99dresses, the Y Combinator graduate that gives women the ability to hit "refresh" on their wardrobes as often as they like through clothing swaps, has gone mobile-only with the launch of its new iOS app. The startup has fundamentally reworked the virtual currency system on which its swaps operate, due to the fact that U.S. users didn't take to it the same way that the startup's original Australian user base had.
99dresses recreates clothing swap parties in a digital format — the main point is to unload pieces you don't like any more with the possibility of picking up a cute new piece for free.
When 99dresses launched, it was based on a "button" economy in which users received buttons in exchange for each piece they sold to another user, which could then be used to purchase another item. The site sold additional buttons for $1 a pop, in case someone wanted to go for a bigger buy.
But while that system worked well in 99dresses' native Australia, it didn't work so well when operations moved to the U.S., founder Nikki Durkin explained. The startup no longer operates in Australia.
"We wanted something in America that was more about instant gratification," Durkin said.
The new economics of 99dresses, which launches with the app, means that as soon as you list an item, you receive buttons with which to purchase other points. But Durkin's team has introduced a new element to keep people in line: karma, which rises when they sell and falls when they buy, all according to how many items they have listed and how many people want them.
Each listed item has a 24 hour hold on it, during which users can toss their name into the ring to claim it, and the person with the most karma receives the prize. Someone who consistently lists less desirable clothing will are lower karma, which may mean she'll only win on less desirable pieces she bids for. If an individual claims five items and wins the first one, her karma will decrease such that her odds of winning the second decrease.
Durkin said the team spent about five months tweaking this system prior to the app's release today. Karma, which is now invisible to others, was publicly displayed in a previous iteration, and although the aim was social accountability, it only created a gridlock in transactions.
"In theory it seems like a good idea, but it works too well," Durkin said. "It would get to the point where they didn't realize that in order for one person to receive something, one person's karma is coming up, and it's coming from the other's. In order to make anything happen in the system, someone has to be in the negative."
With the new model, the person who buys pays for shipping, a change from the previous model in which the seller paid it forward by providing shipping. 99dresses adds a 5% charge on top of that. For an item above $100, that still feels like a deal.
Most of the items listed on 99dresses fall in the H&M/Zara/Forever21 price range. Those pieces don't have great resell value in consignment shops, but paying shipping and a 5% surcharge can be justifiable so long as it's less than the price of replacing it with a new item.
The tricky thing about building a reselling app around fast fashion prices is that fast fashion is meant to be discarded and replaced as trends change, which is why it is priced so low. Clothing sold at stores like Zara stand a better chance of working on a platform like 99dresses because it hits in the $50-150 range.
The 99dresses team has shifted since it graduated from Y Combinator, as co-founders Peter Delahunty and Dan Walker have left the company. Marcin Popielarz has joined as technology manager.
Durkin said she could not provide numbers on user engagement, since the new system is only launching today. Here's hoping American users will take to the new platform like they failed to do before.
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