20VC Why VC Is The Perfect Preparation For Founding A Startup & Changing The World Of Online Fashion with Chris Morton, CoFounder & CEO @ Lyst

In this episode of the 20 Minutes VC, host Harry Stebbings interviews Chris Morton, the founder and CEO of fashion tech startup List, which has garnered over $60 million in funding. Morton shares his journey from VC at Bulderton to entrepreneur, emphasizing the value of his VC experience in understanding the startup landscape and raising capital. He highlights List's mission to simplify online fashion shopping by aggregating inventory from various stores, akin to what Spotify does for music. Morton also discusses the future of retail, predicting that physical stores will remain due to their experiential value, despite the growth of digital platforms. He envisions leveraging data to enhance in-store experiences and connect online and offline shopping seamlessly. Morton's insights reveal a strategic approach to building a global, customer-centric service in the dynamic world of fashion e-commerce.

• Host Harry Stebbings introduces the podcast and himself.
• Harry mentions his Snapchat presence and the humorous content he shares.
• He highlights the main guest, Chris Morton, founder and CEO of List Now.
• List Now is a fashion tech startup with significant funding from notable investors.
• Chris Morton has a background as a VC at Bulderton, focusing on consumer Internet startups before founding List Now.

"Hello and welcome to another episode of the 20 Minutes VC with your host Harry Stebings. And you can follow me on Snapchat at h stebbings for utterly hilarious vc jokes, topnotch mojito making, and a view inside some of the world's best vcs and startups."

This quote serves as an introduction to the podcast and the host, establishing the light-hearted and informative nature of the show.

• Harry Stebbings advertises Lisa mattresses, emphasizing their design and comfort.
• He highlights the convenience of their online shopping experience.
• A promotion code is provided for a discount on the mattress.
• Lisa's philanthropic effort of donating mattresses to shelters is mentioned.

"Well, trust me, that will not be the case anymore when you get a Lisa mattress. They're built to perfection with three unique layers comprising of two inches of memory foam and two inches of latex light foam designed to keep you cool."

This quote describes the construction and benefits of Lisa mattresses, tying into the advertisement segment of the podcast.

• Harry welcomes Chris Morton to the show and thanks Nicola Glue for the introduction.
• Chris expresses his pleasure to be on the show and thanks Nicola as well.

"Well, Chris, welcome to founders Friday of the 20 Minutes VC. It's absolutely fantastic to have you on the show and I do want to say a quick thank you to Nicola Glue for making the introduction."

This quote is Harry welcoming Chris to the podcast and acknowledging the person who facilitated the introduction.

• Chris Morton discusses his career path, starting from a renewable energy startup to working at Benchmark.
• He mentions his intention to leave Benchmark within three years to start his own business.
• Chris highlights the learning and networking opportunities at Benchmark that helped him build his team for List Now.

"And eventually I found myself working at benchmark, the fund. And on the first interview said, I want to leave here in three years, at least, at most. So if I haven't left by then, please fire me."

Chris explains his ambitious plan during his interview with Benchmark, indicating his entrepreneurial mindset and determination to start his own venture.

• Chris Morton recalls his diverse background compared to other junior members at Benchmark.
• He had no finance experience but was hired for his unique skills and perspective.

"Gosh, it's taken me back eight, nine years ago. I think I was very lucky that the team there were looking for quite a diverse group of junior folks..."

This quote reflects on Chris's unconventional background and the value of diversity in a team, which contributed to his hiring at Benchmark.

• Chris Morton discusses his thought process behind starting a business and how being a VC first helped him.
• He compares working in VC to a "startup MBA" and credits it with providing the seed capital for List Now.
• Chris advocates for the VC-first, operator-second model based on his experience.

"So I mentioned I was thinking about starting something at 16, then also maybe when I was 24, 25, close to starting something else."

This quote shows Chris's long-standing entrepreneurial aspirations and his strategic approach to gaining experience before founding his own company.

• Chris Morton explains that List Now aims to be the easiest way to buy fashion online.
• List Now aggregates inventories from various stores and brands to create a unified shopping experience.
• The company's mission is likened to what Spotify does for music and what Netflix does for content.

"So list, very simply, is trying to be the easiest way to buy fashion online."

This quote summarizes the core mission of List Now and its role in the fashion tech industry.## Ecommerce Market Dynamics

• Lyst has a significantly larger inventory compared to traditional department stores, boasting 3-4 million items.
• The platform experienced substantial growth with 40 million users and hundreds of millions in sales last year.
• Consumers are resonating with the marketplace model provided by Lyst.

"have about three or 4 million items. Most department stores have orders of magnitude less than that, sort of 30 or 40,000." "We now have the largest inventory, had about 40 million people use the site last year, hundreds of millions in sales."

The quotes highlight Lyst's expansive inventory and its success in attracting a large customer base, indicating a positive consumer response to the marketplace model.

• Chris Morton believes that the vision for ecommerce changes frequently due to rapid technological and societal shifts.
• He references the book "The Structure of Scientific Revolutions" to explain paradigm shifts that redefine possibilities.
• The digital technology paradigm is currently reshaping the ecommerce landscape.
• Lyst's vision is adaptable and customer-focused, aiming to provide the best fashion experience.

"So I don't think there's like an end or ultimate vision. I think the vision changes every few years with the world." "Suddenly technology will bring about a massive change that will change everything about how that world works."

Chris Morton discusses the absence of a static ultimate vision for ecommerce, emphasizing the importance of adaptability in a world where technological advancements can lead to significant paradigm shifts.

• Lyst aims to create the best fashion experience tailored to the customer's preferences and habits.
• They understand their customers' shopping patterns, such as peak times and preferred devices.
• Lyst recognizes the importance of physical retail and seeks ways to integrate in-store experiences with their digital platform.
• They are exploring options to provide personalized shopping experiences in physical locations based on online behavior.

"We have an idea of what we'd like to achieve in the next five years that is really with the customer in mind." "Right now, I'm a little bit frustrated that we can only really deliver an experience to her digitally."

Chris Morton expresses Lyst's customer-centric approach, aiming to enhance the shopping experience both online and offline, and his desire to expand beyond digital offerings to meet customer needs throughout the week.

• Lyst is a technology and engineering-led company, focusing on enhancing the retail experience through data science.
• They aim to utilize data from the web to personalize the shopping experience and potentially integrate inventory from physical stores.
• Lyst plans to use technology to inform customers about in-store availability of items they are interested in, based on their online activity.
• The company is exploring ways to leverage logistics services to provide faster delivery from local stores, despite not handling operations and logistics themselves.

"Our view is that we can build a better experience using engineering and data scientists." "But if we can start to bring on inventory from physical stores in the real world, then we can start doing some pretty interesting things around personalization."

Chris Morton discusses Lyst's strategy to employ technology and data science to create a more personalized and efficient shopping experience, including the potential to incorporate real-world inventory into their platform.

• Chris Morton does not believe physical retail stores will disappear.
• He differentiates between emotional and commodity commerce, emphasizing the importance of physical stores in fashion.
• Physical stores offer an emotional experience that online platforms struggle to replicate.
• Brands in physical stores can tell stories and create desirability, which is crucial in the fashion industry.

"I really don't believe that we will. I think physical stores play an important role, particularly in fashion, which is emotional commerce rather than commodity commerce." "So part of it is shopping for leisure, the enjoyment of going through these destinations, as these physical stores are."

Chris Morton argues that physical retail stores will continue to exist due to their role in providing an emotional and leisurely shopping experience that is integral to the fashion industry, setting it apart from commodity commerce.## Experiential Retail and Brand Connection

• Customers are more likely to engage with brands they have a physical connection with, such as experiencing a Prada store's ambiance.
• The retail experience is becoming increasingly experiential, and this trend is expected to persist.
• Physical stores are not anticipated to disappear, but there may be a shift towards experiential retail in city centers, with suburban stores potentially being more impacted.
• Customers love fashion and appreciate the flexibility of shopping both online and in physical stores at different times.

"A customer who sees the amazing undulating wooden floors of the Prada boutique in Soho are more likely to come onto list and buy Prada items because they have that connection with the brand."

The quote emphasizes the importance of a physical retail experience in creating a connection between the customer and the brand, which can influence online shopping behavior.

• List carries desirable brands and leverages the emotional connections these brands have established with customers.
• Customers often come to List with a specific brand in mind due to advertising and product placement.
• While capitalizing on the brand value of carried products, List is also investing in its own brand marketing.
• A combination of leveraging existing brand stories and building the platform's brand is the strategy for List.

"We are fortunate to carry the world's most desirable brands and those brands in aggregate, spend many, many billions of dollars building these stories and establishing these emotional connections such that when a customer comes onto list, a lot of the searches and journeys that we see are focused on a brand."

Chris Morton explains how List benefits from the brand equity and marketing efforts of the brands it carries, which helps attract customers to their platform.

• The decision to base List in London was strategic due to its proximity to fashion hubs like Paris and Milan, and London's own fashion tech success.
• The initial strategy involved partnering with top-tier multi-brand retailers to gain a cross-section of brands.
• List aimed to provide a curated fashion-focused platform that would appeal to luxury brands, positioning itself as a custodian of these brands.
• List also serves as a marketing platform for brands, allowing them to curate collections and tell their stories.

"The strategy was work with the top tier, multi-brand retailers. That then will give us a great cross section of brands. And then we can go to the brands, we'll go to other retailers, and they will see that we already have a great mix from day one."

Chris Morton describes the initial strategy for onboarding major brands to List, which involved leveraging partnerships with established multi-brand retailers to build credibility and attract additional brands.

• Chris Morton's background in venture capital provided him with valuable relationships and insights for fundraising.
• The focus was on maintaining standard terms and not overstretching on valuation to avoid negative funding cycles.
• The importance of a diverse board with members who bring different value to the table was highlighted.
• Chris Morton leveraged his VC experience to ensure a smooth fundraising process for List.

"It was definitely made easier for my time on the VC side... We've always been very focused on having the most vanilla term sheet. We could not overstretching ourselves on valuation."

Chris Morton reflects on how his venture capital experience influenced List's approach to fundraising, emphasizing the importance of standard terms and reasonable valuations.

• Chris Morton was asked about changes he would make if he could start the process again, indicating a reflective perspective on the entrepreneurial journey.
• The question suggests a consideration of lessons learned and potential improvements, although the specific changes Chris Morton would make are not detailed in the provided transcript.

"Candidly, like when I was looking, just browsing through the questions you sent me, this is the one that I was hoping you wouldn't."

The quote indicates that Chris Morton found the question about changes he would make to his startup process challenging, implying that it is a thought-provoking topic for founders to consider.## Attitude Towards Mistakes and Learnings

• Chris Morton reflects on his attitude towards mistakes, indicating that he views them as valuable learning opportunities rather than regrets.
• He emphasizes that every mistake made has provided significant insights.

Why? Well, I mean, there's no major thing. There's all sorts of small things, but I just don't think there's anything major. I don't know if it's like an attitude thing of no regrets. And every mistake we've made, of which there have been plenty, there's always been, like, a really valuable learning.

The quote highlights Chris Morton's perspective on mistakes, suggesting that he does not dwell on them but instead focuses on the lessons they provide.

• Chris Morton discusses a significant early challenge when a potential technical co-founder backed out at the last minute.
• He shares how this setback led to an unexpected positive outcome by eventually finding a more suitable co-founder.

Like, very early on, bringing on a technical co-founder. Probably the first major decision I had to make. [...] And Monday at 01:00 p.m. Got a phone call saying, I've taken a job somewhere else. [...] And it was a really valuable learning because it was just a realization that every company that you admire, every company that's made it, they've had to deal with seemingly company crippling moments as par for the course.

This quote describes a crucial moment in Chris Morton's early career, where he learned that even successful companies face significant challenges.

• Chris Morton credits Mark Evans as a significant mentor in his career.
• He values the mentorship and guidance provided by Evans, who has transitioned from a former boss to a board member in Morton's current venture.

Probably the more obvious answer would be Mark Evans. He was one of the guys who hired me at benchmark. [...] So to get your former boss to become your boss again at the board, you have to really want that. And I'm really thrilled to be working with him again in this sort of slightly different relationship. But yeah, huge mentor for me.

The quote conveys the importance of mentorship in Chris Morton's career, particularly the influence of Mark Evans, who has played a pivotal role in his professional development.

• Chris Morton outlines the future strategy for his business, focusing on global expansion and enhancing the integration of online and offline inventory.
• He expresses a strong belief in the potential to build a category-leading product in the fashion industry.

Right now, we're focused mainly in the US and a bit in the UK. [...] I think we'll stay within fashion, but we'll go much more global. [...] I talked a bit earlier about how we want to look at some of the in store inventory and really sort of connecting the dots between offline and online as well.

The quote details Chris Morton's vision for the future of his business, emphasizing a global approach and a seamless connection between various sales channels.

• Chris Morton acknowledges the impact of Asia's growing middle market economy on the luxury fashion industry.
• He discusses the need to consider pricing strategies and the potential for direct engagement with Chinese consumers.

Yeah, I mean, it's definitely something it's impossible to ignore. [...] So we think about it a lot. We're very sensitive to working with the brands to make sure that we're pricing products accordingly.

This quote highlights the strategic considerations Chris Morton's company must take into account due to the emerging middle class in Asia and its affinity for luxury fashion.

• Chris Morton contemplates leveraging the company's API to enable third-party shopping experiences, potentially expanding into markets like China.
• He emphasizes the importance of partner collaboration and brand alignment in this expansion strategy.

Another idea, we have this huge inventory. We use our own API to power our own services, but perhaps we could open up an API to let third parties power their own shopping experiences as well. [...] Maybe we'll partner with somebody who we can pop up our API into WeChat or into another property there.

This quote reveals Chris Morton's innovative approach to market expansion by considering the use of APIs to facilitate new shopping experiences in collaboration with partners.