Checking In With HACKcelerator Alums: Lustr from Sydney
They’re not just another fashion marketplace.
It’s always amazing to watch real and bonafied startups emerge from a weekend-long hackathon.
Lustr, a fashion-tech startup based in Australia, was born out of the AngelHack Sydney 2016 Hackathon. They were one of the superstar startups from that year’s HACKcelerator cohort, ultimately winning interviews with both Techstars and Y Combinator.
An interesting thing about hackathons, especially ones that produce real startups, are the situations when strangers come together as the perfect founding team. This was certainly the case with Lustr’s founders(Angela Liang, Liliana Ructtinger and Jeremy Vista).
We spoke with Liliana and learned about what Lustr is up to, and how they came together at the hackathon.
Q: We were so excited to see Lustr’s social channels seemingly stretching and getting ready for your big announcement (they just officially opened for business in Australia!) last week!
For the readers who aren’t familiar with Lustr, can you tell us what your platform does?
A: Lustr is an online business-to-consumer (B2C) platform for independent fashion labels that allows them to grow their business in four ways: connect, engage, sell and learn.
- Our artificially-intelligent “virtual personal assistant” understands a shopper’s personal preferences and matches them to independent labels that suit their style and values.
- Once connected to their customers, labels can ask shoppers to vote on upcoming designs to crowd-source consumer sentiment from their target market, ie. “do they even like what I’m thinking of producing”?
- Shoppers can shop current season, or pre-order through a unique crowdsourcing model, with incentives built in for them to share the upcoming collection with their own friends. Labels receive cashflow earlier in their manufacturing process, also helping with inventory forecasting to de-risk their production.
- Finally, labels can learn from the (almost stalker level) data that Lustr collects on their customers to help them make better business decisions.
The combination of these four features are not available anywhere else on an integrated platform, and there are certainly few opportunities for smaller labels to leverage collective data (those big data services are very expensive and usually reserved for use by large corporations with big budgets) as well as an engaged audience of like-minded shoppers, that we are able to collect across all labels on our platform.
Q: Amazing. Where did the idea come from?
A: Angela, our CEO! The idea was actually born out of passion and frustration. As a stylist, she worked with many designers (from emerging to well-established) and become friends with most of them and end up catching up for coffee, etc. Most of the chats ended up centering around their cashflow problems and struggles to grow their brand.
She was sick of hearing the same problems over and over again, which all essentially boiled down to customer acquisition, market understanding, customer conversion, and financing and often found herself talking about business strategy, giving them advice from my commercial insights and former career experience but thought there had to be a better way. From an external point of view (since Angela didn’t have a fashion background) she observed a lot of “old school” entrenched expectations of how to do business in fashion and thought it made no sense.
So she came up with a few ideas and looked into the fashion tech options available, but couldn’t find anything that was doing exactly what she wanted to do. So, the drive for Lustr emerged.
Q: Did you all know each other prior to the hackathon? What were your roles at the hackathon and have they carried over or changed at all since turning the project into a real startup?
A: We were strangers who met at the hackathon by chance — in fact, we were all about to pack it in because we hadn’t found a team to work with and then we all just came together at the last minute, thought we’d give it a shot and won it!
Honestly, this is the work of serendipity at her finest. We all have complementary skill sets and our personalities work really well together. During the hackathon, Angela was leading the charge, she is a born leader. I was working on research and translating it into what needed to happen for development and Jeremy was the developer.
This has stayed pretty much the same, although now there are lots of additional things to do! Did anyone say marketing, legal, customer service…?!
Q: Did you all have familiarity with the fashion industry?
A: That part was all Angela. Her experience plays a huge role because she is so familiar with the problem, has a solid network that we look to for advice and who became our first set of clients.
Her experience gives credibility to Lustr, she understands the inner workings of the industry and this makes it a lot easier to get a handle on how to tackle the problem.
Q: Now, you graduated the HACKcelerator program and demoed in the Fall of 2016, and this November you launched in Australia. Tell us about Lustr’s journey from Global Demo Day 2016, to the recent launch.
A: We have done a lot this past year!
After getting back to Sydney we got ourselves a co-working space we could afford and set up there. We decided that we needed to slow the pace down so that we could revisit our intentions as a team. Our first step was to re-validate our idea.
We did this in the form of a few months of research: in-person focus groups and workshops with both designers and shoppers. We had a lot of fun with these — we used some really creative methods and we had some really positive feedback from the participants. Oh, and we also learnt a lot! We took those learnings and thought carefully about our features and how to optimise them so that they would work best for our users and would be readily adopted.
Then we moved onto design — we worked with a super-talented graphic designer who re-branded Lustr and designed the screens that Jeremy would use when he started to build. Then it was onto the huge task of development — we created the specifications for Jeremy and he went ahead. In between there was copywriting that we started, as we slowly built up our social presence, Instagram in particular is really important for us, since we are working with a really visual product.
We took a month to on-board designers, getting ready for public launch (we don’t want to open up an empty store!) and all the while continuing to test the site. We also worked hard to make connections with key industry partners who have helped to give us a voice and reach designers. At the moment we are working with the Australian Fashion Chamber and the Council of Textiles and Fashion — the two primary fashion industry bodies in Australia. Our big push now is marketing for customer acquisition — that is our primary focus.
In the middle of this there was legal stuff, accounting stuff, you know, admin. We wanted to make sure we were a bonafide legitimate business and would be able to operate smoothly in Australia.
Q: What’s the most challenging thing you’ve faced as early-stage startup founders?
A: We’ll be thrilled if we can work out the Facebook algorithm! Our advertisements are such a challenge to get to work well.
Really, I kid — that’s peanuts compared to the challenge of building a business with just three people. Angela is working on the business full time and Jeremy and I are still working our other jobs. That’s really hard — finding productive time to work together. We’re super proud to tell everyone, though, that because of that, we’re not just self-funded, we’re self-powered.
We do the work ourselves. It’s a challenge but also the biggest reward.
Q: Now that Lustr has launched, what’s the roadmap for 2018? Any plans to expand outside of Australia in the near future?
A: I think 2018 will be about growing Australia strong, as our geographic vertical. While we ship internationally, we want to work first with Australian designers. We know the market here, we have our roots here, we believe in Australian fashion and we are gaining recognition and traction. Of course we will expand, but we want to get a solid grounding first.
Q: Any advice for other new founders out there?
A: First, find yourself the best team. Start there. You can have a great idea but if your team is not strong, it won’t go anywhere.
“You can have a great idea but if your team is not strong, it won’t go anywhere. A good test is to ask yourself — would I go on vacation with my co-founders?!”
Another piece of advice is not to scramble for funding too early. As an early startup, you are not worth much, so you will be giving away equity for a (relative) bargain, allowing your business to be unfairly benchmarked. This matters because later funding rounds could result in lower valuations. Also, as you give away parts of your business (i.e., equity), you relinquish control over it. You become answerable to others who may have a different view of how the business should be run. Keep a grip of the reigns for as long as you can!
If you can, work with other startups in your ecosystem. They’ll “get” you. Our payments provider has been wonderful (Assembly Payments) and has really allowed us to deliver on our mantra of simplifying life for designers. They are agile enough to tailor to our needs and small enough that we have a personal contact who makes life so easy.
Finally, there’s a lot of hype out there. People get really excited about startups (it’s awesome, seriously!) but keep a level head: at the end of the day, you are building a business. The medium may be different, but the same principles apply: know your value proposition, know your users, keep your costs low (no fancy things, OK?!) and grow organically.
“Growth-hacking will only get you so far — think carefully about making authentic connections with people who truly believe in your work, they will be your biggest advocates and your best bet for future success.”
Q: If you were to look 5 years into the future (a perfect future), where would you like Lustr to be?
A: Global. We’d be working with brands from all over the world and we’d be known as THE destination for independent fashion design. Oh, and we’d be based at Lustr House, a co-working/living pad in Byron Bay where we could bask in the sunshine, surf, and eat mangos all day (while we worked away at the business).
