Polyvore Profile

UPDATE: Former CEO Sukhinder Singh Cassidy has stepped down, replaced by Co-founder Pasha Sadri.

Executive Summary
With a new CEO and millions of users, Polyvore is positioned to turn the corner in social media monetization by valuing data parsing as much as ad sales, direct referrals, or sponsorships.

About the Company
Polyvore is an enjoyable, addictive, and fun way for fashion enthusiasts to create collages based on catalog feeds, scanned images, and other web assets. Along with Lookbook.nu, it is setting the standard for fashion based social communities.

Polyvore connects directed curatorial, validated editorial, and retail referrals to a DIY community that rivals the user base of mainstream sites such as Style.com.

Current Revenue Pathways
Polyvore has all of the traditional revenue pathways of social media: online sales referrals, ads based on impressions, and sponsored “contests.” However, there are a few scalability roadblocks to this model:

Potential Roadblock: Complex Deals

Multiple complex deals could be required to connect some product images to specific online retailers. Some deals will be straightforward and others will be a mess. Referral revenue for fashion means constantly chasing, closing, and maintaining deals to make ensure the right sites, the right creative, and the right products remained linked. As the site grows, so will the need to develop systems for closing and managing these deals.

Problems like these are not insurmountable, but they are difficult. YouTube took on the messy legal tangle of sorting out multiple copyright holders to find ways to monetize mash-ups, tributes, re-mixes and more. They succeeded, but it required an ongoing investment. Not everyone has Google's deep pockets to fund the difficult work required to manage a vast spread of complex deals. Polyvore has deals in place, so maybe this isn't a roadblock, but as the site grows, the complexity will grow as well.

Potential Roadblock: Context Creates Meaning

Fashion is about cultivating desire and engaging imagination. Designers know this and control the context of an item very tightly. In fashion, you never simply buy an item, but you always also buy the idea of the item—the implied lifestyle or aspirational fantasy associated with the garment. It could prove to be a challenge to convince the highest-end brands to release control of context. Community monitoring at Polyvore quickly weeds out unappealing juxtapositions, but this is potentially a tough sell for luxury brands.

Social media means sending around little bundles of autonomous media; the message has to be able to stand on its own even when standing next to another. We naturally draw connections between images we see next to each other. Eisenstein famously formulated this theory for film. Marketers everywhere rely on this technique to transfer the positive feelings we feel for one item or concept onto another. Politicians use this on the campaign trail when they kiss babies and stand next to hard-working everyday people. Context creates meaning.

Traditionally, marketers have strictly controlled this process of associative value. Polyvore puts this power into the hands of users. It can be frightening at first, but can also be terrifically helpful in the long run, as an entire community sifts and sorts the best of the associations from the worst. The result is almost always something interesting and appealing.

True Value

Retail referrals, ads, and sponsorships are only the beginning of the true value of Polyvore.

As an example, let’s look at Twitter. The social media platform went from a way to update one’s personal status to inadvertently becoming a global monitor of the human condition. As soon users stopped talking about themselves and instead started talking about the world around them, the nature of real-time information exchange became altered forever. No longer just for entertainment, Twitter played a role in elections in Iran, the UK, Chile, the US and India. Every major natural disaster now results in people using Twitter at all stages of discovery, co-ordination and recovery.

Twitter enables anyone with a mobile phone to contribute to the information ecosystem. The New York Times regularly comments on how Twitter has transformed the nature of news.

For Twitter, it is not just about breaking stories, but is also about relevance. Through smart filtering and analytics, Twitter not only knows what people are talking about, but also knows what information is being valued. The next wave of great apps for Twitter will leverage how information is being valued to create secondary conclusions. Smart filtering and analytics are even being used in Twitter's newly announced revenue platform called Promoted Tweets.

Polyvore = Retail Analytics

Just as Twitter has gone from a social media network to the monitor of the human condition, Polyvore has the opportunity to grow from a social media fashion site to the pulse of retail analytics.

Clearly already thinking along these lines, Polyvore has a Zeitgeist section featured about halfway down the landing page. Much like Google’s Zeitgeist, the table shows current rankings for brands, sites, trends, and celebrities.

Assuming that deep data exists from the daily usage of the site, parsing this data could result in valuable information for retailers trying to decide what to buy for different markets.

Fashion retailer H&M famously monitors sales to drive production decisions much in the same way that Wal-Mart monitors sales to trigger warehouse deployments and production increases.

Polyvore has the chance to make tangible the inexplicable trends of fashion. Influential agents of change drift into and out of fashion in an untraceable way, but the results of those trends can be codified and sold through Polyvore. The value is only there, however, if it can be used to increase sales or reduce waste/costs.

Why hasn't Polyvore already launched such a service? My guess is that it isn't because they don't have the data, but is instead because they are looking for the best way to demonstrate the value of the service.

The value will come from solving for specific client needs, such as managing real-time purchasing decisions during holiday peaks, determining the best way to move dead stock based on associated buying trends, or identifying consistent secondary purchasing associations that can be extracted to drive customized incentive programs.

Positioned correctly, Polyvore has the opportunity to create a consultancy service division for producers and buyers looking for reliable data and recommendations to make product decisions that can move at the speed of trends.

Snapshot of Polyvore.com April 2010

User Base

118 million pageviews per month
Site duration 5-11 minutes per visit
35% between 18-34
25% between 35-54
average household income $80,000
72% say they’ve bought something they saw on Polyvore.
70% have posted a product on another social-networking site

Current Revenue

1/3 commissions/referrals
2/3 ads/contests/sponsorships

Sources

http://www.newyorker.com/reporting/2010/03/29/100329fa_fact_jacobs?currentPage=5#ixzz0kvvjnEEL

http://www.polyvore.com/cgi/business

http://blog.polyvore.com/2010/02/so-happy-to-be-here-from-polyvores-new.html

http://www.nytimes.com/2010/04/13/technology/internet/13twitter.html