In this exciting episode of the Startup Leap Podcast, Hosts, Maria and Yvonne chat with Eshita Kabra-Davies, the visionary founder of the award-winning app By Rotation on her journey building technology for the world’s largest shared wardrobe.
Eshita shares her journey from corporate finance to entrepreneurship, inspired by a life-changing honeymoon to India.
Learn how By Rotation is reshaping fashion consumption, promoting sustainability, and creating a powerful community-driven marketplace.
In this episode, we dive into:
00:53 Meet Eshita, Founder of By Rotation
02:08 From Finance to Fashion: Eshita’s Journey
03:02 The Honeymoon Epiphany
03:50 Building a Sustainable Fashion Community
06:13 Navigating the Early Days of By Rotation
10:11 The Power of Digital Communities
17:49 Fundraising and Ownership
23:47 Solo Founder Challenges and Team Building
26:01 Reconnecting with Vlad: The App Journey Begins
26:59 Optimizing for Profitability: Key Metrics
28:14 Empowering Women: Stories of Impact
32:05 Building a Premium Marketplace
34:57 Expanding Internationally: The US Market
38:13 Navigating COVID: Challenges and Opportunities
45:31 Future Vision: Scaling and Profitability
46:04 Inspiration and Reflections
Don’t miss this insightful conversation on entrepreneurship, sustainability, and community-driven fashion!
Like, comment, and subscribe for more expert startup advice!
Have questions? Drop them in the comments – we’d love to keep the conversation going!
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Website: www.thestartupleap.io
YouTube: https://youtu.be/6TZ6INxsd2k
#VCFunding #StartupFunding #Entrepreneurship #SustainableFashion #BusinessGrowth #StartupSuccess #FundYourBusiness #VentureCapital #TheStartupLeap #ByRotation #WomenInBusiness #FashionTech #MariaRotilu #YvonneBajela
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
90% of donations that we give charities in the UK
(00:03):
end up back to landfills in African and Asian countries.
It was on your honeymoon, went to India,
had this aha moment for my rotation.
You can rent a 400 pound dress for 40 pounds.
It's a new way of looking at fashion.
Your decision to be a solo founder, was it deliberate?
Had a spreadsheet, showed all the different
fashion rental players, mapped out how they were similar
and what I wanted to do different to them.
(00:25):
That was actually my honeymoon planning itinerary.
Five and a half months in, I left my job
and I'm like...
Welcome to The Startup Leap, the number one podcast
interviewing startup founders who have taken the leap.
On The Startup Leap, we hear real, raw,
and relatable stories of how they've navigated
taking the leap.
We're your hosts.
I'm Yvonne.
And I'm Maria.
And this is The Startup Leap podcast.
(00:47):
Any statements made by Maria, Yvonne,
or the Startup Leap guests are solely their view
and are not advice.
Today's guests, we have the founder of an award-winning app
that serves over half a million rotators,
one of the largest shared wardrobes in the world
that served the likes of Helen Mirren
and many other celebrities.
Welcome, Ashita.
Welcome.
(01:09):
Thank you, Yvonne and Maria.
How are you doing?
I am excited.
I am here with my plus one, my baby Saffron's
first ever podcast appearance.
Welcome.
What a privilege.
Obviously.
Now Ashita, bi-rotation is now global.
You've expanded to the US, started in the UK
(01:29):
right before COVID.
Did you know it would become what it is today?
Not really.
I thought it would just be a marketplace business model,
a sharing economy for essentially sharing fashion.
Now it's become a social network
where people are lending and renting designer items
beyond just fashion.
Five years later and only $3 million of funding,
(01:52):
we have built the world's largest shared wardrobe.
It's got the likes of Dame Helen Mirren
Ellie Golding, Diana Asher Smith,
students, bankers, lawyers.
One of our biggest super powers is community,
which is a great moat as well.
How did you get it off the ground?
So I founded Bi-Rotation as a side hustle.
I used to work in investments and finance.
(02:14):
I was investing in corporate bonds
and more on the public market side.
I always had this itch to be an entrepreneur.
I grew up in a very entrepreneurial family.
My dad has a rags to riches path.
We grew up learning about negotiation skills
and how to be street smart at the breakfast table
before going to school.
What exactly did your father do?
So he exports and imports granite and marble
(02:36):
and also runs an ed tech business in Singapore.
And he actually emigrated from India
when I was two and a half years old.
I saw the hustle and the determination
to make something out of nothing.
I also want to prove to myself and to my family
what my true potential can be.
I always knew while working in the corporate world
(02:56):
that at some point I wanted to start my own business.
I just didn't know what I wanted it to be in.
It wasn't actually until my honeymoon
back to Rajasthan in India where I was born
and I hadn't been back for over 14 years.
For me, home now is Singapore.
Going back, I was shocked to see a lot of textile waste
in this beautiful state of India
where you see all the palaces, the deserts,
(03:18):
the incredible India posters that you see.
Rajasthan is a textile state, essentially, of India.
It's known for its craftsmanship.
It's known for its production.
I just couldn't help but realise that I was part of the problem
because it turns out that 90% of the donations
that we give to charities in the UK,
they end up going back to landfills
in African and Asian countries.
(03:38):
Did not know that.
My own, yeah.
90%?
You think you're doing a great thing.
I think that they're still producing 92 tonnes
of textiles every year,
and that's just continuing to go into landfill.
Yeah.
So there was a huge impact element
to why you started the company.
I wanted to have a nice wardrobe when I was going on honeymoon.
There's a very pragmatic problem,
(03:59):
and a first-world problem, really,
where I was like, there's nothing out there
where I can just borrow clothes, rent clothes,
for a week or 10 days.
I don't want it to be a ball gown or a tuxedo
or a hat to go to the races or something.
I actually just want to wear nice, contemporary clothes
that I want to look fabulous in, feel amazing in,
(04:20):
have an experience and be a different character on my honeymoon.
And so I already noticed that gap in the market,
but it wasn't actually until I was on the honeymoon
where I realised this is actually a serious problem.
You know, the fashion industry
is the fourth most polluting industry in the world.
What about taking planes and what about oil and gas?
Sure, oil and gas is definitely the most,
but we all consume fashion every single day,
(04:43):
and some of us are being brainwashed and manipulated
by the ultra-fast fashion companies.
But I think that's when I realised
that this is not just a niche problem.
It's not just a first world problem
that I want to have in my little bubble in London.
It's actually something that could help everyone and anyone.
So for me, I knew it had to be a global solution.
(05:04):
It had to be scalable.
It had to be something that was community-oriented
and really was going to transform the fashion industry.
And today, five years later,
we've built business that is still only peer-to-peer,
which actually really does transform consumption for good
on a very grassroots level.
And we've built the most scalable business model
(05:25):
in our sector, fashion rental.
We only emit 24% if we rented it.
You almost reduce the emissions by renting by almost 80%.
That's insane.
I feel like that stat alone is enough reason
for anyone to think about renting instead of buying.
Did that express itself in any other way
aside before you got to rotation?
(05:46):
Yeah, that is a great question, actually.
And I don't get asked a lot about that
because everyone wants to know about tech
and entrepreneurship and all of that.
I had been a web designer since the age of 11 years old.
So I always had an interest in the aesthetics
and the creative side of things.
If you ask some of my schoolmates, they'll be like,
I was always like trying on different outfits
(06:06):
and accessories and trends.
It was less about fashion.
It was more about how things look
aesthetically pleasing together.
You mentioned that it was a side hustle.
Tell us about navigating when you have the epiphany
and you're like, okay, I'll start it,
but I'm not necessarily gonna leave my job.
What was the mental model there?
Well, I had to tell the compliance department
(06:28):
because I was like, okay, there's press articles coming out
and my name is being mentioned
and there's no reference whatsoever
to me having an actual full-time job.
They would just call me the founder
and the CEO of By Rotation.
So that's when I was like, I need to disclose it.
We've got a small favor to ask.
If you're enjoying the podcast, hit that subscribe button.
Yep, subscribing and following us
(06:49):
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Now back to the episode.
Well, I had to tell the compliance department
because I was like, okay, there's press articles coming out
and my name is being mentioned
and there's no reference whatsoever
(07:10):
to me having an actual full-time job.
They would just call me the founder and the CEO
of By Rotation.
So that's when I was like, I need to disclose it,
which was fine.
I was told that it's not competing with what I'm doing
and what the business is doing, so it was fine.
But it was getting to a point where we were being printed
in broadsheet newspapers.
(07:30):
And also my face was gonna be on the business of fashion
the day that we were launching.
But yeah, I took six months pursuing the side hustle
before realizing that it was something worthwhile pursuing
and could actually be worth the opportunity cost
of leaving a lucrative career working in finance.
So there was like a cost benefit analysis spreadsheet
(07:52):
to show what could be.
Like an actual spreadsheet?
Yes, yes, exactly.
I thought it was like a figure,
it's a spreadsheet in your head,
but you actually built a spreadsheet.
I had a spreadsheet that showed all the different
fashion rental players globally
and mapped out how they were similar
and what they were doing that I wanted to do different
to them.
And that was actually my honeymoon planning itinerary.
(08:13):
So I already had that idea brewing in my head.
I just had to really think about,
okay, if I leave this job and I leave this career,
like what would I expect if I went full-time
with bi-rotation?
Is it really worth the opportunity cost?
But it was really about understanding what kind of value
I could bring, not just to society,
but also on a personal level,
(08:34):
because that is important.
Personal motivation is so important
when you're a solo founder in particular.
Oftentimes people leave their roles to work on a company,
building your company while still working within
your corporate role.
And then you have this moment where you're like,
okay, we've reached pilot market fit,
now it's time for me to leave.
How did you acquire those early customers?
Because this is obviously a marketplace,
(08:55):
two sides to it.
You've got the renters and then you've got the individuals
who are lending, right?
So how did you acquire both sides in the early days?
It's always something that a lot of people who are building
marketplaces still ask me.
For me, the reality was I was really just leveraging
on my personal connections and networks,
begging everyone around me to list their items
(09:18):
on the bi-rotation ugly beta website and being like,
can you just list it?
I just need it to start feeling and looking real,
and you can tell me what you really think
once you've used it.
So yeah, I was really just begging on my friends,
my families, my friends of friends, my colleagues,
my ex-colleagues, and then I started going to a lot
(09:40):
of small businesses putting on their own events
or pop-ups and things like that.
I would go to, I don't know, four or five a week
in the evenings after work, and on the weekends,
I would go to these events and out try and network
with everyone.
It's not about just that one big fish at the event.
I actually made an effort to start networking
with just that one person at the event.
It was also really about finding that one connection
(10:02):
who maybe we could collaborate with,
and that's how I started meeting people
within the very tight-knit fashion
and sustainability spaces.
And from a product perspective,
you mentioned that you're a website designer.
Did that come in handy in thinking about the first product?
Yeah, it definitely did, and it's funny
because when I was 11, I was really into web designing
(10:22):
and advertising and marketing,
and ended up creating a really big web forum.
So this is before the days of Reddit.
Before Reddit was like a thing,
it was called Radiant Message Board.
It was for other graphic designers and web designers,
who used Neopets.com when I lived in Singapore.
And as an Asian, I wasn't allowed any pets,
(10:42):
which is why I now gave birth to this dog.
So I had a virtual pet on Neopets,
and I ended up making a lot of pen pals online.
And then I was like, oh, there's like a whole world out there.
I have friends in Tasmania.
What is Tasmania?
I never even knew what that was.
And I think that sort of made me really conscious
of digital communities.
(11:03):
However, I lost myself into chasing a job right out of uni,
because as an international student,
you do need to have your visa sponsored.
So I was like, I can't just be an entrepreneur on day one.
I can't just, I do need to work for a corporate
who can sponsor my visa.
So I guess I was probably like later
to my entrepreneurial journey,
(11:24):
but I always knew that I would end up probably coming back
to my background in creating digital communities
and the aesthetic side of things.
At our peak, when I was maybe,
I think it was 13 or 14 years old,
I had over 3000 members on my forum.
That is insane for a 13, 14 year old.
At that time, not now, it's like, you know.
(11:46):
Sure, yeah, yeah.
Because back then there weren't that many people
also interacting with each other,
interacting with strangers online essentially.
And I was making money by selling my web designs
to other people online.
And I had a PayPal account before.
I had a bank account, but I didn't control my bank account.
My parents did when they had $1 in it.
(12:06):
But I had this PayPal account that I was making money on
by selling graphic design to strangers.
And it was crazy because when my parents found out,
they were like, what are you doing at 2 a.m.
on our computer?
Why are the internet charges so high?
And then later when I had that laptop,
they're like, what are you doing?
What's going on?
We need to check your web history.
(12:27):
They're like, she's making money online.
And that was really novel back then.
And I think that's probably something
I wish I held onto closer.
I had this whole thing where I was like,
I need to get a job if I wanna stay in the country.
So I can't do all this creative stuff.
It's not gonna lead to anything.
And that's probably a regret that I had.
But hey, it all comes back.
Yeah.
It always works out.
(12:48):
Communities, now it sounds like you were very early
at building communities with your web design community.
I'm just very curious because you've now built this moat
with the bi-rotation community and it's thriving.
Thank you.
Even on the app, I go in, I comment,
and anytime some of the rotators I've borrowed from
and lenders I've borrowed from before
(13:09):
issue a new item, I'm like, I'm gonna borrow that.
One thing I'm just really curious about is during COVID,
obviously you started in 2019.
I think a lot of companies operating in space
went to the B2B side,
but you've always remained focused on the communities.
So this is a very consumer phasing proposition
that we are offering.
(13:30):
And sure, there's different ways to approach it,
which could be through B2B and B2C as well.
What we saw happening during the pandemic,
the 16 months, was the pandemic pivot.
And a lot of companies just jumped on that bandwagon
because it was the easiest way to raise capital,
but it was in the most genuine way to do.
(13:51):
And for me, it just didn't make sense.
And I think I'm very, I cannot compromise my integrity.
I can't tell you that I'm gonna do all of these things
when I know I'm not going to do them,
when I know they probably aren't gonna work out
just to raise money in the short term.
Because actually that does end up
with a lot of frustration for everyone,
all the stakeholders, including yourself as a founder
(14:14):
and as someone who's operating and running the company.
So I knew that was in the path that I wanted to go to.
For me, the mission was really to transform consumption
for good, and that really requires everyone to play a part
because more than 70% of the items that we have
in our wardrobes aren't being used in the last 12 months.
That is the real problem.
The brands shouldn't be creating new items
(14:36):
just to rent them out.
That's not what I wanna do.
I want existing people to take stock
and then join us on a grassroots level.
Because when they join us on a grassroots level as well,
there's this emotive factor, this loyalty,
and that is a price tag that's very hard to put on.
It's very hard to convince people to essentially
never use this brand or this product or whatever again,
(14:58):
if they have such an emotional attachment to them.
There's this thing that someone once said
that the best products, especially consumer products,
are causes.
They're belief systems.
You have not just users or customers,
but you have true believers.
I'd love to talk a little bit even on that same thread.
The idea of sharing your wardrobe,
like it sounds nice now, but I imagine in 2019,
(15:19):
when it wasn't as mainstream,
you might have had the conviction,
but explaining it to people, what was that like?
And maybe also paint a bit of what the landscape was like,
because now we're seeing more and more crop up,
but I'm sure it wasn't the norm at the time.
Yeah, I remember when I came back from my honeymoon,
I essentially made a Facebook event,
and it was really me saying, I'm back from my honeymoon.
(15:42):
I have a puppy, come meet my puppy.
I tricked them into coming to my party at home
in my one bedroom apartment.
Gotta do what I gotta do.
My one bedroom apartment, and essentially had a focus group
to be like, what do you think of this idea?
Here are my clothes on rails,
and I asked a couple of other friends
to also bring their clothes,
because they were bought into the idea.
And I was like, what do you guys think?
(16:03):
Meet my dog, cute, right?
So what do you think of this idea?
Do you think that you would rent stuff from a stranger?
Would you lend your stuff to strangers?
And a lot of my friend circle, even to date,
is very corporate, and they were like, this is weird.
This is strange, and we're not that into fashion
like you are.
I can see it working for some people.
We're not there yet mentally.
(16:24):
So I felt quite, I suppose maybe I felt a bit discouraged,
but then I remembered about the life cycle adoption.
The adoption life cycle, yeah.
I remember the adoption life cycle,
and it made me remember,
I don't have to have just one customer persona.
I can have multiple, and actually these guys
are probably my middle to late majority.
They're gonna need more convincing,
(16:44):
and they're gonna need convincing from the early adopters
who are gonna be the ones who like to try new things,
who like to be in the know.
They like to be the taste makers who set the tone,
and those were gonna be my fashion insiders.
They were gonna be people who are influencers,
VIPs, celebrity stylists, fashion editors
who write about it to make things cool.
(17:06):
And that's when I realized, okay, it's good to know
that they could be open to it, but not yet.
They need more convincing, and that's when I realized
I needed to start trying to find a way into meeting
these fashion insiders, and thus I ended up doing
a lot of networking while running By Rotation
as a side hustle, first and foremost.
(17:26):
And then I came back to my friends
and those professional networks.
And today, our super user, our main customer,
is the working professional.
It took about three and a half to five years to get here,
because now it's much more mainstream,
and I believe By Rotation, definitely in London,
and other metropolitan cities in the UK,
and in New York, is becoming a household name.
(17:48):
I love it.
One thing I wanna talk about is fundraising,
because I know that you've been very intentional
about how much you raise.
You speak a lot about ownership and the fact
that you still own over 70% of the business, right?
How did you think about that from the very early days?
Because oftentimes, it's something that people
don't really optimize for until it's too late.
Yeah, I think the finance background definitely helps.
(18:10):
I was investing in corporate bonds,
I would look at annual reports of my sector,
which was banks, not very sexy,
but they are 40% of the bond market,
and that's one entire sector.
I understood a lot about things like
raising equity versus debt,
also understanding things like positions
on your balance sheet.
And with my father being a business owner,
(18:31):
it became very, and his path has allowed him
to be a master of his own destiny.
And so, I was very conscious and mindful
of all the people who have been accepted
into our cap table.
If you look at our pre-seed round,
it was friends, families, ex-colleagues of my husband's.
So it was really like people who just believed in me.
And they were like, she is a go-getter,
(18:53):
she will make it happen.
Even if the idea changes or COVID happens,
she is gonna find a way to make it happen.
With that, I could set the tone when it came to valuation,
because we had just gone into COVID,
there were no transactions,
there were 30 transactions, one a day.
That is not really a real business.
So it was really about the growth opportunity beyond COVID.
(19:14):
And I could set the terms when it came to the valuation.
For our next round, we did do a venture backed round.
So we do have three funds in our cap table.
We have a very large family office.
We have the few prestigious fashion insiders as investors.
We have a few VCs as well who have written angel tickets.
And I think with that, I also made sure
that everyone belonged to different networks.
(19:36):
And so they could wave our flag in their own networks.
And it helps spread the word of buy rotation
as organic ambassadors.
And that has been really helpful for me.
Because the valuation was already set in the pre-seed round,
where I gave up less than 10%.
And a lot of female founders in the consumer space,
(19:57):
they're told that in your first round,
you have to give 20 to 25.
Did you hear that from people
when you were raising your first round?
Yeah, they always said that your valuation
is always gonna be one mil.
So if you're raising 300, then it's one mil.
And I'm like, that doesn't make sense to me.
We were shortlisted for YC.
And they're like, you're probably a bit too far ahead
for YC and your valuation is much higher than what we give
(20:18):
with the amount that we give you.
Do you want to come in?
And I was like, probably not actually,
because it sounds great,
but it was also gonna be a virtual cohort.
And I was like, I'm not sure.
I was like, I'm not sure it's gonna add that much value.
I'm happy not to be a part of this.
Not happy, YC is great,
but I understand that the timing is not for us.
And so it was interesting because all of this stuff
(20:39):
really made me realize I have to be quite protective
of my equity, I can't just give it away like candy.
And I think a lot of people are told,
you need to have an amazing board,
you need to have all these cool faces in the industry
on your slide, which shows your advisors,
your non-executive directors.
And I was like, I don't understand all of this,
because first build the business and product,
(21:00):
then these people are gonna come organically and naturally.
Like the focus shouldn't be to say,
I have a board and I have board meetings,
and this is very professional and corporate.
I think for me, having worked
in a very corporate environment,
I found the scrappy side of things really exciting.
Like the fact that I can wear my workout gear to work
and actually do really serious work in meetings.
(21:22):
Like that to me is much more refreshing than,
I'm a boss now, I have an office, here's my printer.
You've been there, done that, you're like,
that's not what I'm optimizing for here.
Exactly, exactly, I left that,
because I wanted to build something very real
and be a part of it, like in every single way,
from going to the post office to do the early rentals
that I was managing myself, or to open up the store
(21:44):
and sign on leases for a five story townhouse in Mayfair.
I very much see myself as not just the founder,
like a lot of people think when you're the founder,
you're gonna be this visionary,
and after a while, you won't actually do anything.
You'll just be the ideas person,
the person who meets people.
But I-
You're also in the pop-up,
you're wearing house-comers.
As a shop girl on the weekends,
(22:06):
I will carry 20 dresses to help style you,
and I will learn from your feedback
what you like and you don't like.
And if it's a recurring theme,
I will take it back to my engineering team,
and be like the product needs to change,
because this is not obvious at all to people.
So I am to date, five years in,
very involved on every level, grassroots and strategic.
And I think for me, it's not about growing a business
(22:29):
at any crazy cost.
Like that growth mentality, where growth at all costs
was supported by crazy funding, that's not there anymore.
We are in a situation, especially last year,
where a lot of startups were told
to think about default alive.
Survivorship is much more important,
to be honest to your founder, than growth at all costs.
That's what some-
(22:50):
You have to be alive to grow, like-
Exactly.
And if that means that your growth is not gonna be
three X, 10 X, whatever, that you promised your investors,
they should be understanding,
that you might need to have this slower period
to then come out again.
And I think we've definitely seen that.
We've only raised three million.
My team and I have more than 70% of the business.
We are really a master of our own destiny.
(23:12):
And that's allowed us in these very quiet periods
for consumer funding in 2022 and even 2023.
It's only just coming back now.
It's allowed us to really focus on the efficiency
within the business.
We've been growing this year at 60%
while reducing our costs by 60%.
We've done no marketing spend whatsoever.
(23:33):
The business is just growing on its own
while we're actually becoming leaner.
And I feel like that narrative shifted aggressively
pre-zero and post-zero, just like it's two different worlds.
I wanted to talk about, Tim,
because you talked a little bit about that.
Your decision to be a solo founder, was it deliberate?
Did you, you were like, I have everything I need,
or did you think about bringing someone else?
(23:54):
And as you fundraised, did this come up in the conversations?
How did you navigate that too?
I don't know.
I think I didn't really do a lot of research
about being a solo founder or having a team or whatever.
Like, to be very honest with you.
Additional like venture story
of how businesses should be built, et cetera.
I think I maybe started doing that later
after already founding Barretation.
(24:15):
So it was very much, I want to-
Solo founder wasn't a thing in your mind as it like, okay.
I see what you mean.
I saw my dad as being very independent and just being like,
I just have to go and do this on my own.
If no one's going to join me,
if I don't have that network or support,
I just have to go and fend for myself.
So I think in that way, I'm perhaps a bit of a lone ranger,
but I think that helps me be much more efficient.
(24:36):
Because I can hear a lot of stories about founders
seeing things differently,
especially as the business matures, things happen,
which especially in the tough times,
really test a relationship.
But obviously I'm lucky in that I do have a CTO
while I'm very product oriented.
I would say I'm not a coder.
So I have an engineer who has been our senior engineer.
When I was first running Barretation as a side hustle,
(24:59):
and today he's our CTO.
He's been with me even longer
than I've been with the business formally.
So it's really about building those strong relationships
and being very clear as to what their roles are
and ensuring everything else in the end falls on me
as the founder.
How did you meet the CTO?
I'm curious, because people always ask this question.
Yes, they do.
As a solo founder, especially.
Non-technical founders.
(25:19):
And I get that a lot as well.
And the reality is that this, I would just say is luck,
serendipity.
One of my closest friends who was a bridesmaid
at my wedding as well, I was bridesmaid at hers.
She went to high school with my CTO.
And I had originally met him when I was working
in Edinburgh at Standard Life Investments.
She brought him to my apartment.
(25:39):
I was hosting a dinner.
She was like, do you mind if he comes?
He's staying over.
He's just visiting UK.
I was like, oh, I haven't cooked enough for everyone.
Fine.
And he was fine.
He didn't speak much English back then.
But he was really sweet.
And then I met her, I think, four years later at her wedding.
And I was like, cool, nice to see you again.
Don't really know you.
(26:00):
Cool dude.
And then there you go.
He comes back into my life when I'm
asking around and being like, do you
know anyone who could probably create an app for me?
And it's worth mentioning my husband's
a computer scientist.
So while my husband's not involved in the business
full time, he's very much an advisor.
And he can check someone's work when it comes to engineers.
(26:20):
He helps me with the interviewing process
to understand if my CTO, Vlad, really
has the capabilities to actually build the app.
Because Vlad actually hadn't built anything
as sophisticated as By Rotation.
We've built a social network in-house,
completely proprietary.
For him, it's also been a great learning curve.
I think it's the most successful startup he's worked on.
(26:41):
And it's how he got his global talent visa
to move to the UK.
So yeah.
I love that.
It feels good to add value beyond just, I think,
your professional life.
And I feel like By Rotation is doing that for everyone,
not just our customers, but also our team.
Love that.
You mentioned earlier that one of the things
that you've been optimizing for as a team
(27:03):
is driving down your costs and so on.
I know that you've always been focused on profitability.
I'm just curious, you're building a marketplace.
What are some of the north star metrics
that you really optimize for day to day, daily active users?
It was daily active users before 2023.
And after 2023, it is just GMB.
The focus is really GMB and also revenue.
(27:25):
So for me, things like the margins on the commission,
they are important.
This year, we've done only one discount code the entire year.
And we're just being very mindful into ensuring
that people see us as a premium marketplace,
not as a discount marketplace.
Because to be honest with you, being able to rent a designer
(27:45):
dress for 10% of retail value for three days
is already a big discount.
That's an amazing build proposition.
Being able to rent a 2,000 pound dress for 150 or 200 pounds,
that's better than secondhand.
That's better than fast fashion because of the quality.
And it's obviously better than buying it firsthand.
So we've been very mindful of GMB growth
and also revenue growth.
(28:06):
So those are currently our north star metrics.
And they're bringing us to profitability in 2025.
OK, congratulations.
Thank you.
I'm just curious.
Now, you've obviously had quite a profound impact
on a lot of women's lives.
I mean, over 90% of your users are women.
I read a story of a woman that had used bi-rotation
to fund her IVF journey.
(28:27):
And then there's another story of a woman that was making,
I think, 4K a month from bi-rotation.
Did you know that impact would be had from the women
that are lending on the platform?
So I think that's a really important point for myself,
which was, I want to wear nice clothes,
but I don't want to pay crazy amounts of money.
And these are all the incredible sort of side effects
that have come from that.
(28:49):
I wanted to always show people that your fashion that's
hanging in your wardrobe, and it doesn't
need to be your Chanel bags and your Birkin bags,
but it can just be your dress can actually make you some money
and become a real asset class.
Like, we've actually made contemporary fashion
some people are making 10X on a dress that they bought.
They bought it for maybe 300 pounds.
(29:10):
They made like 3,500 pounds on it, and they still own it.
So they can also resell it.
Like, it's crazy to think of your items as these things
that are essentially bringing you more money
and becoming assets.
We've learned from some of our top lenders
that it's made them change their relationship with fashion
and consumption altogether.
They're like, I'll buy the higher quality thing.
(29:31):
I'll think about it.
And I'll buy the higher quality thing,
because I know I can recoup my money on it.
And I'll own it for a longer time as well.
So I want to be very strategic when I do actually go shopping.
And that's something that I'm super proud of.
It's impacted both sides and also on the production side,
because we're taking away from, I would say,
the Zaras and the H&M's of the world, where dresses now
(29:52):
cost about 60, 70 pounds.
We're telling you, you can rent a 400 pound dress for 40 pounds.
That beats that proposition.
It's really a new way of looking at fashion.
And with the woman who paid for her IVF journey,
she's actually told us this year, at the beginning of the year,
that it was successful.
So now she's saving up for her surrogacy.
(30:13):
And that obviously is another expensive undertaking.
We've met other women who've told us
they're saving for their home deposits.
They're saving up for their side hustle.
There's a woman who's making an active wear brand on the side.
And when I rented from her, she sent me her leggings and said,
this is what I'm doing with my income.
Tell me what you think of my brand.
And it's so cool, because my side hustle
(30:34):
has helped others with side hustle.
For your side hustle, exactly.
Yeah, I think you haven't taken one,
because I haven't rented a dress before.
And before this, we were just talking.
I was like, maybe this is the core, right?
Like that first dress that you actually rent.
So our customer retention rate is more than two thirds,
which is crazy.
(30:54):
It's all about getting you to try your first time.
And you're like, oh, no, that makes sense.
I don't think I'm going to buy again.
To be completely honest, before I tried it,
I was like, I don't really want to ship a wardrobe.
But then once you try it, it's like, why am I
going to buy an outfit I'm probably going to wear once,
twice, three times?
And everything is clean when it's sent to you.
It's a seamless service.
(31:15):
And it's also kind of like, when you stay in a hotel room,
it's not like the towels were made just for you.
They were all been dry clean.
Great analogy.
But it's true.
Forget Airbnb, which we love and we partnered with.
But even hotel rooms, the fanciest hotel rooms,
the bed linen and everything, it's
been used by someone else.
That's the thing with consumers, right?
You don't know what you don't know.
(31:37):
And so in a product, it could be a new category
until you try it.
And so that education is required.
You did a great job of that in the early days.
I remember during COVID, and you'll do the Instagram
posts, for example.
And the community probably lenders not actively lending,
as they normally would outside of a pandemic.
And so we definitely use that time
(31:59):
for educating brand awareness and user acquisition.
There's no point sitting around.
Thank you.
Cost effectively as well.
Of course, with you, of course.
I was going to double click on the education piece,
because I think it's very interesting that you mentioned
that you're not a discount product.
You're a premium product.
From a founder's perspective, especially for consumer,
(32:21):
where people are scared to push with the customers
to defining who they are as a product,
because they feel like customers have low attention span.
They're very price sensitive.
So are there any other mental models
you used in, I guess, just being sure about what you're
putting into the world, and the fact that customers might not
(32:44):
like it, but you can educate them in the right direction?
It's a common theme in this with bi-rotation,
in the sense that you are almost moving the industry to where
it should be.
So are there mental models for maybe people
who are building things that are not necessarily mainstream yet,
or things that are not aligning with current consumer behavior,
but actually create opportunity for them to create value?
(33:07):
We've definitely evolved.
Our mission has always been the same.
You'll see that our community, our brand,
the way we position ourselves has definitely evolved.
Even our tone of voice has evolved.
And I think that helps in helping figure out
your average order value as well.
And we've been very mindful of that.
I would say when we first launched,
our average order value was half of what it was.
(33:29):
And even year on year, it's increased by a third.
I'd say it's taken time and confidence
to be like, we're actually becoming
more and more of a premium product and a luxury product.
It took confidence, and it took experience.
You couldn't just lend it.
You have items on there that are worth over 10k, right?
Yeah, there's broken bags on there.
You couldn't do that in the early days?
No, definitely not.
(33:50):
Having ways to manage the risk of those products
potentially not coming back.
True, but also we've now positioned it
such that we're pushing more premium brands on the app.
So it's really the person who signed up with us five years
ago is predominantly a woman.
She has also grown up with us.
And her aspirations are also changing.
(34:10):
Maybe she joined us when she was graduating
and wanted a graduation dress.
Then she got a job, and now she's getting promoted.
Now she's going to her friend's wedding,
or she's getting married, or she's having a baby.
We're growing up with our audience,
and we've been very mindful in ensuring
that our AOV also evolves with that.
I love that.
But it takes, I would say, you can't just rush into it.
(34:32):
You need to build that sort of trust,
especially if you want to be a luxury scaled product.
You need to find a way to convince them to give you
more money all of a sudden.
Even though it's not the same product, but it's the same app.
When we launched in the US last year,
which is a profitable area for us already,
that has an AOV of one and a half times the UK.
(34:53):
It's a more premium product.
We're a more premium service, and we're
seen as more premium than our incumbents in the US.
So that perception takes time sometimes.
Perception is the word.
Interesting.
I was talking about international expansion.
Yes.
How did you navigate that move into the US
and the activation of the customers, the members,
the buyers?
I was very convinced that this business has
(35:14):
to be a global business with local communities everywhere.
I don't want to run this business.
If it's just a London business, if it's just a UK business,
that's not worth the opportunity cost that I set out on.
And for me, the sharing economy needs
to look more like Airbnb, not an inventory holding subscription
business.
So for me, that's not what I wanted.
We have money.
We've just gotten money from venture funding.
(35:35):
And to be honest with you, it didn't take a lot of money
to scale the product, which again, is the app,
to also have a US version of it.
And we chose.
Did you already see a pull from the US?
Yeah.
We were getting a lot of inquiries.
But we also got inquiries from European countries,
from Middle Eastern countries, from Asia.
But the US for us seemed the most,
(35:56):
I won't say low-hanging fruit, because it's still
a huge beast.
It's a bigger beast in the UK.
But it seemed more obvious to us because of the culture,
the language, right?
If I'm telling you that there's Dame Helen Mirren and Ellie
Golding on the By Rotation app, you get it.
If you're in the US, you get it.
It's the same thing.
The language is similar.
If we wanted to show amazing efficiencies of scale
with our first market, international expansion market,
(36:19):
it had to be one that was easiest
to handle for engineering and for marketing,
because those are our two main costs.
So for us, the engineering actually
happened within a matter of 2 and 1 1.5 months,
which wasn't too difficult, despite having
a small engineering team.
The marketing, we started soft launching and collecting
a database to understand who would actually
(36:41):
want to use the app.
So we started getting our early adopters.
How did you go about that soft marketing?
Especially on both sides of the marketplace,
given it's a global product, you do
need lenders within a location or region
to be able to lend to people in that region.
So one very tangible advice I'd give,
and it's a learning for us as well,
is that we should have had a US version of the website that
(37:03):
said, we're going to come soon.
Please leave your email.
We should have done that before.
We only did that in September 2022.
We did a soft launch in February 2023.
That's when we started getting those people who
signed up through email and inviting them
to a private event to identify who was going to be a lender,
who was going to be a renter, build that grassroots
personal touch with By Rotation and with me
(37:26):
as the founder in particular.
And then we did our official launch in May 2023.
So we really worked on the grassroots community
by having a soft launch system.
And that was really to get the supply onto the app.
But we were also lucky in that By Rotation
has amazing footprint on Google, on Search,
because of the press that we have.
(37:47):
When we announced that we were soft launching in February,
we were being told by American celebrities,
oh, I thought you were already here.
Good, you're finally coming because we've been waiting
for this.
I love it.
So we were very lucky in that we have good awareness
within the UK and US, and especially
with the early adopters, because right now in the US,
(38:07):
we're still in the early adopter phase.
We've just completed a year and it'll be a half in Jan.
So with us, it's mostly fashion insiders that are currently
our key demographic.
Got it.
I wanted to talk about COVID.
You've mentioned it a few times.
What was its impact on your business?
Because you started in 2019, so you're probably just barely
a year in after your honeymoon, and then COVID happens.
(38:29):
Was it an accelerant or to the business?
Did it position you for anything that you eventually
took advantage of later?
I'm wondering if it maybe also helped your US expansion
or awareness.
I'm just curious on what the impact of that business
was on how you took advantage of it.
That's it.
Five and a half months in, I left my job,
and I'm like, oh, we're all stuck at home.
I could have just done this as a side hustle
(38:50):
and kept a tab open on my laptop.
It is what it is.
And I was like, now that I've chosen this path,
I'm going to go full in.
I'm not going to pause.
I'm not going to make banana bread and paint walls.
I did do that, but I also didn't leave my bowl in this.
And I was like, you know what?
I said we're a peer-to-peer marketplace,
so that shouldn't stop me.
Everyone knows how to package things.
Everyone knows how to create and consume content online.
(39:12):
But didn't it affect the ordering?
Yeah, the transactions.
People are probably not wearing dresses as much
if they're not going out as much.
But I still was like, this is great,
because I don't have supply on the app anyway.
Everyone's stuck at home, so let me just convince them
while they're merry-condoing their wardrobes
and their homes to start listing items.
So we're like, you're bored at home.
Do this now.
It takes you one hour.
(39:33):
Do an hour a week or something, because who knows?
It was indefinite anyway.
So in a strange way, it was actually very helpful
to our business model.
In fact, it probably really helped us,
because it slowed down anyone else who had inventory models.
You saw why closet in China closed down during this time.
And that's an inventory-based rental model.
So it became very clear to me that business model is broken,
(39:56):
and it needs to be disrupted.
We are the fashion rental 3.0, because not only now have we
built a peer-to-peer marketplace,
but we've also built a gamified social network.
And that's the direction that I want to go more and more into.
It became very clear to me that this
has to be a social network.
That was our iteration.
I remember in 2021, I think in January,
(40:19):
when we were still in COVID, and we were figuring out,
will we finally come out of this?
I was like, this community that we've built,
they need to start interacting with each other on our app.
This has to be like a closed thing, where people use it
directly to contact, inspire each other, chat,
and essentially only use us.
And it creates a loyal following, too.
(40:40):
So that gamified app has actually
made us launch a lot of features, even this year.
Like, in the beginning of this year,
we launched this rent by location feature.
Which I love.
Yeah, you can essentially see, even now,
where we're recording, if someone suddenly tells me,
Esha, you really need to come in,
I can check what's in my one-mile radius right now
(41:00):
and quickly rent something from someone.
They just need to chat me back and be like, yeah, sure.
It's in my home.
I'll put it out in my front garage or something,
and you can collect it.
So it's really convenient.
It's better than next day delivery.
And I think it's even more sustainable,
because there's no deliveries or anything involved.
And that's the direction we're going towards,
which is why I say local, the local communities.
(41:20):
And there's definitely pockets of areas
within metropolitan cities where there's a mass of lenders
that you can quickly rent from.
And then the second feature that we
launched, which I'm super excited about, is the wallet
feature.
So about 40% of our renters have also
gone on to become lenders, because they realize
it's so easy to make money.
(41:41):
And how often, in a two-sided marketplace,
does your demand become your supply?
I've never driven an Uber before.
I've never been in an Airbnb post, right?
So I was like, there's something here,
and that's why it's called buy rotation.
So there are a few super users, definitely myself included,
where we lend items, and the money that we make
gets stored into the wallet on the app.
(42:03):
And I use that money to rent from others.
I never take out that money.
It just stays on the app.
So there's an embedded finance plea there.
I'm not a crypto or a token person,
but this is basically a currency on the app.
And there's so much more we can do with it.
If you think about a loyalty program, which
is something we want to do more of in 2025,
where every action that you do on the app gets you rewards.
(42:27):
Yeah.
Credits, which can be used.
I'm curious.
At the time you just like rewinding five years,
what were you most worried about?
And now that you've lived five years post the idea,
what was the thing that you were most worried about
that you're like, oh my god, I was overthinking that?
Or something, the flip side, where it was almost like,
I didn't think about that enough.
(42:48):
It's not as big as you think it is.
The reason why I ask this is the point of making a leap,
especially as a first-time founder,
you are an entrepreneur at heart.
But moving from this corporate world
to building this thing that had very little precedence,
you must have had doubts and fears and concerns.
Five years later, what's your reflection on that?
Yeah, I think I'm still friends with a lot of my ex-colleagues
(43:11):
and still very much know what's going on in that world.
And it's funny because a lot of my ex-bosses
and these close friends will say to me,
how many people in our industry have
achieved what you've achieved?
Just look at yourself as Sheeta and I'm like,
that's very kind, but I think there's much more
of a mountain that I still need to climb.
But they're like, yeah, that's fine.
(43:32):
But just look at this, this is insane.
Not many people have been able to do this.
I didn't think that it would help someone
on their fertility journey.
It's not something that I even thought about.
I didn't think that it would be such an emotive connection
that would be able to build within the first brand
and company that I founded.
And I think it comes back to my interest
(43:54):
in marketing and advertising.
I always wanted to be able to impact how people feel.
And I think we've done that through Virotation.
I love that.
Yeah.
And that is pretty cool.
I feel that it's developed me so much more
in professional ways than I could have ever imagined.
In what you did before, yeah.
It's not just a job or a career.
(44:16):
It's my reason for being.
And I've never felt that with any other jobs
that I really enjoyed.
Would you tell yourself anything if you could go back?
At the point you made the leap, at the point you decided
where it was real?
I would have said, don't worry about what others are doing.
Just do your own thing.
Don't feel like you need to hire people with sexy backgrounds
(44:37):
just because everyone else is doing that.
Do what is actually right for your business.
And really go with your gut feeling about people and things.
Because you will be proven right.
And I've certainly had that experience with,
I think hiring is one of those things that is,
you really have to learn it by being an experienced founder
(45:01):
and operator.
And I think as a first time founder,
I thought I was being very careful with who I hired.
But there certainly were some lapses, I thought,
where I was like, I'm hiring this person because of their CV,
not because they use Virotation or they fully love it.
And that seems like a vanity thing now
that I look back at it.
I did it because I thought it would send the right signals
(45:22):
to the people that I wanted to impress or have on board.
And I shouldn't have done that.
I knew in my gut that person was really right for us.
I would say, be authentic because it will all pan out
the way that it was meant to.
And you will see that you were right.
What next for Virotation?
We're going to continue expanding in the US, where
we're still very much at our early adopter phase.
(45:43):
And then we're soft launching in a new international market
next year.
And then we're reaching profitability.
The mission and the vision remains the same,
which is to transform consumption for good.
And in the longer term, it doesn't necessarily
need to be limited to fashion.
We're already seeing homewear, menswear categories really
boom, maternity-related items.
(46:03):
But yeah, I want to see Virotation
in every corner of the world.
One more question.
You've had a very inspiring journey.
And a long journey.
Has there been any individual's resources?
I know you say you don't like self-help, but is there
any individual that you look to that's
inspired your own personal journey?
(46:24):
Podcast, whatever it may be.
Yeah, I actually hate to say this, but Zero to One,
the book, read it during COVID.
And I was like, this is it.
And he's quite contrarian.
So that book, I would really recommend it.
180 pages, pretty easy read, lots of highlighting,
things that stay with you.
So that's a really good book that I really enjoyed.
(46:44):
I also enjoyed this book, which is fiction,
called The Remains of the Day by Kazuo Ishiguro.
It really awoke in me this question about my purpose
and how my job and my title define the person that I am
and the life I'm going to live.
As for a person who inspires me, I think I'd say it's my dad.
Just one of the things he told me very early on
(47:06):
when I was thinking about leaving my job
to found Virotation, he's five years from now.
When do you make money?
When am I going to see a green sign on the Excel spreadsheet,
like a green text?
I was like, no, it's a startup.
It's like Facebook, you don't make money.
It's going to take a while.
I mean, this doesn't sound right to me.
Because he's a traditional guy, right?
Export-import guy.
(47:26):
And he was like, I don't think this is going to work.
But he was right.
And now the focus is so much on,
are you actually having economics
that are going to bring you to break even in profitability?
It hasn't happened in five years for us,
but it will in our city.
So I feel very connected to his philosophy.
Having seen that it has worked for him,
(47:47):
I believe that it's going to work for us.
Thank you so much for joining us.
This was incredible.
Thank you, guys.
Tell us what you think of this episode
on all of our platforms at the Startup Leap pod.
Do you have a question?
Ask us and we'll ask our guests.
Go to thestartupleap.io.
See you next time.
Girl Scells K trails Landed with Five吧
90% of donations that we give charities in the UK
(00:03):
end up back to landfills in African and Asian countries.
It was on your honeymoon, went to India,
had this aha moment for my rotation.
You can rent a 400 pound dress for 40 pounds.
It's a new way of looking at fashion.
Your decision to be a solo founder, was it deliberate?
Had a spreadsheet, showed all the different
fashion rental players, mapped out how they were similar
and what I wanted to do different to them.
(00:25):
That was actually my honeymoon planning itinerary.
Five and a half months in, I left my job
and I'm like...
Welcome to The Startup Leap, the number one podcast
interviewing startup founders who have taken the leap.
On The Startup Leap, we hear real, raw,
and relatable stories of how they've navigated
taking the leap.
We're your hosts.
I'm Yvonne.
And I'm Maria.
And this is The Startup Leap podcast.
(00:47):
Any statements made by Maria, Yvonne,
or the Startup Leap guests are solely their view
and are not advice.
Today's guests, we have the founder of an award-winning app
that serves over half a million rotators,
one of the largest shared wardrobes in the world
that served the likes of Helen Mirren
and many other celebrities.
Welcome, Ashita.
Welcome.
(01:09):
Thank you, Yvonne and Maria.
How are you doing?
I am excited.
I am here with my plus one, my baby Saffron's
first ever podcast appearance.
Welcome.
What a privilege.
Obviously.
Now Ashita, bi-rotation is now global.
You've expanded to the US, started in the UK
(01:29):
right before COVID.
Did you know it would become what it is today?
Not really.
I thought it would just be a marketplace business model,
a sharing economy for essentially sharing fashion.
Now it's become a social network
where people are lending and renting designer items
beyond just fashion.
Five years later and only $3 million of funding,
(01:52):
we have built the world's largest shared wardrobe.
It's got the likes of Dame Helen Mirren
Ellie Golding, Diana Asher Smith,
students, bankers, lawyers.
One of our biggest super powers is community,
which is a great moat as well.
How did you get it off the ground?
So I founded Bi-Rotation as a side hustle.
I used to work in investments and finance.
(02:14):
I was investing in corporate bonds
and more on the public market side.
I always had this itch to be an entrepreneur.
I grew up in a very entrepreneurial family.
My dad has a rags to riches path.
We grew up learning about negotiation skills
and how to be street smart at the breakfast table
before going to school.
What exactly did your father do?
So he exports and imports granite and marble
(02:36):
and also runs an ed tech business in Singapore.
And he actually emigrated from India
when I was two and a half years old.
I saw the hustle and the determination
to make something out of nothing.
I also want to prove to myself and to my family
what my true potential can be.
I always knew while working in the corporate world
(02:56):
that at some point I wanted to start my own business.
I just didn't know what I wanted it to be in.
It wasn't actually until my honeymoon
back to Rajasthan in India where I was born
and I hadn't been back for over 14 years.
For me, home now is Singapore.
Going back, I was shocked to see a lot of textile waste
in this beautiful state of India
where you see all the palaces, the deserts,
(03:18):
the incredible India posters that you see.
Rajasthan is a textile state, essentially, of India.
It's known for its craftsmanship.
It's known for its production.
I just couldn't help but realise that I was part of the problem
because it turns out that 90% of the donations
that we give to charities in the UK,
they end up going back to landfills
in African and Asian countries.
(03:38):
Did not know that.
My own, yeah.
90%?
You think you're doing a great thing.
I think that they're still producing 92 tonnes
of textiles every year,
and that's just continuing to go into landfill.
Yeah.
So there was a huge impact element
to why you started the company.
I wanted to have a nice wardrobe when I was going on honeymoon.
There's a very pragmatic problem,
(03:59):
and a first-world problem, really,
where I was like, there's nothing out there
where I can just borrow clothes, rent clothes,
for a week or 10 days.
I don't want it to be a ball gown or a tuxedo
or a hat to go to the races or something.
I actually just want to wear nice, contemporary clothes
that I want to look fabulous in, feel amazing in,
(04:20):
have an experience and be a different character on my honeymoon.
And so I already noticed that gap in the market,
but it wasn't actually until I was on the honeymoon
where I realised this is actually a serious problem.
You know, the fashion industry
is the fourth most polluting industry in the world.
What about taking planes and what about oil and gas?
Sure, oil and gas is definitely the most,
but we all consume fashion every single day,
(04:43):
and some of us are being brainwashed and manipulated
by the ultra-fast fashion companies.
But I think that's when I realised
that this is not just a niche problem.
It's not just a first world problem
that I want to have in my little bubble in London.
It's actually something that could help everyone and anyone.
So for me, I knew it had to be a global solution.
(05:04):
It had to be scalable.
It had to be something that was community-oriented
and really was going to transform the fashion industry.
And today, five years later,
we've built business that is still only peer-to-peer,
which actually really does transform consumption for good
on a very grassroots level.
And we've built the most scalable business model
(05:25):
in our sector, fashion rental.
We only emit 24% if we rented it.
You almost reduce the emissions by renting by almost 80%.
That's insane.
I feel like that stat alone is enough reason
for anyone to think about renting instead of buying.
Did that express itself in any other way
aside before you got to rotation?
(05:46):
Yeah, that is a great question, actually.
And I don't get asked a lot about that
because everyone wants to know about tech
and entrepreneurship and all of that.
I had been a web designer since the age of 11 years old.
So I always had an interest in the aesthetics
and the creative side of things.
If you ask some of my schoolmates, they'll be like,
I was always like trying on different outfits
(06:06):
and accessories and trends.
It was less about fashion.
It was more about how things look
aesthetically pleasing together.
You mentioned that it was a side hustle.
Tell us about navigating when you have the epiphany
and you're like, okay, I'll start it,
but I'm not necessarily gonna leave my job.
What was the mental model there?
Well, I had to tell the compliance department
(06:28):
because I was like, okay, there's press articles coming out
and my name is being mentioned
and there's no reference whatsoever
to me having an actual full-time job.
They would just call me the founder
and the CEO of By Rotation.
So that's when I was like, I need to disclose it.
We've got a small favor to ask.
If you're enjoying the podcast, hit that subscribe button.
Yep, subscribing and following us
(06:49):
is the easiest way that you never miss an episode.
And don't forget to sign up for our newsletter,
subscribe.thestartopleap.io
to get exclusive updates straight into your inbox.
Now back to the episode.
Well, I had to tell the compliance department
because I was like, okay, there's press articles coming out
and my name is being mentioned
and there's no reference whatsoever
(07:10):
to me having an actual full-time job.
They would just call me the founder and the CEO
of By Rotation.
So that's when I was like, I need to disclose it,
which was fine.
I was told that it's not competing with what I'm doing
and what the business is doing, so it was fine.
But it was getting to a point where we were being printed
in broadsheet newspapers.
(07:30):
And also my face was gonna be on the business of fashion
the day that we were launching.
But yeah, I took six months pursuing the side hustle
before realizing that it was something worthwhile pursuing
and could actually be worth the opportunity cost
of leaving a lucrative career working in finance.
So there was like a cost benefit analysis spreadsheet
(07:52):
to show what could be.
Like an actual spreadsheet?
Yes, yes, exactly.
I thought it was like a figure,
it's a spreadsheet in your head,
but you actually built a spreadsheet.
I had a spreadsheet that showed all the different
fashion rental players globally
and mapped out how they were similar
and what they were doing that I wanted to do different
to them.
And that was actually my honeymoon planning itinerary.
(08:13):
So I already had that idea brewing in my head.
I just had to really think about,
okay, if I leave this job and I leave this career,
like what would I expect if I went full-time
with bi-rotation?
Is it really worth the opportunity cost?
But it was really about understanding what kind of value
I could bring, not just to society,
but also on a personal level,
(08:34):
because that is important.
Personal motivation is so important
when you're a solo founder in particular.
Oftentimes people leave their roles to work on a company,
building your company while still working within
your corporate role.
And then you have this moment where you're like,
okay, we've reached pilot market fit,
now it's time for me to leave.
How did you acquire those early customers?
Because this is obviously a marketplace,
(08:55):
two sides to it.
You've got the renters and then you've got the individuals
who are lending, right?
So how did you acquire both sides in the early days?
It's always something that a lot of people who are building
marketplaces still ask me.
For me, the reality was I was really just leveraging
on my personal connections and networks,
begging everyone around me to list their items
(09:18):
on the bi-rotation ugly beta website and being like,
can you just list it?
I just need it to start feeling and looking real,
and you can tell me what you really think
once you've used it.
So yeah, I was really just begging on my friends,
my families, my friends of friends, my colleagues,
my ex-colleagues, and then I started going to a lot
(09:40):
of small businesses putting on their own events
or pop-ups and things like that.
I would go to, I don't know, four or five a week
in the evenings after work, and on the weekends,
I would go to these events and out try and network
with everyone.
It's not about just that one big fish at the event.
I actually made an effort to start networking
with just that one person at the event.
It was also really about finding that one connection
(10:02):
who maybe we could collaborate with,
and that's how I started meeting people
within the very tight-knit fashion
and sustainability spaces.
And from a product perspective,
you mentioned that you're a website designer.
Did that come in handy in thinking about the first product?
Yeah, it definitely did, and it's funny
because when I was 11, I was really into web designing
(10:22):
and advertising and marketing,
and ended up creating a really big web forum.
So this is before the days of Reddit.
Before Reddit was like a thing,
it was called Radiant Message Board.
It was for other graphic designers and web designers,
who used Neopets.com when I lived in Singapore.
And as an Asian, I wasn't allowed any pets,
(10:42):
which is why I now gave birth to this dog.
So I had a virtual pet on Neopets,
and I ended up making a lot of pen pals online.
And then I was like, oh, there's like a whole world out there.
I have friends in Tasmania.
What is Tasmania?
I never even knew what that was.
And I think that sort of made me really conscious
of digital communities.
(11:03):
However, I lost myself into chasing a job right out of uni,
because as an international student,
you do need to have your visa sponsored.
So I was like, I can't just be an entrepreneur on day one.
I can't just, I do need to work for a corporate
who can sponsor my visa.
So I guess I was probably like later
to my entrepreneurial journey,
(11:24):
but I always knew that I would end up probably coming back
to my background in creating digital communities
and the aesthetic side of things.
At our peak, when I was maybe,
I think it was 13 or 14 years old,
I had over 3000 members on my forum.
That is insane for a 13, 14 year old.
At that time, not now, it's like, you know.
(11:46):
Sure, yeah, yeah.
Because back then there weren't that many people
also interacting with each other,
interacting with strangers online essentially.
And I was making money by selling my web designs
to other people online.
And I had a PayPal account before.
I had a bank account, but I didn't control my bank account.
My parents did when they had $1 in it.
(12:06):
But I had this PayPal account that I was making money on
by selling graphic design to strangers.
And it was crazy because when my parents found out,
they were like, what are you doing at 2 a.m.
on our computer?
Why are the internet charges so high?
And then later when I had that laptop,
they're like, what are you doing?
What's going on?
We need to check your web history.
(12:27):
They're like, she's making money online.
And that was really novel back then.
And I think that's probably something
I wish I held onto closer.
I had this whole thing where I was like,
I need to get a job if I wanna stay in the country.
So I can't do all this creative stuff.
It's not gonna lead to anything.
And that's probably a regret that I had.
But hey, it all comes back.
Yeah.
It always works out.
(12:48):
Communities, now it sounds like you were very early
at building communities with your web design community.
I'm just very curious because you've now built this moat
with the bi-rotation community and it's thriving.
Thank you.
Even on the app, I go in, I comment,
and anytime some of the rotators I've borrowed from
and lenders I've borrowed from before
(13:09):
issue a new item, I'm like, I'm gonna borrow that.
One thing I'm just really curious about is during COVID,
obviously you started in 2019.
I think a lot of companies operating in space
went to the B2B side,
but you've always remained focused on the communities.
So this is a very consumer phasing proposition
that we are offering.
(13:30):
And sure, there's different ways to approach it,
which could be through B2B and B2C as well.
What we saw happening during the pandemic,
the 16 months, was the pandemic pivot.
And a lot of companies just jumped on that bandwagon
because it was the easiest way to raise capital,
but it was in the most genuine way to do.
(13:51):
And for me, it just didn't make sense.
And I think I'm very, I cannot compromise my integrity.
I can't tell you that I'm gonna do all of these things
when I know I'm not going to do them,
when I know they probably aren't gonna work out
just to raise money in the short term.
Because actually that does end up
with a lot of frustration for everyone,
all the stakeholders, including yourself as a founder
(14:14):
and as someone who's operating and running the company.
So I knew that was in the path that I wanted to go to.
For me, the mission was really to transform consumption
for good, and that really requires everyone to play a part
because more than 70% of the items that we have
in our wardrobes aren't being used in the last 12 months.
That is the real problem.
The brands shouldn't be creating new items
(14:36):
just to rent them out.
That's not what I wanna do.
I want existing people to take stock
and then join us on a grassroots level.
Because when they join us on a grassroots level as well,
there's this emotive factor, this loyalty,
and that is a price tag that's very hard to put on.
It's very hard to convince people to essentially
never use this brand or this product or whatever again,
(14:58):
if they have such an emotional attachment to them.
There's this thing that someone once said
that the best products, especially consumer products,
are causes.
They're belief systems.
You have not just users or customers,
but you have true believers.
I'd love to talk a little bit even on that same thread.
The idea of sharing your wardrobe,
like it sounds nice now, but I imagine in 2019,
(15:19):
when it wasn't as mainstream,
you might have had the conviction,
but explaining it to people, what was that like?
And maybe also paint a bit of what the landscape was like,
because now we're seeing more and more crop up,
but I'm sure it wasn't the norm at the time.
Yeah, I remember when I came back from my honeymoon,
I essentially made a Facebook event,
and it was really me saying, I'm back from my honeymoon.
(15:42):
I have a puppy, come meet my puppy.
I tricked them into coming to my party at home
in my one bedroom apartment.
Gotta do what I gotta do.
My one bedroom apartment, and essentially had a focus group
to be like, what do you think of this idea?
Here are my clothes on rails,
and I asked a couple of other friends
to also bring their clothes,
because they were bought into the idea.
And I was like, what do you guys think?
(16:03):
Meet my dog, cute, right?
So what do you think of this idea?
Do you think that you would rent stuff from a stranger?
Would you lend your stuff to strangers?
And a lot of my friend circle, even to date,
is very corporate, and they were like, this is weird.
This is strange, and we're not that into fashion
like you are.
I can see it working for some people.
We're not there yet mentally.
(16:24):
So I felt quite, I suppose maybe I felt a bit discouraged,
but then I remembered about the life cycle adoption.
The adoption life cycle, yeah.
I remember the adoption life cycle,
and it made me remember,
I don't have to have just one customer persona.
I can have multiple, and actually these guys
are probably my middle to late majority.
They're gonna need more convincing,
(16:44):
and they're gonna need convincing from the early adopters
who are gonna be the ones who like to try new things,
who like to be in the know.
They like to be the taste makers who set the tone,
and those were gonna be my fashion insiders.
They were gonna be people who are influencers,
VIPs, celebrity stylists, fashion editors
who write about it to make things cool.
(17:06):
And that's when I realized, okay, it's good to know
that they could be open to it, but not yet.
They need more convincing, and that's when I realized
I needed to start trying to find a way into meeting
these fashion insiders, and thus I ended up doing
a lot of networking while running By Rotation
as a side hustle, first and foremost.
(17:26):
And then I came back to my friends
and those professional networks.
And today, our super user, our main customer,
is the working professional.
It took about three and a half to five years to get here,
because now it's much more mainstream,
and I believe By Rotation, definitely in London,
and other metropolitan cities in the UK,
and in New York, is becoming a household name.
(17:48):
I love it.
One thing I wanna talk about is fundraising,
because I know that you've been very intentional
about how much you raise.
You speak a lot about ownership and the fact
that you still own over 70% of the business, right?
How did you think about that from the very early days?
Because oftentimes, it's something that people
don't really optimize for until it's too late.
Yeah, I think the finance background definitely helps.
(18:10):
I was investing in corporate bonds,
I would look at annual reports of my sector,
which was banks, not very sexy,
but they are 40% of the bond market,
and that's one entire sector.
I understood a lot about things like
raising equity versus debt,
also understanding things like positions
on your balance sheet.
And with my father being a business owner,
(18:31):
it became very, and his path has allowed him
to be a master of his own destiny.
And so, I was very conscious and mindful
of all the people who have been accepted
into our cap table.
If you look at our pre-seed round,
it was friends, families, ex-colleagues of my husband's.
So it was really like people who just believed in me.
And they were like, she is a go-getter,
(18:53):
she will make it happen.
Even if the idea changes or COVID happens,
she is gonna find a way to make it happen.
With that, I could set the tone when it came to valuation,
because we had just gone into COVID,
there were no transactions,
there were 30 transactions, one a day.
That is not really a real business.
So it was really about the growth opportunity beyond COVID.
(19:14):
And I could set the terms when it came to the valuation.
For our next round, we did do a venture backed round.
So we do have three funds in our cap table.
We have a very large family office.
We have the few prestigious fashion insiders as investors.
We have a few VCs as well who have written angel tickets.
And I think with that, I also made sure
that everyone belonged to different networks.
(19:36):
And so they could wave our flag in their own networks.
And it helps spread the word of buy rotation
as organic ambassadors.
And that has been really helpful for me.
Because the valuation was already set in the pre-seed round,
where I gave up less than 10%.
And a lot of female founders in the consumer space,
(19:57):
they're told that in your first round,
you have to give 20 to 25.
Did you hear that from people
when you were raising your first round?
Yeah, they always said that your valuation
is always gonna be one mil.
So if you're raising 300, then it's one mil.
And I'm like, that doesn't make sense to me.
We were shortlisted for YC.
And they're like, you're probably a bit too far ahead
for YC and your valuation is much higher than what we give
(20:18):
with the amount that we give you.
Do you want to come in?
And I was like, probably not actually,
because it sounds great,
but it was also gonna be a virtual cohort.
And I was like, I'm not sure.
I was like, I'm not sure it's gonna add that much value.
I'm happy not to be a part of this.
Not happy, YC is great,
but I understand that the timing is not for us.
And so it was interesting because all of this stuff
(20:39):
really made me realize I have to be quite protective
of my equity, I can't just give it away like candy.
And I think a lot of people are told,
you need to have an amazing board,
you need to have all these cool faces in the industry
on your slide, which shows your advisors,
your non-executive directors.
And I was like, I don't understand all of this,
because first build the business and product,
(21:00):
then these people are gonna come organically and naturally.
Like the focus shouldn't be to say,
I have a board and I have board meetings,
and this is very professional and corporate.
I think for me, having worked
in a very corporate environment,
I found the scrappy side of things really exciting.
Like the fact that I can wear my workout gear to work
and actually do really serious work in meetings.
(21:22):
Like that to me is much more refreshing than,
I'm a boss now, I have an office, here's my printer.
You've been there, done that, you're like,
that's not what I'm optimizing for here.
Exactly, exactly, I left that,
because I wanted to build something very real
and be a part of it, like in every single way,
from going to the post office to do the early rentals
that I was managing myself, or to open up the store
(21:44):
and sign on leases for a five story townhouse in Mayfair.
I very much see myself as not just the founder,
like a lot of people think when you're the founder,
you're gonna be this visionary,
and after a while, you won't actually do anything.
You'll just be the ideas person,
the person who meets people.
But I-
You're also in the pop-up,
you're wearing house-comers.
As a shop girl on the weekends,
(22:06):
I will carry 20 dresses to help style you,
and I will learn from your feedback
what you like and you don't like.
And if it's a recurring theme,
I will take it back to my engineering team,
and be like the product needs to change,
because this is not obvious at all to people.
So I am to date, five years in,
very involved on every level, grassroots and strategic.
And I think for me, it's not about growing a business
(22:29):
at any crazy cost.
Like that growth mentality, where growth at all costs
was supported by crazy funding, that's not there anymore.
We are in a situation, especially last year,
where a lot of startups were told
to think about default alive.
Survivorship is much more important,
to be honest to your founder, than growth at all costs.
That's what some-
(22:50):
You have to be alive to grow, like-
Exactly.
And if that means that your growth is not gonna be
three X, 10 X, whatever, that you promised your investors,
they should be understanding,
that you might need to have this slower period
to then come out again.
And I think we've definitely seen that.
We've only raised three million.
My team and I have more than 70% of the business.
We are really a master of our own destiny.
(23:12):
And that's allowed us in these very quiet periods
for consumer funding in 2022 and even 2023.
It's only just coming back now.
It's allowed us to really focus on the efficiency
within the business.
We've been growing this year at 60%
while reducing our costs by 60%.
We've done no marketing spend whatsoever.
(23:33):
The business is just growing on its own
while we're actually becoming leaner.
And I feel like that narrative shifted aggressively
pre-zero and post-zero, just like it's two different worlds.
I wanted to talk about, Tim,
because you talked a little bit about that.
Your decision to be a solo founder, was it deliberate?
Did you, you were like, I have everything I need,
or did you think about bringing someone else?
(23:54):
And as you fundraised, did this come up in the conversations?
How did you navigate that too?
I don't know.
I think I didn't really do a lot of research
about being a solo founder or having a team or whatever.
Like, to be very honest with you.
Additional like venture story
of how businesses should be built, et cetera.
I think I maybe started doing that later
after already founding Barretation.
(24:15):
So it was very much, I want to-
Solo founder wasn't a thing in your mind as it like, okay.
I see what you mean.
I saw my dad as being very independent and just being like,
I just have to go and do this on my own.
If no one's going to join me,
if I don't have that network or support,
I just have to go and fend for myself.
So I think in that way, I'm perhaps a bit of a lone ranger,
but I think that helps me be much more efficient.
(24:36):
Because I can hear a lot of stories about founders
seeing things differently,
especially as the business matures, things happen,
which especially in the tough times,
really test a relationship.
But obviously I'm lucky in that I do have a CTO
while I'm very product oriented.
I would say I'm not a coder.
So I have an engineer who has been our senior engineer.
When I was first running Barretation as a side hustle,
(24:59):
and today he's our CTO.
He's been with me even longer
than I've been with the business formally.
So it's really about building those strong relationships
and being very clear as to what their roles are
and ensuring everything else in the end falls on me
as the founder.
How did you meet the CTO?
I'm curious, because people always ask this question.
Yes, they do.
As a solo founder, especially.
Non-technical founders.
(25:19):
And I get that a lot as well.
And the reality is that this, I would just say is luck,
serendipity.
One of my closest friends who was a bridesmaid
at my wedding as well, I was bridesmaid at hers.
She went to high school with my CTO.
And I had originally met him when I was working
in Edinburgh at Standard Life Investments.
She brought him to my apartment.
(25:39):
I was hosting a dinner.
She was like, do you mind if he comes?
He's staying over.
He's just visiting UK.
I was like, oh, I haven't cooked enough for everyone.
Fine.
And he was fine.
He didn't speak much English back then.
But he was really sweet.
And then I met her, I think, four years later at her wedding.
And I was like, cool, nice to see you again.
Don't really know you.
(26:00):
Cool dude.
And then there you go.
He comes back into my life when I'm
asking around and being like, do you
know anyone who could probably create an app for me?
And it's worth mentioning my husband's
a computer scientist.
So while my husband's not involved in the business
full time, he's very much an advisor.
And he can check someone's work when it comes to engineers.
(26:20):
He helps me with the interviewing process
to understand if my CTO, Vlad, really
has the capabilities to actually build the app.
Because Vlad actually hadn't built anything
as sophisticated as By Rotation.
We've built a social network in-house,
completely proprietary.
For him, it's also been a great learning curve.
I think it's the most successful startup he's worked on.
(26:41):
And it's how he got his global talent visa
to move to the UK.
So yeah.
I love that.
It feels good to add value beyond just, I think,
your professional life.
And I feel like By Rotation is doing that for everyone,
not just our customers, but also our team.
Love that.
You mentioned earlier that one of the things
that you've been optimizing for as a team
(27:03):
is driving down your costs and so on.
I know that you've always been focused on profitability.
I'm just curious, you're building a marketplace.
What are some of the north star metrics
that you really optimize for day to day, daily active users?
It was daily active users before 2023.
And after 2023, it is just GMB.
The focus is really GMB and also revenue.
(27:25):
So for me, things like the margins on the commission,
they are important.
This year, we've done only one discount code the entire year.
And we're just being very mindful into ensuring
that people see us as a premium marketplace,
not as a discount marketplace.
Because to be honest with you, being able to rent a designer
(27:45):
dress for 10% of retail value for three days
is already a big discount.
That's an amazing build proposition.
Being able to rent a 2,000 pound dress for 150 or 200 pounds,
that's better than secondhand.
That's better than fast fashion because of the quality.
And it's obviously better than buying it firsthand.
So we've been very mindful of GMB growth
and also revenue growth.
(28:06):
So those are currently our north star metrics.
And they're bringing us to profitability in 2025.
OK, congratulations.
Thank you.
I'm just curious.
Now, you've obviously had quite a profound impact
on a lot of women's lives.
I mean, over 90% of your users are women.
I read a story of a woman that had used bi-rotation
to fund her IVF journey.
(28:27):
And then there's another story of a woman that was making,
I think, 4K a month from bi-rotation.
Did you know that impact would be had from the women
that are lending on the platform?
So I think that's a really important point for myself,
which was, I want to wear nice clothes,
but I don't want to pay crazy amounts of money.
And these are all the incredible sort of side effects
that have come from that.
(28:49):
I wanted to always show people that your fashion that's
hanging in your wardrobe, and it doesn't
need to be your Chanel bags and your Birkin bags,
but it can just be your dress can actually make you some money
and become a real asset class.
Like, we've actually made contemporary fashion
some people are making 10X on a dress that they bought.
They bought it for maybe 300 pounds.
(29:10):
They made like 3,500 pounds on it, and they still own it.
So they can also resell it.
Like, it's crazy to think of your items as these things
that are essentially bringing you more money
and becoming assets.
We've learned from some of our top lenders
that it's made them change their relationship with fashion
and consumption altogether.
They're like, I'll buy the higher quality thing.
(29:31):
I'll think about it.
And I'll buy the higher quality thing,
because I know I can recoup my money on it.
And I'll own it for a longer time as well.
So I want to be very strategic when I do actually go shopping.
And that's something that I'm super proud of.
It's impacted both sides and also on the production side,
because we're taking away from, I would say,
the Zaras and the H&M's of the world, where dresses now
(29:52):
cost about 60, 70 pounds.
We're telling you, you can rent a 400 pound dress for 40 pounds.
That beats that proposition.
It's really a new way of looking at fashion.
And with the woman who paid for her IVF journey,
she's actually told us this year, at the beginning of the year,
that it was successful.
So now she's saving up for her surrogacy.
(30:13):
And that obviously is another expensive undertaking.
We've met other women who've told us
they're saving for their home deposits.
They're saving up for their side hustle.
There's a woman who's making an active wear brand on the side.
And when I rented from her, she sent me her leggings and said,
this is what I'm doing with my income.
Tell me what you think of my brand.
And it's so cool, because my side hustle
(30:34):
has helped others with side hustle.
For your side hustle, exactly.
Yeah, I think you haven't taken one,
because I haven't rented a dress before.
And before this, we were just talking.
I was like, maybe this is the core, right?
Like that first dress that you actually rent.
So our customer retention rate is more than two thirds,
which is crazy.
(30:54):
It's all about getting you to try your first time.
And you're like, oh, no, that makes sense.
I don't think I'm going to buy again.
To be completely honest, before I tried it,
I was like, I don't really want to ship a wardrobe.
But then once you try it, it's like, why am I
going to buy an outfit I'm probably going to wear once,
twice, three times?
And everything is clean when it's sent to you.
It's a seamless service.
(31:15):
And it's also kind of like, when you stay in a hotel room,
it's not like the towels were made just for you.
They were all been dry clean.
Great analogy.
But it's true.
Forget Airbnb, which we love and we partnered with.
But even hotel rooms, the fanciest hotel rooms,
the bed linen and everything, it's
been used by someone else.
That's the thing with consumers, right?
You don't know what you don't know.
(31:37):
And so in a product, it could be a new category
until you try it.
And so that education is required.
You did a great job of that in the early days.
I remember during COVID, and you'll do the Instagram
posts, for example.
And the community probably lenders not actively lending,
as they normally would outside of a pandemic.
And so we definitely use that time
(31:59):
for educating brand awareness and user acquisition.
There's no point sitting around.
Thank you.
Cost effectively as well.
Of course, with you, of course.
I was going to double click on the education piece,
because I think it's very interesting that you mentioned
that you're not a discount product.
You're a premium product.
From a founder's perspective, especially for consumer,
(32:21):
where people are scared to push with the customers
to defining who they are as a product,
because they feel like customers have low attention span.
They're very price sensitive.
So are there any other mental models
you used in, I guess, just being sure about what you're
putting into the world, and the fact that customers might not
(32:44):
like it, but you can educate them in the right direction?
It's a common theme in this with bi-rotation,
in the sense that you are almost moving the industry to where
it should be.
So are there mental models for maybe people
who are building things that are not necessarily mainstream yet,
or things that are not aligning with current consumer behavior,
but actually create opportunity for them to create value?
(33:07):
We've definitely evolved.
Our mission has always been the same.
You'll see that our community, our brand,
the way we position ourselves has definitely evolved.
Even our tone of voice has evolved.
And I think that helps in helping figure out
your average order value as well.
And we've been very mindful of that.
I would say when we first launched,
our average order value was half of what it was.
(33:29):
And even year on year, it's increased by a third.
I'd say it's taken time and confidence
to be like, we're actually becoming
more and more of a premium product and a luxury product.
It took confidence, and it took experience.
You couldn't just lend it.
You have items on there that are worth over 10k, right?
Yeah, there's broken bags on there.
You couldn't do that in the early days?
No, definitely not.
(33:50):
Having ways to manage the risk of those products
potentially not coming back.
True, but also we've now positioned it
such that we're pushing more premium brands on the app.
So it's really the person who signed up with us five years
ago is predominantly a woman.
She has also grown up with us.
And her aspirations are also changing.
(34:10):
Maybe she joined us when she was graduating
and wanted a graduation dress.
Then she got a job, and now she's getting promoted.
Now she's going to her friend's wedding,
or she's getting married, or she's having a baby.
We're growing up with our audience,
and we've been very mindful in ensuring
that our AOV also evolves with that.
I love that.
But it takes, I would say, you can't just rush into it.
(34:32):
You need to build that sort of trust,
especially if you want to be a luxury scaled product.
You need to find a way to convince them to give you
more money all of a sudden.
Even though it's not the same product, but it's the same app.
When we launched in the US last year,
which is a profitable area for us already,
that has an AOV of one and a half times the UK.
(34:53):
It's a more premium product.
We're a more premium service, and we're
seen as more premium than our incumbents in the US.
So that perception takes time sometimes.
Perception is the word.
Interesting.
I was talking about international expansion.
Yes.
How did you navigate that move into the US
and the activation of the customers, the members,
the buyers?
I was very convinced that this business has
(35:14):
to be a global business with local communities everywhere.
I don't want to run this business.
If it's just a London business, if it's just a UK business,
that's not worth the opportunity cost that I set out on.
And for me, the sharing economy needs
to look more like Airbnb, not an inventory holding subscription
business.
So for me, that's not what I wanted.
We have money.
We've just gotten money from venture funding.
(35:35):
And to be honest with you, it didn't take a lot of money
to scale the product, which again, is the app,
to also have a US version of it.
And we chose.
Did you already see a pull from the US?
Yeah.
We were getting a lot of inquiries.
But we also got inquiries from European countries,
from Middle Eastern countries, from Asia.
But the US for us seemed the most,
(35:56):
I won't say low-hanging fruit, because it's still
a huge beast.
It's a bigger beast in the UK.
But it seemed more obvious to us because of the culture,
the language, right?
If I'm telling you that there's Dame Helen Mirren and Ellie
Golding on the By Rotation app, you get it.
If you're in the US, you get it.
It's the same thing.
The language is similar.
If we wanted to show amazing efficiencies of scale
with our first market, international expansion market,
(36:19):
it had to be one that was easiest
to handle for engineering and for marketing,
because those are our two main costs.
So for us, the engineering actually
happened within a matter of 2 and 1 1.5 months,
which wasn't too difficult, despite having
a small engineering team.
The marketing, we started soft launching and collecting
a database to understand who would actually
(36:41):
want to use the app.
So we started getting our early adopters.
How did you go about that soft marketing?
Especially on both sides of the marketplace,
given it's a global product, you do
need lenders within a location or region
to be able to lend to people in that region.
So one very tangible advice I'd give,
and it's a learning for us as well,
is that we should have had a US version of the website that
(37:03):
said, we're going to come soon.
Please leave your email.
We should have done that before.
We only did that in September 2022.
We did a soft launch in February 2023.
That's when we started getting those people who
signed up through email and inviting them
to a private event to identify who was going to be a lender,
who was going to be a renter, build that grassroots
personal touch with By Rotation and with me
(37:26):
as the founder in particular.
And then we did our official launch in May 2023.
So we really worked on the grassroots community
by having a soft launch system.
And that was really to get the supply onto the app.
But we were also lucky in that By Rotation
has amazing footprint on Google, on Search,
because of the press that we have.
(37:47):
When we announced that we were soft launching in February,
we were being told by American celebrities,
oh, I thought you were already here.
Good, you're finally coming because we've been waiting
for this.
I love it.
So we were very lucky in that we have good awareness
within the UK and US, and especially
with the early adopters, because right now in the US,
(38:07):
we're still in the early adopter phase.
We've just completed a year and it'll be a half in Jan.
So with us, it's mostly fashion insiders that are currently
our key demographic.
Got it.
I wanted to talk about COVID.
You've mentioned it a few times.
What was its impact on your business?
Because you started in 2019, so you're probably just barely
a year in after your honeymoon, and then COVID happens.
(38:29):
Was it an accelerant or to the business?
Did it position you for anything that you eventually
took advantage of later?
I'm wondering if it maybe also helped your US expansion
or awareness.
I'm just curious on what the impact of that business
was on how you took advantage of it.
That's it.
Five and a half months in, I left my job,
and I'm like, oh, we're all stuck at home.
I could have just done this as a side hustle
(38:50):
and kept a tab open on my laptop.
It is what it is.
And I was like, now that I've chosen this path,
I'm going to go full in.
I'm not going to pause.
I'm not going to make banana bread and paint walls.
I did do that, but I also didn't leave my bowl in this.
And I was like, you know what?
I said we're a peer-to-peer marketplace,
so that shouldn't stop me.
Everyone knows how to package things.
Everyone knows how to create and consume content online.
(39:12):
But didn't it affect the ordering?
Yeah, the transactions.
People are probably not wearing dresses as much
if they're not going out as much.
But I still was like, this is great,
because I don't have supply on the app anyway.
Everyone's stuck at home, so let me just convince them
while they're merry-condoing their wardrobes
and their homes to start listing items.
So we're like, you're bored at home.
Do this now.
It takes you one hour.
(39:33):
Do an hour a week or something, because who knows?
It was indefinite anyway.
So in a strange way, it was actually very helpful
to our business model.
In fact, it probably really helped us,
because it slowed down anyone else who had inventory models.
You saw why closet in China closed down during this time.
And that's an inventory-based rental model.
So it became very clear to me that business model is broken,
(39:56):
and it needs to be disrupted.
We are the fashion rental 3.0, because not only now have we
built a peer-to-peer marketplace,
but we've also built a gamified social network.
And that's the direction that I want to go more and more into.
It became very clear to me that this
has to be a social network.
That was our iteration.
I remember in 2021, I think in January,
(40:19):
when we were still in COVID, and we were figuring out,
will we finally come out of this?
I was like, this community that we've built,
they need to start interacting with each other on our app.
This has to be like a closed thing, where people use it
directly to contact, inspire each other, chat,
and essentially only use us.
And it creates a loyal following, too.
(40:40):
So that gamified app has actually
made us launch a lot of features, even this year.
Like, in the beginning of this year,
we launched this rent by location feature.
Which I love.
Yeah, you can essentially see, even now,
where we're recording, if someone suddenly tells me,
Esha, you really need to come in,
I can check what's in my one-mile radius right now
(41:00):
and quickly rent something from someone.
They just need to chat me back and be like, yeah, sure.
It's in my home.
I'll put it out in my front garage or something,
and you can collect it.
So it's really convenient.
It's better than next day delivery.
And I think it's even more sustainable,
because there's no deliveries or anything involved.
And that's the direction we're going towards,
which is why I say local, the local communities.
(41:20):
And there's definitely pockets of areas
within metropolitan cities where there's a mass of lenders
that you can quickly rent from.
And then the second feature that we
launched, which I'm super excited about, is the wallet
feature.
So about 40% of our renters have also
gone on to become lenders, because they realize
it's so easy to make money.
(41:41):
And how often, in a two-sided marketplace,
does your demand become your supply?
I've never driven an Uber before.
I've never been in an Airbnb post, right?
So I was like, there's something here,
and that's why it's called buy rotation.
So there are a few super users, definitely myself included,
where we lend items, and the money that we make
gets stored into the wallet on the app.
(42:03):
And I use that money to rent from others.
I never take out that money.
It just stays on the app.
So there's an embedded finance plea there.
I'm not a crypto or a token person,
but this is basically a currency on the app.
And there's so much more we can do with it.
If you think about a loyalty program, which
is something we want to do more of in 2025,
where every action that you do on the app gets you rewards.
(42:27):
Yeah.
Credits, which can be used.
I'm curious.
At the time you just like rewinding five years,
what were you most worried about?
And now that you've lived five years post the idea,
what was the thing that you were most worried about
that you're like, oh my god, I was overthinking that?
Or something, the flip side, where it was almost like,
I didn't think about that enough.
(42:48):
It's not as big as you think it is.
The reason why I ask this is the point of making a leap,
especially as a first-time founder,
you are an entrepreneur at heart.
But moving from this corporate world
to building this thing that had very little precedence,
you must have had doubts and fears and concerns.
Five years later, what's your reflection on that?
Yeah, I think I'm still friends with a lot of my ex-colleagues
(43:11):
and still very much know what's going on in that world.
And it's funny because a lot of my ex-bosses
and these close friends will say to me,
how many people in our industry have
achieved what you've achieved?
Just look at yourself as Sheeta and I'm like,
that's very kind, but I think there's much more
of a mountain that I still need to climb.
But they're like, yeah, that's fine.
(43:32):
But just look at this, this is insane.
Not many people have been able to do this.
I didn't think that it would help someone
on their fertility journey.
It's not something that I even thought about.
I didn't think that it would be such an emotive connection
that would be able to build within the first brand
and company that I founded.
And I think it comes back to my interest
(43:54):
in marketing and advertising.
I always wanted to be able to impact how people feel.
And I think we've done that through Virotation.
I love that.
Yeah.
And that is pretty cool.
I feel that it's developed me so much more
in professional ways than I could have ever imagined.
In what you did before, yeah.
It's not just a job or a career.
(44:16):
It's my reason for being.
And I've never felt that with any other jobs
that I really enjoyed.
Would you tell yourself anything if you could go back?
At the point you made the leap, at the point you decided
where it was real?
I would have said, don't worry about what others are doing.
Just do your own thing.
Don't feel like you need to hire people with sexy backgrounds
(44:37):
just because everyone else is doing that.
Do what is actually right for your business.
And really go with your gut feeling about people and things.
Because you will be proven right.
And I've certainly had that experience with,
I think hiring is one of those things that is,
you really have to learn it by being an experienced founder
(45:01):
and operator.
And I think as a first time founder,
I thought I was being very careful with who I hired.
But there certainly were some lapses, I thought,
where I was like, I'm hiring this person because of their CV,
not because they use Virotation or they fully love it.
And that seems like a vanity thing now
that I look back at it.
I did it because I thought it would send the right signals
(45:22):
to the people that I wanted to impress or have on board.
And I shouldn't have done that.
I knew in my gut that person was really right for us.
I would say, be authentic because it will all pan out
the way that it was meant to.
And you will see that you were right.
What next for Virotation?
We're going to continue expanding in the US, where
we're still very much at our early adopter phase.
(45:43):
And then we're soft launching in a new international market
next year.
And then we're reaching profitability.
The mission and the vision remains the same,
which is to transform consumption for good.
And in the longer term, it doesn't necessarily
need to be limited to fashion.
We're already seeing homewear, menswear categories really
boom, maternity-related items.
(46:03):
But yeah, I want to see Virotation
in every corner of the world.
One more question.
You've had a very inspiring journey.
And a long journey.
Has there been any individual's resources?
I know you say you don't like self-help, but is there
any individual that you look to that's
inspired your own personal journey?
(46:24):
Podcast, whatever it may be.
Yeah, I actually hate to say this, but Zero to One,
the book, read it during COVID.
And I was like, this is it.
And he's quite contrarian.
So that book, I would really recommend it.
180 pages, pretty easy read, lots of highlighting,
things that stay with you.
So that's a really good book that I really enjoyed.
(46:44):
I also enjoyed this book, which is fiction,
called The Remains of the Day by Kazuo Ishiguro.
It really awoke in me this question about my purpose
and how my job and my title define the person that I am
and the life I'm going to live.
As for a person who inspires me, I think I'd say it's my dad.
Just one of the things he told me very early on
(47:06):
when I was thinking about leaving my job
to found Virotation, he's five years from now.
When do you make money?
When am I going to see a green sign on the Excel spreadsheet,
like a green text?
I was like, no, it's a startup.
It's like Facebook, you don't make money.
It's going to take a while.
I mean, this doesn't sound right to me.
Because he's a traditional guy, right?
Export-import guy.
(47:26):
And he was like, I don't think this is going to work.
But he was right.
And now the focus is so much on,
are you actually having economics
that are going to bring you to break even in profitability?
It hasn't happened in five years for us,
but it will in our city.
So I feel very connected to his philosophy.
Having seen that it has worked for him,
(47:47):
I believe that it's going to work for us.
Thank you so much for joining us.
This was incredible.
Thank you, guys.
Tell us what you think of this episode
on all of our platforms at the Startup Leap pod.
Do you have a question?
Ask us and we'll ask our guests.
Go to thestartupleap.io.
See you next time.
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