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Hello Lover! Open Runway Seeks Shoe Lovers of the World

Forget Manolo Blahnik! Monika Desai thinks Carrie Bradhsaw*-like Fashionistas can create scintillating foot couture on their own. Targeting a slice of the $30 billion women spend every year on handbags and shoes, Desai is imminently launching a technology driven, fashion design platform called Open Runway. VC News Daily reporter Dennis Mayer caught up with the would-be fashion mogul for a preview of the startup. *(Sex and the City shoe-obsessed character)

VC NEWS DAILY: Tell us about Open Runway.
DESAI: We're building a design-your-own-fashion platform for women. They can come onto our site, and design their own shoes and handbags. We create their design and deliver it to them. With a product called "Design Studio," users can mix and match different items and see what they look like. And then, as part of that design process, we're also building a really strong social shopping experience, with crowd-sourced design contests.

VC NEWS DAILY: How will social media help Open Runway?
DESAI: We're designing a fun, social shopping experience, where customers can share their designs not only with the Open Design community, but with their friends on Facebook. It really differentiates Open Runway from other online retailers... We're creating a community of up-and-coming fashion designers. In our design pipeline, we'll have contests that target those designers. The Open Runway community will vote on their favorites, and then the customers can make the designs their own with custom leather, color, uppers, etc.

VC NEWS DAILY: What will make your business model a success?
DESAI: We don't have any inventory, so we don't have the risk of unsold inventory and markdowns. 25 percent of every dollar spent in the fashion industry is lost in markdowns. Open Runway uses an e-commerce model. We will have base designs on the site, and those can be customized. Then we will outsource to factories who manufacture the designs on demand.

VC NEWS DAILY: Do you have competition? Is anybody operating similar sites?
DESAI: Nobody is dominating the design-your-own women's fashion market yet. There are a number of companies doing it for men's shirts, and NIKEiD does it for sneakers. Over the past couple of years a couple of companies have come up, but they're focused on just shoes or just handbags.

VC NEWS DAILY: Who is your target customer?
DESAI: She's an urban female, in her 20s or 30s, and somewhat affluent - with an income of at least $75,000 as a single person or $100,000 as a household. She also does a lot of shopping online, and is very tech-savvy.

The "fashionista" -- the customer who's looking for something to set them apart, or to match certain items to their wardrobe -- they can do that at Open Runway.

VC NEWS DAILY: How far away from launching the company are you?
DESAI: We're a couple of weeks away from launching an invite-only sub-launch.

VC NEWS DAILY: What kind of experience did you and your team have before founding Open Runway?
DESAI: I worked in consumer brand marketing and customer acquisition for 13 years before starting to work on the business model and supply chain, which has kept me busy for the last couple of years. My co-founder (chief technology officer Eric Estabrooks) has a background in software development, so he's been developing the site and the software. Before working with me on Open Runway, he was involved in a number of startups and a couple of exits.

VC NEWS DAILY: Have you sought funding yet?
DESAI: We're self-funded right now, but will start looking for money as soon as the site launches.

VC NEWS DAILY: Are you considering joining any incubators as you launch?
DESAI: Actually, we've received a golden ticket to work at Critical Mass (a venture-backed shared working space for entrepreneurs in the Cambridge Innovation Center.) It's exciting just being around all these great start-ups. We were also MassChallenge finalists last year, we are Springboard Enterprises alumni, and we are part of the First Growth Venture Network.

VC NEWS DAILY: Once you launch, what are your plans for growth?
DESAI: Eventually, our goal is to become the go-to destination for creative fashion. We're starting with shoes and handbags, but we want to create other verticals.

VC NEWS DAILY: What are your hopes for Open Runway? What are your revenue projections?
DESAI: We expect to be a $100 million company within five years. NIKE.iD does at least that much a year, and other venture-backed custom sites are doing just as well. The Open Runway product market is a $30 billion industry in the U.S.