Last week, I had a conversation with Joanne Solomon Wilson, one-half of the New York City power couple who has been a pioneer in the angel investment and venture capital sectors, in which her husband, Fred Wilson, is one of the co-founders of Union Square Ventures.
Joanne is one of those women who one might find slightly intimidating at first, but she was gracious enough to let me pick her brain and ask her for all sorts of questions from the most personal to common problems within the angel investment community. I got to know Joanne through her blog, Gotham Gal, an insanely popular blog that dissects all aspects of life from business, to feminism to cuisine and art. There are very few blogs in which women entrepreneurs, founders and investors are willing to be candid and open about their lives, and I find Joanne's viewpoint a refreshing one from those that are written by publicists only portraying a censored point of view, if at all. To know Joanne is to admire her, as she has the kind of career and life that most women probably aspire towards.
Joanne Solomon Wilson
I was curious about what Joanne was like as a teenager, as I recall my teen years primarily filled with ennui and apprehension. However, it doesn't seem as if Joanne has changed much from those early years, as she was a forward thinking, insanely driven, competitive senior in high school, who had single-handedly ran the Montgomery County school office, re-organised their entire office and even coached teams back then as well. I asked if she ever thought about becoming a Professor or a lecturer at a university? as I could see that her no-nonsense approach to life would probably inspire the next league of female entrepreneurs. Currently Joanne is an advisor to many startups, in addition to having a portfolio of 50+ startups in which she has made many investments in sectors such as advertising, media, mobile apps, travel, shipping and even ice cream.
"I just have so many responsibilities right now, that I don't know if I have the time to teach. However, I would love to teach." Joanne was also the closing keynote speaker at my alma mater, Columbia University for their startup festival last year.
One thing Joanne and I have in common is that we both have the same personality type, at least, according to theMBTI: we are intuitive thinker judgers. Since there are so few women with this type, it's fairly easy to seek them out because their actions and perhaps life history may closely align with your own. I have noticed that a lot of women in the Producers Guild of America, in which I am on the International Committee, also share this type of personality. It could be that personality types are attracted to certain sectors, and ours mainly flourish in the male-dominated ones. Of course, this isn't to say that personality type is an end-all-be-all, but it's an interesting theory that gives insight into understanding a person's interaction with others. Joanne and I discussed some of the top challenges a woman faces in the corporate and start-up world and she had this to say:
"There are so few women in the first place, that's the initial problem. Women, like men, need to find peers to connect with, develop camaraderie. I've tried to address this issue by launching the Women's Entrepreneur Festival. It is a place where women can connect and be heard. Although many of us may share similar qualities, generally, women network differently than men do. We have priorities, go home to see friends, need time for ourselves and tend to separate our social and personal lives from our professional lives. Men typically have less delineation of their lives and are happy to go to any event vs the few that are worthwhile." - Joanne Solomon Wilson
Currently, Joanne and her husband are spending the winter in Los Angeles, which was also Joanne's hometown before her family moved to the East Coast. We discussed some of our favourite restaurants, Abbott Kinney Street and the various developments that are going on there and the inevitable gentrification. Joanne, too, prefers the West side of LA, near the beaches.
"It's a shame, there were many great independent brick-and-mortar retailers on Abbot Kinney that are now filled with chains."
I agreed. The rent for these independent shoppes are so high, in addition to other expenses and CA taxes that it makes it nearly impossible for small retailers to survive in California. Similarly, if one wants to open a retail shoppe, the best place to do it is in Texas, where there are no corporate taxes and low overhead. Whole Foods was initially launched and tested in Texas; anything that works in Texas will be a testament of success to the rest of the U.S.
One of the founding partners of Gjelina's, Robert Schwan, gave me a tour of the restaurant when it first opened on Abbot Kinney Street in Venice, California. The interior took approximately two years to design and all materials were from recycled or repurposed natural materials, with specific pieces in the Ladies' lavatories ordered from Italy.
I asked Joanne what some of the common mistakes she has noticed within her own set of entrepreneurs (male or female) whom she had invested in?
"I've noticed there are initially some red flags, mainly to do with execution. That is why I invest in people, not ideas. There was one entrepreneur whom I wasn't sure was capable of executing what I thought was a great idea, and yes, it didn't work out in the end, but it's important for me to invest in an entrepreneur who can surround herself or himself with great people, stick with their thesis and be a scrappy, tenacious decision maker, and not be prone to analyse something to death; to be a big picture thinker, and be able to build a team to get things done."
We also spoke about the past and some things we could've done differently or any regrets Joanne has had:
"I believe everything happens in the natural sequence it was supposed to. Everything is a learning experience that brings closer insight to where you are right now...but, sometimes I do think about having the opportunity to go to grad school. Fred did his MBA and at the time I thought about what if I had done mine as well...but I didn't and that is fine. I made the best decisions at the time that I felt were right for me."
-Joanne Solomon Wilson
Women and the work-life balance is one of the hot topics within corporate and entrepreneur circles, and I imagined that having two people in a happy marriage who both had demanding, high profile careers is something of unicorn or even a fairytale these days that most women could only wish for and asked Joanne what she thought were some of the most important qualities in making that kind of ideal relationship work?
"Respect is number one, the single most important thing to have for each other. Without respect, a relationship is doomed. It is also understanding that we are better as a team than being apart, and we're able to fill in each other's shoes, should something happen. At one point, I had made 3x the money that Fred was making. It's also important to have a similar life perspective and to enjoy doing things together. Fred and I love to travel together, explore new cities and restaurants together and we raised our kids with the same morals and values; these things lead to less strife." - Joanne Solomon Wilson
Joanne also added, "If you're a vegan, you have to marry a vegan. You can't marry someone who loves meat and BBQ all the time; those things may initially work out, but not in the long run...You have to be with someone who holds the same values as you do."
Joanne Solomon Wilson and Fred Wilson. Shared values are one of the many things that keeps them together.
We also discussed some of the valuations of companies, such as Uber. I asked Joanne if she thought there were a tech bubble?
"Absolutely not. There is no tech bubble. There are always companies that are overvalued and undervalued, but back in 2008, we also had the implosion of the banking industries, and now you can't build a company without technology. I am not an investor in Uber, but it will certainly be interesting to see where Uber is 10 years from now." - Joanne Solomon Wilson
There was also a seed round recap blog post that Joanne had made which I found very impressive as well as alarming. If founders made it a habit to recap seed rounds then that sets a bad precedent for investors and creates a negative atmosphere for angel investment. I asked Joanne what was the outcome of that incident?
"I think it's important that as a Founder to be transparent and honest and if you're evasive, it gets you nowhere. However, I can understand in that situation that particular Founder I had invested in felt it was necessary to go out and get as much money as possible, especially for an early stage company. I still want to see that Founder succeed even if I got screwed. We even had a chat for 10 minutes the other day when I was asked for advice, however, I do not condone that kind of behaviour, as it's not something I think Founders should do because it creates less trust within the angel investment community."
I asked Joanne about the future of eCommerce, what her thoughts were on brick-and-mortar shoppes?
"I don't think brick-and-mortar will go away. It's in a state of transition. For brick-and-mortar shoppes to stay relevant in the eCommerce era, there has to be an experience you want to go into, have excellent customer service, the ability to take classes. People want to be part of a community, breathe fresh air, do stuff with their kids. It can't just be about selling and buying, there has to be an experience that you can't have while clicking buy on online shoppes."
Shoppes must be more than a click-and-buy experience, according to Joanne Solomon Wilson
On a final note, I asked her what advice she would give to budding entrepreneurs?
She said with authority: "Be Bold. Being afraid of failure gets you nowhere. Failure is part of learning and experience."
Joanne Solomon Wilson is an angel investor, wife, mother of 3 children, speaker at many events, founder of Women's Entrepreneur Festival and sits on the Board of Directors for more than a handful companies including the High Line. She also makes legendary chocolate chip cookies.
By Sierra Choi
Vinod Khosla, the iconic U.S. immigrant who founded Sun Microsystems in 1982 then went on to become a venture capitalist.
Vinod Khosla wrote an interesting essay on the validity of a liberal arts education recently that has fueled a deluge of negative comments from the online community. In his essay, Is Majoring in Liberal Arts A Mistake for Students?, he makes several curious assumptions:
1. Studying history and literature can prevent a person from self-agency: "If subjects like history and literature are focused on too early, it is easy for someone not to learn to think for themselves and not to question assumptions, conclusions, and expert philosophies. This can do a lot of damage."
2. Scientists have the ability to transition into different careers within the liberal arts, such as "becoming philosophers", whereas "philosophers" do not have an ability to transition into scientific careers. "A scientist can more easily become a philosopher or writer than a writer or philosopher can become a scientist."-Vinod Khosla
3. A Liberal Arts education limits people's ability to understand statistical models and prevents them from distinguishing between statistical understanding of anecdotal information from one rooted in critical analysis.Mr. Khosla then paradoxically goes on to write that in his experience, liberal arts majors from elite universities such as those at Stanford and Yale, excluding the top 20%, are lacking in critical thinking skills. In addition, "following one's passion" doesn't work to find suitable careers for the majority except for "the top 20% or bottom 20%" of students.
4. Contemporary liberal arts education can all be exemplified by one book: Malcolm Gladwell's Outliers, which Mr. Khosla says is "impervious to all forms of critical thinking".
For those of you who aren't familiar with Gladwell's book, Outliers is a sociological study of manufacturing trends in United States from post-War America to the present era that attempts to explain the wealth of self-made millionaires, billionaires and star athletes. Gladwell groups together and selects particular individuals, and comes to the conclusion that age, the professions of the parental antecedents, and being born in the "right era" hold more significance than America's penchant for believing in self-agency and pursuit of the American Dream; in that each individual in his case study of the self-made millionaire/billionaire/ star athlete etc. was actually "born" into his or her profession out of circumstance, rather than as an individual who had paved his own path in life. Gladwell's book is a sociological treatise depicting Skinnerian psychology and Hume empiricism.
However, much controversy arose because certain people did not like Gladwell's conclusions against widespread American beliefs of the individual prevailing against society and criticised his statistical evaluations, (eg. "he cherry-picked certain people and results and did not evaluate all the people of a generation he was studying" etc). However, Gladwell's statistical analysis is actually not all that different in methodology from statistical evaluations of medical studies on pharmaceutical drugs for FDA approval or the ratings systems of politicians that many people and news agencies use as source material today.
Scientists and doctors utilised electroconvulsive therapy (aka electro shock therapy) routinely on patients with typical and atypical psychological disorders in the 1930s despite the fact that the therapy often lead to patients becoming brain dead.
To reiterate his point, Mr. Khosla then comes to the conclusion that studying the liberal arts is at best, a leisure activity that does not require one's critical thinking skills and that it is better to study engineering, because engineering is more closely aligned with the principles of critical thinking than for example, philosophy. He then illustrates his point by ironically, quoting a philosopher (Thomas Huxley) and an English literature professor (William Deresiewicz) to drive his point then makes a rather curious leap in logic by asserting that students today choose to study the liberal arts because it is easier than studying engineering or science.
The Reader (1874): Renoir's portrait of Claude Monet reading a book. According to Vinod Khosla, studying literature should be a leisure activity.
I'm not sure if Mr. Khosla has ever studied Latin or Chinese, or even attempted to read the Illiad, but I think many people would agree that coding is probably a much easier task than attempting to deconstruct a tome with many divergent interpretations and historical references. However, I think here that the question of epistemology is one that Mr. Khosla is attempting to reconcile. What he seems to be arguing against is not liberal arts education per se, but specialisation within both the liberal arts and engineering/sciences. Instead, Mr. Khosla makes an argument for the liberal sciences, a holistic combination between a liberal arts education and science/ engineering. He also asserts that it is hard to teach people ethics and creativity, and those pursuits, should be outside of institutionalised education, something that Malcolm Gladwell also states in The Outliers.
“Ten years ago, no analyst in the world would have predicted 650m cellphone subscribers in India but only 300m people with access to latrines and toilets. Even five years ago, no one would have predicted the way that Twitter took off. These are the black swan outliers.”
- Vinod Khosla as quoted from his favourite publication, The Economist
It is also true that many cultural icons often write books later in their lives. Former military generals write about their experiences in the military, politicians write about the dreams of their parents, and scientists can author biographies. Mr. Khosla's rather interesting but myopic observation that "scientists can become philosophers and writers but philosophers and writers cannot become scientists" is probably referring to cultural scientific icons, such as Einstein, who has written a biography, and in fact, many people from different professions have written biographies, but I think what Mr. Khosla is missing here is that most scientists nor philsophers nor writers often do not possess the will to transition to other careers. Aside from scant biographies written by ghost writers, I hardly think there are many scientists who decide later in their lives to become philosophers or vice versa- rather, philosophers such as Deleuze, Descartes and Wittgenstein would easily be dismissed by Mr. Khosla, however their work today, along with many other philosophers have been the inspiration of many scientific theories, and I daresay, decades ahead of scientific trends, serving as the impetus for scientific research by questioning the various traditional methodologies of their time.
If we were to simply categorise Mr. Khosla as an eccentric billionaire who has lost touch with the population at large, I think would do him a great injustice. Like many immigrants, his incredible work ethic and prescience in computer science in the early 1980s lead him to become founder of one of the most iconic companies in the United States. Mr. Khosla started his career at the age of 20 by selling soy milk in India before he moved to the United States to found Sun Microsystems. As part of that generation in which a technical education paved the way out of poverty, he has every right to believe that an engineering degree had more weight in his success and the founding of Sun Microsystems than a liberal arts degree, although despite the obvious bias, as he also states, is that today's society has since changed from those early Silicon Valley days, and American education, as it is currently today, is not equipped to tackle the challenges of a rapidly changing, technological society.
“I never compute returns. If you start forecasting cash flows, you lose innovation, you lose instinct. You average yourself down to mediocrity.”-Vinod Khosla in The Economist
The post-industrial educational system as it is in place today in the U.S. was intended to train students to work for large corporations, via specialisation in each sector. However, as we move into the Diamond Age, that kind of specialisation in both the liberal arts and in engineering and the sciences has presented a dead end in social mobility, as technology and scientific advances rapidly become obsolete. Mr. Khosla, despite the off-putting title of his essay, asks us to consider a broader, interdisciplinary education, what he terms as the liberal sciences, and move away from the current American model of education of specialisation. I daresay that what Mr. Khosla is really arguing for in his long-winded, meandering essay is more reflective of a British style of education, in which critical thinking, assessment of ethics and creativity are not only necessary, but a given in every subject.
Perhaps what Mr. Khosla really intended to say in his essay, in which he amusingly debased students at Yale and Stanford as lacking in critical thinking skills, is that what America really needs are better teachers.
By Sierra Choi
When I was in high school, I remember the year that I volunteered at the hospital and witnessed one of the most quietly devastating aspects of how people live and die. I was fifteen and worked in a wing filled with senior citizens who weren't really living, but there to die. There were so many people, strapped to their demerol drips and who watched television all day, and did nothing, just waiting to die. No one ever visited them, and they would walk the aisles of the hospital alone, if they got of bed at all. Then, one by one, they would disappear, and their rooms would become empty and cleaned, only to be filled up by a new incoming patient. Instead of the ideal of living out one's last days on endless holiday and travel, the ideal of saving up for retirement entails a rather grim reality for the majority of people, dying alone in the hospital.
Although in this technological era, people often talk about the longevity of life and how generations in the future will live longer than we do now, I wonder what kind of life they would lead? Growing up, I never knew who my grandparents were and only had photos of them, as the majority had died before I was born, and I only glimpsed my maternal grandmother once when I was five before she, too shortly died.
One of the most underrated sectors in startups is eldercare. So far, there are around 270 startups focused on care for the elderly ranging from virtual companion pets to financial advisors to finding caregivers. As a child of parents who had married when they were older, I had put the thought of their mortality somewhere in the back of my head until my father had fallen ill last year and it became challenging to find the right kind of care he needed. However, I think what is most important is that we cherish the wisdom of the elderly and somehow integrate them into active members of our society. It is so easy to dismiss senior citizens as being irrelevant, especially in our youth-obsessed society.
A scene from the Hollywood movie, The Intern (2015) in which Robert DeNiro plays a senior citizen who becomes an intern after retirement at an eCommerce startup founded by Anne Hathaway's character.
I read recently in a medical journal that ageing should be classified as a "disease"; as the inherent conditions that accompany ageing are part of a wider classification of symptoms in which treatments are available. Two of the things I think are most important regarding eldercare are: exercise and social activity. It would be great if there were a social network to match up elderly people in nearby geographies and schedule visits and walks with a caretaker nearby to assist in any emergencies. However, most of the startups that I have looked into are focused on hiring and finding one-on-one caretakers, not making friends and building a social network. I think what everyone of all ages requires are intellectual stimulation, regular exercise and a purpose in life.
However, because for many elderly people, their friends have already passed away and because their family members might be spread wide apart, I think it is very difficult for older people to stay socially active. Also, most elderly people do not want to be put in a rest home or live in the depressing annuals of the hospital. Life shouldn't be about being confined to a hospital bed or a rest home and watching television all day. That is not how I envison people should live.
Some of the more prominent elderly care startups focused on providing caregivers include Care.com, HomeHero,Carelinx, the UK's HomeTouch, and the Andreessen Horowitz backed Honor, which had recently announced that they would make contractors full time workers with equity in light of the recent controversy regarding on-demand startups and the classification of workers in other such startups as Uber and HomeJoy.
“I really don’t want two classes of people in our company. Everyone is in it to help the elderly and everyone should succeed if Honor succeeds,” said CEO Seth Sternberg of Honor.
I also think that there might be a great opportunity for the youth of our generation to be matched up with the elderly to record the collective histories of our era. If we could create a comprehensive record of the stories of the elderly by matching them up with young, aspiring novelists and journalists, I think that could be an interesting record for future generations to study. There are so many stories I only know about my own grandparents through my aunt. For instance, I've been told that I'm very similar in temperament to my paternal grandmother and resemble her, although all the photo albums of our family had been lost when they were taken during the Japanese occupation of Korea. In addition, my grandmother was a bit of a hellraiser when she was young, was one of the first in her era to always be dressed in skirtsuits instead of the traditional Korean attire, and lived in Japan with my grandfather when he studied at the University of Waseda; was fluent in Korean, Japanese and Chinese and had made her own secret batches of rice wine in the family barn when there had been a prohibition of alcohol during the 1940s and 1950s.
One of the only remaining photos I have of my grandfather (left) and my depiction of him (right) using acrylic paint on canvas. Most of my family's photo albums and assets were seized at the border when my grandfather and grandmother temporarily fleed to China during the Japanese occupation of Korea during the 1940s.
All these stories become lost when we don't record them, and the personal histories of people I think are more important than what is recorded in history books. In the UK, there has been a long tradition of recording and preserving the personal histories of people, and many registries where people's unpublished manuscripts, diaries and letters have been kept spanning more than 500 years.
In any case, the challenges of eldercare have prompted a new era of thinking about how people live and die and I think it's important that we move away from the hospital and senior home model of previous eras, and towards a more humanistic, social way of caring for our most valuable citizens.
By Sierra Choi
Louis Vuitton quatrefoil monogram on coated canvas
Many people are probably familiar with the iconic Louis Vuitton motif, but most people probably aren't aware of the cultural influences behind it. In 1854, Louis Vuitton designed waterproof trunk cases for travel utilising lightweight coated canvas. To prevent his waterproof design from becoming copied, he printed a motif composed of flowers and quatrefoils and put a trademark on it. The quatrefoil design is an iconic one derivative from Ancient Chinese history that has been the inspiration of art architecture and design spanning over several centuries across many different geographic regions.
Quatrefoil design from the Han Dynasty in China 206BC- 25AD
From 114BC to the 18th century, during the time of the establishment of the Silk Road, in which several trade routes were established from China to India to Persia to Europe, the quatrefoil gained popularity and spread throughout India and to Europe, and to France, where in the 19th century, Louis Vuitton derived inspiration into his flower + quatrefoil motif that would become symbolic of the Louis Vuitton luxury brand. The quatrefoil also gained popularity in architecture- and became popular in designs of Cathedrals, where many people associate the quatrefoil with Christianity. However, the design itself was derivative from the Han dynasty in China, in which the quatrefoil was present in many bronze emblems and ceramics.
Quatrefoil in architecture: 17th-19th century
The quatrefoil also is a symbol of open economic trade, and crossing many different divisions and cultural divides, and the exchange of philosophies, religions and technologies, hence why it has a kind of universal appeal across many geographies, although in the contemporary post millennium era, many people might associate the Louis Vuitton quatrefoil motif with nouveau riche, the kind of flashy status symbol that people dismiss as an overt display of money, however, the motif itself is based on a period of great economic trade and the removal of cultural barriers and divisions of many nations.
The routes of the Silk Road: 114BC to the 18th centuries: opening commerce for international trade between many different nations
My earliest memories of the Louis Vuitton quatrefoil motif are the things that my mother loved. I remember many hours sitting at the airport with my mother's LV bags in tow as we were traveling from the US to East Asia and back again. Although I grew up in a generation in which kids would get bullied at school if they owned any sort of luxury item, and tried to conform and be as invisible as possible via an endless uniform of jeans and t-shirts, my mother's generation was derivative of ladies who would get dressed up to go to the supermarket and the airport, and would take great value to care for the things they owned.
An image from the 2014 Chanel Ready-to-wear fall/winter collection with the set design in a supermarket setting. Karl Lagerfeld poked fun at flash sales, and said he longed for the modern women to return to an era in which they would get dressed up to go to everyday places, such as the supermarket.
In an era of fast-fashion, these luxury brands no longer hold as much caché as they did for generations past. The flash sales of luxury eCommerce marketplaces such as the Gilt Group, HauteLook, RueLaLa, TheRealReal, and many others do not appeal to people in the post-Millennial generation who can't really make sense of the cost-benefit ratio of purchasing items that are marked up 3000x to another similar looking item of similar quality even if it's "on sale." Although there is a huge problem with counterfeit items, and it is estimated that many luxury brands actively have departments to deal with counterfeit items with Louis Vuitton spending an estimated 15% of its revenue to prosecute counterfeiters, it is also the case that many different designers often inspire and copy from each other, in that fashion is an incestuous community where many designers influence the other, and reinvent each other's ideas.
In terms of eCommerce, I think what the current generation really prefers is a lifestyle site with a combination of wellness, health, style and experiences, and not be inundated with daily emails about flash sales. That kind of "hard sell" psychology does not work for people who have lived through 2000 and 2008 and have seen fortunes rise and fall and back again. I recently read some blog posts regarding curated items on eCommerce sites such as Lyst, and to be honest, I have seen many others as well on numerous eCommerce sites, and think most editor's picks are not something that appeals to anyone except for that particular editor. Instead, I think what every generation loves is the story, the unique tales behind brands.
Since many luxury brands have very little net profit based on sales of their luxury items, and haute couture is a negative revenue undertaking, many luxury brands are dependent on the sales of their cosmetics, perfume and accessories lines. Thus far, haute couture has eluded 99.9% of the population at large as it is estimated that less than 70 people around the world each year purchase luxury items directly from haute couture houses. However haute couture is also symbolic of a bygone era, of a time when women had beautifully hand-crafted clothes made specifically for them, and for the majority of people, the extraordinary prices of haute couture are out of reach, leaving the population for mass consumption of fast-fashion, factory made, poorly constructed clothes that are then thrown into the tonnes in landfills every year.
The hope for flash sales from such eCommerce marketplaces such as Gilt, RueLaLa, TheRealReal et al was that luxury items would find a second home at these numerous sites that discount these items, however, the overwhelming response has been that women are not interested in buying luxury items, discounted or not- they have been steered towards the era of fast-fashion, of disposable, trendy items that appeal to people's fickles tastes. However what both men and women want in our contemporary era is not the label, but the quality and customisation of items.
The Silk Road, now replaced by Alibaba's online marketplaces allow people to buy direct from China, and move goods from around the world; however, a rather unexpected development of this has been more people taking up space in other online marketplaces, reselling items bought in bulk on Alibaba to other sites such as Etsy, effectively destroying Etsy's artisan, handcrafted image by inundating the site with resellers who mark up items 700-3000%+.
After the departure of Etsy Founder Rob Kalin, Etsy allowed large manufacturers to enter the Etsy marketplace, hoping to scale the business into the next phase. However, as a result, Etsy is now inundated by numerous resellers posing as artisans, damaging the Etsy brand.
The psychology of the hard sell does not work for an internet savvy generation bred on YouTube, Instagram and fast-fashion. The post-Millennial generation do not read Vogue or Marie Claire for fashion inspiration. Daily emails about flash sales goes directly into the trash folder in my inbox. I may click on a YouTube channel, but if it's about what I bought today/ what I ate today- I will click to something else and will not watch. Trapped between a rock and a hard place, there isn't enough substantial content for women on YouTube which promotes fast-fashion and consumption of toxic cosmetics, yet the hard sell of luxury marketplaces have left something more to be desired. Instead what would be refreshing is if eCommerce marketplaces created more editorials and provided insight into the human condition, offered tips about health and wellness and stories about everyday people who have created a unique look then offered a choice of different price ranges from the most frugal shopper to the big spender.
Although LVMH (Louis Vuitton + Moët Hennessy) has posted a profit for FY2015 and 16% rise in revenue, the overall trend seems to be that luxury brands are in danger of disappearing into the ether if their cosmetics, perfume, accessories do not bump up their revenue expectations each year. For FY2014, LVMH sold 24% of its rival Hermès stake to compensate for its 5% revenue decline.
With the decline of luxury brands in mind, and seeking to create a new strategy, Bernard Arnault, the head of LVMH, last month announced that Groupe Arnault will set up a buyout firm with US private equity firm L Catterton to create a consumer-focused investment firm (with LVHM owning 40%) seeking assets under management of $12bn focused on the retail and personal care sector.
But one thing is clear, as luxury brands move into the realm of private equity, eCommerce marketplaces such as Etsy, Wish and other sites that have become resellers of products on Alibaba and have become dependent on the Alibaba model, with Alibaba taking 99% of the market share. On Nov 11, 2015, Alibaba made $14.4 billion on a single day and $10bln in the first 10 hours alone whilst LVMH reported a revenue of $9.8 bln (€8.8 bln) for their clothing and leather goods sector for nearly all of 2015.
Bernard Arnault has said that he wishes to make the luxury brands in his LVMH portfolio companies: Louis Vuitton, Céline, Christian Dior et al, "objects of desire". Of course, his mindset is coming from that of a billionaire art collector perspective. However, the original founder, Louis Vuitton, fused art with functionality and created products that appealed to the everyday citizen, and which symbolised the dissolution of cultural barriers at the time, opening the borders of trade between many different nations.
By Sierra Choi