Lessons for Founders from Stich Fix Founder Katrina Lake
Katrina Lake founded Stich Fix in 2011 while she was still in Harvard Business School despite all the people saying that her concept for Stich Fix was a bad business idea. Fast forward to 2020, Stich Fix’s market cap is more than $4B. Lake took the company to the public in just six years.
Stitch Fix is a personal styling platform that delivers curated and personalized apparel and accessory items for women. It may sound like a personalized shopping subscription service which is true but Stich Fix is a data science company at its core. Lake explains Stich Fix in her own words: “We send you clothing and accessories we think you’ll like; you keep the items you want and send the others back. We leverage data science to deliver personalization at scale, transcending traditional brick-and-mortar and e-commerce retail experiences. Customers enjoy having an expert stylist do the shopping for them and appreciate the convenience and simplicity of the service.”
Katrina Lake attended the Ladies Who Launch Summit 2020 as a keynote speaker to talk about her journey as a founder that took her company to IPO in six years. She shared her wisdom on starting and growing a tech company. Here are our three key takeaways from the conversation:
1- Company Culture Matters
Usually, company culture is not on the priority list of new founders but it is crucial for the sustainable growth of a startup. Katrina Lake talked about the importance of company culture. She said that the thing that she is the proudest of isn’t the fact that she is the youngest female founder ever to take a company public but that she created a company where everybody, including her children, would want to work. She rolled out a maternity leave policy and took full 16-week maternity leave for both kids. She wanted to show that it is possible to be a good parent while growing a company.
It is also worth noticing that she created a company where data scientists and stylists who came from different worlds are working together. We think that the multi-disciplined culture of the company is one of the main reasons for the company’s huge success.
2- Don’t Get Discouraged with No’s
Katrina says not many people thought it was a good idea back in 2011. One of her professors at Harvard called it an inventory nightmare. Then she talked to VCs and tried to explain to them why Stich Fix is the future of retail. She said that fundraising was so hard for her. When she said that, we remembered the article she wrote for hbr.org. She explained this with a very specific example in that article: “I remember that at one meeting, a VC said within the first five minutes, “I just don’t understand why anyone would ever want to receive anything like this.” In a male-dominated VC industry, it was hard for her to get VCs excited about the future of retail or women’s dresses. But it didn’t stop her instead it forced her to focus on profitability and capital efficiency.
3- Importance of Having the Right People
The third takeaway is about people. She talked about the importance of surrounding yourself with the right people along the way. This includes board members, employees, and people that surround the rest of your life. She highlighted that the people whom you collect along the way are so important since you turn to them when you have hard times. She advised not to be afraid to ask for help from people in your network. She exampled this by telling a story of how she called Sarah Friar who was the CFO of Square back then, even though she wasn’t close to her, the night before the IPO to ask for some advice because she was nervous about the IPO day.
One last anecdote from her keynote: She noticed the lack of diversity among Stich Fix vendors with which the company spends millions of dollars, and as a result took action to bring more female-led vendors into the Stich Fix network.
It was really inspiring to listen to Lake’s journey. Even though we think online events are great for obvious reasons (like you don’t need to dress up), we miss in-person events. Hopefully, we will be able to attend events in person in a COVID-19 free world soon.