Feb. 22, 2023

#104 Dressd: Red Carpet or Red Ocean?

#104 Dressd: Red Carpet or Red Ocean?

Clothing rental companies get a bad rap in the VC world. It seems like no matter how much money investors sink into them, they always just… fail? But today’s founder thinks she found a way to make it work. Capri Wheaton is going after a demographic that always has to be red carpet ready: sorority girls.

If you're interested in investing in Dressd, visit pitch.show/dressd, and if you'd like to taste the product on next week's episode, go to pitch.show/granola

Transcript

Neal: [laughs] Welcome to The Pitch show 3 [clap] 

 

There are some ideas that just really feel like they’ll take off. So much so that Venture capitalists have invested hundreds of millions of dollars trying to will these ideas into existence. Think virtual reality, meal delivery kits, or scooter rentals. 

But no matter how much money has been poured into them, these businesses just haven’t taken off the way everyone expected! And VCs don’t want to be suckers, so eventually they learn their lesson and stop investing in these companies.

When this happens, it creates what investors call a Red Ocean.

 

Charles: Like, a market where like -

Neal: It's a sea of red.

Jillian: I was gonna say -

Charles: - it's just been a sea of red.

 

So what happens when a founder walks in The Pitch Room thinking their business is the one that will succeed where everyone else has failed?

Maybe she’s right… or maybe she’ll end up chum in a red ocean.

I’m Josh Muccio, welcome to The Pitch. Where real entrepreneurs pitch to real investors for real money.

 

Neal Sáles-Griffin: I’m Neal Sáles-Griffin, Managing Director here at Techstars Chicago, Welcome to Chicago

Charles Hudson: I’m Charles Hudson, Managing Partner, Precursor Ventures

Elizabeth Yin: I’m Elizabeth Yin, and I’m a General Partner at Hustle Fund

Jillian Manus: I’m Jillian Manus, Managing Partner of Structure Capital

Mac Conwell: I’m McKeever Conwell II, most people call me Mac and if you follow me on Twitter it’s Mac the VC

 

The Pitch for Dressd is coming up after this.

Jillian: Hello.

Capri: Hi.

[hellos]

Charles: Hi, nice to meet you. I'm Charles.

Capri: I'm Capri. Nice to meet you.

Charles: Nice to meet you, Capri.

Elizabeth: Elizabeth. Nice to meet you.

Mac: Mac.

Capri: Nice to meet you, Mac.

Mac: Nice to meet you.

Capri: Jillian, nice to meet you.

Jillian: Nice to meet you, Capri.

Neal: Neal.

Capri: Neal. Nice to meet you.

Capri: Hi, I'm Capri, the founder of Dressed, an app where you can make money by renting out the dresses in your closet. When I was in college, I was so broke that one time my friends and I stole a carton of oat milk from the Berkeley cafeteria and smuggled it into my dorm. I remember scouring my dorm just looking all around for anything that I could sell to try and make some money. And finally when my eyes landed on my closet, I thought, there is no way I'm gonna sell my precious clothes. And then it hit me. What if I could keep my clothes and make money off of them. Fast forward to today, I built Dressd so that all women could have their oat milk and drink it too. Dressd is a peer to peer app where women can turn their clothes into cash without ever having to sell them. There's 334 billion dollars in assets sitting in women's closets across the US. We're raising 1.5 million to scale our peer to peer model that is more efficient and more scalable than rent the runway. Thank you. 

Jillian: Okay. Is this already launched? How many customers? What are the biggest challenges?

Charles: Let’s start with how it works.

Capri: Cool. Okay. So how it works is it's a pretty simple app and website, just peer to peer marketplace where someone uploads their dress for rental, they take some pictures, they add a description, and then that individual seller posts that onto Dressd as a listing. And then for the end user, they can scroll the app and the website, and then once they pick a dress, both parties are sent a shipping label and a return shipping label straight to their email, and then when the end customer wants to send the dress back after two weeks, they slap the return shipping label on the box and just send it back. 

Mac: And so how long have you been working on this?

Capri: We launched our very early beta version last March. And since then we've gotten more supply on the platform, so we have about 300 dresses on now and about 4000 sign-ups, and we feel that we're ready with that amount of dresses to finally go ahead and launch our product.

Mac: How many rentals have you done so far to date and how do you make money?

Capri: So far, we've done 13 rentals total, but we haven't really spent money into launching or advertising the product yet. Just talking to very early customers that we've just found by DMing them on Instagram or from early TikTok momentum. Our business model right now is a commission fee from each rental. So we take a 15% commission out of every transaction. 

Elizabeth: What did those numbers typically look like? Like, how much would a rental be?

Capri: So I think a great case study is an example of a For Love & Lemons dress that was rented out through our platform. So those dresses typically retail around 350 to 400 dollars. And that dress I believe was rented for $45 plus shipping on top of that. So the end user paid about $60 in total to rent that dress. 

Neal: So I want to wrap my head around the delta here. I think I heard since March you have 4000 sign ups and then 13 rentals have been done.

Capri: Yes. That’s correct. 

Neal: So help me understand the delta between the 4000 sign ups and then the 13 rentals.

Capri: Originally when we had - when we were doing our beta, we sort of went semi-viral on TikTok. We have a video that has almost 2 million views. And so we got a lot of sign ups from that. But we only had about 25 dresses on the platform. So that's when we had our first ten rentals. But majority of those rentals are like repeat of this one popular dress that went viral. So now we're at the point where we believe about 300 dresses is sort of the critical supply amount that we need to really be able to successfully launch the product and start gaining traction.

Neal: So what have you learned in talking to your customers about who's like primed for this, who's likely to convert going forward, and what's your plan for acquisition? 

Capri: Yeah. A lot of questions there. 

[laughter]

Capri: I think to start, like, we really have nailed down our ideal user in the early days really is the college sorority girl. Our customer is actually a lot more simple than we originally thought. All they want is to look good at an affordable price for their event. And so that's why targeting sororities is a really great opportunity for us, because we can actually partner with sororities, build out ambassador programs where girls are making rentals in preparation for an event that they have in a month. And we're about to test this out with UCLA for one of their February invites.

Charles: How do you get your sellers to take the time and upload the inventory with a relatively low volume of rentals at the moment?

Capri: Yeah. I mean, I think people are really excited about the idea of making money off your clothes without having to sell them. Young people need to make money. I particularly remember feeling this way, like, my clothes are some of the only things that I actually own and I actually have And so like empowering those women to turn their clothes into assets is a really great opportunity for them. Because typically, the mindset of our user is kind of like, well, I really like this dress, I spent a lot of money on it, if I sold this dress on Depop I wouldn't make anywhere near the value, even as a second hand dress. So those two value propositions make rental a really strong argument for our core customer.

Jillian: Okay. I'm gonna hit you with some cold water. So one of our companies is Style Lend. Are you aware that this is one of the most difficult spaces, with the most failures? And just some data points for you, from the companies in the fashion rental space, literally Le Tote went under, Ycloset went under, CaaStle went under. They raised over $100 million and never were able to make it work. RTR lost two thirds of its stock value since its IPO. This space is one of the most difficult spaces, hands down. What makes you so special that you're going to make this work when so many others, with hundreds of millions of dollars, are unable to?

Capri: Yeah. That's, that’s a great question. A lot of the customer psychology has changed in the past few years specifically to make peer to peer rental something that's able to happen at scale. So when Rent the Runway was first starting, the reason why they had to sort of own all of their inventory and ship everything from centralized hubs, is because peer to peer transacting and renting was not a normalized behavior at the time. So consumer behaviors have shifted significantly since Rent the Runway to make way for a model that is peer to peer to happen at scale. I've seen a lot of companies similar to Style Lend, I forget exactly what the case was there, I have more notes on that if we can -

Jillian: It's exactly your model.

Capri: Is it completely peer to peer? Like they don't own any inventory -

Jillian: Yes. Peer to peer, closet to closet. Yep. 

Capri: I'd love to learn more about that. A lot of the examples that I've seen, for example, Wardrobe or Pickle, a lot of these very recent platforms that are popping up are not actually entirely peer to peer. They call themselves peer to peer but they still have centralized closets where you pick up items, they still hold the inventory which then becomes a) a logistical nightmare and b) eats into their costs. But I'm not familiar with that model specifically so I'd actually love to learn more about their approach. 

Jillian: So, so Capri, if I were you, I would learn about every single platform that is in exact competition with you. There are four other ones that are the same exact model of - as yours. That would be my starting point. What works, what hasn't worked, what can I do differently.

Charles: yeah, I mean, we were seed investors at Poshmark at my old fund. What you're hearing from Jillian is, you know, investors use this term, a red ocean. Like, a market where like -

Neal: It's a sea of red.

Jillian: I was gonna say -

Charles: - it's just been a sea of red.

Capri: Yeah.

Charles: And what I can tell you is having met with most of these companies, the biggest problem is liquidity. Two things have to happen. Someone who puts a dress on the platform, at some point has to feel like, oh wow, this is great. Like, it actually rented.

Capri: Right.

Charles: It needs to feel like it's a liquid marketplace. And then someone looking for a dress also needs to feel like if I go to the platform, if I go to Dressd, I'm going to find something. And one thing, you have this one really natural anchor around these sorority events, where the calendar's kind of known and - one thing that really helped Poshmark were posh parties, where they could get people physically together to create density. And for you, you have these natural density moments around these and could you use those as a way to get both more people to put inventory on the platform, and as a way to market to these sororities. Like, hey, this is a really good place for you to get a cute look for the formal. I think you actually have something that a lot of the other sites I've seen don't have. So I think you have honestly some options here that I don't think you've maybe fully explored.

Elizabeth: And to this point, I think actually this is why people have moved away from the P2P model because it is really hard to get that liquidity and that supply side I think the college market is really interesting and I wonder on the shipping side, because that is a big chunk of the cost, if you have like a liquid marketplace on a given campus, there's more trust, cos it's like, oh, a UCLA student is renting from me, another UCLA student - and also maybe there's no shipping, so that reduces it. So I'm just wondering whether there are things you can play around with the college market specifically, it's often easier to start with existing communities in these pockets that are big enough and maybe the college market in this case might be a good one. 

Mac: So I think Elizabeth - what Elizabeth's bringing up is interesting, but I just gotta be honest with you - I'm out, for all the reasons Charles gave. Like, we've all seen a bunch of these. We've seen a bunch of these fail. Even Poshmark, like they got lucky.

Charles: We had some tough moments, yeah. For sure.

Mac: That one was rough. And me personally, I have a hard time investing in super competitive industries. It's just hard because the benchmark for you to get funding is so much higher, because you gotta figure out how to raise above the noise. Like there's - there's a bunch of them. And so when you get in front of investors, they gonna rattle off a bunch of names and ask you why you're better. And if you tell them anything that's remotely similar to what they've heard before, it just shuts off. 

Capri: Thank you. Sorry, just wanted to address a couple of things before we move on. So first, on the localized pick up. We are actually in the process of building that. We're launching it in January at ASU - that's gonna be our first campus takeover that we're testing out the localized pick up in a beta version. So either January or February, that will be live and tested at ASU.

Jillian: So these are students that are doing the pickup and deliveries? That’d be great

Capri: Yeah. Yes. So we're building out sorority partnerships, so we'll have an ambassador program with several of the top sororities at ASU, we'll be providing outfits for a few of their parties, as well as, we'll be testing out localized pickup with them. The second thing that you mentioned kind of reminds me of the previous startup that I built, which was Thryft, where we were providing software for clothing resellers who were selling over Instagram. We grew that to 150k GMV within the first five months of launch, and that was completely organic through Instagram. So we're - we're really excited to leverage a lot of those same communities, the same idea of resellers and influencers adding their Dressd link to their bio, and that's something that I already have experience with, kind of kickstarting that initial growth there. So I'm really excited to use that.

Mac: So what happened with Thryft? 

Jillian: Can you explain Thryft?

Wait…..what? Before Dress’d, there was… Thryft? So this isn’t Capri’s first time wading into this Red Ocean. Have the investors written her off too soon? 

What happened with Thryft will define the rest of this pitch. That’s coming up, right after this.

[break]

Welcome back. Before the break, Capri just casually slipped in the fact she’d built something similar to Dressd before. The investors are gonna want her to address that.

Mac: So what happened with Thryft? 

Jillian: Can you explain Thryft? 

Capri: Yeah yeah. So with Thryft, we built one of the fastest website builders ever built. So we took your Instagram profile and we turned it into a website in less than ten seconds with listings and everything. So we noticed that there was a pattern where with clothing resellers would actually list their items as Instagram posts, and they would have all the details like the price, the description of the item, etc, in the caption. So we realized that we could take people's social media posts and turn them very quickly into website listings using AI. So yeah, we were working on that, grew it to 150k GMV within the first five months. But when it came down to it, we just weren't able to charge our users as much as we needed to, and we didn't see - like our core thesis there was like, that there was going to be this mass migration from people who are selling on Depop and Poshmark - sorry -

Charles: Yeah. It’s all good.

Capri: Poshmark. We were kind of - our thesis was, you know, there are a lot of frustrations with these bigger platforms, they take like you know sometimes up to 20% of the sale, people are going to get frustrated and they're just going to sell on Instagram and TikTok, so we were trying to sort of build the infrastructure for that. 

Neal: So who's with you on this? And then a little bit more about your background, cos it sounds like you've done some stuff in this space.

Capri: So my background, I sort of hacked my way into UC Berkeley. I sent them an emergency memo saying that they had forgotten a student off the admissions list, and I was in the next day. And then my freshman year, I dropped out. I went through YC. And so yeah, we have an awesome designer and engineer on our team as well. She previously - she went to Brown and while she was at Brown, she built a college reselling marketplace called Zar where college students would sell their stuff, and our current investors are Y Combinator, Starting Line VC, so really exciting team and lots of amazing investors that we're very lucky to have.

Charles: What are the terms?

Capri: So we're raising 1.5 million at a 6.5 million cap.

Charles: So I'd like to do 25k. The thing - the reason you end up with red oceans is because there's a nugget of a good idea there and everybody else screws it up. I think this is a case where you kind of dramatically undersold until the last five minutes your own qualifications.

Capri: Sorry.

Charles: It's okay. It happens all the time. One thing when you said it, it struck me, 60 bucks for a college student's a lot of money. I think the amount of money that a seller can make on your platform with just a few items is material to them. And so I think there's just something interesting here. So I would like to invest 25k.

Capri: Thank you. Very excited to have you on board.

Mac: Quick question for you.

Capri: Yeah.

Mac: You've mentioned Y Combinator is a current investor - does that mean this is a pivot from Thryft?

Capri: Yes. Yeah, it is a pivot from Thryft. 

Neal: Where are you financially? What are we currently burning, how much runway do we have? How many commitments do you have for the round you're raising? 

Capri: We currently don't have any money committed in the current round.

Neal: You do now.

[laughter]

Capri: Now 25k. There we go. We have about a year left of runway but we're not in the position where we can really move fast and scale. We do feel very financially constricted on the marketing side, so things like, buying dresses or you know doing sorority partnerships and ambassador programs, we just have to be extremely hacky and cheap about the way that we approach those.

Jillian: I look for a fanatical audience, a fanatical buyer that - right? And sorority sisters are fanatical. that's something that truly interests me. It's unique to you. I think that you have something here. And you're not trying to boil the ocean right now but you're trying to prove out that use case, I also think you're very smart and you're very - you bury your lede.

Charles: I've never heard a YC founder take that long to say they were in YC.

Elizabeth: YC. Yeah.

Charles: Usually it's the first thing out of their mouth.

Jillian: Like you buried the lede. You're the lede. As you know, we're investing in you. At first I thought to myself, this is a woman who's kind of this is her first foray, she's not maybe gonna know what she's doing - I really have to be honest with you - maybe really doesn't know what she's up against, what it takes to run a company, what it takes to address certain challenges. So now I do. 

Capri: Absolutely.

Jillian: But I - you know, I'm thinking, I'm still processing this a little bit.

Neal: Well, I gotta say, it is better to be understated than overrated. Okay. In my mind, I was like running the numbers trying to figure out a way to commit. I would love to commit; I cannot. I'm out for now. Because I think the terms that you're raising on are out of my scope. I do earlier stage pre-seed investment. You're further along than that. That being said, I do want to find a way to help and I have seen other people go down this path in similar industries that might be helpful to you.

Capri: Awesome. Yeah. Really excited to circle back and follow up with you. Thank you.

Elizabeth: I think for me, towards the end of this conversation I got really impressed with you. As well as your team. I think the thing that I'm still mulling over in my mind, even though I think this is great founder market fit is can you get enough turns on these dresses? Can you get that supply? Even with this hyperfocus on the campuses. And I think I'm just not sure I quite have that conviction and so I'm out.

Capri: Alright. Thank you.

Mac: All right, Jillian.

Jillian:  I think because I've been burnt on StyleLend and I've seen this red ocean, like, actually swam in it, I actually scuba dived in it. So I'm out. But I do think you do have something here. I just think it might be a small business but Charles sees it bigger. 

Charles: I too have scuba dived in that red ocean, as well.

Jillian: Yeah, you did. You scuba dived in that red ocean. I'd like to get some more information on this, and I'd definitely like to track you. I see - I understand your vision now more. For future, frontload yourself, what you've done, then pivoted and that would have been a better pitch.

Capri: Thank you. I really appreciate that. That's a huge learning.

Jillian: Yeah. Absolutely. But you're very impressive.

Capri: Thank you.

Neal: Cool. 

Charles: Thanks, Capri.

Capri: Awesome. Thank you so much. I really appreciate you taking the time to hear my pitch and to ask these questions and really excited to follow up with you all and keep you updated. So thank you so much for your support.

Jillian: Absolutely.

Capri: Thanks.

Jillian: [Mind blown sound]

Elizabeth: Most YC founders would have said that the first thing.

Neal: Oh yeah, yeah, wearing a badge of honor, tattoo on their forehead.

Mac: But you know what -

Neal: Did I mention? I was at YC combinator?

Mac: But here's my point, right. You're all giving her big ups for that? That bothered me. The part that she mentioned all those investors, those are not investors in this company, those are investors in Thryft. And she's pivoting to this company and using their money to pivot into a new company.

Neal: Well, I'm sure she communicated that to them.

Mac: And that's why she's raising so much money now, because her cap table's gonna be messed up if she doesn't. Or she has to screw over those investors and just start off fresh. She didn't mention any of that. She just rattled off these investors in her company. I'm like, that's not for the company you're building. That's for the company you were building.

Charles: I thought she was clear about that, that they invested in Thryft. 

Jillian: That’s right. That’s right.

Mac: That bothered me. Because she - she wasn't forthcoming with that.

Charles: That didn't bother me at all. Different - different vibes. I guess it happens to me all the time that people have legacy cap tables and I'm just like - I'm just used to it. 

Neal: Yeah. It's on us to ask those type of questions.

Mac: I appreciate that.

Charles: To be fair, I might - there's a chance I'll look at the cap table and be like nope.

Jillian: Yeah. Right.

Charles: I was just like, there's so much obvious stuff here that you're not doing that you're kind of aware you should be doing -

Mac: Yeah. That's true.

Charles: But like, I don't think she's gonna go 0-for on all those experiments.

Jillian: But I really, really wish she would have said, listen, this is a competitive landscape, there are a lot of ones that failed, here’s why I'm not gonna fail.

Elizabeth: Yes. This is my differentiation.

Jillian: Right. This is my - exactly.

Mac: I tell founders in crowded spaces, always start with your competitive landscape.

Jillian: Yes!

Mac: Because that's the only thing I’m going to care about -

Jillian: 100%. Like, I know what you're thinking -

Elizabeth: Address the elephant in the room.

Jillian: Charles you're not going to want to hear this, but I didn't feel that energy of a true inspirer who's gonna just get everybody, you know, lifting the team and - I didn't see that. Women have a disadvantage of walking into a room, period, right away. And if you don't exude a level of sincere confidence and be able to put all your value out there, very succinctly, frontload this, I think that you are going to lose a lot of people.

Mac: I could feel that. 

Charles: And I kind of wanted to see that tenacity.

Charles: We have a lot of people like Capri in our portfolio.

Mac: That's why investors like Charles are important

Charles: And I went in so quick because I'm like, I've seen this pattern, this human behavior pattern before. Our portfolio's half female. We have a bunch of really smart female founders who just don't do the alpha thing. They just don't do - and -

Jillian: But then it's not even an alpha - she felt - I hate to say, timid, but even a bit timid.

Charles: I think timid's appropriate for the - yeah.

Mac: Yeah, timid's appropriate, but - but that doesn't mean she's not a good founder.

Jillian: No, it doesn't mean she's not a good founder, but it takes so much more for a female founder to win.

Mac: Yes

Charles: The quiet - yeah.

Elizabeth: I would say I'm like that. I've gotten that feedback before about me.

Jillian: What? You?

Elizabeth: I have. Years ago I was in a pitch meeting and at the end of it I asked the investors, so what did you think? And the investor said, I don't want to say the wrong thing and call you a meek Asian woman, but I wonder how you will lead a company of a hundred people. He literally said that. And I was thrown for a loop cos I was like, did I just hear that? Like -

Jillian: Well, first of all, the guy's a moron.

Mac: We all know - but we all know investors who think that way.

Elizabeth: Well, no, but I mean to this point, if he thinks that, everyone else thinks that.

Mac: They're just not gonna tell you that.

Elizabeth: This is exactly this archetype.

Neal: Yep.

Elizabeth: Right?

Jillian: It is.

Mac: I mean her being timid didn't bother me. It was just the freaking industry. Have fun, Charles! [laughter] But granted when Charles said, I'm in for 25, I was like, oh, Charles is in. Then I was like, that's 25. He's just taking -

Charles: Yeah, maybe I'll do more after - after I get closer, but I was like my biggest dumdum investments at Precursor have been where I've worked with someone for a year and not invested and then when they raised, it's at some crazy price, and I'm like, I just worked for free and helped this person for a year; I should have put money in if I was going to help them anyway.

Jillian: Yes.

Elizabeth: There you go.

Neal: Test the spidey senses on the bank account.

Charles: Yeah. You know, I'm like -

Neal: And we'll see -

Charles: - we're people pickers at Precursor.

Neal: Yeah.

Charles: You all know that, that's what I do. I'm like, I'm getting the good vibes from her. Like, we've seen this -

Elizabeth: She's sharp.

Neal: Well to tie a bow on that convo, though, I'll just say sometimes incredible founders have a way of hiding their power level. 

So Charles has agreed to go scuba diving in this red ocean once again. He’s in for 25k. 

A few months went by, I was excited to catch up with Capri and hear all the updates on Dressd. But also… I wondered how she felt about what happened in the pitch room.

Capri: I feel like I massively undersold myself and undersold my credentials in, in the pitch room. I didn't expect to be grilled so hard in the room, but I'm really, really glad that I was, because I, after that, I scrapped my entire pitch deck. I scrapped our memo. I scrapped all of our fundraising materials.

Josh: Really? 

 

Capri: Yeah, I did. And I, I started over with this idea of you know, my background as, as the forefront.

 

Josh: Not every founder responds the same way to that. So I think your ability to take feedback is really impressive.

 

Capri: Thank you. You know, I want to create a massive company and I, I don't think you can do that. Just, you know, without taking feedback or without, you know, taking every single opportunity to learn and grow. Because it's, it's very tough out there, you know, it's like you're basically like bleeding in the water and there's sharks all around. Like, that's how I would describe, building a startup. It's, it's not easy. In fact, most of the time it's incredibly terrifying and everything's on fire. So you need all the help that you can get.

 

Armed with a brand new pitch strategy, Capri… Stopped pitching investors and focused on the business instead. In January of this year, Capri went full steam ahead on her plan to target sororities. Starting in Arizona and San Diego.

 

Capri: We tried so many different things from, you know, sponsoring parties to trying to launch different referral programs and honestly, nothing stuck. We got a few rentals here and there but I was driving back from Arizona to San Diego. I was talking to my boyfriend about this program with sororities and he kind of said something about you know, the best way to, I guess, like market or to get people excited about what you're doing is figure out, you know, how to help them and just genuinely go in with the intentions to help. And so we kind of switched our focus from, you know, how, what can we take from the sororities? What can we get? How many rentals can we get? And we focused instead on, you know, where can we actually provide genuine help to the sororities while also getting them to, to use our app I won't reveal the secret sauce, but we figured out essentially a repeatable process to be able to rapidly onboard sororities across the country. And then we're helping them achieve their goals at the same time that they're renting dresses. I actually started out in San Diego speaking at a few sororities at SDSU and onboarding them onto the program. And the reaction was so incredibly positive. It was just like, I just, I couldn't stop smiling after I, after the chapter meeting because you just heard murmurs throughout the crowd of like, oh my God, this is so cool. Where has this idea been all of my life? This is so useful and I don't think there's any better feeling in the entire world as a founder. And that's really after speaking at the first chapter meeting, I just had this feeling in my gut, like, this is what we're meant to do and this is gonna work. And I believe in the first month since launch, we've onboarded 16 entire sororities all across the country. Now, you know, the executives of the sororities are actually pushing our app much harder than we are and really hustling to get their girls to use it.

 

Josh: Is this what, what product market fit feels like? 

 

Capri: You know, I don't think it's product market fit. I would say it's probably the first indicator though.

 

Josh: Too early, too soon

 

Capri: Yeah. I think it's probably a little bit too soon, but it's, the indicators that we've been seeing are just incredibly exciting so far. 

 

Josh: Got it. Like when you pitched in the sh, on the show, it was like, you were, you had just come up with this idea of really focusing on sororities. And you know, obviously like it was available nationally and there were a few dresses on it, but very few people had rented the dresses. But looking at your website now, there are a lot of dresses available on the platform and it sounds like it's actually working. 

 

Capri: I think it's, it's starting to work and it's, it's definitely feeling very exciting for sure. Whenever I say sorority, girls, investors always kind of laughed at, laugh at that. But when you look at so many amazing companies like Tinder, Bumble, they were all built from sororities and from frat parties. And I think when I think back to my first startup Thryft and how we made 150 K GMV in the five months after launch. We didn't do that with any ad spend or any spend really whatsoever, we found a community of resellers. We realized how to build viral loops and network effects into our product and, that led to our initial user base. So I think that's a more, more genuine and more sticky approach to obtaining your first customers. And the downside is that that takes an incredibly long time, and I think a lot of investors don't want to hear that it's gonna take six to nine months or maybe even a year or more to acquire your initial audience. But when you do acquire that audience, it's gonna be a lot more genuine, a lot more sticky. They're gonna be, you know, going out of their way to hustle for you and to refer you to new people. So I think that's, that's really important.

 

Josh: So like these little hacks, right, where you don't have to pour millions in marketing dollars and VC dollars to build the brand, and it's almost like that's what you would need to have anyway to build a business like this in a space that’s seen so many failures.

 

Capri: Yeah.

 

Josh: Like you have to find some new way of acquiring customers that hasn't been done before. 

 

Capri: I agree. I'm very bullish on it, it's all about the approach. And one thing about me is that I will just keep pushing. I'll just keep bashing my head into the wall until we, you know, break through the wall. 

 

Josh: [laughs]

 

Capri: for lack of better terms. Because I think sometimes entrepreneurship can feel like that, right? You, you really believe in this product, you know in your heart it's gonna work. But you need a way for, for other people to see that. And I think it just takes, honestly nothing but persistence and creativity. You know, essentially if we hadn't tried so many other things with sororities and gotten mediocre results, we wouldn't have been able to find this strategy that's now really,  really working for us.

 

Josh: Go Capri. Go . 

 

Capri: Thank you. 

 

With the early momentum she has with sororities, Capri is ready to go out and re-launch her fundraise. And Charles Hudson, btw, followed through and invested $25k.

 

Capri: It meant a lot coming from him because he was an early investor into Poshmark. So the fact that he can see the same kind of potential in Dressd, it just means a lot.

 

Josh: Before you raise the big round, don't forget about the pitch fund. We would love to invest alongside Charles. 

 

Capri: Absolutely. I'm so, so excited about that. I, I really appreciate everything that you guys have, have done for me and thank you so much for the opportunity. I feel like the pitch has just been a huge, huge, you know, cause of growth  in, you know, my life personally, professionally, and, and for, for Dressd. I mean, you've, you've heard how much we've accomplished, how much we've changed, how many things we've completely scrapped and went back to the drawing board on. And I feel like we're in a much better place because of it. And I'm just super thankful.

 

Josh: How would you feel about also doing a syndicate at the same terms and you can make it whatever dollar amount you want, to let listeners invest in this company? 

 

Capri: Yeah, let's do it.

 

Josh: Really?

 

Capri: Yeah. Yeah. That sounds awesome. That would be super exciting to have anyone who hears this, you know, want to invest in us. 

 

Capri may have been overlooked, discounted, easily dismissed in the beginning of her pitch, but she stole the show in the end.

If you are interested in investing in Capri’s company. Go to pitch.show/dressd to learn more and apply to invest. That’s pitch.show/dressd

We’ll be unpacking more of what happened in Capri’s pitch in our newsletter this week. You don’t want to miss this one. You can subscribe at pitch.show/insider

The Pitch is me, Josh Muccio, Lisa Muccio, Kerrianne Thomas, Anna Ladd, and Enoch Kim.

Special thanks to Kyle Brastrom for introducing us to Capri.

Music in today’s show is from The Muse Maker, Breakmaster Cylinder, Boxwood Orchestra, Joey Kantor, and The Brow.

Want to pitch on our show? Applications are now open for our next recording event. It’s this June in sunny San Diego CA. For more info and to apply to pitch, go to pitch.show/apply and fill out the application.

You can follow us on YouTube, Twitter, Instagram, AND TikTok @thepitchshow where we are posting videos from the pitch room. 

And if you want more of The Pitch, subscribe to Pitch+. You’ll get ad-free listening to the entire catalog and occasional bonus content. Plus, it’s a really good way to support the show. You can subscribe on Apple Podcasts or anywhere you listen to podcasts. Just go to pitch.show/plus to learn more.

The Pitch is made in partnership with the Vox Media Podcast Network. 

Next week on The Pitch…

Neal: Granola guy!

Phil: Drum roll please.

Neal: He's already two bites in.

Rob: This is good.

Jillian: Is it good, different good?

Elizabeth: Oh really?

Rob: It is. You know what, I like the fact that it's not crazy different. In other words, if you like granola, you would like this.

If you want to taste test next week’s pitch alongside the investors (and the mysterious Granola Guy) go to pitch.show/granola 

See you next Wednesday.

Jillian ManusProfile Photo

Jillian Manus

Investor on The Pitch

Jillian Manus is Managing Partner of an early-stage Silicon Valley venture fund, Structure Capital. Branded “Architects of the Zero Waste Economy," they invest in underutilized assets and excess capacity. She was named one of the top 25 early-stage Female Investors by Business Insider in 2021. Jillian serves on numerous corporate and non-profit boards, these include: Stanford University School of Medicine Board of Fellows, NASDAQ Entrepreneurial Center Board of Directors, Fuqua School of Business at Duke University.

Charles HudsonProfile Photo

Charles Hudson

Investor on The Pitch

Charles Hudson is the Managing Partner and Founder of Precursor Ventures, an early-stage venture capital firm focused on investing in the first institutional round of investment for the most promising software and hardware companies.

Prior to founding Precursor Ventures, Charles was a Partner at SoftTech VC. In this role, he focused on identifying investment opportunities in mobile infrastructure.

Elizabeth YinProfile Photo

Elizabeth Yin

Investor on The Pitch

Elizabeth Yin is the Co-Founder and General Partner at Hustle Fund, a pre-seed fund for software startups. Before founding Hustle Fund, Elizabeth was a partner at 500 Startups, where she invested in seed stage companies and ran the Mountain View accelerator. She’s also an entrepreneur who co-founded the ad-tech company LaunchBit, which was acquired in 2014. Her book is called Democratizing Knowledge: How to Build a Startup, Raise Money, Run a VC Firm, and Everything in Between.

Capri WheatonProfile Photo

Capri Wheaton

CEO & Founder of Dressd

I’m Capri, a Berkeley dropout backed by Y Combinator. Previously, I built a secondhand clothing marketplace and SaaS tool for clothing resellers.

Today, I’m the founder of Dressd: a peer-to-peer marketplace where Gen-Z women rent clothes from each other. We allow women to turn their clothes into cash… *and* retain ownership of those items. Clothing rental is a $5.87 Billion market.

Neal Sáles-GriffinProfile Photo

Neal Sáles-Griffin

Investor on The Pitch

Neal Sáles-Griffin is an entrepreneur, teacher, and nonprofit leader. He co-founded the first beginner-focused in-person coding bootcamp, and ran for mayor of Chicago in 2019. He's currently the Managing Director of the Techstars Chicago accelerator as well as the Techstars Rising Stars fund, and is an Adjunct Professor at Northwestern University's McCormick School of Engineering where he teaches entrepreneurship.

Mac ConwellProfile Photo

Mac Conwell

Investor on The Pitch

McKeever "Mac" Conwell II is managing partner at RareBreed Ventures. Mac is a former software engineer and was a former DOD contractor with top-secret clearance. He was a two-time founder with an exit and a failure. Next Mac moved on to venture capital via the Maryland Technology Development Corporation as part of their seed investment team. Mac went on to found RareBreed Ventures, a pre-seed to seed venture fund that invests in exceptional founders outside of large tech ecosystems.