Stanislav RostJustin AshtonSherife Abdel Messih

Apparel Retail Market Facts Average US consumer spends

~$250/year online on apparel (30% annual growth)

Apparel retailers / designers spend >$1.2B annually on market research

US Retailers spend tens of millions more on excess inventory / management costs

Stylus narrows the gap between apparel retailers and consumers

Vision

Bridge the gap between fashion retailers, designers, manufacturers and consumers

Convert fashion-aware to fashionable customers

Provide fashion democracy, direct feedback to the industry

Channel the power of a fashion social network towards online purchases, quality market research

Stylus For End-Users

Fashion-oriented social network Upload your own photos, label your apparel Get peer and expert review of your style,

suggestions for new clothes Any suggestion is annotated with photos,

links to buy Photomagazine of attractive new fashions Earn authority, capabilities, and priority in

giveaways with participation and friend invites

Stylus For the Industry

Integrate your clothing database into discussions, one click away from impulse purchase

Targeted advertisements based on user profiles

Worldwide exposure and word-of-mouth advertisement

High-quality market research and pricing estimation Demographics, geographic coverage,

confidence

CompetitionOnline Fashion

Retailers

Fashion Magazines

Discussion Forums

Style Advice Websites

Social Networks

Marketing Research

Firms

Stylus

Focused on Fashion Fashion Ads Purchase Merchandise Fashion Articles, Art and Photos

Offers Style Advice General

General/Personal

(no tech. support)

General Personal

(withtechnology

support)

Intelligent Clothing Search

(classes)

(classes + similarity-

based)

Collecting Market Research

(history

of purch.)

(expensive

labor + small

sample sets)

(large

sample size + demogr. diversity)

IP Potential

Projected Revenue Streams

Ads Affiliate Apparel Sales

- Banner - Large, brand-name retailers

- Featured content - 3.5% avg. commission

- Fashion Integrator Tool

Market Research Direct Apparel Sales- Automated report delivery - Featured small designers

- $1K/per item minimum - 10% fee commissionStylus’ model includes no inventory costs

* Commission is the cut taken from partner apparel distributors/retailers

Market

Social Network (SN) Users

Fashion Conscious Consumers

Pew Research (US)

• 75% teens are SN users

• 30% 20-35 yr old SN users*

• 50% SN users check once/day

Woods and Poole (US)

• 26% of all in the target demographic are fashion-conscious

US Fashion Conscious/SN users = 26% * 30M SN users = 8M users

* Very conservative estimate, no exact data available for entire age range

Target Demographic: 15-35 year olds, fashion conscious, social network users

Market cont.

2008 Online Apparel sales to hit $12B (Jupiter) As of Jan 2006, people spent $243/year on clothing

purchases online. Fastest growing online segment (25-30% CAGR)

Our total apparel market 8M consumers (5% commission) spending $243/year $97M annual market for apparel sales on Stylus

In 2004, $1.2B was spent on apparel market research Goal is to capture >2.5% by year 5, earning

>$30M/year

Assumptions on growth

Took middle of the road growth projection

Bounded at 5M users$1K/item under market researchAverage apparel sale of $80/year/user

Revenue Projections

Operating Expenses

Cash Flow

Cash flow positive in Year 3rd Qtr, FY3

Cash Flow by Month

$(2,000,000)

$-

$2,000,000

$4,000,000

$6,000,000

1 5 9 13 17 21 25 29 33 37 41 45 49

Month beginning Series A (month 6)

Average quarterly cash burn rate:Year 1: $145KYear 2: $390KYear 3: $277K

Marketing Primary goal in first 3 years is to grow the SN

user base Target demographic is 15-35 fashion conscious, SN users Create online buzz through ads in SNs, fashion forums,

groups Beta launch parties in key cities Target college campuses heavily in first 2 years

Industry trade shows Demonstrate power of showcasing new designs on Stylus Create excitment among up and coming designers

Market Research Start by letting select partner retailers (Guess, Gap) use our

functionality for free First target retailers / designers with huge research budgets

Goal: Highest quality website / easy interface that will attract users

Competitive Advantages

Lower cost market research Unique domain-specific search, review tools Inherent switching costs of SN users Involved and committed user base Deep integration with the fashion industry

Team

Justin Ashton, Acting CEOMBA Candidate, MIT Sloan School of ManagementAir Force Intelligence, 6 yearsElectrical Engineering Background

Stan Rost, CTOPhD Candidate, MIT CSAILComputer Networks & Systems

Sherife Abdel Messih, VP Business DevBachelor Degree Candidate, MIT Mechanical Engineering/International Development

The Offering

$600 thousand seed round Series A: $9 million

$7 million: operating expenses $1 million: marketing / Biz Dev

expenses $600 thousand: legal and patent

expenses $1 million: unforeseen expenses

Summary

Goal:

Provide quantum leap into Web 2.0 for designers

Become technological cornerstone of the industry

Offer one-stop-shop for fashion / apparel consumers