It’s Never Been A Better Time To Create A Luxury StartupAs I’m based in Paris and work in the tech ecosystem, there is a lot of chatter about luxury brands and their future. Paris is still the city of outrageously beautiful goods and clothes from powerful brands. Luxury shops are still crowded with countless of tourists. Yet, when I talk with people around me, it has become much more trendy to find a new up and coming brand before anyone else that manufactures quality products — maybe it’s a sign that the hipster culture is becoming mainstream, maybe not. But it is certainly a sign that there is an opportunity for new luxury startups.
For example, Dymant is a French startup that works with luxury craftsmen to design, produce and sell limited edition objects to a demanding clientele. Late last year, its co-founder and CEO David Alexandre Klingbeil asked me a hypothetical question — “what do you give your wife when she already has three Hermès handbags?”
I still don’t have a good answer to this question, but I know for sure that buying a handbag that is clearly identified with its brand feels tacky to me — I don’t want to give a bag as a present that has the Louis Vuitton initials all over it.
"We can agree that by any measure of good, an Hermès bag is not good"
Everlane clothes and accessories are reasonably priced, but more importantly, they don’t scream Everlane. That’s probably why I find them much more attractive than traditional luxury goods.
I believe that, at a larger scale, that the authority of well-established brands is fading away — and it is especially true for brands who sell high-end products.
“If you look at Condé Nast, 10 years ago they were at the center of many conversations among the elite. Many people read The New Yorker, Vanity Fair, Vogue, Gourmet and more,” well-known marketing expert Seth Godin told me in a phone interview ahead of the Hackers on the Runway conference. “Today they could disappear and nobody would miss them. It only took a decade.”
But well-established luxury brands don’t really need to improve their products, it’s all about marketing. ” There is no question that, in a blind test, luxury goods are overpriced. That’s the definition of luxury goods. They are not better in terms of measurable engineering specs. They are better because they are scarce,” Godin said.
But many will fail. Brands, like media companies or even tech startups, need to find an audience of passionate buyers, readers and users to stay relevant. These people will be the ambassadors of the brand. For example, you buy a Harley Davidson to be like other Harley Davidson owners.
Startups can take advantage of that and build their own tribes around their products. They can compete in no time against luxury giants like LVMH thanks to the Internet and ecommerce.
And we can even see that some startups are already doing this. Dymant’s branding has these intrinsic community values. Klingbeil compares Dymant’s luxury objects to a form of patrician luxury. Patricians held political power in ancient Rome. “They like elegant low-key luxury, the kind of luxury that shows that you have nothing to prove.”
In other words, Dymant is recreating a tribe like old luxury brands. And he doesn’t need a huge advertising budget to do so. That’s why it’s never been a better time to create a luxury startup.