Imagine this. You’ve just moved to a bustling metropolitan area to go to college, and the only clothes you can afford on your student budget are vintage.
But what vintage!
The vintage shops are packed with affordable, quirky, one-of-a-kind pieces in your size, all for a price you can afford.
The thrill of the hunt keeps you coming back again and again and again. You can’t pass by a cute outfit, even if you know you’ll never wear it.
But your passion is rapidly becoming an addiction. Your boyfriend points out that your closet is full. You’re going to have to either stop shopping or get rid of what you have.
What do you do?
For Susan Koger, the answer was to start a business.
For those in the know, online fashion retailer ModCloth has been a shining example of the American dream since two students—just 17 and 18 years of age—launched it in 2002.
Its story might just inspire you to look through your closet and dust off that old eBay account.
We’re born with a gene for fashion. But for most of us, the pleasure lies in wearing our purchases—not ushering them along to another owner.
But for certain business-minded women (like Sophia Amoruso of Nasty Gal), the thrill of scoring a cute outfit pales next to the thrill of finding a buyer for it.
That’s what happened to Susan.
She didn’t know what to do with all the vintage fashion she’d acquired, so she asked her boyfriend Eric to help her sell her acquisitions online. And she found she loved it. She not only loved ushering her “babies” out into the world, but the extra income proved handy.
By the time she graduated with a business degree, ModCloth was beginning to burst out of her college dorm room. She and Eric had scraped by with just one part-time employee to help with packaging and shipping, but they knew it was time to expand.
Like so many memorable internet entrepreneurs before her—Larry Page and Sergey Brin (Google), Mark Zuckerberg (Facebook), Jerry Yang and David Filo (Yahoo!)—Susan saw the brand she’d built from her college dorm grow into a multimillion-dollar business.
She was living the dream:
Find something you’re passionate about and discover a way to turn it into a full-time income.
For good measure, change women’s lives along the way.
Women loved ModCloth. It carried the stamp of student idealism. It stood for empowerment, individuality, and staying real. It became “the fashion company that you’re friends with.”
With its “cute, quirky, retro aesthetic,” the company moved from reselling vintage into offering its own unique pieces sourced from independent designers.
They wondered what would happen if they encouraged customers to upload pictures of themselves in the clothes they’d purchased, so they set up a Style Gallery.
They wondered if there might be budding fashion designers among their customers, so they solicited customer designs.
Then they did something even more amazing:
They stopped Photoshopping their models.
They were the first fashion company to make that decision, leading the way for others to follow suit.
One look through the ModCloth website today shows women of every shape, size and color. They even used their own staff for a swimsuit shoot.
Wow. That’s a topic close to my heart. Visiting ModCloth’s site was a stark visual reminder of how much I’ve come to expect catalog models to look a certain way.
But why buy clothes that only look good on professional models? Surely the best clothes are those that suit real bodies.
Hip hip, hooray!
But ModCloth didn’t stop there.
They launched their own plus-size collection when they found that few independent designers were turning their talents to larger sizes.
After a survey found that 2 in 3 women feel embarrassed to shop in the “plus-sized” section, ModCloth removed the term from their site. Now, they offer “expanded sizes” for a full range of women.
As the company grew, Susan and Eric grew with it. They married and ran the company as co-founders. They sought to expand their impact by partnering with charity Schoola, which raises money for Malala Yousafzai’s Malala Fund.
As Eric explains, “We’ve … made a point to never feel corporate. We want the brand to come across as if Susan is still writing copy, not a big organization.”
They’d achieved the dream. It was happily-ever after….
Until March 2017, when everything changed.
That’s when Susan and Eric made the decision that would turn ModCloth’s future upside down.
A larger business had offered to buy them out, to the tune of an estimated $51 to 75 million.
Selling the company would enable to them to grow even bigger, open brick-and-mortar stores, and reach even more customers with their pro-women vision.
Unfortunately, that company was Walmart.
Some argued that ModCloth needed the infusion of cash to survive. It had experienced layoffs, and fashion is at best a risky business.
And Walmart had promised they wouldn’t interfere in the running of the company.
But when Susan and Eric sold, their loyal fans felt betrayed. Walmart stood for the opposite of ModCloth’s values. How could they continue to shop at ModCloth when they wouldn’t be caught dead shopping at Walmart?
It’s hard to imagine how Susan must have felt, reading the comments on social media. She’d built a company from scratch that women loved. Now, many of those very same women were turning against her.
Had she done the right thing, selling out to a retail giant to keep her vision alive?
Few of us will ever find ourselves in this kind of situation.
But entrepreneurs across the world dream of it. Build a brand up until it’s big enough to attract the attention of bigger players, then sell it for a fortune and retire to the Caribbean.
What would YOU do:
If your choice was between helping the baby you’d nurtured from the time you were a student spread its wings and soar…
Or keep your integrity at the cost of playing small?
Tell us in the comments.