How Farfetch is predicting the future of fashion in Web3
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This is Most Innovative Companies from Fast Company, where we speak to visionary founders to understand how they think, how they innovate, and what lessons they may have for you and the businesses that you run in every shape and size. I'm James Vincent, a founding partner at Foundr. This is a story about constant reinvention.

An anecdote that I'll bring to you with regard to some of my time at Apple and the reinvention that happened around really creating this supercomputer in your pocket, which you know today to be the iPhone, which is perhaps your most treasured possession. I want to tell a story about Steve's ability to cannibalize his own business and be willing to make those huge leaps.

So we had iTunes and iPod. iTunes had been launched and iPod was this opportunity to change the conversation in culture. And, um,

In a Marcom meeting, we were presenting what is now famously known as the iPod Silhouettes campaign, which actually I think just reappeared. So you'll probably see it everywhere because they're reusing some of it in a new way. But I want to describe the process of getting to that innovation. So we had set up this meeting. It was a very important one. Steve had set a very high bar for like, I want to reinvent the company. The company needs to be different. We need to stop being Apple Computer companies.

We need to be Apple. And so Apple at that time in 2002 had a habit of doing white ads that said, say hello to, right? And then a beautiful shot with a drop shadow and a line across the thing. And then the little earbuds and a beautiful shot of the iPod, say hello to iPod, a thousand songs in your pocket. Okay, awesome. And so we're like, okay, well, let's do that. And then let's do something a little bit more creative and a little more interesting and a little more cultural. And

And then right at the end, we had the campaign that we all had incredible passion for, which is, went on to be the silhouettes. And so Steve came into the meeting. He walked in. He was like, great. I'm really excited for this meeting. And I told my whole team to stand at the end of the room and not move and not say anything. So we all just stood there sort of physically demonstrating our passion for this silhouettes campaign. So he starts walking down kind of going, okay, well, you guys seem to like this. Let's see what this is all about.

And he looks at the Silhouettes campaign, and the Silhouettes campaign is these shadows of people dancing with earpods. Remember those earpods with the wires? And they're dancing, and they're big posters with incredibly vibrant backgrounds. And then there's some videos of people dancing, and the earphone wires going all over the place, and people just lost in their music and really having an amazing time.

And Steve's first reaction is like, oh my God, this is pretty cool. And then he looks at the products and he goes, wait a second, my product is a blob. I'm never doing that. And so in the end, we were like, well, why don't we do some ads like that at the beginning where you show how beautiful the product is. All our print can be that for the beginning. So everyone knows how beautiful the product is. But if we're going to make that conversion away from the computer company into a device company, which it is today and many other things, services and other software and other things on top,

We need to have a cultural conversation. And the silhouette campaign, we bought wild posters, which were, you'd post on the side of hoardings of construction sites. So we, just like rock posters, right? Remember when rock posters used to post on wild postings? That was literally where most people found them. They would walk right past them and you'd be like, oh my God, that's it. And then obviously the TV spots

We started off finding a whole bunch of incredible music discovery from Jet to Wolf Mother, Black Eyed Peas, Gorillaz. We got to U2, we got to Coldplay. And so you'll probably remember which one of yours is your favorite. But his willingness to move...

the brand from literally as visualized by the beautiful product shot, say hello to, to a deeply cultural conversation that began the ability for people to understand that a small device in your pocket might have a thousand songs in your pocket today. And Apple became the cultural brand it is today.

So I'm excited to share with you the conversation with Jose of Farfetch, a constant innovator, someone who saw the opportunity actually in Web 1, saw it in Web 2, is already working on Web 3, brings to it his passion as an individual that is both a technologist and a person that loves fashion. And each time he's able to invent and reinvent. And I think oftentimes Jose's out there

inventing something that the rest of the world doesn't yet understand, but they get there. I believe that's what Jose is all about, and I hope this conversation will reflect that. Jose, great to see you. How are you? Great to see you, James. Jose, if you don't know Farfetch, which maybe there's like one or two people on the planet that don't, but runs a multi-billion dollar fashion company that brings together

people, brands, boutiques, and creates just a very, very unique combination. So why don't we start at the beginning for those people that don't know? And you're a fashion person. You know how to make shoes. You're also technology obsessed. And so tell us, like, how did you get to forming Farfetch? Go back, tell us the story of Jose. I didn't like fashion at all when I was a little kid, but I was completely obsessed with coding, with programming computers.

I got one of those ZX Spectrums. They were 48K in memory in total, which is the size of a small email these days. And they had rubber keys and you would switch them to a TV set. So they didn't come with a monitor or a screen. I got that when I was eight years old for Christmas and it didn't come with any video games. So the only thing I could do was programming. It came with a little programming manual.

a basic language programming manual and that was it. I was completely obsessed since that day with coding. It was my teenage years were about programming and obsessing about being a tech entrepreneur one day. And I thought fashion was frivolous and I thought fashion was a waste of time and money.

And like any typical geek, I used to wear the same shoes until the soles fell apart. That all changed when I started developing software for shoe factories. And that got me inside the factory. And then was when my passion for fashion developed, was looking at how the designs came to life, right? How...

designers from all around the world, from Sweden, from Japan, from the West would come to these factories with their ideas, turn those ideas into patterns, into real products. And I decided to learn pattern cutting, convinced the pattern cutter to give me lessons from 7 a.m. to 9 a.m. every day and taught myself how to design and cut patterns and how to make shoes.

And for me, it was the second love of my life in terms of professional obsessions. And I decided at the age of 22 to start a shoe line called Swear. It's still on the internet. We still actually make them. We make them on demand. I fell completely in love with fashion, moved to London in 1996, opened a tiny little shoe store.

and launched a website for that shop. I mean, in 1996, no one was selling fashion over the internet. The day I opened the store and I opened the website, and I thought, here I am in the middle of Covent Garden with a 200, literally 200 square feet store. It was a hole in the wall. It wasn't even a proper store. And overnight, while the store is closed, people in Japan are placing orders, and the next day I'm shipping them out. And this is

Surely, every little star, every designer, every fashion company should do this and they should go direct to consumer and utilize the internet. And then the idea of Firefetch came about in 2007. It was very simple. It was to bring together a community of people like me, small designers, but also big designers that by then I started to...

being in the industry for so many years, you start to meet the big brands. And so I had a good knowledge of the community from boutiques, department stores, small brands, big brands. And the idea was very simple. What if I created a platform for an industry that doesn't have one and that caters for the sensitivities and the requirements, which are very specific of the high-end fashion industry?

and then give them a digital platform. And it's interesting because you see companies like Airbnb and Uber and these companies, they're matching existing assets, right? Be it apartments or cars and drivers that already exist. They're not creating anything new. Actually, they're utilizing and making more efficient something that already exists out there in the world.

And FireFesh was doing exactly that, like taking the inventory that was already in boutiques without having the need to produce anything more and just connecting it 24/7. And we definitely preceded those businesses. So it was a very revolutionary model.

I remember, and you and I have had a few experiences that I remember. One was when I went with you to Porto and you spoke to the boutiques. You know, you had your own store, right? But what I witnessed with you

is that I witnessed you talking to the boutique owners like they were your core advocates and that the heart and passion of you as a person was really coming out in the business that you'd built. And whilst you might have more Gucci than Gucci, right? Because I know you have a lot of brands, right? And of course, the brands are super important to our conversation. But the boutiques are sort of almost like the beating heart of...

of the conversation around fashion and local fashion and people in fashion? I think, first of all, this is an industry that is really the labor of love. And honestly, you know, opening a fashion boutique

or becoming a designer is never a financially driven decision. It doesn't take an economist to find out about that, right? Don't open a restaurant and don't start a fashion brand, right? Okay, got you. Exactly. It's extremely, extremely difficult. And it's certainly, you know, if you want to make some bucks and if it's financial...

outcomes that you're going after, you may as well go and be an investment banker, right? So this is really the labor of love. You know, these boutiques is so interesting because sometimes there are boutiques that are three, four generations old. And we have boutiques that were on Farfetch that were founded in the 19th century, which is incredible. We have a boutique in Venice,

That was the first ever client of Burberry outside the UK when Burberry was a military supplier and purveyor and was not even a fashion company. And they started buying these trench coats because they thought it was cool to have a military trench coat. You have these incredible stories, but then you have the

the young 25, 27-year-olds that come out of design school and instead of being designers, they want to be curators of fashion and they open a boutique that is almost like a gallery, bringing new talent to the far. So you have this mix of very old school family businesses and then some of the boutiques are the labor of love of young people that really want to bring something new to the world and bring their perspective and their curation.

And then the same happens for the designers. I was one of them and I knew what I wanted to get out in the world with Swear. Swear was actually a very aggressive brand in a way. The name says it all, right? It was all about that spirit of rebellion. It was a very rebellious, very against the system kind of brand. I really wanted to revolutionize and to change things and to shake the status quo, etc., etc.,

And each designer comes with a different story and a different message. And these are very human stories, right? They come from the heart, they're the labor of love. And for me, this forms a patchwork that is absolutely incredible of personalities, stories, characters, ways of seeing the world and the global one, right? Because we have boutiques in Japan, we have boutiques in Brazil, we have boutiques in Australia, everywhere around the world. So this comes with also all the cultural nuances and different aspects

perspectives and that's one thing that most people get wrong is that they think that fashion is just another industry but it is not, it is culture and it is what Jungian psychologists call the mask the mask that we wear

And we have different, we should have different masks, right? When we are a father or a husband or a CEO or being interviewed by James, we all have different masks. And that's the way human beings function. And fashion is the second mask.

You're reminding me of that dinner that we had in San Jose and you offered to buy some wonderful Burgundy wine. And I think we had a couple of bottles and I asked you describe, you know, your sense of fashion. And the quote that I'll never forget that you said to me is you're not going to walk naked into the world. You said every morning you have to make a choice and you make a choice somewhere between

fitting in conformity or individuality. And actually the same person might make different choices on a different day, right? On Monday morning, they might be super conforming because they're in a conventional job. Saturday night, they're like crazy. I'm just going to do individual. Most people are somewhere in the middle, right? I actually saw an ad of yours. So congratulations. And I can still remember it because, you know, I used to know a bit about advertising before, but, and it said there are 397 t-shirts, right?

But I found the one for me on Farfetch. It felt like it came out of that conversation about almost mass individuality. Absolutely. What is your persona today, now? And this is not at the conscious level, but we're always making these decisions. And fashion is absolutely a part of it. And I have this, it's very funny because sometimes I have this conversation with a venture capitalist friend.

or an investor and they're looking at me like, okay, all right, yeah, not me. I'm not part of that.

And then I start to tease them. I noticed all you guys wear Patagonia vests. Or they wear that GLA with the name of the company, you know, the Venture Capital Fund, ABC, whatever, ACME, or Sun Valley 2022, the conference that they just went to. And they very proudly wear that as like, I've been to Sun Valley, like a marathon will go around running with a finisher t-shirt, right?

and say, I kind of sense a pattern here. You guys are all wearing in this room like the same thing. Is that a fashion statement? Oh, no, no, no. This is like we don't care about fashion. Okay, why don't we swap? Because you know what? I would never wear one of those gilets.

one of those little vests, but would you wear my chunky shoes? And they said, no, no, no, we wouldn't wear that. So there is a fashion statement, right? There is such a clear fashion statement. And I mean, look, Steve Jobs, he had the look, the Steve Jobs look, it's the turtleneck with the jeans and the tucked in, you know, turtleneck and that was it. And so even the people that

At the conscious level, they'll say, no, no, no, no, no, absolutely. My fashion is black and I'm above that. I'm above all of that. They are absolutely not.

They have created a persona. That persona is dressed with something, normally something very specific that they deeply care about, even if it's the same thing every single day, and that they wouldn't take out and change for anything else, right? And so it's undeniable, even for the big skeptics. For most people, this is quite evident.

If you ask fashion enthusiasts, they say, of course, yeah, it actually translates how I feel today. So it is our persona that goes together with the psychological persona. And it is like that for 8 billion human beings in the world. So it's completely, it's not an industry like the others. It's linked to culture and it's linked to individuality. It's amazing to hear your personal stories, Jose.

this is Fast Company and I know you and I worked together and we together came up with this notion of sort of the global culture of fashion, right? It's all happening like all the time, everywhere on every platform and it's just constantly moving. And I feel like

More and more and more, I'm feeling the Jose in the brand coming out because I feel the expression of the platform you're building. You've created a fund where people can create brands. You sponsor. And I know you have this new thing for Web3, which I'd love to talk about, which is sort of

The program's called Dream Assembly. Is that right? Do you want to tell us a little bit about that and where that's going and what is Farfetch doing in that conversation? Absolutely. We want to be the global platform for fashion and beauty.

What does it mean to be the platform? Does it mean just to have a marketplace or it could mean to have a marketplace and white label our technology so that other brands and other retailers can also have their brand.com? It should also mean that because we are in the industry of brands, so people will always want to have their brand direct to consumer presence.

And it should also mean us creating a bit like Netflix or a podcast platform like Spotify or Apple Podcasts, creating tools so that creators can bring products to live direct to consumer on our platform. And that's what NGG does, right? So they have this incredible capacity of

taking creators from zero. They started off wide with Virgil from nothing, from zero, and the same thing with Palm Angels and Francesco and others. And they have this incredible ability to develop brands from zero

to become worldwide phenomenons. And of course, amplifying these brands digitally and distributing them digitally is something that is paramount to this creative success. So for us, it's really, we're constantly thinking, okay, we want to be the platform for the industry. What is it that industry needs? And how can we enlarge that vision to create an ecosystem where curators and creators can thrive, right?

And DreamAssembly is precisely that. By the way, DreamAssembly, I came up with that name because assembly is a programming language. It is actually the hardest programming language to crack because you speak to the machine, it's machine code, you're speaking to the processor directly.

And then Dream, as in, you know, then Dream Assembly is the factory of dreams, right? So that's the idea. Dream Assembly is a play with the assembly programming language and the dream that fashion needs. It is an industry of dreams and how do we bring those two worlds together? And now we're bringing it back with Web3 because I feel that this is our role. Our role in Web3 is to be, again, the connectors, right?

between technology and fashion. And very often fashion does not really understand what Web3 is and vice versa. Web3 doesn't understand the real needs of the fashion consumer and the fashion brand. And the idea is that we can team up. In this case, we teamed up with Outlier Ventures. They're kind of the Y-combinator of Web3 and Farfetch to really accelerate the most exciting

Web 3 projects that are related to the fashion and lifestyle industry. So watch the space. I think we're going to have some very, very cool stuff coming from Dream Assembly. That's amazing. We could talk about Web 3 forever, mainly because no one knows what it is. But in the realm of fashion, right, do you get a digital asset that you can use as well as the physical asset?

Do you shop through a digital metaverse in order to create that thing? You know, if you think about Web 2.0,

and what it did. And we've just told the story, right? I mean, you were a company that through web two, which was like, Oh shit, there's all these places where people can buy stuff now online. And you brought that knowledge and understanding to the fashion industry, right? You're both your passions. You brought them together. You've created a company out of those passions and it's proven, right? But you're now thinking ahead of web three before people

really even know what it is, but we do know that the future, whether it's we're wearing AR glasses, you know, snap, you know, like, oh, I see stuff or I'm in a metaverse walking up and down a shopping mall. So how do you think about that? Because the luxury business

relationship is normally a human one right now it's gone to like you know tiktok you know right all the way to the other extreme of kind of like oh i kind of like that let me go buy it and i i heard from h&m that they said something like 60 or 70 of the clothes that are brought back because teenagers or gen z's are buying it one day posting themselves in it and then taking it back the next day but i

All of this is to say, as we go into Web3, as you have clearly understood Web2, how do you help other people think about Web3, dispersed communities, the opportunities of mixing digital and physical? Yeah, let me start by saying that for me, absolutely, fashion is about...

the human side of things and it is a deeply human endeavor and going again, it's your second persona that is with you every single day, right? And therefore, technology should be at the service of that, not replacing that. So we always think of technology as enhancing the human interaction between curators, creators and lovers of fashion.

as opposed to replacing that human connection. In terms of Web3, what does that mean for this industry? I think first, what is Web3? And the best definition I read was Web1 was about read, Web2 was about read-write, and Web3 was about read-write-own. So if you think Web1...

which was the old days of Netscape. I don't know if you remember AOL, it was very cryptic and that was nothing. I mean, you would only read, you would only click on links, hyperlinks and read stuff that other people had published and it was organized in portals and Google obviously then revolutionized that, making it searchable, but it was essentially, you know, European fed stuff. And Web2 is about you creating the stuff

with the explosion of social media platforms. They are user-generated content and two-sided marketplaces, such as Airbnb and Farfetch, etc. So that was Web 2.0.

And Web3 brings the ownership to the customer, right? Because the web, what's amazing about the internet, what is revolutionary is when you open this to the world and it's decentralized, it is universal. So these are universally accepted protocols that cross political barriers, borders, and this is the power of the internet.

What the Internet lacked was a layer of protocol on top of these existing protocols that would allow for payments and that would allow for ownership, for a ledger that would say you own this digital asset or you own your own data, for example. And this is what Web3 is, as simple as that. So think of Web3 as the Internet itself.

with another layer and that allows businesses and users and people all around the world to, without the need of a blessing of a corporation or a state, to transact and own and prove the ownership of digital assets.

The web one, web two, web three description. I think the audience is going to love that because they can actually maybe understand what web three is. We had a guest from Patreon, Jack and Sam from Patreon, who you know is the creator economy and they make sure that artists get paid because you have a direct relationship with them. And for them, it was the artist owns this business.

thing, this video, this whatever, and you sponsor them and you are their patron and you pay them whatever a month and then you get direct access to all of that stuff. And so they were actually defining it as even though their company was created 10 years ago in Web 2, they were really kind of, I think, native Web 3 thinkers in that they were building for the opportunity of ownership.

And so tell me more about that within fashion in terms of the opportunity of ownership and how that impacts people in fashion. When you take that to fashion, then the use cases are endless. And that's why we have Dream Assembly, right? We want to bring more and more and more use cases.

And this is the issue, is when people think, oh, Fashion Web 3, that's the metaverse, that's digital clothes on avatars. Oh, that sometimes looks horrendous, sometimes looks quite futuristic, but not that exciting.

You know, like, is it a game or is it something serious, like a second life kind of thing? The answer is it can be all these things because it doesn't matter. You know, for me, the definition of Web3 application to fashion is the application of these principles, right, of user control and user ownership and decentralized design.

architectures to the fashion use cases. And that can be in one side of the spectrum, very simple, like crypto payments, which we've launched both in-store, so you can now go to our physical stores, Browns, Off-White, etc., or online. Very simple use case to loyalty. I think the new loyalty programs of the future will be tokenized, which means that you actually own, you're not depending on the department store or the retailer,

relationship because right now they're only worth anything if that retailer stays alive and recognizes those points. And by the way, they may lapse the points and say, oh, write you a letter, sorry, but you haven't, your points are gone. So what if there were pan-industry loyalty programs which were tokenized

And you could actually cash back if you wanted to cash back or spend over the counter. That's another idea. Obviously, authentication. There's a huge counterfeit problem in fashion. And what if you had effective... We're working on that with a startup, like unhackable cyber-physical methods of authenticating a product. So I can guarantee that Nike off-white product

that you bought on Stadium Goose on the secondary, on the resale sneaker marketplace is absolutely authentic and you can actually trace the provenance. Digital twins, you know, like buying something physical that has a twin and then you can go to Roblox and dress your avatar with it.

digital goods, pure and simple, that only exist. How can we create interoperability? Because if you create a design for Fortnite, you need to create another design for Roblox, you need to create another design for Decentraland, and another design for... Because the object files are not compatible, right? So how do you create the Google Translate of skins so that you can use the same...

at work or IP that you acquired in different environments. And it goes on and on and on and on. It can be anything. And that's Web3. And that's what we're trying to bring to the fashion industries is that perception that there are no limits to imagination and what Web3 will bring to this industry

is incredible innovation. And the other thing that people conflate is the value of Bitcoin or Ethereum or whatever it is and the power of the technology. So when it's at $60,000 a coin, oh, this thing is going to revolutionize the world. When it's at $20,000 a coin, it's a Ponzi scheme. Yeah.

And that's completely irrelevant because if you ask me, it could be worth $2, it could be worth $200,000. It's anyone's guess. And it is absolutely inherently speculative.

Of course it is inevitably speculative. By the way, stock prices and house prices are speculative, although you can argue there's an element of valuation there that is more substantial, but we would be here all day. But that's not the point. The point is the power of the technology. It's almost like putting a value on the internet. How much is the internet worth? God knows. Maybe an economist one day has done this calculation. It doesn't matter. And you can say it's worth

10 trillion or 100 trillion or whatever number you put there. The technology itself enables incredible innovation for many, many years to come and it will evolve itself, right? It will get better and better. And that's what excites me. And it shouldn't be conflated with NFTs going up in price or down or how many Ethereum your ape is worth today.

You keep coming back to, and I'm going to make this, you'll be embarrassed, but comparison with Steve, right? So Steve was the technologist that understands the human condition, right? And he just, every time kept coming back to, oh, the iPod, people will play for music now. And I'd say, oh, the phone, we don't need buttons. Let's use, you know, the Swiss army knife, there's apps, right?

So you have your technology and fashion and the two things you bring together. You can see you're a great custodian of Farfetch itself as a company, but you're also very prescient. Sometimes you're a little bit out there ahead of others, right? That can be quite a lonely place, right? Just tell me about what it's like being a founder that has some sense of the future and is willing to put bets on it, maybe even before...

people understand? I think it's a very human trait is to invent, right? And you see it even in chimpanzees, right? So one chimpanzee looks at the other, imitates, but imitates a little better. And one chimpanzee starts washing potatoes in salty water, suddenly they taste better and then all the others go. So this very human pleasure, joy,

of doing something a little bit better than what it was done until now. And by that, changing the world a little bit. So your presence in this world has created a new way of doing things. And that is, in a way, your legacy, right? And that's the joy that comes out of inventing, of coming up with something new. I think it's something that is very human and all entrepreneurs or most entrepreneurs

have that and if you have the inventor's bug it's like you're a storyteller you're an amazing storyteller james right so for you the joy of telling a story in a new way and finding almost pathways in your mind that no one had found before to go straight to the point and tell the story of a brand and a company in ways that even the founder hadn't realized and

It must be incredible, the joy and the thrill you get from it, right? And for us, it's the same thing, but it's inventing things and coming up with new cool stuff. Well, thank you so much, Jose. We really got some very interesting things. And I think the community is really going to enjoy hearing what's behind the wonders of Farfetch and your own personal story and what a delightful person, real human you are. Thank you, James. Thank you for thinking of us. Bye-bye.

So that was an awesome conversation with Jose from Farfetch. I think a story not well understood or known. Here's a founder that had two passions. He was a technologist from the age of eight, writing code, and then fashion came along. He became a shoe designer because he's from Portugal. And his two passions turned into his company.

Not only did that allow him to have the foresight to understand around the time of the internet arriving and boutiques and the endless shelf and creating a platform that you brought brands and people and boutiques together, and that he could understand that and that it was beyond just simply a website, but then a distribution platform, but then building on top of that platform nonstop. I think Jose's description of Web3 was perhaps to the community, one of the

simplest and most understandable definitions. And it wasn't simply how he described it from read to write to own as being web one, two, and three. It was the fact that he then went on to illustrate it and talk about it in ways that people could understand. So I think the problem with web three is the absolute lack of storytellers. I think web three is telling a horrible story about itself. That little one step ahead means

means that I have tremendous faith in Farfetch, in Jose, in his leadership of it, because it comes from the heart, comes from the soul. This is a passion company. It's a purpose company. It has a clear mission. And you can see from the interview why it does so well and why no doubt it will continue to do so.

All right, that's all for this episode. If you're a new listener, be sure to subscribe to Most Innovative Companies wherever you listen. And if you like this episode, please leave us a rating and a review on Apple Podcasts.

And we also want to hear from you. So let us know what you'd like to hear more of. Send us an email at podcast at fastcompany.com or tweet us at hashtag most innovative companies. Most Innovative Companies is a production of Fast Company in partnership with founder FNDR. We couldn't afford the vowels. Our executive producer is Joshua Christensen. Our sound design is Nicholas Torres. Writing is Matias Sanchez.

Alex Webster and Nikki Checkley helped with the production. This podcast was done in collaboration with my wonderful partners at Founder, Stephen Butler, Becca Jeffries, and Nick Barham.