Shoes of Prey was an Australian ecommerce trailblazer that tried — but ultimately did not succeed — to build the world’s first business based on mass customisation at scale.
Launched by Jodie Fox, Michael Fox and Mike Knapp in 2009, the business lasted ten years before finally closing in early 2019 — though it effectively ceased operating in 2018.
For a while, though, its star burned bright, and it attracted over $US25 million in investment.
The early metrics were very positive, says Fox. “There was very high engagement. And when I say positive metrics, I’m talking like 70 to 75 Net Promoter Scores consistently throughout the business.”
Customer acquisition costs were low as word of mouth took hold, and that was reflected in the fact that three-quarters of the traffic was organic.
“You just couldn’t wish for metrics like this,” she says.
The company was also cash flow positive very early. That’s even more impressive in the context of the times when commerce was still a relatively new concept — especially for Australian shoppers.
“That cash flow positivity meant we were at break-even at two months.”
After two years, Shoes of Prey had achieved multi-million-dollar revenues and, while there were plenty of hiccups along the way, from a financial perspective the growth outlook was strong.
But not strong enough. By 2019, the company that pioneered the idea of mass customisation at scale would close its doors once and for all. But why?
“What we found towards the end of the business was that we were over-performing in a niche. We continued to look for these scalable channels into the mass market, but the traction just wasn’t there.”
Fox’s new book, Reboot: Probably More Than You Ever Wanted to Know about Starting a Global Business, describes her experience. We spoke prior to the announcement that the book will launch on 16 December.
Where it began
Every company needs its creation story, and Fox says her idea came from wanting to empower women to be able to design their own shoes.
“I had personally had the opportunity to go and design a pair of shoes with a shoemaker and it was just the most fun thing that I’d ever been able to do. I actually designed 14 pairs of shoes in one and a half hours, sitting with the shoemaker.”
She was intrigued and delighted by the opportunity to take control of all those little things, “… whether it was a heel height, or colour, or even a toe shape, you know, all of these elements that came together. But above all, it was so much fun.”
She showed the final designs to her friends, and they agreed. Soon Fox was building shoes for them as well.
There was no bolt of lightning that led her to the decision to launch Shoes of Prey. Instead, it was simply something that she and co-founders Michael Fox and Mike Knapp (both working for Google at the time) had the curiosity to explore further.
“We all hope for that emotional bolt of lightning, but I think it’s a very romanticised view of how it really works. And you really need to have the practical undertones to it — to put it through its paces to decide if it is something that you’re going to invest in.”
The amount of time and effort you end up giving to these ideas is phenomenal, she cautioned. “You really need to be able to believe that this is something that can go the distance.”
The first academic paper around the concept that mass customisation would be the future was published more than 25 years before Shoes of Prey’s founders became the first company to exploit and explore the model.
And that innovative mindset extended into other areas of the business model as well. The company was one of the first to work with influencers online to promote its products.
“One particular influencer was a YouTuber who had this extraordinary traction with her videos. She had more than half a million subscribers to her YouTube channel and she posted ten-minute videos three times a week.”
With a largely female audience running into the hundreds of thousands, it seemed like a strong fit. And indeed the early metrics seemed to suggest so.
“We approached her, and she agreed to do a video about the shoes. It was a competition and you needed to post a link to your shoes, and also the comment on what you’d wear with them. We ended up having 90,000 people enter that competition. It was the most commented video on YouTube worldwide that day, and it drove about half a million unique visits within three or four days.”
Shoes of Prey discovered, however, that scale does not always result in sales. “Ultimately we found that the people on YouTube did not have enough disposable income to buy our product.”
Cleverly, however, the founders took the story of the impact of the campaign and pitched it to journalists at the Wall Street Journal.
The story put the brand in front of the women who really were the target audience — “professionals with disposable income” — and, according to Fox, “ultimately tripled our business.”
Fox and her partners rode the rollercoaster through startup, scale-up, investment growth, and then eventually the failure, and she is honest about the personal impact.
“There are a lot of stresses on founders. I certainly suffered from depression and anxiety. Those days just really felt like there was no hope. That’s on a very personal note — but how can it not be a personal note when it’s your own business? It’s like another child.”
Adding to the complication, Fox was married to one of the co-founders, and they divorced three years into the business.
“So Shoes of Prey was an extremely personal journey for me as well as a professional one.”
Fox says she is naturally positive by nature and sees the book she has written about Shoes of Prey as an important way to tell a story that often gets neglected.
“We do need to share with each other the kind of critical analysis of what went wrong. That means sharing how it felt so that it feels like you’re not crazy.”
“When we did announce our cessation of trade many years later, people came forward who I respected enormously in that entrepreneurial retail community. They reached out to me to welcome me to a space that they’ve been in and to give me a soft landing into it and to even say the words that they still believed in me as a person — which just were some of the greatest gifts I’ll ever receive in my life.”
Our conversation ends with a difficult and challenging question for Fox: did Shoes of Prey fail because the problem simply could be solved, or because she and her partners were the wrong people to solve it?
She pauses before answering. “I guess ultimately there might be a way to solve it. But $US27 million and ten years of testing various channels to build scale didn’t deliver the mass market solution.”
Reboot: Probably More Than You Ever Wanted to Know about Starting a Global Business is due for release on 16 December.