Sick of those “unicorn” tech companies getting all the press? Well, Blank Label isn’t one of them. And that’s just fine with founder and CEO Fan Bi and his investors.
Blank Label, which sells men’s clothing online and offline, has closed its first outside funding round: $1.1 million from a who’s who of young Boston-area angel investors, including Drew Volpe from Locately and Semantic Machines; Mike Salguero of CustomMade; Art Papas from Bullhorn; Roy Rodenstein of TrueLens; and Jennifer Lum from Adelphic Mobile.
The round (raised over the past year or so) is modest and fits the company’s trajectory. Blank Label was launched in 2009 as an online-only retailer. It rode a wave of mass customization companies, offering things like a “configurator” to let people choose their own fabric, stylings, and so forth. Along the way, Bi left the U.S. because of visa issues (he’s Australian), moved to Shanghai, came back to Boston in 2011, and now runs the 12-person company in Downtown Crossing.
In case you’re wondering how he’s managed to stay in the U.S.—there’s been renewed interest in immigration reform for entrepreneurs—Bi got a special visa that exists only for Australian citizens (as part of a fair trade agreement).
Bi came to the conclusion that mass customization was “an interesting blip, but hasn’t really had much consumer traction.” Instead, he says, “people actually like top-down design” of apparel. “It’s about utility. We’re solving a problem for guys,” he says, who want to buy comfortable and well-fitting shirts, suits, and outerwear (as pictured above).
What’s more, that problem has to be solved with brick-and-mortar stores as well as websites—see companies like Warby Parker, Bonobos, and Ministry of Supply, for example. In terms of clothiers, Bi says, there hasn’t been a truly successful brand that’s online-only. “The reality is 90 percent of clothes are still purchased offline,” he says. “People want to feel and touch and try on.”
To that end, Blank Label opened a real-world store in Boston about a year and a half ago. It’s planning to open a second store in Washington, DC, in August, and will look to open two more stores in other U.S. cities. The new investment will be used to pay for store expansions, Bi says.
Now, about that unicorn stuff: Blank Label’s business has been growing, Bi says, but “it’s been a slow grind over five years.” Plenty of other companies are in the same boat. Bi was out in San Francisco earlier this year, and he says he heard entrepreneurs saying, more or less, “If you’re not trying to build a unicorn within three years, you’re basically a loser.” Worse, he says, employees of such companies work at a startup for six months and leave if it’s not on a rocket-ship trajectory.
If you look at the history of big consumer businesses like Lululemon or Whole Foods, Bi says, “they take 10 years to build, not three years. When you try to compress that into three years, bad things can happen.”
But surely he’s been tempted to work on something flashier? “There’s definitely a lot of perceived opportunity cost,” Bi says. “I’ve come to realize there’s a fast-trajectory startup route,” he says, and then there’s “building for the long term.”
“We’re building a business, not building a startup,” he says.