Wednesday, April 7, 2010

Will Fashion Stake Make Crowd Sourcing the Next Social Media Phenomenon?

A little known, internet startup called Fashion Stake is hoping to leverage the growing power of the internet and social media to catapult itself into fashion notoriety. Specifically, it will operate on a relatively new premise, known as Crowd Sourcing. The company hopes to attract up and coming designers who have plenty of talent and flair, but simply lack the financial capital to launch their lines. Fashion Stake will provide the virtual venue, through which designers can receive both direct financial support and feedback from potential customers. It’s easy to see how designers can benefit, but what do investors get out of the deal?
Essentially, someone who helps fund the line will maintain a stake in its success and ultimately receive credits to purchase clothes. According to Daniel Gulati, CEO of Fashion Stake, “What we’re basically doing is redirecting the margin to fans and cutting out the retailer altogether.”

In their view, many designers will embrace the idea, since the profit-hungry middleman is being avoided altogether. The concept also has the potential to empower designers to pursue their own individual vision, rather than that of large retail companies. For consumers, the draw is just as attractive. They have the opportunity to influence fashion and, more importantly, be able to buy directly from the designer much more quickly than they would have been able to in the traditional designer/retailer model.

Undoubtedly, Fashion Stake and the designers who sign on to use the service have high hopes that the new venture will succeed. If the concept were to truly catch on, it has the potential to revolutionize the fashion industry. The company and designers aren’t the only ones who have a vested interest in its success or failure. One can also be certain that other startups will be paying close attention, to see if crowd sourcing has the potential to launch them into business orbit, as well.
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