Interview with Kathy Savitt, Founder Lockerz: Nearly $70m in Funding, 18m Users and 100 Startups Launched
Kathy Savitt is a former Amazon and American Eagle Outfitters executive and is currently the founder and CEO of social commerce company Lockerz.
Created from Kathy’s vision to create the homepage for Generation Z, Lockerz has grown from 50 members to nearly 18 million members in less than one year.
Kathy believes that the power of Gen Z as cultural disrupters will significantly impact both prior and future generations.
Lockerz is funded by Liberty Media, Kleiner Perkins Caufield & Byers, DAG Ventures and Live Nation Entertainment. A major source of her inspiration is her two teenage daughters.
We spoke to Kathy about how she raised nearly $70m in vc funding in two years; the lessons she learned launching 100 startups; and her top tips for female entrepreneurs.
TNW: How did you come up with the idea for Lockerz and then decide to take the leap of faith from idea to execution?
KS: The idea for Lockerz started fermenting almIost nine years ago and gained steam during my time at Amazon.com and American Eagle Outfitters. In my executive marketing and product roles, I observed a major sea change in consumer shopping and buying behavior among teens. This was the first truly digital native generation, and I was curious as to what this change meant for technology companies, content providers, retailers and marketers.
This also the start of my obsession with Generation Z (born between 1992 and 2010). Gen Zers were essentially “curating” their online experience and shopping, communicating, and consuming content simultaneously, from multiple sources.
They made decisions based on the opinions of friends, not on what was being pushed to them from traditional marketers or even online customer reviews.
After months of self-funded research, my vision for Lockerz came together. There wasn’t a company or Web site that was seeking to embrace the fundamental shift that was occurring — it was a major market void.
So I started the company in 2009 based on a desire to create something of real value for this incredibly important and influential generation, who are the most disruptive in modern history and will soon enter their twenties.
TNW: Who were your first customers and how hard was it to attract them?
KS: We started on a small, focused scale: one college student in each state for a total of 50 members. The strategy behind this approach was to grow organically and take advantage of our target user’s curation habits. From those 50 users, we grew purely through word of mouth, with no marketing and advertising.
In three weeks, our membership grew to 3,000 and in one month, 150,000. In less than a year, we grew to more than 17 million members, and we’re still growing rapidly.
TNW: How did you determine what Generation Z want from an online platform and how do you keep abreast of their changing tastes and requirements?
KS: Based on several months of funded research to analyze Generation Z’s habits and thought processes, I gained a deep understanding of their needs for an online platform. Some of the findings from this research include:
- More Gen Z-ers carry a mobile phone than a wallet—increasingly their phones are their wallets. As a result, their notion of technology skips over utilitarian to essential.
- Gen Z categorically rejects badge-brand dressing—they bring the iPod approach to the mall. Fierce individualism comes with prolific “expression.”
- One-to-many communication is more common than one-to-one. Gen Z is all about sharing—I often refer to them as Generation Share.
- Their world is increasingly game-ified. Uniquely, Lockerz creates hundreds of micro-achievements by rewarding its members for social expression, as well as their influence.
Like any demographic, there’s an expected level of fluidity and evolution as this generation grows older, and we make sure to keep abreast of their changing tastes and requirements through several avenues. One of them is our own Lockerz Advisory Board (LAB) Members, which is comprised of a rotating group of Gen Z-ers who test features before they’re released to the public, contribute ideas and provide feedback.
TNW: Your PR company MWW Savitt, helped to launch 100 startups. Which key lessons from this period did you apply to launching your own company?
KS: One of the most important lessons I’ve learned as an entrepreneur is to nimbly execute the right answers quickly—rather than the absolute perfect answer.
Startups aren’t built for perfection at all costs. They have to keep moving forward at a certain pace or they die.
Another important lesson is that inspiration sometimes comes from initial failure.
The key is to revisit your vision and the customer needs and keep innovating using your customers as a compass.
TNW: You have raised nearly $70 million in VC in the past two years, largely from Kleiner Perkins Caufield & Byers, who are known for rarely funding women-led companies. What would be your number one tip for women entrepreneurs seeking investment?
KS: Passion and evangelism for your startup are contagious.
Also, think ahead of the skeptics. Do this by anticipating all the reasons an investor would give as to why they can't fund your business.
Preparing for those challenging questions requires differentiating your idea and being creative and wide. It’s to not only prepare your answers, but to make the necessary changes to your business to answer those challenges before somebody else raises them.
TNW: Do you have any tips or any advice for women who are thinking about becoming entrepreneurs?
KS: Definitely. I have a few top-level tips that I reiterate to entrepreneurs who ask me for advice:
- Think big. There are always people who want to make you think smaller, so you have to think consistently on a broader scale before you dive into the minute details.
- Look beyond the partnerships that help you on product or monetization to those that help you think strategically about your business. This means having a willingness to figure out what people can do to support your mission.
- Sell your vision right upfront. This vision shouldn’t only include what kind of product you want to build, but also who your audience is, how you want to monetize it and how to create barriers for the competition.
- Be quantitative to how you want to define success. Build this quantification into your presentation so your potential investors know you're thinking that way.
TNW: Do you have any role models or mentors?
KS: I’ve been fortunate to work with some amazing leaders who’ve given me invaluable guidance. Greg Maffei, the CEO of Liberty Media, is one of my most long-standing mentors, as well as a personal friend and business colleague. He believed in Lockerz from the beginning, and proceeded to invest personally, as well as through Liberty Media. More generally, my years working with Jeff Bezos were profoundly impactful. I learned a great deal from him, and took to heart his relentless focus on the customer experience. Finally, my father, Everett Jassy, continues to be my most influential and beloved role model who’s supported me from day one.
TNW: What has been your biggest challenge throughout the history of Lockerz, from planning to funding and execution, and how could others learn from it?
KS: Being a startup, missteps are part of the experience and we like to say that we “embrace our wrongness” on a daily basis.
One of the most significant challenges for us was in the very early days. I touched upon our organic growth earlier: we built a site for several hundred thousand users, but when we scaled to tens of millions in a matter of months, we didn’t have the architecture to support it.
Another example surrounds the launch of our e-commerce experience last summer. Our original shipping model was “sell now, buy later,” a popular model with deal sites that results in longer shipping times (10-17 days). We found out quickly that this didn’t work with Gen Z, as they are accustomed to 2-3 day shipping models. We turned this around and adapted the shipping model a short time later.
The key takeaway from both of these challenges is that adaptation is essential for survival: evolve with the customer and avoid being static.
TNW: Is there a moment in the history of your company which you remember as the highlight so far?
KS: There isn’t one moment that stands out. Rather, every time we move closer to our vision of becoming the homepage of Generation Z, whether it’s launching a new product or feature, premiering new content, acquiring a new member, is a highlight for the company.
TNW: Is there anything we haven’t asked you, but you’d like to share with our readers?
KS: We’re working furiously towards our mission to become the homepage of Generation Z. Through the end of the year we’ll be introducing some very exciting features and products. This includes a new shopping experience timed for the Holidays, and the rollout of a major proprietary social experience that we’ll launch before the end of the year. Stay tuned.
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