FashionTap Before Shark Tank
Before creating the FashionTap app, Amy Roiland was a fashion blogger herself. Frustrated with the lack of the features that she was looking for on other social networking platforms, Amy decided to create her own. She developed a platform that allows bloggers to upload photos, and tag specific items. When users click on the tags, they are taken to a sales page where they can purchase the item, and the bloggers make money on the commission. Would the Sharks bite on this innovative new idea? Let’s take a look.
FashionTap on Shark Tank
Amy Roiland walked out into the Shark Tank and onto the stage. She introduced herself, and her business, FashionTap. She requested $100,000 in exchange for 10% equity stake in the business. Amy said that FashionTap was a social media app that users could use to search for bloggers and influencers. She said that the consumers could make money off of items that they already wear. She demonstrated on the large screen that was on the stage. People can upload their own pictures of themselves wearing their favorite eyeshadow, or shoes, tag them, and upload it to their followers.
Amy told the Sharks that they were looking at the profile of Erica, who was a popular fashion blogger. Amy said that people follow her to get ideas on styling the latest trends. Amy showed a picture of a model on the screen who had three different items tagged in the picture – her shoes, a necklace, and her dress. The viewer that that picture could tap on any item, which would take them to a sales page that sold the merchandise. The blogger would make commission off of the sale, which incentivises them to keep posting salable items. The consumers wouldn’t have to ask the blogger where they get their items.
Amy insisted that “branded retailers” love FashionTap, as reaching out to bloggers and influencers was the newest wave of advertisers. She said that she started FashionTap out of her love of fashion, and asked the Sharks to help her make it happen. Kevin was the first Shark to speak up. He said that FashionTap was already happening on multiple platforms, such as Instagram and Facebook. He wanted to know what made Amy’s idea unique. Amy said that she was a fashion blogger herself, so she had extensive knowledge of the industry. She pointed out that Instagram was not a fair comparison since you cannot tag different elements of the photo, or even post live links in the description of the picture. Amy also said that bloggers that post on Instagram are not incentivized to post brands since they do not make a commission off of sales.
Mark asked Amy if she was concerned that Instagram could become a real competitor by inserting links into their posts. Amy told him that she was not concerned about that. She pointed out that Instagram was not a fashion targeted site, it was for everyone. Amy claimed that Instagram was too cluttered to be much of a threat, and bloggers could import their INstagram photos into FashionTap, and then tag the items as appropriate. Kevin wanted to know how she was able to make money with this concept. Amy told him that she had three different revenue streams. The first one was eCommerce, where she would make 10% of sales from big box retailers. Chris Sacca, who was a guest Shark for this episode, pointed out that the retailers would then need to add inventory to the FashionTap store, and make it taggable. Amy said that would be part of the negotiations with the larger stores, and Chris said that she didn’t realize how difficult those deals would be to close.
Barbara asked if she had made any deals already, and Amy told her that she was already working with large brands such as Free People, and Jeffrey Campbell. She had a list of connections, she just had to reach out once they built the database. Mark said that she had to build up FashionTap enough so that the bigger brands had a large audience to sell to. Amy nodded in agreement. Mark asked her how many active users she had, and how many downloads of the app had occurred. Amy told him that she’d gotten 6,000 downloads over the last six months, and 1,500 of those were active users each month.Amy said that the only way that FashionTap had been marketed was organically through her blogging channels, so she has not done any paid advertising.
Amy said that the second revenue stream was sponsorships. FashionTap would facilitate sponsorships with large brands. The brands would send merchandise and money, and Amy would give the items to more popular bloggers who would wear them, and advertise them. Barbara asked how much money the model would receive from the sponsorships. Amy dodged that, and said that her third revenue stream was affiliate links, which provided the model with between 3-35% of the sale of the product.
Kevin asked what her revenue looked like with the current model, and Amy let him know that she’d done $60,000 in sales in the last 6 months. Daymond asked what FashionTap’s cut of that would be, and Amy said that FashionTap would get 1-15% of the total revenue. Kevin clarified that she had made $6,000 so far. Amy said that she hadn’t taken that percentage yet – she was giving all of the money back to the users. Chris Sacca clarified that she was providing them with the full affiliate fee, and Amy said that that was the case. Kevin asked her how she was able to feed herself without bringing in a profit. Amy laughed, and said that she was really excited about the business. Kevin pointed out that you can’t eat excitement, and asked her how she was living. Amy told him that she was living off of her savings.
Amy said that she also has a chairman who gave her $90,000 to create the FashionTap app. Kevin asked how much of the company he owned, and Amy told him that the chairman owned 38% of the company, while she owns 33%. Mark told her that a $90,000 investment to get that far is pretty good. Daymond asked her who else had pieces of the company. Amy told him that her COO had 5% of FashionTap, and the CTO owned 23%, and 1% would go to the developer. Mark asked her what she wanted the money for, and Amy told him that she wanted to use the investment strictly for marketing purposes. She would not pay herself, but instead would build up the FashionTap user base.
Mark asked what she would do if her idea did not work. He pointed out that $100,000 was not a whole lot of money, and she was really depending on her idea going viral. Amy said told him that she planned on pushing through, and marketing FashionTap through organic means. Mark asked if she realized how hard it was to get viral when they only had a six month background. Amy said that FashionTap was different because she pays users to use the app. Mark said that she needs to tell him something more exciting because he did not believe that $100,000 was enough to scale the business to profitability. Amy said that if she could get to even 100,000 users, it would increase sales to $7 million. Chris asked if that was only for the affiliate links, but Amy said that the figure was also counting the e Commerce revenue stream. Chris asked if her ultimate goal was to get a larger affiliate fee through making direct deals with big companies. Amy confirmed that that was her plan. Chris said that he did not hear anything in her current business plan about the large number of salespeople that she would need to go out and make those deals for her. He insisted that those were hard deals to make since big companies would not want to give her a large margin of profit since FashionTap was relatively small.
Amy said that the biggest issue would be finding the brands since there was no current fashion social networking platform out there. Chris said that he disagreed because he was Instagram investor, and they were the current fashion social network. Chris referenced Sophia Bush, who was a TV personality who got paid by brands to model the clothing, and she was making a lot of money doing it. Chris claimed that she would not bring the traffic over to FashionTap since she was already successful on INstagram. Amy asked if her fans were happy with the situation of not being able to purchase the items directly from the Instagram page.
Mark said that he disagreed with Chris, and he thought that large Instagram personalities would follow their fans wherever they go. Mark told Amy that she has not answered his most important question, which was how they were going to compel people to use FashionTap. Mark went out, citing the lack of answers on how Amy was going to use her investment dollars for marketing. Chris told her her that he did not believe that she would get the influencers necessary to make FashionTap really big. He said that FashionTap was a good approximation of the perfect selling app, but Amy did not understand how much work was going to go into making it happen. Chris went out.
Kevin told her that he saw her being crushed by Godzilla. He wished her the best, but he saw bad things in her future. Kevin went out. Amy thanked him. Daymond was up next. He called Amy the real deal, and told her that he loved fashion, and could see that she did as well. Daymond said that he would love to work with her, but he thought that the Instagrams of the world were already doing what FashionTap was doing. Daymond went out. Barbara was the only one left. Daymond told her that she should support Amy. Barbara gestured to Chris and Mark, and said that she would probably listen to them, but she planned to ignore them. Daymond asked her if she was planning on making an offer, and the show dramatically cut to commercial.
When Shark Tank came back, Barbara said that she was reminded of Grace & Lace, which was another fashion company that she had invested in. Barbara said that the investment had been a long shot, but it was the most profitable business that she had ever invested in – and Amy reminded her of them. Kevin told Barbara that he heard Godzilla coming, and Barbara told him to mind his own business. Barbara said that she needed 25% of the business in order to give her the $100,000 that Amy was seeking. Amy took a deep breath, and told Barbara that she had to politely decline. She stated that she was unable to negotiate on the 10%, which Barbara said was like slamming a door in her face. Barbara said that she went out, and Kevin told Amy that she’d just been crushed by Godzilla. She walked off the stage.
FashionTap Now in 2018 – The After Shark Tank Update
According to the About page on the FashionTap website, FashionTap has grown both their team and their user base. It appears that the app is only available for iPhone and iPad users in the iOS app store, but they still have tens of thousands of users. They have a total of 114 reviews, mostly positive. The negative reviews that they did earn mention that the app’s search feature isn’t up to par. It’s difficult to find specific looks. Amy Roiland has big plans for the future. She is looking to add new features in the FashionTap app, such as better search, and actually implementing the e Commerce aspect. She also plans on opening up offices for FashionTap.