The Scotsman has been involved with the world of technology and fashion for many years, helping build and consolidate brands such as Net-a-Porter and now Farfetch as its SVP of Technology, an online hub for independent boutiques that has raised more than $100 million and had sales of $275 million in 2013 (+100% YoY).
David was at LeWeb to talk about fashion e-commerce, but before he went on stage we sat down with him to talk about his career, the intersection of tech and fashion and other topics related to building and scaling companies.
You moved to London after the dotcom bubble burst. What was the tech scene like back then?
Yes, I got there in 1999 and I worked at a sports portal. It was quite cool at the time, because we got to create the websites for many good football teams from all over Europe.
We had a lot of fun but it was the tail end of the dotcom bubble, so there was no money left to invest and most companies had more investment than actual money and it all fell apart pretty quickly. After that I went on to work for another company that also built sports and football websites for the Premiership. I then met Net-a-Porter CEO Natalie Massenet through a mutual friend and we got along very well. I ended up working for them for five years and loved my time there; we were just at the right time, when everything was just exploding in the online fashion world. I’m a tech guy so I helped them build the systems that could support their site and efforts. Until I joined they basically were using Excel spreadsheets for everything, which was a disaster waiting to happen from a systems perspective. We did a good job and we had five years of crazy growth and we all learned an awful lot.
How did you go from Net-a-Porter to Farfetch? I left Net-a-Porter because I wanted to do something else, although I could have worked with Natalie for the rest of my life. But I left and did some consultancy work with other companies from London. Natalie then introduced me to Erik Torstensson, who has the head of an agency called Saturday, and for a three years we did ecommerce, fashion, editorial and ecosystem consultancy things with some great brands. A few years later I met Jose from Farfetch. He first asked me if I would go down to Porto for a couple days to meet the company and help out. It was such a great experience that I decided to stick around. I had been consulting for almost three years in which I basically told people what to do, but I never got around to doing things myself. All of a sudden there were systems again and I could get my teeth into them, change them, evolve and revolve them, etc.
It was exciting and I decided to stay around and work for the company. Jose is massively entrepreneurial in a way that I'm not and we work great together. Are you saying you don't consider yourself an entrepreneur? I suppose I have a very strange approach to risk career-wise. One thing most people learn as they get old is that you can do something for money or for a bit of love, and if you can combine the two even better, but generally that's quite hard. If you have to choose between money and love, go with love. I'm not good at having an idea and crushing that idea until you build a company out of it, so I don’t think of myself as an entrepreneur. What I think I'm good at is building teams and getting things going: getting dirty with systems and try to build revolutionary systems, if that's possible. Tech and fashion. Are those two hobbies you already had and were able to combine? I always loved clothes, fashion and shoes. But it took me a few years with Natalie to refine that to the point where I was comfortable doing that kind of stuff and working on it. As a techie I used to design big networks for campuses and big buildings, so there was no fashion crossover in that. But it meant a very logical and symmetrical approach to design that I really liked, and that's what made the crossover into fashion a lot easier because you get an eye for how things look and it ends up becoming the front end representation of things. At Net-a-Porter we had a shitty back office system like most people had back then, but we decided to build a beautiful system that made things easier for anyone working for the company. We wanted to get the guys who were packing and picking the packages to like the clothes as much as those who were buying them, and I think we achieved that. I wouldn't say it has become a blueprint for the industry, but everyone who has followed that model finds it interesting and useful. There's still a feeling that I hate that is that if the public can't see it, the systems can be as bad looking as you want because nobody will notice it. What I've always tried to do is to make back ends as radical as front ends, or at least make them enjoyable for those who use them often. I think technology should look fantastic and I've always believed that. From the outside it seems that three main aspects of fashion have radically changed with the internet: the way you present products, the way you discover them and the way you buy and distribute them. You've seen it from the inside. How deep an impact has technology had on the fashion industry? It has impacted fashion but sometimes less than you might think. Where it should have had a bigger impact is in social stuff, in regards to openness, generosity, etc. People who use the internet are always sharing stuff and a lot of brands still have that fear of letting go of some of their brand power. They have the idea that if they don't control it, it's not useful for them. Some large brands have started to realize that over the past few years, which is good for everybody. Burberry has this approach where they don't care whether they make a sale online, offline, now, two years from now, etc. What matters to them is that however you engage with their brand (Instagram, retail store, etc) it will end up becoming positive for the brand itself and the sales will come. There's no desperate attempt to match a social media effort with an ROI. Because let's be honest, nobody knows the exact ROI of a specific campaign. And if they say they do, they're probably fucking lying. It's all about building an ecosystem around the brand. In a previous interview you said something like 'for me the dream scenario is a business with an open mind and not necessarily a fat wallet'. So related to what you just said, do you still find a lot of 'closed-minded' businesses in the fashion industry? Yes, absolutely.
One of the ideas that we preach is that the fashion industry is not massively ready for technology. People don't go into a Burberry store and buy everything there. They go to Burberry to buy some shoes and then to some other store to buy a dress. Brands should open their mind and start working together. I think that people and companies get paralyzed and slow when they receive money, and we've even seen this at Farfetch with all the capital we've raised. You start thinking about what you need and instead of building it yourself -while you learn even more about your company- you go out and buy it or license it from someone else. Sometimes it works but not as often as people think. I love the idea of building things instead of buying them, which I think is very good for engineers to face big challenges and continue innovating. When it comes to companies who have raised a ton of money and to avoid spending a big part of it on things you actually don't need... how do you achieve that? Is that a company culture thing? Yes, it totally is. We've got a fair amount of money in the bank account but I'm very nervous about spending it. It's like the money you get when you turn 18 or 21 from your grandparents: it's there, but you're only expected to use it when it really matters. It's there for a rainy day. Money is very useful when it comes to expanding globally, but I'm very careful when it comes to spending it. For example, at Farfetch we're always trying to keep hiring tight, so we don't go mad with that. Talking about hiring and personnel, most of your tech team is located in Portugal. Have you found hiring talent from Porto hard? As a company we're quite proud of our Portuguese origins. It doesn't set us apart because anyone could move to Porto if they wanted to, but our co-founders are Portuguese and one of our core values is actually 'todos juntos', which means all together. We love it because it connects all of us and it shows respect to where we come from. It is difficult to find and attract enough talent from Porto but it's not impossible, and the fact that we position Farfetch as a technology company as opposed to a fashion company within Portugal does help recruit. We are quite public about the fact that we want to be portrayed as a tech company that does fashion, instead of the other way around. How much has social media impacted the fashion world? The impact of social media has been enormous. Social works as a democratization tool because everybody uses, and the brands that don't -for example some luxury brands- are shooting themselves in the foot. There's a generation that has been born tweeting, using Facebook, and whether fashion brands want to be there or not, they have to. Going forward, how do you see the intersection of fashion and tech evolving? It's not about doing interesting things, but about whether those things stick. There's still a slight challenge between tech and fashion, and I think the fact that more women will join the industry in coming years is good for the sector as a whole, because they usually have a better sense for fashion. For any industry, it's also very interesting to see at what's going on in other markets and sectors and try to apply that to your specific niche, and that’s something that we are paying close attention to at Farfetch. But as I said, it’s not about doing interesting things, but about creating things that matter and stick.