In late February, the business publication Fast Company has published an annual ranking of innovative companies. Fifth place it took the delivery service of clothes on the Stitch Fix subscription, which has overtaken several major technology companies. In particular, Alibaba group could only get to 15 places, and running until the 17th.

The user receives a monthly Stitch Fix box with five clothing items and accessories that can to please him that doesn’t fit — send it back. In the company teach artificial intelligence to understand customers and make them personalized boxes? To pick up for a subscriber things for the first time, the service uses the data provided by the user: the company asks to fill out a big application form, attach collections in Pinterest and the letter with personal wishes. The data is loaded in the “brain” of the company, which processes the information and sends the results to stylists. In the fashion startup has about 4 000 fashion experts, and most of them remotely from different cities and on your own schedule. But since the box with the garments, which the company called Fixes, they gather together, — artificial intelligence helps them not to repeat, and to abandon things similar to those that once did not like the buyer. The “brain” provides stylists all the information gathered about the size, preferences, reviews and even relation to unusual things. In General, the perfect combination of artificial intelligence and humans.

Stitch Fix is not the first and not the only service selection and delivery of clothing by subscription. “E-commerce in the fashion segment developed according to the principle “the more, the better”, — says the founder of a startup Easysize Gulnaz Khusainova, included in 2018 in the U.S. the Forbes list of the most promising entrepreneurs of Europe to 30 years. In the end, the online stores have filled their pages with product so that the buyer was hard to find your item among the thousands. Therefore, creating services that save the consumer from the pangs of choice and personalizeduyj offer — the logical development and next step in the evolution of online retail. And users appreciate: according to the Guardian, in 2014, the number of visitors to online retailers on a subscription grew by 800%.

In Europe there are about 50 such services, almost all of them are small startups that work with an audience of not more than 5,000 per month. The reason — in capital intensity of this business, said Khusainova, because in order to create unique styles, the company should be a huge range, which also need to be able to optimize. The largest players in the European market — Modomoto, Outfittery and Thread. Interestingly, they all focused only on men. In Modomoto claim that their service is used more than 250,000 guys and Threads about one million. Orientation towards men is justified, says Khusainova, because to pick up clothes easier for them than for women: they have fewer styles and categories of clothing. Have their own services on the selection of things and some classic online shopping and shopping malls, because they bring additional profit. For example, the German retailer Zolando have created a service Zalon, which collects for buyers cherished personalized box.

But Stitch Fix box special: behind them the army of stylists and a powerful artificial intelligence. “Data science, says company founder Katrina lake is not woven into our corporate culture, it is our culture”.

The company generally began with the creation of the algorithm around the customers and their needs in 2011. Now Stitch Fix more than 100 professionals in the field of Data science, most of which doctors of science in fields such as mathematics, statistics or aerovista. “What on Earth can make a guy to work in the company on the selection of clothing?”, — surprised astrophysicist Chris Moody, who like to join Stitch Fix in 2015, working with supercomputers that simulate the collision of galaxies.

It was he three years later invented Style Shuffle — something like an analogue for Tinder app users Stitch Fix. This development is not just teaching the algorithm to better understand and define the style of each client, but also stimulates consumers to go back to the app because it is addictive to scroll through and like your favorite items. According to the company, about 75% of 2.9 million of its customers use this feature. After a few years of work, Moody changed his mind. “The problems that we solve here — he admits now, is extremely interesting.” Have service another surprising algorithm that helps the company win the battle for customers — it was called “Hidden style” (latent style). When you create a “glove Tinder”, the company found that customers can be categorized by styles and offer similar things. For example, the algorithm is able to calculate what the girl who likes frills, and probably enjoy it and skirt with floral print.

Entrepreneur in captivity

The company founder Katrina lake has admitted that it is not going to create their own company. She only wanted to join one of the existing ones startups, but met with hundreds of entrepreneurs, found a suitable partner. To obtain new knowledge and better assess the risks, she enrolled at Harvard business school. “I used two years of study, to plan and run their company,” she wrote in the Harvard Business Review. Not all were in awe of her ideas: one of the teachers even called her “inventory nightmare”, because by design all the products that she wanted to provide to customers should be owned by the company.

First, it was really risky, and secondly, because of the need to possess a large number of things like many European services are unable to grow into large companies. But the idea of a lake was to buy just the right things that will be possible to approach her clients. So, the basis of the company should be technology Data science. “If I listened to every investor who didn’t like my idea — shared lake in an interview with Forbes, each the head of a large retailing company, which believed it was bad, I wouldn’t be here.”

In the end, the first “stylish box” she sent from her apartment in April 2011 — a month before graduating from business school. Lake admitted that her first “artificial intelligence” was simple: she used her familiar statistical methods in SurveyMonkey and Google Docs. In 2012, Stitch Fix is lured into their network Eric Coulson from Netflix, who advised the company. “Once in Netflix,” he recalls, ” someone suggested to show the user a video that he might like when you open applications.” The idea was interesting, but too risky for Netflix, a giant in the field of Data science. But for the company that created the lake, — at the time. After all, it is the quality and number of algorithms used to Stitch Fix, depends on its revenue.

To assemble the perfect box for its subscribers, not only Stitch Fix works with more than 1 000 brands, but also uses the stuff released under its own brand. Because the verified technology and algorithms allow the company to anticipate trends. In 2017 of the things of its own brand Stitch Fix was going about 20% boxes. But to become a separate fashion house the company, according to lake, is not going to.

But the public has become. 6 years later after starting Stitch Fix came on the IPO, making the 34-year-old lake is the youngest founder in the history who led his company to the stock exchange. The beginning of trading, it was noted not only in the company of colleagues to support her came husband and one year old son hugging a stuffed cat lake was holding. “I’m not one of those who look and say “Oh, she’ll be a CEO,” joked she.

Anyway, with the IPO of her company investors have valued at $2 billion, the service Stitch Fix uses 2.9 million customers, and revenue for 2018 of $1.2 billion

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