can be the social proof necessary for the second.

Lower Barriers Attract More Pre-Orders

While Moda Operandi is following the flash sales model by operating behind an invitation only closed door, FashionStake recently dropped theirs.

“We took down the wall to give our users a chance to explore our site and find out about who FashionStake is BEFORE we ask them to commit to giving us their email address,” says co-founder Vivian Weng. “What weâ€ve found is that our users really need a chance to at least see what weâ€re offering (in terms of experience and product) before they are willing to create a profile on our site. As weâ€ve checked out traffic since weâ€ve taken the wall down, weâ€ve noticed that users really do poke around and explore our designers – read their bios, browse their products – before they actually give us their email address for future contact.”

“We had previously believed that users were interested in crowd-sourced apparel only if they were interested in becoming buyers of that apparel,” she continues. “What weâ€ve since learned is that there are many shoppers who love just having a say in the curation process; and there are other shoppers who like to shop clothing that have been curated by their peers. In effect, the curators and the shoppers arenâ€t necessarily the same person. What weâ€ve done with our new business model is to separate out the ability to interact/engage with us (i.e., ‘Voting Boothâ€) from the ability to discover and shop new emerging designers (i.e., ‘The Shopâ€). Weâ€ve lowered the barrier for users to engage in our community because anyone can now have a voice in the curation process.”

Attract the Right Crowd by Going to the Crowds

Perhaps more than other industries, fashion thrives on a certain amount of exclusivity. While it may seem obvious to anyone interested in a crowd supported business, restrictions aren’t the same as exclusivity. Though it might not seem entirely logical at first, those building businesses with crowd sourced components are finding that the best way to get the right crowd is to be as social as possible.

“In order to build the FashionStake community, we are really leveraging the networks of our designers. Whatâ€s remarkable is that these emerging designers do have great networks of consumers, but many donâ€t manage their social media or online presence optimally. We see ourselves as aggregating these designers†networks and helping them actively market to their target consumers and manage a dynamic online presence,” says Weng.

Garmz co-founder Andreas Klinger lists Facebook as the main driver of traffic and credits much of their success to the support of their fans.

“To be really honest Garmz is doing very well. It is so amazing how much great support we get,” he says.

Browsing through the store, where production ready designs are put up for pre-order or sale, we came across this hooded jacket by Silas Bahr. Or, exhibit A in why Garmz just may be able to make the crowdsourced fashion model happen.

It may not be the next Tik Tok + Lunatik (read: million dollar project), but the hoodie/asymmetrical front jacket combination strikes a rare balance between comfort, functionality and design. Even Jimmy Choo and Ugg couldn’t figure out the design portion of that equation, so it’s no small feat.

“It always had been a wish of mine to have something between a sweater or hoodie and a jacket. I like the classy style of a jacket but the comfortableness of a sweater. I do not like to look too formal but not too casual either. So I mixed it all up.” – Silas Bahr on his inspiration for the hooded jacket

We like the idea that there’s a place where a student who was “not very interested in fashion design before” can find the support to go from concept to clothing. Mix it up.

Hooded Jacket by Silas Bahr – €76/approx. $100 at Garmz

Garmz, a 6-month-old startup from London, is among a growing list of websites banking on the internet to make pre-orders easier, reduce risk when it comes to mass production and excess inventory.

A design up for votes on Garmz

Burberry and Proenza Schouler are two established brands who’ve taken a similar approach, allowing customers to order items immediately after they appear on runways, so the idea of allowing demand to create supply is recent, but not totally new. Neither is the desire to allow emerging designers a platform to have their work seen – and eventually produced. “Democratize fashion,” is the popular tagline, and dozens of companies have tried in at least two dozen ways to put their spin on it with varying degrees of success and failure.

What then, is Garmz’s approach? Part community, part commerce, designers submit sketches to the Garmz website where users vote on their favorites. Once a design achieves popularity, the Garmz team reviews it to ensure it would be suitable for production (we’re guessing that means you won’t be able to order any Lady Gaga style meat dresses) and the designer is contacted to work through details for creating a prototype. Garmz then photographs the item, calculates the production price and puts it online for pre-orders. depending on the number of pre-orders, the piece moves into larger batch production where Garmz takes on the role of a traditional online retailer.

A Garmz produced jacket up for discounted pre-order

Designers receive 5% of the revenue on each piece sold. 5% doesn’t seem like much, but co-founder Andreas Klinger feels that Garmz still offers a unique advantage over other options that would give designers a larger cut. Etsy, for example, charges $0.20 for each item listed, and a 3.5% fee when an item sells. While that leaves a would-be designer with 95%+ of the sale, Klinger explains that Garmz is adding a layer of professional services in addition to a marketplace.

When a design on Garmz goes into production, the company handles everything from sourcing fabrics and textiles to mass production in Eastern Europe. Designers don’t have to learn about pattern making, finding production facilities or any of the things that are typically needed to move from individual items to commercial collection, and typically not covered in design schools.

Additionally there’s quality. Looking at some of the finished garments on display, there’s a consistency in fabrics and construction that can be elusive for designers starting out. The clothes aren’t couture, but wouldn’t be out of place among well-made secondary designer lines.

Our Thoughts

There are many creative talents who are never able to succeed in fashion because they never find the right business guidance to support their creativity. Threadless has shown that people will back up votes and social intent with purchases, and if Garmz can do something similar for designer fashion they could be a viable area of support for emerging talents who typically rely on grants, awards, and prizes to afford fabric, fashion shows and publicity.

Finding the funding to produce a label is a problem lots of would be designers face, but if Garmz wants to attract top-tier talent, an option that gives designers a larger share of sales (even if it also gives them a larger share of the risk) will probably become necessary.

Partnering with design schools could also be a good option. While Central Saint Martin’s, FIT and Parsons are renowned for their alumni, the number of design jobs at top fashion houses are limited and the economics behind building a successful business aren’t covered often enough. Retail and knowing how to sell are often the jobs that are available. Even if it doesn’t make them rich, a platform where designers could learn about marketing, manufacturing and other aspects could benefit the school, and give Garmz a continuous, high level of new talent which will be necessary to keep community interest high.