After teasing the launch of their new startup last year, e-commerce veteran Julie Bornstein and her technical co-founder, Amit Aggarwal, are today launching The Yes, a women's shopping platform that they've been quietly building for 18 months and they say will create tailor-made experiences for each user, courtesy of its sophisticated algorithms.
Bornstein's experience and vision alone attracted $30 million in funding to the venture last year from Forerunner Ventures, New Enterprise Associates and True Ventures, among others. To learn more about how it breaks through in a world rife with e-commerce companies, we talked with Bornstein, who previously spent four years as COO of the styling service Stitch Fix and before that spent years as a C-level executive at Sephora. We wondered specifically how The Yes differs from Stitch Fix, given that both companies use data science to discover clothing for shoppers based on their size, budget and style.
Aside from the fact that The Yes is taking an app-only approach (unlike Stitch Fix), and doesn't have a subscription model, Bornstein says that The Yes is very much focused on people "who want to shop" versus those who want their shopping done for them. Yet that's just the start of what makes The Yes different than its other predecessors, said Bornstein in a conversation that follows below, edited lightly for length.
TC: You're building what you call a store around each user, who downloads the app, answers questions that provide a lot of "signal" about that person's style and brand preferences and size and budget, and that's adaptive, meaning the algorithm is always re-ranking products as it learns better what a person likes. What demographic are you targeting?
JB: It's women of a very broad age range, from 25 to 75, who care about fashion, whether they're an in-the-know-on-everything fashionista or they just want to look great. And you can shop high/low, which is how most women shop these days. So it depends what you're looking for.
TC: It sounds like you're selling women's apparel exclusively to start. Are you also selling handbags? Jewelry? Accessories?
JB: We're focused on fashion and footwear, and we have accessories and handbags. A lot of our brands have great handbags. Then we will be expanding more to jewelry and other accessory categories over time.
TC: What brands can shoppers find on the platform?
JB: We have 145 brands at launch, ranging from Gucci, Prada and Erdem to contemporary brands like Vince and Theory to direct-to-consumer brands like Everlane and La Ligne to everyday brands like Levis. When a brand integrates with The Yes, the platform sells each brand’s full digital catalog.
TC: Why go app only?
Most of the e-commerce sites that have mobile presence really feel like a website converted to a small screen. We [thought if we] challenged ourselves to leverage the technology of the native app environment, [we] could build a much slicker experience for the user. We also know that mobile is growing. It's about 50% of total purchases now in fashion and growing faster, so while we know that web will be important to add, we really felt like mobile and iOS were the places to start.
TC: Stitch Fix uses machine learning to analyze customer tastes, but it ultimately relies on human stylists to choose items. What new advances have been made in AI that can allow The Yes to actually pick products using artificial intelligence? Isn't fashion, like music, a "noisy" problem, with consumers often not knowing what they want?
JB: It's such a nuanced area and really hard to do in the form of recommendations, but there are a number of reasons that enable us to do it. One is we had to build the most extensive taxonomy that exists in fashion. We did think a lot about the music genome project that Pandora did and all the work that Spotify has done. Music is definitely one of our inspirations. And if you look at what they did, they had some human expertise in the beginning, creating these categories, and then the machine learned on top of it, and we have done the same in fashion. So we had fashion expertise build our initial taxonomy.
Then we leveraged both machine learning and computer vision to train models to understand how to absorb all pieces of data related to a product, as well as the image itself and how to read images. And it gave us a really strong understanding of 500 dimensions for every single item. [Meanwhile] to understand what the consumer cares about, we spent a lot of time testing and learning which questions [to ask] when it comes to brand and price and things like color and style and size and fit...
TC: Because of your background, comparisons are probably going to be made between The Yes and Stitch Fix. What was the impetus for this new business? Was it a matter of eliminating that personal touch?
JB: I had such a great experience at Stitch Fix, and I'm still a shareholder and a big fan of the company and the team. And I think what they're doing, what they continue to do, is terrific in really pushing the boundary on this concept of shopping-as-a-service.
What I am working on, and our team is really focused on, is the actual consumer shopping experience for consumers who want to shop. There's a strong percent of the population who really loves to shop and wants agency in their own selection, and that is really the consumer we're going after.
TC: You're launching with roughly 150 brands. What is your relationship with them? Are you taking a cut of a transaction? Are you ever taking possession of their products? Do you have a warehouse or warehouses?
There were two things coming into this business that I wanted to avoid based on my personal experience, which was one, owning inventory, and two, reshooting every item for its own new photographs on the site. Pinterest and Instagram and all these other visual sites have shown us that the brands spend a lot of money shooting images to look a certain way to help communicate what their brand is all about. So leveraging those assets has been terrific.
[Regarding inventory], there's no reason to ship the product from the brand to another warehouse and then to the consumer. We're cutting out that stuff and shipping it direct from the brand. From a consumer standpoint, you order on our app, and everything is one-click, and you are charged by [us]. But then the order is placed through the brand and is shipped from the brand to you. Then we will communicate to you when it's shipped, when it's arriving, and if you have any customer service issues, we take care of it.
And we take a flat commission [on sales].
TC: Returns are free. But isn't that a huge cost center, and might it deter people from returning items if you charged something for returns?
JB: My feeling is that free shipping and free returns is a baseline requirement to offer a great service. And it's our job to help match [shoppers] to product that you're not going to return. We have an enormous goal to have the lowest return rate in the industry. It will obviously take us some time to get there. But we believe that by making sure that we understand what works for you and what doesn't, we can get [there].
TC: You raised $30 million last year. Are you in the market for a Series B? What will you have to show investors toward that end?
JB: The logic behind the dollar amount that we raised was: how much do we need to build what we want to build, and then bring it to market and get traction? And so that is our goal that starts tomorrow. . .
TC: How has this current reality altered your plans? Launching during a pandemic isn't what you were imagining, obviously.
JB: No, it is not. [Laughs.] I don't know that any of us could have possibly. We did delay our launch; we were originally launching in March, and once COVID hit, we needed to make sure we could see straight and understand the impact. I think as time has passed, we have felt more and more compelled to get out there to help our brands, all of whom are feeling the impact of the retail stores closing, or orders being canceled by their retail partners. They're all businesses and many of them small businesses, so we want to help them.
It's also an interesting time because we all need a little bit of levity and escape. And the app really is a fun escape.