Applied Series: Why It's So Hard to Solve Fashion's Fit Problem with 3DLOOK's Vadim Rogovskiy

Fashion's Big Fit Problem
This episode features Vadim Rogovskiy, CEO of 3DLOOK,  in which he takes us through how he discovered that fashion is the industry with the biggest pain to get body measurements and fit right. Starting from a tech perspective, in which he confesses is not necessarily the best process for starting a business, Vadim takes listeners though why fashion brands are struggling with fit.

AI Powered Body Measurements
3DLOOK's patented AI technology has the potential to reduce consumers buying ill-fitting clothes and its innovative approach can streamline the consumer experience.  Serving over 100 brands including Reformation and Bershka, the mobile technology combines virtual try on, body data analytics, and sizing recommendation to overcome the retail challenges.

And as a little bonus, Vadim is also a VC investor with his micro fund,  which he talks us through what makes a great fashion tech founder and what he's looking for within teams to convince him to write cheques. 

Find out about 3DLOOK here
Connect with Vadim on LinkedIn

*EXCLUSIVE OFFER* -20% discount for podcast listeners on the printed or ebook of Fashion Tech Applied. Purchase your copy at Springer here using the discount code*: 08cWPRlx1J7prE

*Offer ends end June 2024

Transcript

Peter Jeun Ho Tsang: 0:03

Fashion Tech Applied is published, my co-authored book taking you through six chapters uncovering the technologies and innovations powering the fashion industry. I am Peter Jeun Ho Tsang, founder and CEO of Beyond Form, and welcome to the special podcast series Applied. Each episode, I'll be sitting down with incredible fashion tech professionals that are featured inside the book. On today's episode, I'm sitting down with Vadim Rogovskiy, co-founder and CEO of 3DLOOK, an AI-powered 3D body scanning solution that encompasses fit and body sizing, virtual try-on and health data. We've discussed previously on the podcast show how difficult it is to get fit right, either for the consumer or the brand. There's no standard way of doing things with these two problems, like high return rates, like e-commerce sites. However, Vadim and his team have managed to create a sophisticated and laid solution that seems to be taken as one step closer to solving such issues.

Peter Jeun Ho Tsang: 1:02

Let's get to the conversation with Vadim on this episode of Venturing into Fashion Tech. How are you today, Vadim?

Vadim Rogovskiy: 1:26

I'm doing great. Thanks for coming here.

Peter Jeun Ho Tsang: 1:28

I'm glad to have you on the podcast show talking about 3DLurg, your entrepreneurial journey and virtual fitting rooms today. To give our listeners some context, the virtual fitting room market is projected to reach $10.57 US billion by 2028, with a growing compound annual gross rate of 19.29%, according to verified market research. It's an up-and-coming industry and is growing very, very quickly as well. The various reports state that the average return rate for online fashion retailers is around 30% and can be as high as 50% during the holiday period. I'm sure you're going to talk about this a little bit later on. Vadim Fit is extremely difficult to get right in the fashion industry from all perspectives. Many startups are tackling it in various ways, from virtual try-on to AI-powered fit recommendation systems through to body scanning and more. I'm so excited to see and hear how Vadim you are tackling from your perspective. I think you're what we can class as a serial entrepreneur. Am I correct there?

Peter Jeun Ho Tsang: 2:44

Yes, I mean, I think it sounds right 3D look is in your first rodeo and I imagine that you've got many startup battle scars, which I think come in handy in the context of creating a startup. Tell us about your journey and how you ended up building your current company.

Vadim Rogovskiy: 3:01

I've been building startups since I entered the university. It was more like a fun for me, more like a hobby I would say, more like bed projects, but I started to learn to code, I started to learn how to do digital marketing etc. And started to launch my first small projects. So I went all the way from web studio, social games development studio, e-commerce store so at that time we were selling t-shirts with equalizer screens that responded to music. It was a long time ago, like 2009 or something, and I was making pretty decent money as a student. And then I went back to a barrel like 10 years later, which is also funny. But then I got in my projects bigger and bigger.

Vadim Rogovskiy: 3:54

My first real company was in AdTax in advertising. It was a SaaS tool that helped small, medium-sized businesses to run their ads on social media. So it didn't take off as well as I expected, but I still managed to. So the company was called AdCenter and I started it in 2011 or something and I sold it in 2014. So it was a small exit, but still I learned a lot, made all kinds of mistakes I could have made at that time, but still managed to get some kind of outcome right Not the outcome I expected, though, and at that time, before I even sold that, I already started to work for my second company, because I already realized that my first company was not going to be really big. My second company was also an AdTax, but it was a platform that helped mobile app developers to monetize their audiences and, on the other end, it helped another group of app developers to promote their apps, and we basically, in any country, we helped them to get installs, to get active users according to their criteria, and that company went really well.

Vadim Rogovskiy: 5:06

So my first company was Bootstrap. My second company was also Bootstrap, until one of the VCs was basically very like. They were very persistent, trying to convince me to get their money. I understand at that point, like, why do I need to raise any capital? Because my company was profitable. Then I realized that obviously it can grow much faster if I get the capital and apply it properly. And also, at the same time, their final argument was that I could take some money off the table through secondary. So I'm like, wow, I didn't even know that option actually existed. So I agreed. So I took some money off the table.

Vadim Rogovskiy: 5:47

So the round was series A of 2014, 2015. It was $2 million Now even it's even kind of small for a C round according to current criteria, but at that time it was a pretty substantial series A round. But yeah, I mean we in another day, at Techmark, it started to get into the bad territory because lots of bad actors, lots of scammers, lots of fraud and lots of people tried to make money by creating some artificial traffic, artificial installs, and I realized that and the multipliers for companies started to go dramatically going down and I was growing a company. We were really investing all the profits into growing company and growing the capitalization and at some point of time I realized, no, I need to do something else. I was lucky to take some money off the table, so I invested almost all of them into 3D looking to my next company and I appointed a different CEO at my previous company and then of the day we couldn't sell the company and we folded it.

Vadim Rogovskiy: 6:48

But at that time I was already full-time working on 3D look because I anticipated that. Why 3D look? Because I wanted to use my experience in building software for enterprises right and also my experience with mobile devices, but not from advertising perspective but more like from a technology perspective. Especially, I was very fascinated about camera and about computer vision applications that started to emerge especially around 2015-2016. And then I eventually wanted. We decided to solve a problem of measuring human body using just a smartphone camera that many people tried to solve for the last 20 years and succeeded. That's how I got into my current company.

Peter Jeun Ho Tsang: 7:28

So I imagine being chased by VC investors must have been quite a funny feeling. How did you feel at that moment in time when they're like take my money, take my money Like? How do you react to something like that?

Vadim Rogovskiy: 7:41

Ah, as a people, I mean. Well, at the time I was bootstrapped and entrepreneur. I didn't know about any other ways to be successful as a founder. Then it was pretty opposite. When, I mean in 2021-2022, founders knew that there is only one way to be successful as to raise capital, but, like seven years before it, bootstrapping was the primary way to grow your startup, to become successful. Actually, I recently wrote a post about it on LinkedIn. So, and yeah, I mean at that time I was like why do I need this? I don't need this, we can grow 50% a year, 100% a year was we are profitable. Like why do I need this right? Yeah, at 3Dlook, it was my first camp where I had to learn how to fundraise properly, because at Clicky, my second company, I didn't actually know how to fundraise and basically that that VC was just the most persistent and I was like I'm going to take it because they offered cash out option as an incentive.

Peter Jeun Ho Tsang: 8:39

So you've been quite fortunate, then, so far on your journey, because not every startup founder gets an exit where they can make money, and to do that more than once, to be able to cash out more than once, is quite a journey already. So you mentioned that you are now on your third company, 3dlook. What does 3D look specifically?

Vadim Rogovskiy: 9:02

We started not according to the startup books. Right, we didn't start from a consumer problem. We started from a technology problem. Because, after a lot of research, when we understood that, yeah, if we solve the technology problem, we're going to find a market for it, for short-words or multiple markets. Because if we start from a consumer problem, still we might not be able to solve it using this kind of technology.

Vadim Rogovskiy: 9:26

Because for me, it was always important to you, like all my companies were built around, I would say I can call it a mission to build companies around cutting-edge technology. Try to be one of the first entrepreneurs to bring these innovative technologies into businesses. Right, by basically combining technology and user-friendly, like AI interfaces to bring use cases to business. At that time, what we did was also very innovative. And now, with 3D, look, it's a totally different market, totally different solution. Everything except the fact that it's still very related to my mission and also that it's still my third B2B company.

Vadim Rogovskiy: 10:12

It was all built around the notion that we wanted to give power to consumers by scanning.

Vadim Rogovskiy: 10:19

I mean, so consumers could scan their bodies using a smartphone and then use their body data in different ways and applications. To pick a parallel that fits you, or to use this in a weight loss app to see how you progress towards your fitness goal, or use it with your doctor for the remote checkup, etc. But obviously, after a lot of customer development, we figured out that fashion, e-commerce, fashion manufacturing still at that time it was the industry with the biggest pain. So we still, until this day, we focused on fashion, although we also started to approach digital health and fitness, and I can talk about that separately. But our very proposition now is that we increase conversions, reduce returns. But, moreover, what is the most important thing, we bring body data intelligence to brands and retailers. We help them to understand how their actual consumers look and how their body data correlates with what they buy, what they keep, what they return. So only we believe, we are convinced that if you do, if you solve this, you can. This is the only way to solve the problem of returns.

Peter Jeun Ho Tsang: 11:29

You mentioned that you start the technology first. You don't think that was a little risky?

Vadim Rogovskiy: 11:34

As in two previous cases, it started from a passion. It was just very exciting to see if it's going to work or not. It was like a research. So basically I've found that this research for a couple of years until we and I said, yeah, actually it kind of works, but we need this, we need that, we need to scale our R&D team, we need to start maybe doing some marketing. So at that time I started to raise capital, but before that I've been funding it myself and, yes, we definitely. It was just super exciting.

Vadim Rogovskiy: 12:10

I mean, at first I didn't. I obviously understood that, yeah, if it works, if we can build a business out of it, the exit outcome can be great. But basics of that was just I could not do that Right. I was just, I was kind of. It was usually the most exciting thing for me at the time. Nothing else could even be compared to that and I didn't think about money as a direct outcome. I do this for money. You know, I did it for fun and also it was super interesting a lot of learnings. But then gradually we started to understand okay, there is a huge potential there that can also lead to financial outcome as well.

Peter Jeun Ho Tsang: 12:51

Seems to be working for you. 3d luck is thriving. As I said right at the start of this episode, fit in the fashion industry is so notoriously to get right, and our listeners that come from the industry, I can imagine, understand that it's difficult, whether that was done through technology or not. Why do you think it is so difficult for the industry to get fit right for the consumer, and then how does the technology aim to solve that at 3DLurg?

Vadim Rogovskiy: 13:21

Because we are B2B2C company, so we offer our software to various businesses and they pay us for that, to brands. But we also interact with the consumer directly and with long term, success of what we do depends on the consumer first of all, and what is interesting that we always thought that it's the main thing is to convince the brand to use it. But the complexity here is that everyone understands that it's important. Everyone understands that fit is important. Everyone understands that, yes, it's better to get to understand what size you need to buy so you don't have to return it, so you don't have to do a bracketing, basically to buy three items like one item in three sizes and then return two of them. Right, but in brands understand it. We never had problems to convince brands to give it a shot. But, yeah, of course some brands are more innovative, some brands are less innovative, some brands are super slow. That's another problem of the industry. But still, we almost never had to work hard to convince a brand to at least kind of talk to us. Right, they came to us and still coming to us. We don't have a sales team, right. But on the consumer side it's much harder because consumers were trained for decades that returns are free of charge. Just buy a few items, you return them and all it cares. And there was a generation that basically grew up doing that and it actually started, even not online, it started even, like in countries like Germany. It started with catalogs, with paper catalogs. So it started in a few generations where actually they grew up doing that and it's very hard to like rewire them to do things differently. Of course Generation Z is easier. With them, they really embrace it. But it takes much more time to educate consumers rather than brands, and that's why it's one of the complexities of this problem, because solving it fundamentally goes against the way how consumers were trained by the brands to do that previously.

Vadim Rogovskiy: 15:38

And also, of course, when we talk about FIT, many people in the industry know that size charts already became marketing tool, like vanity sizing etc. So they often don't represent the actual FIT of the garden. Secondly, the same brand, same item produced on two different factories fits differently. And also we have a lot of subjective factors here, when consumers just get the right size but still something is off. So, and all of this combined, I mean it's a very hard problem to solve. That was so many startups failed, so many corporates failed. But why we believe? Why we see that this is the right time to solve it? Because, yeah, I mean, new generation is getting more and more buying power. Brands started to understand that fast fashion models are not going to work in the long term. Sustainability is top of mind for many brands, countries, governments, people, etc. And technologically, from a technology standpoint, it's easier now to solve this problem. So we believe that now is the right time to solve it.

Peter Jeun Ho Tsang: 16:55

Well, it's exciting that you have companies queuing up to work with you, but do you again, I think, another area that is quite enviable, or positioned to be in, that's quite enviable for many startups. And just going back to your point, the technology itself now is becoming easier to solve this specific issue and, if we do get it right, as you say, the GenC are, you know, quite okay with using such technology now quite easily as well. But it's going to reduce that return rate that I mentioned right at the start of the introduction, that up to 50% of no online returns are happening. Huge implications, of course, not just from a business perspective, but for the environment as well. Huge logistics, similarity issues there, the amount of emissions and carbon going just in and out of the atmosphere just because of this online return that fast fashion has hardwired us to be, you know, now expect, shall we say, from an online experience.

Peter Jeun Ho Tsang: 17:54

So, just going back to the book, fashion Tech Applied. So 3DLurg is mentioned in chapter 4 of the book. So I think this is the first time you've seen it right over Dean. So chapter 4 about marketing and how to use virtual vetting rooms within the marketing and retail of fashion brands, and that was my co-author Von wearing their garment there. So we discussed in the Q&A on 3DLirk in the book that scanning more than 60,000 people during 2020, this is what happened when the fitting rooms were not in use during COVID-19. How does the data inform the AI and what can we learn from such for example such scans?

Vadim Rogovskiy: 18:43

I, like many startups that are trying to solve this problem only in the front end by just giving you the right size recommendation.

Vadim Rogovskiy: 18:54

We understand that it's not enough and brands need to understand, first of all, to see how real consumers are different from their fit models, because fit model informs the right fit and tent of the brand.

Vadim Rogovskiy: 19:07

But what if real consumers are totally different? And that's what we see when we do these researches for well-known brands and, yeah, I mean some of them already started to incorporate this or are going to start to incorporate these findings into the design and production. But, yeah, first of all is to understand that really this data allows brands to understand, to basically find the fundamental reasons for returns. And our game plan is to, like you've talked about, like the next few years, to collect enough data to basically to be able to provide industry-wide analytics related to body data of consumers and how it correlates with what they buy, keep return, so that this alone could become a separate product, separate solution. But we need to collect a bit more data, a bit more diverse data in the next few years to be able to do that, because I think this can bring the biggest value based on our technology.

Peter Jeun Ho Tsang: 20:10

So it sounds like data is a huge, important part of your solution, actually the way forward to solve the fit problem as well. Let's just move, then, away from a sweetie look. You discussed at the start this conversation that you really had to learn how to deal with VC investors, take other people's money and grow a VC backed company. You yourself now sit on both sides of the fence. Not only are you running your company, but you're also an investor within a small VC fund as well. Why did you decide to do VC investing on top of your day job?

Vadim Rogovskiy: 20:47

During my previous entrepreneurial leagues, also trying to do some annual investments. On the side, I was mentoring startups. I launched one of the first startup accelerators in Eastern Europe, in Ukraine. I always was trying to be like active in a startup ecosystem by learning from ours, by helping others, etc. And at some point of time I just realized that when I started 3D, look for like four or five years I went full, basically 200% of my time on the working on this company and then I realized that I stay in the bubble and I just need to do something else in parallel, just for a small fraction of my time.

Vadim Rogovskiy: 21:28

I always wanted to get some VC experience and also I knew that I can bring a lot of value to the table, because the majority of VCs they've never been entrepreneurs themselves. They just don't get it. They don't understand it. They didn't feel it. They didn't feel how to lay off people. You've worked this for five years, haven't been through this rollercoaster, they don't understand it. So that's why I understood that I can try to help to build them really found a friendly VC.

Vadim Rogovskiy: 21:56

And then because my friend Iher I know him for a long time and he is a very active angel investor and at the time, two and a half years ago, he was at the point where he wanted to start a fund and he led me to join him to launch the fund together and I liked the mission.

Vadim Rogovskiy: 22:11

So the mission is backing immigrant founders building mostly beauty company on the US market and helping them, serving as a bridge in different countries in the US. And yeah, I mean it works well for me because still, my main job is running through the loop, but what I do on the VC side I'm responsible for our portfolio. As soon as we invest, I step in and I basically establish a dialogue, a regular dialogue, with all the entrepreneurs in our portfolio. We have 41 company in the portfolio now and I help them not to hit the wall. I help them with lots of things, lots of issues etc. That I personally experienced and when I were also sharing, where I did mistakes. What I learned from and what we hear from them is that they never heard the kind of feedback from any VC because, again, mostly the VC is just they don't have any practical experience in this.

Peter Jeun Ho Tsang: 23:04

I think the keyword that he used, that is roller coaster and he starts a bound, I think relate to that word. Are you still on roller coaster, do you think, vadim?

Vadim Rogovskiy: 23:15

Well, I talked to entrepreneurs who already have been doing that for 15 years and maybe, like on the later stages or IPO, etc. It's still maybe. It's still, I mean, it's always going to be a roller coaster and when it's not, probably you get boring very quickly. And I think it's always a roller coaster when you find new challenges, when you find new challenges for yourself, for the company, and I mean at any point, at any point of time, at any size companies, technology companies, very vulnerable, right. Maybe after an IPO you're in a bit of safe mode, but still not 100%. So, yeah, I believe, yeah, it's still a part of roller coaster, for sure.

Peter Jeun Ho Tsang: 24:03

Yeah, I don't think it ever stops. If you're in the startup ecosystem, I think you continue on the rollercoaster. What do you look for, then, in a potential investment?

Vadim Rogovskiy: 24:12

Mostly the founding teams, right, and as I've seen a lot of founding teams before and also I've seen my teams and I understand what makes founding team greater, what makes founding team dysfunctional. So I just I observe how they behave and calls. I look at how they distributed their shares on CupTable, look at their roles etc. And yeah, I mean you can uncover a lot of red flags when you just look at the founding team. And previously in my angel investments or when I worked on accelerator, I did lots of mistakes when I loved the ideas but underestimated or just overlooked some red flags and founding teams. So now I don't do this mistake anymore, I'm not trying to do this mistake anymore.

Vadim Rogovskiy: 25:00

And yeah, I mean I look for coachable founders for sure, because coachability, I think, is a balance between saying yes to everything investor says, which is bad, but also rejecting everything because of your ego. I think it plays something. You know it's located somewhere in the middle between these two things. And yeah, for being very curious founders, very hungry hungry in a good sense for new team and knowledge, doing experience and very hard working right and very humble. Obviously we look at markets, the logic, etc. But it starts from a founding team, even if it's a great idea, great market, amazing opportunity etc. But founding team is not convincing that they can do it in the long run, we're not going to invest.

Peter Jeun Ho Tsang: 25:45

I completely agree that. I've a team that are some starts with the IME where the idea itself is robust and it makes sense. But you just meet the founding team and you're just like, yeah, I don't think you're going to be able to do this in the current team setup and you just know it's just a no go from the start. From then, what? You see, what are some of the biggest mistakes that fashion tech entrepreneurs make?

Vadim Rogovskiy: 26:10

It's funny, but we didn't invest in any fashion tech companies yet, although I'm trying to find them and I think we will in this year, but we haven't done it yet. Why? Because a lot of times we don't see balanced founding teams. We see just people with same experiences, same background, etc. Right, for example, two designers decided they're going to build a company, or two engineers or whatever. Like very, very, very rarely I see complementary, diverse teams with complementary experiences.

Vadim Rogovskiy: 26:45

I think it's one of the very strong points of 3D, look, because we have I have two co-founders and each of us brings totally different perspective to the table, but I very rarely see this. And secondly, yeah, fashion tech is super hard. I mean, it's super hard. It's super hard to get to the point to get from zero to one. So we have a lot of very pre-seed startups like Pre-Revenue, sometimes Pre-Product, with lots of aspirations, lots of rosy projections, but we just understand that we usually want to wait a bit more until they have at least some tools. That is going to work. Fashion tech is just super, super hard and almost no unicorns came from that industry, maybe just a few. There is a reason for that, but I think it's not going to be forever. I think it also explains why this industry is so attractive, because it's so outdated in some ways and there are so many problems that can be solved and will be solved.

Peter Jeun Ho Tsang: 27:44

I completely agree. So, on that note, do you think fashion will ever solve the problem of it?

Vadim Rogovskiy: 27:49

No, not yet at all. I mean not yet at all, but I think it is going to be solved.

Peter Jeun Ho Tsang: 27:54

One can hope.

Vadim Rogovskiy: 27:57

Of course it will. I mean, I have to believe, I have to be an opportunist trying to start up.

Peter Jeun Ho Tsang: 28:01

Exactly so. I just want to finish off this episode with a quick fire round of questions. The first answer that comes to your head Are you ready? Yes, have you read fashion tech applied yet?

Vadim Rogovskiy: 28:13

Not yet, but I'm waiting for the book to arrive in my mail.

Peter Jeun Ho Tsang: 28:16

It's coming very soon Are you ready, your favorite fitting garment?

Vadim Rogovskiy: 28:20

Un-tucked shorts that fit me really well yeah.

Peter Jeun Ho Tsang: 28:24

Best way to get fit right digitally.

Vadim Rogovskiy: 28:26

Come on, Plug for me I mean use your feet by a 3D look.

Peter Jeun Ho Tsang: 28:32

Exactly One brand that integrates fit tech really well.

Vadim Rogovskiy: 28:35

That's a good question. I think I can give an example of Bershka. That did a really good job together with us.

Peter Jeun Ho Tsang: 28:42

Best piece of advice for budding entrepreneurs.

Vadim Rogovskiy: 28:44

Don't stop and stay, even during the hardest times. The main goal should be staying in the business for as long as you can, because you never know what is waiting for you around the corner and there are a lot of certain deep hits that can happen. Just stay in the business, don't stop to learn and in any case, you're not going to forget this experience, hopefully from a positive side. Thank you so much.

Peter Jeun Ho Tsang: 29:09

Vadim.

Vadim Rogovskiy: 29:10

I think you're better.