POV TEAM PORTFOLIO ABOUT GAMECHANGERS / ENTREPRENEUR JOURNEY Putting Fashion in the Palm of Your Hand Partnered at Seed MAR 20, 2017 Mobile devices have exploded in recent years, but in the beginning, people only used their smartphones to call, text, and take photos. Everything else was done at home on desktop computers. Manish Chandra had a crazy idea back in 2010. He wanted to build an ecommerce platform specifically for handheld devices. And that’s what he did with Poshmark, a mobile fashion marketplace. “At the time,” he says, “everyone was trying to convince me to launch a website. But I knew that everything was going to happen on the mobile phone. Today it seems like a no-brainer, but at the time I was totally going against the grain of Silicon Valley.” Before Poshmark In 2004, Chandra built and launched Kaboodle, a groundbreaking fashion and collaborative social shopping website. But after he sold the venture to the Hearst Corporation in 2007 he began thinking about ecommerce and fashion in a new way. “I was on vacation with a friend in 2010,” says Chandra, “and he was taking photos using the latest gizmo, his iPhone 4. I immediately saw his ability to snap high quality photos and share them instantaneously with friends across the internet was far more than my fancy SLR camera could deliver. I realized that this could facilitate an amazing platform.” Soon after, Chandra found himself chatting with the homecoming queen at his son’s high school. She told him two things that would eventually lay the foundation for Poshmark. The first thing she mentioned was that she enjoyed shopping at consignment stores. Later, she groused about the abundance of clothing in her closet that she would never wear. “That conversation rejuvenated my thoughts,” says Chandra. “It just made sense that the marketplace needed a mobile platform to reach women who liked to shop at thrift stores and women who wanted to sell clothes directly from their closets.” Wasting no time, Chandra assembled an initial team of collaborators and started brainstorming ideas. Co-founder Tracy Sun was involved right from the very beginning, thanks to an introduction by Mayfield Partner Navin Chaddha. “That led to an amazing meeting between me and Tracy,” says Chandra, “which then led to what is more than a six-year-old partnership between the two of us.” Chaddha had met Chandra during his Kaboodle days, and Mayfield led a small Series A financing round for Poshmark, during its incubation phase. “Everyone on the original team was super excited about the idea and they all agreed that it made a lot of sense,” says Chandra. “It took just about three months for the initial core team to come together fully.” From there it quickly gained significant momentum. “People knew that smartphones were good for taking pictures. But would people use them to shop for clothes?” The Speed of Fashion “The second milestone occurred in 2011 when we set up shop in my garage in Fremont,” says Chandra. “That’s when the product development really started.” With the addition of Gautam Golwala and Chetan Pungaliya to the founding team — two brilliant engineers who were with Chandra at his previous company — progress on the new app happened swiftly. Compared to Kaboodle, Chandra and his team were more focused. “We were moving very, very fast,” he says. “In four months we moved our operations into our first office space in Menlo Park.” Poshmark was a labor of love, says Chandra, and that propelled the team to work even harder: “We were determined to build a platform that combined amazing technology with a razor sharp focus on the customer. Those values were in place at the very beginning of the process. And those values are part of Poshmark’s culture today.” The app found success early. But that success presented unique problems, says Chandra. “We had absolutely zero systems in place to handle the avalanche of users,” he says. “For the first three-four months I was personally managing every single customer-service request. I was working from seven in the morning until nine at night but I couldn’t keep up.” Lessons were learned. “When you get that initial burst of traffic,” says Chandra, “it forces you to be all hands on deck. You have to invent systems on the fly. We were definitely not prepared for it, but we were able to rebound and keep going.” At the time, Poshmark was truly swimming in uncharted waters: eBay was around of course, but a dedicated mobile marketplace for fashionistas had not been established yet. “There was a lot of skepticism in Silicon Valley back in 2010,” says Chandra. “Were people willing to shop on their phones? There was no precedent for it. People knew that smartphones were good for taking pictures. But would people use them to shop for clothes? That was a big question mark.” Face-to-Face — 500 Seller Stylists Looking for ways to reach prospective customers, Chandra and his team started hosting “Posh Parties” in the San Francisco area. “We didn’t have a product at the time,” he says, “but the events helped us define our aesthetic as we moved forward.” “We would bring wine and gifts to these events and everybody would have a great time,” says Chandra. “Still to this day we enjoy hosting virtual and physical Posh Parties.” Word of Mouth — 25,000 Seller Stylists Continuing to gain momentum in the Bay Area, Poshmark decided to expand awareness in Los Angeles. “We were just starting to figure out how to grow our platform,” says Chandra, “but we didn’t have a clear business plan in place.” Hosting Posh Parties in San Francisco had worked wonderfully. Why not do the same in LA? “We got lucky,” says Chandra. “We had a tremendous turnout at our first event.” Opinion leaders and fashion bloggers came out. And a lot of users came too. “The story got picked up by the local ABC affiliate and that led to an avalanche of new users who discovered our app.” In the next several months, Poshmark hosted live events in Houston, San Antonio, Dallas, and New York. “Poshmark went from just being a mere idea to really starting to become a growth engine,” says Chandra. “And that led to an organic word-of-mouth community development in the first year of our launch.” “We knew Manish Chandra, a proven entrepreneur, for years. When he decided to build the first mobile fashion brand, we knew he had the discipline to succeed. We partnered in 2011, and by leveraging the sharing economy and social commerce, Poshmark is now the largest mobile fashion marketplace.” — Navin Chaddha, Mayfield Enter Facebook Mobile — 250,000 Seller Stylists The next milestone came at the very end of 2012. That’s when Poshmark was an early adopter to leverage Facebook’s foray into mobile and their growing interest in apps. The platform’s gross merchandise value went through the roof, says Chandra: “In less than 30 days we went from a few hundred thousand dollars in GMV to several million dollars in GMV. We grew almost tenfold between December 2012 and February 2013. It was an exhilarating, crazy time in the history of Poshmark.” No longer a start-up, Chandra and his team were now operating on an entirely different level. “Poshmark started in 2010 when a group of us sat down for an informal brainstorming session. And two-plus years later we were driving millions of dollars of GMV every month to our customers.” But success brings its own particular challenges. “Things blew up so badly that we had to almost kill growth in order to get our system consolidated and in stable condition.” From Shopping to Shipping — 500,000 Seller Stylists Poshmark’s renewed focus on its infrastructure led to a strategic collaboration with the United States Postal Service. “We had to refocus and scale up all our systems,” says Chandra, describing what happens when they experienced rapid growth. This included attention to software, and to payment — and to shipping. “We worked with the USPS in 2012 to get our system launched,” he says, but by 2013, with the sheer enormity of their undertaking, the USPS had put Poshmark’s activities under a microscope. “They were going to take punitive action,” says Chandra, “but the discussions led to them advocating to start a new kind of shipping label that had characteristics unique to fashion,” such as accommodating a range of weights and sizes for a single price. The result was PoshPost, which launched in March of 2014. “The PoshPost label is a core competitive advantage for Poshmark,” says Chandra. “It is imitated often but never copied because we are solving a hard problem around fashion logistics.” From Styling to Creating — 2 Million Seller Stylists “We have grown almost eightfold since early 2014,” says Chandra. The newest growth driver, he explains, is the launch of retail in early 2016 as they started to partner with fashion brands. As a result, Poshmark’s “seller stylists” can go from selling from their closets to creating Poshmark boutiques to sell on behalf of these brands. Chandra reflects on how much Poshmark has evolved since it started, back when mobile ecommerce was uncharted territory: “Navin really believed in the people, believed in me, believed in the direction we were going, even though at that time our idea was early — the notion of our marketplace was not really there.” “Our seller stylists are redefining fashion retail,” says Chandra of Poshmark today. They’re running boutiques and launching their own fashion brands. What is not lost is the core focus of Poshmark where thousands of new seller stylists start their journey from their closets every day with the dream to become the fashion moguls of tomorrow. “We’ve empowered our community to start their own businesses, and the next stage,” says Chandra, “is truly transforming the fashion business.” UP NEXT: March 2017 Q1 News Flash NEWSLETTER SIGNUP Terms of Use | Privacy POV Gamechangers Conscious Capital Enterprise Consumer Engineering Biology Team Investment Operations Portfolio Enterprise Consumer Engineering Biology Milestones About Our Promise Beliefs Philanthropy Contact News CXO of the Future Mayfield India LP Login