Did you know that fashion is the second most polluting industry after oil and gas? 100 billion pieces of clothing are produced every year, with 60% ending up incinerated or in a landfill? Sellpy is on mission to improve usage of existing fashion pieces, and to essentially counteract waste, by offering a platform to easily enable upcycling. In this episode we meet with with Gustav Wessman, CMO and Partner of Sellpy about their growth, journey and what they’re trying to achieve.
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Welcome to episode two of GigaPod. I’m here today with Gustav Westman. How are you?
I’m fine. Thanks. How are you?
I am really good. Gustav is the CMO and partner at Sellpy, and I’m super excited to have you here today. Gustav, tell us a little bit about your story with Sellpy How did you get involved?
Yes, so, before Sellpy, I was at IZettlefor a couple of years. I worked on a sort of more than the risk compliance side, but we started with customer acquisition, and then after a while, I wanted to try, something new. I mean, iZettle had grown from, I think, 80 employees, to like 350 in the three years that I was there. So, wanting to do to sort of the same journey but from a much earlier stage. And then I actually knew one of the co-founders and the CEO I knew him from before. So, I kind of had Sellpy on my radar and then they sort of opened up position, for basically in growth and marketing, which I hadn’t worked with, but it sounded really fun. So, I applied got the job, and you know, here we are four years later.
Yes. And that’s incredible, would you say a change from being working on the risk and compliance side to working in marketing, but now being the CMO as well? Is there any sort of learnings that you take from your days in risk and compliance to now hitting up marketing?
I think some of the similarities; I think a lot of working with marketing today is very data-driven in many senses. And I think a lot of, a lot of the work that I did on the risk and compliance side and was very quantitative. So, that kind of, I mean, kind of fit nicely into it as well. But I also have the opportunity to, since I was the first marketing employee, I basically, in the beginning, had to do everything. So, I had to, you know, write newsletters and edit images and basically do everything. And then eventually once I’ve had the opportunity to start hiring, I’ve basically been able to sort of carve out the parts that I really shouldn’t do that I’m really not good at, but it has given me the opportunity to actually learn them to a sort of like a hygiene level so that it’s much easier for me to actually be someone’s boss when I’ve actually at least worked with what they’re doing for a while. So, it’s a transition. I think for me worked really well. And then obviously when you’re really an early-stage startup, basically everyone’s doing a bit of everything. So, Yes, I was working with growth and marketing, but of course, I was doing a bunch of different things as well.
Yes. That’s great to be very hands-on. So, tell us a little bit about your team. So, you’ve been around for five years now. You’ve been there for four years. You’re the first marketing hire, and now you’re heading this incredible journey with Sellpy. So, tell us who’s in your team, and why did you hire these certain people?
Yes, so, we’ve always had a sort of the philosophy that we want to do as much as possible in house. I think it kind of comes from its sort of a company culture thing, and it comes from the fact that what we’ve had to do on the sort of operations and logistics side, we’ve had to do everything in house because there’s been nothing that we could actually like sort of buy-in or, finished system. We had to develop everything ourselves, and we’ve sort of used that same philosophy within other departments as well. So, it means that we sort of we’re tribal right now. We’re sort of building up our full kind of like in house, like our Bureau, which was what we were kind of calling it. So right now, we’re, I mean, we have had Jonathan who’s working with basically all our content, we’re hiring for sort of two more positions as well as we’re hiring for a creative director and also sort of like a creative slash copywriter.
So, it would basically be the three of them developing our mean branding and our content in terms of our creative direction. We have Simon, who’s working basically performance marketing and was doing all of that. We have Sarah, who’s working with our influencer marketing and also sort of newsletters and a couple of different other organic channels that we have.
And then we’re actually starting to help more and more companies to sell things as well. So, we’re actually selling on behalf of some, both fashion brands. So, we’re helping them to sell, like samples and different types of overstock, but also for other sorts of e-commerce sites, we can help them to sell, you know, maybe returns. So, in some cases, you know, an e-commerce player might, they could get a return.
Maybe someone’s bought a pair of shoes, and the box is a bit, you know, damaged during shipping. So, the shoes are fine, but they can’t sell them as new themselves and their own channels. Then we can help them to solve things as well. So, we have Victor, who’s basically working more on the like sales commercial site to talk to different companies. Yes. So, it’s growing the team, and it’s really fun.
That’s awesome and what you said to me earlier, which I thought was very interesting was that Sellpy as a tech company that does logistics. So, tell me a little bit more about that.
Yes, that’s essentially how we sort of see ourselves. Technology is a sort of fundamental in everything that we do. So, if, we want to make it relatively profitable to actually solve someone’s shirt or pants for, I mean, we sell them for a hundred or 150 Swedish crowns. Then if we have to take product images, for example, we can’t spend a normal e-commerce site, they will photograph one pair of pants, and they’ll photograph them once, and then they’ll sell 400 of them or a hundred or whatever. So, they can spend one hour, two hours, and three hours to take those images. They can touch them up manually. I mean, we can’t do that. It has to be really, really fast, but we also have to take really good images. So, it means that we’re using a lot of technology to do that.
So, we have…we call them photo robots, which is essentially like a, like a camera lightbox. The flash system that sort of works together with an automatically rotating mannequin. So, we have someone that puts basically a piece on the mannequin, and then the robot basically photographs a piece from three different angles. So that’s just like one example of what we do internally to both do things with really high quality, but also, be able to process a lot of items so, that we’re really efficient.
I’m just getting my mind over the robot, taking the pictures on the mannequin. So, talk to us a little bit more about the business model. There are two arms that you have.
So, we started us basically a selling service, and that’s so essentially there was a, we identified that there was a consumer need. It was for people, most people it’s, I mean, it’s really easy to buy new things. You can buy it. If you have your smartphone, you can buy a new piece of clothing on like a minute or maybe two minutes, if you’re a little bit slower, but you can do it really fast. But if you want to get rid of your old things, that’s really a hassle.
And if you want, actually want to get some money for it, it’s, really, really painful to actually do it. So, that’s basically what we started as. So, we started as a wave to help people to sell the old things that they were no longer using. So, in the beginning, we sold basically everything on [Inaudible 07:50] because it was easy. I mean, there was a technology platform that we could use where there were a lot of buyers.
This is, it was already sort of behaviour around buying and selling secondhand. And we could also sell on auction, which was really key for us in the beginning, because then we didn’t have to value the items because that’s really hard to actually know how much is every single item worth. But now we; A couple of years ago we built our own site as well. So, right now, we have Sweden’s largest e-commerce site for the second hunt, which is our website. So, we have both our selling service and then we sort of upcycled all the items that we’ve received, and then we sell them both on our website, and we also sell on all the platforms like the third year as well.
Yes. And because sustainability is such an inherent part of your, of your business and your business model and from my understanding, it’s sort of, you live and breathe throughout all parts of your organization. How have you, was it intentional that it would be like that?
From the beginning, basically, the initial business idea was a consumer problem. So, here is something that people think is painful and we can find a good solution to it. But then of course I mean, we’re in a fantastic position that our solution is incredibly sustainable as well. So, it’s not just like the smart thing to do from a sort of, convenience and like financial standpoint, but it’s also the smart thing to do from a sustainable standpoint as well. And I think it’s also something that we’ve become a lot better to actually talk about in our communication and also highlight throughout our product as well. So, whenever, if you’re, if you’re buying an item from us, we will show you how much both water and carbon dioxide you’re saving by purchasing that item second hand, instead of buying it new.
And you can also see that sort of on an aggregated level throughout the, for all your purchases as well. So, we’re trying to basically mean highlight the big sort of environmental impact that fashion and the fashion industry has. And how much of your overall footprint actually comes from the clothes you buy, a lot of people are talking about like flick scam or like flight shaming. But I mean, if you, if you look at the fashion industry is polluting way more, than the airline industry. I mean, so, fashion emits more carbon dioxide, then global shipping and global aviation combined. It’s the second most polluting industry after oil and gas. So, it’s really, really a lot that you can, you can sort of shave off your, your own personal footprint, but by actually thinking about the things you buy and actually making sure that you use them because that’s like the big, the big problem that people are using items fewer and fewer times.
So, I think that the global fashion industry produced last year, they produce a hundred billion pieces of clothes, which is insane. It just isn’t, it’s an insane number, and they produced a hundred billion the year before as well. So, it’s a hundred billion pieces of clothes every year and out of that 60 % and up in incineration plant or landfill within six months, which, it’s just insane. So, we’re producing more and more and using it less and less. And what we’re essentially trying to do is really helping us with the usage. So, when, when you’re; We want people to still, express themselves through the clothes that they have and, and, you know, buy things that they like, but we’re trying to both give them a sustainable alternative to buying things, buying things, secondhand quality assured secondhand with a nice buying experience.
But we’re also when they’re, tired of their clothes that they bought through us, they can relist them again and sell them again to someone else. So, we’re trying to really make sure that every single item is used and reused and reused again.
That’s great. And do you say that as one of your missions is to reduce the overall production of goods globally? Or what was your saying?
I think, that could be like an indirect effect of it, but we’re essentially trying to provide a, an alternative for people so, that they can be sort of truly live truly circular in terms of their clothing consumption. So, that’s, and of course, if people are using and reusing and reusing again, then overall global clothing consumption, clothing production will be reduced, but we’re focusing on sort of what we can do, and that’s more related to like usage.
And so, today you are alive in Sweden, you’ve been this, your primary market five years here, and now you’re looking to expand or-
Yes, we are sort of working on launching in Germany, which is really exciting. Very much looking forward to that.
It will be very interesting if you can comment on anything about logistics perspective, how you take this amazing model that you’ve built here in Sweden and then transplant that to another market.
Yes. So, that’s what we’re working on right now because it’s, of course, it’s tricky, but I mean, we are very in sort of logistics in terms, and that’s also, I think the big reason why it’s taken us a couple of years to actually look outside of Sweden. We would have the product that was required, fewer logistics, we probably could have taken it outside of Sweden sooner, but yes I mean the efficiency in our logistics we’ll of course it’s, it’s basically like our bread and butter if we can’t do it in an efficient and good way, then, the viability of our business model, it’s not going to work.
What of course, when launching a new market, maybe we’re probably not going to have like full-on operations locally from, from day one, the way we do, in Sweden. So, might look at it more from a sort of a proof of concept period, to actually see that it works and sort of getting to know the German consumers and what they want to sell and how that works. And then hopefully start doing logistics more locally. I mean, both from a financial standpoint, but also from an environmental standpoint, we don’t want to ship items back and forth in Europe. So, but of course, we have to, we have to look at it from a sort of viability standpoint as well. So, tell us a little bit more about, because I thank you, very good example of a company that is both sustainable, but has also managed to scale and grow quickly. So how has the journey been with getting venture capital and fundraising and things like that?
Yes, so of course, we’ve had the advantage, I would say of; From a cash flow perspective, I mean, when we started selling the first sort of proof of concepts bogged that, you know, one of the co-founders went on to, he went into his closet, and you know, they all, well, three co-founders basically went home, and they picked up a bunch of things and started listing them and selling them. And you basically from day one, we’ve had sort of money coming in, not necessarily covering all expenses, but I mean, we’re not a company that we have to hire a hundred developers and then, you know, work for five years and then start thinking about how we’re going to make money.
So, that has, of course, been an advantage for us that we’ve had cash flow coming in, but of course, we weren’t profitable last year. We haven’t been profitable yet. And so, we’ve have needed some venture capital, and I think we’ve had this sort of a great partner in that. And we’ve had H & M sort of partnering with us, which has been, a really great partner to have, uh, in our back.
And they have, a lot of good connections in, in the industry that we’re working both from logistics, but in clothing. And now, we’re starting to do more things, collaborations within the sort of H and M group as well, it’s been, they’ve been a good partner for us. And I think, I think was also nicest that, I mean, as we’ve raised like a bit of money, but maybe we haven’t traced like a crazy amount of money.
So, we’ve been able to, I think to grow Sellpy, be yes, at a fast pace, but it’s not like, like full-on VC, crazy tonics every year, insane pace, which I think it’s good to actually show that there is sort of alternatives. It’s not that you either don’t, you either grow full organically, or you grow ten next year per year with VC money and you have to, I mean, cause basically like the VC model depends on, as long as one of the ten companies that they invest in are two out of 10 that they invest in the kind of becomes relatively profitable, then they’re fine and happy, but I don’t think it’s necessarily the best way to grow for the other, the other eight, basically you raise so much money, and then you put everything on red, and you do that over and over and over. So, it’s, it’s a good model for the VCs, but maybe not the best model, for all companies.
And so, perhaps that’s learning for other companies that are exploring new business models that perhaps to look at more, how can you get cash flow and from day one and be more sustainable.
If you, the less you have to sort of relying on external capital. I mean the more sort of, you can retain more control and you can also, you can hopefully take sort of more maybe long-term decisions as well. So, I think its good learning to actually about cash flow from a sort of early-stage, and then it doesn’t work for all companies. So, you can still, of course, build a really successful company and raise a bunch of money to do it. But I think it’s good to actually see that there are other ways of growing a company.
Yes, I think that’s good. I was just reflecting on what I just said once you think about cash flow from day one and of course, that’s pretty obvious, but I mean looking at other ways of how one can raise without it.
But also, to actually look at this sort of thing about revenue from sort of early-stage and not just, of course, you can, there are business models where you, where you grow the sort of free version and then you add a premium version later on. But I think it’s smart to at least have an idea of how you’re eventually going to start making money because you can’t be, we can’t be relying on that. There’s always going to be, external capital that you can take in. I mean if we’re sort of heading in towards maybe more of a recession going forward, then, you know, who knows, you might not be able to raise capital in a month. And then if your, if your business model, if you’re, if you’re really far away from actually earning money yourselves that, well, it doesn’t matter how good your IDs that’s true. Yes. So, it’s, you don’t want to be too exposed.
Yes. So, as a wrap-up, what are your top tip since we’re looking specifically at companies within the sharing gig and circular economies, so, say I’m an entrepreneur, I’m starting out, what’s your top tip for me too, so, I can start both think sustainably, but also grow my business?
Well, it’s hard. I think what I really appreciate is that the sort of network opportunities that it’s been around, maybe for like the tech industry overall and Stockholm for a while, but they’re starting to become, you’re starting to see more like circular economy meetups in a circular fashion. They send, and I think it’s very easy. Like when you’re sitting, you’re working with your specific idea or problem, and you feel like, no one else has what we’re doing. Or, I’m not going to be able to learn anything from anyone. But I think after having gone to a couple of these sorts of meetups, they’re like so, many people that are, are working on a kind of like similar ideas or similar place either within fashion or whatever. And like it’s such a great place to, to kind of meet up and, and like network and people are over.
I find it that people are very sort of willing to share and very cause there’s, there’s something maybe a little bit like deeper to their sort of entrepreneurship. There’s usually some sort of very strong why, like, it’s not just, I want to build a really, really fantastic company. Like I actually want to do something really good and at the same time build a company. So; Of these meetups, I think that’s a really great place to start to see of like where you’re, and then like, try it out. Like if you have your product through your idea, I mean, try it out on like friends and family, that’s how we started in the beginning. In the beginning, Oscar, Michael, and Phillip, they basically picked up, they sold like Sellpy bags from their friends and family in the beginning.
And I think also don’t be afraid to kind of, I mean, everything doesn’t have to be perfect from the beginning. Like in the beginning, we used Ikea bags as selfie bags, like actual Ikea bags. So, one of the co-founders has to go, had to go out to Ikea, like every Friday and buy a couple of, hundreds of Ikea bags and they were always really scared. And it’s, you know, of course, no, it’s not like the perfect vision of exactly how we want it to be, but it’s easy. We can do it quickly and we can kind of progress from there. So, thinking Sweden overall, a lot of people really want to make sure that a lot of people are a little bit maybe too scared to kind of just like take the step.
And like, just, just, just like duct tape, something together we actually have a concept like internally that we call like Sellpy tape which is essentially the idea that we can if we can just like duct tape something together and kind of try it. That’s, both from like a physical standpoint, but both from the product standpoint to actually make sure that we’re not stuck in the product development phase for too long. I mean, we want to try it on actual people as soon as possible.
I like that. It kind of reminds me of Facebook’s move fast and breaks shit.
Yes. If you looked at it and it actually that actually comes from this Sellpy tape thing comes from like one of our earlier sort of warehouses, where basically, I mean like the photo lights, they were like taped to the floor, and I remember the mailman got angry because we didn’t have a mailbox outside so, we can deliver like our physical mail and then like Oscar who’s the COO now, he took like a cardboard box, and doc taped it onto the door outside. So, now we have a mailbox. So, think you really want to make sure that you’re iterating fast and you can do things that are great speed rather than everything has to be perfect in the beginning?
I like that these are two really great tips. So, network and release your MVP and go for it?
Yes, I think so.
Yes. Cool. Thank you so, much for your time.
Yes. Thanks for having me.
Raiha: [23: 22]
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