Recently we had the pleasure of getting to know Lisa Morales-Hellebo. The VC, entrepreneur, seasoned product strategist, creative director and founder of New York Fashion Tech Lab, which she launched in 2014, has been on our radar for a while now. Not a newbie to the fashion tech scene, she previously participated in TechStars in 2012 after she was selected as one of the Top 10 Women in DC Tech.

The Carnegie Mellon University alumni, who has also been featured in numerous publications and media outlets like WWD and Refinery 29, is active in the startup community. A mentor at The Startup Institute and The Founder Institute, Morales-Hellebo is the kind of woman you want to get to know because she is a disrupter dedicated to fixing the fashion industry’s supply chain problems by constantly pushing limits. So we took a moment to pick the brain of the Supply Chain Expert and the good news is that she was happy to share some valuable nuggets with us.

Let’s start with the New York Fashion Tech Lab, what drove you to start it and what role did Springboard play?

After having participated in Techstars Boston in 2012 with my fashion tech contextual search engine, Shopsy, we ultimately failed. The day after I pulled the plug on the website, I got a call from ASOS’ head of Global Innovation asking me what happened, saying they were following me and that I made something they needed and have never seen before. You can imagine how deeply saddened I was to inform them that we were fully dissolved and my team had already started jobs elsewhere. This moment helped to validate some insights I’d gained throughout Techstars.

ASOS helped me to see that even though VCs didn’t comprehend or buy into my product, that did not mean it had no value. Rather, the problem was that I didn’t have the right access to champions within brands and retailers to sell the platform as B2B. I learned that venture capitalists don’t invest in things they don’t know, care about, or have expertise in; so fashion tech companies have an additional hurdle in their uphill battle of raising venture. Couple this with the outsized number of female founders in fashion tech and the fact that female founders only receive 2% of all VC funding and the outsized opportunities for a female, technical operator/entrepreneur to deploy capital in this underfunded, yet massive space, became crystal clear.

“Instead of going into a founder depression, I decided to help other fashion tech founders connect with the brands and retailers they were looking to serve.”

Instead of going into a founder depression, I decided to help other fashion tech founders connect with the brands and retailers they were looking to serve. I shared my vision for the first fashion tech accelerator to partner with big brands and retailers with Springboard Enterprises and they offered to get the first two brands on board and be the fiscal sponsor so we could launch at light speed. I designed and launched the program within the first three months of 2014, which entailed getting the ten Founding Member brands and retailers on board for funding, to dedicate their C-suite executives to hand select the startups that they saw adding value to their bottom line, and to give the startups access to internal operations at their companies to expedite getting the startups to a pilot or paying customer. 

The New York Fashion Tech Lab’s website went live in early April 2014 and we only had two weeks for open applications and outreach to startups since our program had to begin by May and end by mid to end of July to account for the brands and retailers turning their focus to holiday planning by mid-summer. Thanks to our being able to use the Founding Members’ names on our media and website, we were flooded with inbound media interest and beat our goals for applicants, despite the short window and no prior promotion.

What were the main challenges you faced in founding the New York Fashion Tech Lab?

It is always equally challenging and exciting to create something that has never existed before, but thankfully, this was not my first rodeo. The most challenging part was getting so many different organizations to align, coordinate C-suite internal politics, priorities, and calendars, and sign off on legal, all while raising my own compensation as I went.

How do you think the fashion industry can go about achieving zero waste in production?

We are at a unique moment in time where we no longer have the luxury of incremental change. Climate Change has imposed a timeline of ten short years before humankind will be faced with massive, forced migrations and crop failures due to severe weather and rising ocean levels. To quote Dan Millman, “The secret of change is to focus all your energy not on fighting the old, but on building the new.” 

Now is the time for paradigm shifts and that is where my research and focus has lived since I left the New York Fashion Tech Lab after the first cohort in 2014. I see localization as being the catalyst for sustainability, circularity, and transparency using on-demand manufacturing. The new normal requires agility and resilience, which is now possible because we can build cyber-physical systems. All future-ready supply chains will consist of distributed, collaborative systems that are both digital and physical. 

What does that look like in layman’s terms? It could be a shared new infrastructure of distributed, collaborative micro-factories doing small batch, quick turn, cut and sew (like Suuchi); all connected via a shared data intelligence layer for real-time throughput, capacity and load-bearing. This “hive” would share regional logistics and raw materials would become the new “volume,” rather than the finished products. Within this paradigm, it is far easier to layer on evolving innovations like digital weaving (Tailored Industry), or circular textile regeneration, like Evrnu. Ultimately, if adopted, we could produce and recycle much of what we consume within 150-250 miles and digitally send purchased product specs to regionalized micro-factory hives that are closest to customers for localized production. Localization, as I’ve outlined, will ultimately be faster and cheaper than trying to retrofit every node of the global apparel supply chain as it exists today.

When it comes to fashion brands doing more, what would you suggest when it comes to using fabric in a smarter way?

Designers should insist on sourcing natural fibres that can be recycled in regenerative processes, like NuCycl, which was recently featured at Wimbledon via Adidas and Stella McCartney’s collaboration. Every business should be accountable for its impact on the planet, its employees, and the communities in which it resides — whether the business is an emerging designer or a major apparel holding company. I have less interest in engineering materials that are still resulting in textile waste that doesn’t have circularity built-in: Textiles from recycled plastic still leech micro-plastics into our oceans and continue to harm the planet.

According to the Business of Fashion, the USA produced $50 BILLION in deadstock in 2018 and we produce four times more textile waste than any other country. Deadstock is clothing that nobody would buy at 90% off and that is sent to landfills or incinerated, which makes it toxic on the way in and toxic on its way out of this world. It adds no value to consumers’ lives and adds nothing but losses to businesses’ bottom lines. Even Zara is beginning to rethink the fast fashion supply chain.

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What tips would you give to fashion businesses looking to reduce waste?

Educate yourself on how your textiles were sourced, produced, and how they can be recycled. Learn how to design for circularity by using single fibre garments that are easier to disassemble. Get creative with other people’s waste by purchasing excess fabric yardage and scrap via Queen of Raw. Seek out small-batch manufacturers and consider creating limited-run capsule collections like Moncler, Calvin Klein, and Fenty. If you are producing luxury items, collaborate with Milaner to tap into their network of the best heritage, luxury artisans across Italy, Spain and France to produce capsule collections (without having to learn three new languages). All luxury brands should be looking for re-commerce partners that allow for their products to have channel optionality for resale, like LePrix, thanks to their proprietary global wholesale platform.

When it comes to recycling of garments after customers don’t want them anymore, do you have any advice on how brands can go about reducing waste in that front?

Carmen Gama gave me a tour of the Eileen Fisher Renew facility in Irvington, NY; and I got to see first hand just how high touch the process currently is for taking back clothing and accessories. Renew has been pioneering in repair, resale, and redesign or reuse, but their systems need to be productized at scale via shared infrastructure for it to become economically viable over time. Brands should be seeking out collaborations with clothing recyclers like Helpsy, because until we streamline and incentivize the consumer experience of recycling, we won’t really move the needle.

“The best way to reduce waste, however, is to focus on building out an on-demand supply chain.”

What are your plans for the future?

My co-founder, Brian Laung Aoaeh and I, have been building The Worldwide Supply Chain Federation, starting with our first chapter in New York (The New York Supply Chain Meetup) in 2017. Since then, it has grown into the world’s first, largest, fastest-growing, and most active network of grassroots-driven communities focused on the supply chain, innovation, and technology. We have 1900+ members in The New York Supply Chain Meetup (founding chapter), 2700+ members around the world, an active chapter in Charleston, South Carolina, and chapters in the process of being formed in several other cities around the world.

The Worldwide Supply Chain Federation held its inaugural global summit, Supply Chain Innovation Technology 2019 (#SCIT2019), on June 19-20 in NYC. Here’s a short 2-minute video featuring people who attended the summit: #SCIT2019 Highlight Reel

Brian and I have proven to be a great team, and so we’ve decided to leverage our experience building a global supply chain ecosystem and launch REFASHIOND Ventures — an early-stage venture capital fund investing in startups that are refashioning global supply chains.

Fashion is considered an extremely dynamic and complex industry that requires its supply chain to be responsive and flexible. How pivotal is the supply chain in creating a good fashion brand?

Supply chains are like oxygen — you don’t notice it until it’s not there. Supply chains are the foundation for all future-ready, sustainable businesses. Zara has proven the need for speed, contributing to the insatiable thirst for fast fashion, but even they recognize that our supply chains must evolve to reduce the volume of production that goes to waste. I know this sounds scary to the industry, but if you look at the stats behind personalization and customization driving higher price points, repeat purchases, and higher customer loyalty; it becomes a no brainer.

Forecasting demand would be a complex exercise for the fashion industry considering how consumer preferences keep changing rapidly, how can brands use technology to forecast demand as accurately as possible?

If we modify our supply chains to the localized, on-demand paradigm I described, then forecasting will shift from predicting the right finished goods to raw materials, colours, and virtual samples. Anything less than this shift is putting a band-aid on a severed limb.

Technology is transforming the way most fashion businesses run. What role does technology play in the apparel retail business?

At The Worldwide Supply Chain Federation, we have trademarked “The world is a supply chain.” because it is so core to our vision of the future. If the world is a supply chain, then data is its atoms. Retail needs to be reconfigured under a distributed collaborative paradigm shift, like ShopFulfill, which sees itself as an interoperable infrastructure of hardware, software, real estate, and logistics; recreating retail-as-a-service within a network of shopping centres. Stores like b8ta and Neighborhood Goods have started to execute stores along with this framework, but ShopFulfill is the first reinvention of shopping centres as regional hubs with shared local logistics for cheaper shared warehousing, fulfilment, and retail infrastructure. Technology should be an enabler of great consumer experiences instead of the topical bells and whistles that have driven no long term value because they have been tied to static supply chains.

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Asian countries especially China and Hong Kong have emerged as a strong hub for the manufacturing of apparel. What are the factors that make certain countries better destinations for apparel manufacturing?

The industry has prized cost savings above all for too long and now that China and Hong Kong are losing their competitive edge on pricing (especially when you factor in the globalized supply chain’s environmental impact and finished goods shipping), it is opening up new possibilities and areas of focus. Every brand I have spoken with is pursuing a “localization” strategy that entails small batch, quick turn, and some degree of higher-quality, but what they are failing to see is the power of distributed collaborative networks. It’s great to develop a specialized vertically integrated supply chain, but you are at a massive loss if a typhoon decimates the region where your raw materials are produced. Distributed collaborative systems are inherently more agile, resilient, and cost-effective. If one region is wiped out, you can send all the digital assets for production to the next closest regional hub with available raw materials and capacity, which is now visible due to a shared data layer.

Our supply chains are being entirely refashioned, so there will be a levelling of the playing field with the adoption of automation and robotics. A Shima Seiki digital weaving machine can produce a customized dress in as little as fifteen minutes, depending on the complexity. This is a technology that will continue to grow more ubiquitous, so it will no longer make sense to produce that item in China for a customer in the USA. Automation will require reskilling (companies like Shimmy are leading the way) and has the potential to contribute to the development of sustainable local economies around the world.

Local artisan communities will become a newly connected part of the supply chain, like Teysha in Guatemala, Soko in Kenya, or Milaner across Europe. Our world is more connected and consumers will have increasingly personalized, customizable, unique options that are either made by specialized artisans anywhere in the world or within their local shopping centre’s on-demand micro-factory

How is changing supply chain changing the dynamics of the traditional fashion industry?

The fashion industry started as on-demand tailoring of quality items. It has since evolved into a top-down system mandating trend, style, and taste; and due to social media, has switched to bottom-up street style influence on the industry. The next evolution will be a combination of street style/celebrity/influencers dropping micro-capsule collections that speak to a specific “tribe” of consumers and fast fashion will become a co-created experience where the consumer can explore their own designs or just make it their own via custom fit. With so many options to collaborate, co-create, and explore global micro-trends or artisans; brands will need to invest in better understanding the role that their tribes want them to play in their lives. Is it experiential? Environmental? Community? Exclusivity? All of the above? It’s a fantastic time to be alive and refashioning your business if you are among the bold and proactive. The followers will likely not exist in 10 years. 

As an active person in the startup community, how do you envision the growth of the fashion industry in the future?

I’ve dedicated the rest of my life to lead the paradigm shift in the fashion supply chain and REFASHIOND Ventures intends to lead the venture community in understanding the opportunities to scale the deployment of much-needed capital. Innovation drives growth and the fashion tech space has been starving for capital since its inception. I believe that driving smart capital into the right innovations in this space is critical to expediting its evolution.

How is the domestic demand expected to change in the near future?

Consumers are demanding sustainability, conscious consumption, and circularity. Yet, we can’t kick the addiction to fast fashion. Yes, consumers are looking to invest more in fewer quality pieces, but they still want to scratch the itch of newness. To satisfy these conflicting desires we need to build in circularity to minimize the impact of trend items on the planet. Trend will consist of cheap, robotically produced garments for the lower price point shopper and the mid-to-luxury tier consumers will rent their trend items to minimize collective waste.

How do you think AI/machine learning will play a role in the supply chain/production process?

Everything can now speak to everything else. We are at the inception of the Internet of Things applied to business, which is a massive opportunity that has never existed before this moment in history. Data is only as useful as the intelligence applied to it, so AI companies like Optimal Dynamics, which brings Hi-Dimensional AI to automating and optimizing logistics and supply chains with IP that’s based on over 30 years of research at Princeton University’s CASTLE Labs; will be the foundation on which businesses derive actionable insights based on computations on the vast amounts of data that has been collected in the past, and that will be collected in the future. This will help to speed up decision-making, and increase efficiencies across every node of every supply chain. 

#TNYSCM is the fastest growing and largest grass-roots driven, monthly supply chain event in the United States, how did you get it to where it is now?

Infectious enthusiasm, expertise, unique thought leadership, and our massive professional networks. We built this community to connect with other supply chain nerds like ourselves. What we’ve learned is that our community is unique because we can bring together the buyers (enterprise execs) and the builders (startups) who are looking to collaborate, but have never had a venue to do so in an authentic, collaborative, interdisciplinary space. We are proud to have built that space with and for our community. 

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