I THINK I was having a coffee with friends when one of them, Natalie Massenet, casually asked me to back her new idea, Net-A-Porter.com, a haute couture website with access to the top labels. It was early 2000 and the tech-boom was raging. Valuations were sky-high and every man, woman and dog had a “brilliant” web idea – often dreamt up in the bar the night before. I was not keen on any of them, including Natalie’s, which I thought was just as uninspiring.
I also wasn’t sure that Natalie could execute the idea. As a fashion journalist she knew the industry as well as anyone, and she is a stylish and beautiful woman with charm and drive. However, she’d never run a business before. Even though I was looking for opportunities in other sectors, friendship was the only reason I reluctantly contributed an initial £10,000 to this dot-com.
What happened next? Natalie got going. Her advantage was her contacts in the industry, and she was able to secure exclusive access to haute couture products that were not generally available. This would not be an easy task for most people and I had underestimated its value. Around this product base Natalie built a great website, on-line magazine and delivery service. I am not normally a big fan of new businesses spending too much on websites, but an up-market clothing site needs to exude luxury and Natalie spent the investment money wisely.
With the business up and running I was able to witness first-hand the customer experience. I remember one night staying with a bunch of friends in the countryside. After dinner, sitting at the table, the women gathered around a computer and started browsing the Net-A-Porter website, credit card details ready. What a great way to shop – no rush, no travel, red wine in hand, and with their girlfriends’ advice on tap. The nervousness of the men about the spending was more than matched by my silent excitement about the business potential. Then one day later, the packages arrived. The amazing gift-wrapping made onlookers immediately envious. A solid black cardboard box with a red ribbon opened to a delightfully tissue-wrapped fashion luxury item. Any returns would be accepted without question, postage paid. It was almost enough to get the men wearing dresses. At the next fundraising I put in another £50,000.
There didn’t seem to be any competition, and sales grew rapidly and internationally. For me, the biggest internal issues for a business are the staff, the space and the systems. Natalie handled these in her stride. She didn’t waste money, and she adapted when necessary. That built value. Finally, the company was sold last year to a trade buyer for about $500m and I made a phenomenal return. Natalie is still there and now fabulously rich, and has just launched Mr Porter for men.
Since the mid-1990s Richard Farleigh has operated as a business angel, backing more early-stage companies than anyone else in the United Kingdom.