Many New Orleanians are familiar with e-commerce in the United States, but how many can say they traveled to another country, without speaking the language, and started a successful e-commerce business? Peter Ostroske started the fashion brand olook in Brazil that delivers up-to-date accessories– shoes, purses, and jewelry– at prices that are fifty percent less than comparable products on the market.
Before olook and Brazil, Ostroske first started another company, Old Harbor Outfitters, a brand that targets big game fisherman. The company showed strong growth in the first few years, but he felt there was a limited market opportunity within the segment and decided to move on.
Ostroske then attended the Wharton School at the University of Pennsylvania and surprisingly, left before graduation because he saw bigger and better opportunities ahead that needed immediate attention. Ostroske originally planned to go to São Paulo between his first and second year at Wharton to map the B2C e-commerce industry. He wanted to be an Entrepreneur-in-Residence and get sponsored by a VC to make it happen. “I made a list of all of the VCs that I thought were interesting and started punching in combinations of first name.last name @ VCname.com until the email wouldn’t bounce back. This is probably the worst thing you can do as someone who is trying to get an investor’s attention but my EIR proposal was short and to the point and it showed my initial position on the market.” He eventually received an offer from a Brazilian firm.
“Overall, I think getting sponsored by a VC was one of the best things I could have done,” said Ostroske. “I had three months to work with a really sharp group of investors who ultimately helped me build the product that they invested in. In fact, I received a term sheet from the firm the day before I was supposed to go back to Wharton and made the decision to stay in São Paulo to start olook.”
The market size in Brazil was the initial attraction to start olook there. Also, Ostroske said, “Brazil is amazing and reminds me a lot of New Orleans with a heavy brass influence in the music scene, a tropical climate and good people.”
According to Ostroske, the Brazilian startup scene is concentrated in São Paulo. “As a result, entrepreneurs are very close and are constantly helping one another with everything from how to get a work visa in Brazil to intros to potential investors. Most recently, informal incubator spaces have started to pop throughout the city.”
Ostroske and his co-founder, a Brazilian who was an ex-co-founder at Dafiti, the Zappos of Brazil and a Rocket Internet Company, founded olook in 2011. They were introduced through Ostroske’s investors and began working together a few short weeks later.
Image from veja.abril.com.br.
The company’s target market is women ages 25-35 in urban areas and the brand is all about personalization. Site visitors can take the fashion quiz and receive personalized fashion recommendations. Unlike many other fashion e-commerce sites, olook designs, manufactures, and retail their own private label products and are not focused on the discount, rather the quality of the items.
“We also strongly believe that the online shopping experience has a lot of room for improvement and have been working hard to bring our customers a personalized shopping experience,” Ostroske said. “I think personalization is so important and it’s definitely a critical component of olook’s early success. The benefits for members are obvious – they spend more time looking at products they like. For olook, we see higher conversion rates, lower SKU counts and higher engagement on the site overall.”
The company’s business model has changed significantly since 2011. First site visitors had to take the fashion quiz to sign up to become a member, but six months later the site was open to, “make a much stronger effort to focus on brand,” Ostroske said. This month, olook is launching its private label clothing, offering third party brands in a curation. He says the company is most closely aligned with ASOS a, “UK-based fashion e-commerce company that mixes an own brand and third party brand strategy with a heavy focus on user engagement through content, personalization and social.”
To date, two companies have invested around $5 million in olook and they are in the process of raising a Series B. Ostroske now speaks fluent Portuguese and has since hired 45 employees. He said his day-to-day is in Portuguese and he is the only non-Brazilian in the company.
As far as feeling successful, Ostroske said he is not sure he feels it quite yet. “There’s still a question of bringing olook to profitability and creating value for our investors, our team and ultimately our customers. When I can deliver those things, then I think it would be ok to say that we were successful.”
As a young entrepreneur with two companies already under his belt, Ostroske provides other young entrepreneurs with advice. He said, “I like to think about new startup opportunities as having four critical breaking points – market size, team, revenue model, product/service. My advice to young entrepreneurs is to be honest with yourself with respect to each one of these points before getting stuck in. Do you have the right team behind you? How big is the market opportunity considering that you are going to only have a marginal representation in the near term? Is the revenue model scalable? Other than this, I’d really consider trying to go somewhere where everyone is not. Forrester estimated B2B e-Commerce to be twice the size of B2C e-Commerce in 2012. US $560bn. With regards to Brazil, I think there’s an opportunity in B2B as well. I believe the expression is – selling shovels in a gold rush. Just an idea…”
With Ostroske’s giant leap of faith, his decision to leave Wharton and the U.S. to move to Brazil and start olook appears to be paying off. He said fashion e-commerce is expected to outgrow all other verticals in Brazil. If olook can get a handle on 2-3% market share over the next couple years, they company will be in great shape.
Like all true New Orleanians, Ostroske is obsessed with the city and hopes to make it back one day. Until then, visit olook.com to see what he is up to!