There is a saying in real estate that you “make your money on the buy side.” It isn’t really how profitably you sell it, but how well you buy your property that determines whether it is a “win” or not. As with all great downturns, there will be those who will make a killing by taking advantage of the nature of cycles. To paraphrase Warren Buffett, when the market is filled with fear, that is the time to buy. The concept is really about being contrarian, moving in the opposite direction of the market.
Of course Buffett can afford to be cavalier. How about everyone else?
Ten years ago, the market implosion was in technology, not real estate, with dot-coms collapsing at a steady clip. Hardly the time to start an on-line retailing business. But that is exactly what Natalie Massenet did. She was a contrarian who rode a counter-cyclical wave to success through the creation of the luxury portal, Net-a-Porter. Ten years after creating the company, she sold it this year to the Swiss investment group, Richemont, which also owns such well-heeled brands as Cartier and Montblanc. Her payday? $76 million (and she remains Chairman).
What makes Net-a-Porter a compelling story? On-line shopping isn’t unique. It wasn’t even unique when it was founded ten years ago. She isn’t designing clothes and accessories. To put it in Venture Capital parlance – she’s a VAR (value-added reseller), not an OEM (original equipment manufacturer). Massenet’s inspiring success story is that she is doing exactly what she wanted to do for a career in a completely untraditional and exceptionally profitable way.
Massenet started her career as a fashion editor. She liked it and was good at it, but saw that a void in the marketplace existed where luxury shoppers could purchase high-end clothes and accessories they liked on-line. Her unique understanding of how purchase decisions get made is what really made her business fly. Massenet recognized that fashion magazines sell clothes. Affluent women (read successful women with little free time) find shopping on-line to be highly preferable to buying in stores. While the ability to see a Jimmy Choo bag or a pair of Christian Laboutin shoes in a magazine and finding them in one place on-line was something, Net-a-Porter’s well-designed website functions as an on-line magazine to boot. Their marketing savvy leads them to provide highly addictive and visually stimulating weekly emails, customized to their shoppers’ purchasing habits. The ability to see the merchandise on models with completely put together looks is a huge improvement over the websites of even the most upscale department stores and boutiques.
Natalie Massenet has succeeded by giving women what they want – a gorgeous fashion magazine of well-made clothing and accessories that a woman can purchase from her iPad. She understands the convergence of media and commerce and sees herself, not as an internet entrepreneur, but as a magazine editor. Her intuitive nature sees opportunity in menswear now and her newest website, Mr. Porter, will be launching soon, offering the same experience, targeted for men, who are notorious for avoiding the shopping mall.
How many people must have told her that the timing was awful to begin an Internet start-up ten years ago! Probably even her investment banker husband. But she chose not to listen because she knew that she would succeed. Her instincts and confidence were strong. Her understanding of what her customers wanted was keen.
Natalie Massenet is an inspiration – an opportunistic visionary who has created her chosen career in an entirely innovative (and exceptionally profitable) way.
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