The story of Olga Vidisheva, CEO of Shoptiques and a member of Forbes’ 30 under 30 lists who came to the US from Kyrgyzstan as a teenager and fulfilled the American Dream
Olga Vidisheva is CEO of Shoptiques, a fashion startup that partners with more than 5,000 boutiques across the world. By 30, she made an impressive career — worked at Goldman Sachs, received an MBA degree in Harvard, went through Y-Combinator and got into Forbes’ 30 under 30 lists. But 13 years ago, when Olga first came to the US from Kyrgyzstan and started working as a waitress to learn English, her success was hardly predictable.
From Kyrgyzstan to the US
Olga came to the US to reunite with her family — mother and a younger sister. They lived in Los Alamos, where her mom, a musician, was giving piano lessons. The town is known as a birthplace of the nuclear bomb, and a large part of its 12,000 population works in Los Alamos National Laboratory. Its employees, frequent guests of the Japanese restaurant where Olga worked, became her first English language teachers. While taking orders, she asked guests about their work and talked about her dreams: Olga wanted to study in a college. But she didn’t know English and had no money. Yet.
After six months of practicing the language with her guests, Olga felt ready to start preparing for TOEFL, a language test required for non-native speakers to enroll in American colleges. Earlier she found that her tips are much bigger if the guests learned about her dream to study in college. With that, she collected the first college payment — several thousand dollars — in three months. A year after arriving in the US Olga became a student of Mount Aida, a small private college in Boston.
During her sophomore year, she transferred to Wellesley, a women’s college, whose alumnae include Hillary Clinton and Madeleine Albright. To earn money Olga, a tall brunette with a 23-inch waist, worked as a part-time model. She signed a contract with Maggie Inc., the largest Boston model agency, and continued modeling throughout the next ten years, even while doing an MBA at Harvard. During these years she appeared in a variety of advertisements, from vacuum cleaners to fashion websites. This job evoked her interest in fashion, which eventually led her to found Shoptiques.
Wall Street and Ivy League
After majoring in economics and minoring in math, Olga got a job at Goldman Sachs as an investment analyst in Technology, Media and Telecom Group. There she got so used to working late nights that she kept a pillow in her cubicle. To deal with work stress Olga took long strolls around foreign cities that she visited on business trips. An idea of Shoptiques, an online sales platform for small fashion boutiques, came after one of such trips in 2007. Olga bought a pair of sandals in a Parisian boutique, and when she returned home, a friend asked where she got those shoes. Olga searched for the boutique online but couldn’t find it. “At that moment I didn’t think of it as a business. I just thought that it is crazy that they are not online,” Olga recalls. The scenario repeated after several other trips. When Olga moved to Boston to pursue MBA in Harvard, she found that her favorite New York boutiques are not online either. That’s when the idea started to shape. “I thought that it’s crazy that it’s 2009, and they still don’t have websites. How is it possible and why?” Olga says. She devoted her second year at Harvard Business School to research the issue. After interviewing 800 Boston boutiques she decided that the opportunity was too obvious to miss out on.
Harvard’s two-year MBA program costs around $200,000. When Olga graduated from Harvard, she had more than $100,000 in student loans and only $10,000 in savings. She had a job offer from an investment company in London that seemed perfect: it was in the same city with her then-boyfriend, promised interesting clients and a big salary to pay-off her debts. However, Vidisheva decided to decline and, instead, spent most of her savings to develop a website for her startup. She couldn’t afford to hire American developers because they would ask for more than $30,000 to do an e-commerce website. Olga decided to search for engineers in Indonesia: that summer she was invited to be a maid of honor on her best friend’s wedding in Jakarta. “While everyone was celebrating, I asked if anyone knows developers,” she recalls. Eventually, Olga found a company that agreed to make a website for $8,000. She used the remaining money to move to New York, where she lived on the floor of her friend’s apartment and worked in a free coworking space. It was a 24-hour job: during the day she approached boutiques and press, and at night she worked with Indonesian engineers because of a 12-hour time difference with New York.
October 4, 2011, became a special day for Olga. It combined three important events. First, she launched Shoptiques’ private beta, inviting a close circle of friends and acquaintances. The private beta featured a simple site where an invited person could buy clothes from 25 American boutiques and invite five more people. Second, Women’s Wear Daily published a story about her startup. It became popular, and the next day Shoptiques had a waiting list of 12,000 people. Third, a friend from the coworking space told Olga about Y-Combinator and convinced her to apply. She applied the same day, 20 minutes before the midnight deadline. Olga says that she was lucky not to know what Y-Combinator was: “I had absolutely no time to research the fact that single founder, non-technical, may not be a good idea to apply. So I just applied”.
In a week Olga learned that she was accepted. Although the incubator was co-founded by a woman, Jessica Livingston, Olga was one of the few women who was accepted. By October 2011, only 4% of 316 companies enrolled by Y-Combinator was co-founded by women. Vidisheva was also the first non-technical single-founder accepted into Y-Combinator.
One of Olga’s pursuits at the incubator was to catch up the lack of tech experience. “Y-Combinator was the first time I talked to people like Mark Zuckerberg and Shawn Fanning, who founded technology companies like Facebook and Napster and were among speakers that we had every week. I learned a couple of things. Number one, it’s way harder than it looks. Number two, it takes much longer than you think. Number three, you have to be true to who you are. People that try to fake it don’t really make it because it’s a lot of hard work, and if you don’t really believe in your idea, it ends up being a drag”.
Even after five years, Olga still keeps in touch with Paul Buckheit, the mastermind behind Gmail and her mentor at Y-Combinator, Paul Graham and Jessica Livingston, founders of Y-Combinator. Her questions vary from technical and strategical, such as launching a mobile version of a website, discussing the latest retail trends, to something more personal. Another perk of graduating Y-Combinator includes access to alumni network which includes founders of other successful startups such as Drew Houston from Dropbox or Brian Chesky from Airbnb. But what is the most important is free access to top investors. After Y-Combinator, Vidisheva raised funds from top venture firms: Andreessen Horowitz, Greylock Partners, SV Angel, and Benchmark Capital. The seed amount is officially undisclosed, although CrunchBase mentions $2,000,000.
American startups have a common formula for co-founders: a couple that balances each other like yin-yang, one with a network of investors and excellent sales skills, the other — with experience in tech. Olga made two attempts to fit this scheme, and failed both times, firing the candidates after several months. Today she says that they were just “a couple of people she brought in and tried giving them co-founder titles, but commitment level wasn’t the same, so at the end, I never had any co-founders”. She was more explicit during her speech on Y-Combinator’s Female Founders Conference in 2015. There she shared memories of her despair: “I put my head down, I’m working on user acquisition. Growth is everything. But whenever I would have a big press, my website would crash. The technology wasn’t scaling. The scariest thing is when you do everything you can, but the one bid that is at the core of your life is failing”. After firing her first “co-founders”, brothers Jeff and Dan Morin, recommended by Y-Combinator, Olga invited a close friend, also from the incubator, whom she described as “one the smartest people I know” (his name is undisclosed). They also parted in a couple of months. This time the problem was different priorities: the partner focused rather on technology than on clients.
She calls the decision to fire her co-founders one of the hardest she made in life, a result of “many lonely cries in a bathroom”. That taught her a couple of important lessons: there is nothing wrong with crying in a bathroom of a public building (“Who cares?”) and being a single-founder. “Everyone has his own path”, she says. Today instead of technical co-founder Shoptiques has a hired CTO.
“World domination, that’s all”
Shoptiques focuses on small independent boutiques that sell women’s apparel and home accessories. Unlike Farfetch, a fashion startup that represents concept stores, Shoptiques doesn’t look for selling designer brands. In this regard, the site is more similar to Etsy, an online platform for handmade and vintage items. Olga says that Shoptiques accepts only 1 out of 5 boutiques that apply for partnership. Most often, candidates fall short of one of the three main criteria. First, the product mix has to be unique. Ideally, the assortment has to consist of little-known, high-quality local brands that could not be found anywhere else. Second, the items have to be exclusive and made in small numbers. Third, the physical boutique has to have nice atmosphere and interior. “These boutiques are the physical extension of our brand,” Olga explains, “so I want to be sure that if the client decides to pick up the order, she will have a wonderful experience”.
The average order value at Shoptiques is around $150, the price ranges from $15 to $8000 from which Shoptiques profits off commission fees that vary from 12 to 30% depending on the partnership terms. Beyond listing on a website, Shoptiques provides partners with delivery, packaging, and photos, communicates with clients, and manages returns. Some boutiques shut down their previous sites after starting a partnership with Shoptiques. This is what New York’s Pinkyotto did: their web address forwards to boutique’s page on Shoptiques. Some boutiques earn more on Shoptiques than they do offline. Olga cites the story of a Phoenix-based boutique, Clothes Minded, that suffered from a sudden drop in sales during a summer heat and would have closed if it didn’t have online sales. The letter from boutique’s owner hangs on the wall of the company’s office.
Shoptiques’ office in the Flatiron area of Manhattan is designed in the same bright pink color as its website. The walls are decorated with photos of the best employees of the month, thank-you notes from boutiques, and mottos of the company. The central part of the office is occupied by an open space. It is surrounded by conference rooms, named after cities where Shoptiques has launched: New York, Toronto, Paris, London, Sydney, Austin, Los Angeles, Chicago, and San Francisco. There is another big room hidden around the corner, a photo studio. Here, twice a week the company shoots clothes for boutiques, and the studio is filled with boxes and hangers. The office receives 800 units every week, part of which inevitably settles in wardrobes of Shoptiques’ employees, including Olga herself.
Shoptiques coordinates all its operations from the New York headquarters. The office employs 30 people who support the site, provide photos, seek new partners, and coordinate orders from all over the world. Olga is one of the first ones to show up. She arrives at 8 AM, being awake for already three hours. It is likely that two of those three hours were devoted to what takes the most part of her day: email. Every day her mailbox receives up to 5,000 letters from teammates, partners, boutiques, and press, and it takes six hours to handle them. Vidisheva can afford an assistant and even recalls that Jeff Bezos has three people doing his email. She resists doing that because wants to be personally involved in every project and be able to jump into any that needs her help. On average, her working day lasts until 8 PM, and during the workweek, she has less than six hours daily for personal life and sleep. Lately, Olga is proud to be doing some workout on Stairmaster before bed.
As a CEO, Olga is mainly in charge of investor relations, finance, strategy, and HR, but in the course of four years, she had tried every position in Shoptiques, except for technical ones. She was packing orders for boutiques, clothing for photo shoots, and gift cards for a year. This approach enabled her both to save money and deeply understand every business process. As a result, Shoptiques provides recommendations for every step of online sales for boutiques: from shaping assortment to dealing with returns. The company developed a special site called Boutique’s Forum, where boutiques can “find articles, help, and advice for getting the most out of Shoptiques partnership”. Shoptiques considers the moment of unwrapping the order as key for winning customer loyalty and provides a detailed manual for packaging orders. Apart from precise instructions on every stage of packaging an order (point 2: “Triple check that the item you are sending is the exact item that the customer ordered (correct color, size etc.)”), the company gives the advice to include a handwritten note and puts examples “for inspiration”. As Olga explains, this is how Shoptiques, being a resource for small businesses, “provides guidance for competing with big retailers”.
Shoptiques had $300,000 in revenue in 2013 and $3,000,000 in 2014. At this point, two years after its launch, the startup reaches break-even point and starts investing profits into further development. Olga credits her aspiration to the fastest monetization to her Soviet roots. “When I called my grandma that I raised money, she said: “Oh my god, they will go after you!” Olga says, recalling her family’s aversion to any kind of debt, “I think this made Shoptiques a better business. From day one we wanted to make money and be smart about spending instead of throwing money and going out of business”. The company aimed to do $20,000,000 in revenues in 2015 but ever since stopped sharing revenues.
In four years the site grew from 25 boutiques in New York and Boston to 5,000 from 12 countries. “We want every unique boutique to be available from any place in the world. Only because you are in New York it doesn’t mean you can’t buy a bikini from Bali or china from Morocco,” Vidisheva says. The company dedicated first two years to building technology and arranging logistics. Then it started launching in neighboring markets, Canada and UK. 2016 was the year of international expansion: the company launched in 11 countries (Australia, Argentina, Belgium, Germany, Denmark, Ireland, Israel, Italy, Mexico, Netherlands, and Sweden) and started delivering to 30 new countries.
Olga laughs off the question about future plans: “World domination, that’s it”. She wants an IPO but wouldn’t say when it might happen. She says, she wants an IPO because it is once in a lifetime chance: “I think it would be fun, building a business where your family can buy shares. Because we support small businesses, I believe every person should be able to buy a share of small business movement in America. What gets me excited every single day is that hopefully, in one little percent chance, I am helping small businesses”.