593: Phoebe Gates: Building an AI Fashion Startup Backed by Kris Jenner & Sara Blakely

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Imagine launching an app in your dorm room, DMing 20 ,000 strangers just to get your first 200 users and six months later finding yourself with half a million downloads and$9 million raised from investors like Kleiner Perkins, Kris Jenner, and Sarah Blakely. Today's guest is Phoebe Gates, co-founder of the AI tech fashion startup Fia. Not only is she building one of the fastest growing shopping apps in the world, but she's also carving out her own identity as a founder, tackling the unique challenges of growing up in one of the most famous entrepreneurial families on the planet.

1:25So in this episode, You're going to learn how Phoebe went from failed prototypes, so many, to finding product market fit in fashion tech, her exact playbook for getting brutal user feedback that fuels growth, the clever strategy she's used to get big name investors on her cap table, and how she's building in public to turn fear into your personal AI shopping assistant. Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:01Let's start with the elephant in the room. We're here with Phoebe Gates. You've built incredible brand, incredible company fee. You've only just launched. You are a serious hustler. This is a massive product. It's growing super fast. Really notable investors. We'll talk about that. But your dad is Bill Gates. So talk to us like what it's been like building and carving out your own identity separate from your family name. Yeah, totally. I think for me, you know, growing up, I was super inspired by both of my parents, right? I was six years old when my father retired from Microsoft. So I did get to hear some about his early days of building and what his time there was like.

2:38But I really got to see the two of them, frankly, found the foundation together and build that out. And I was always inspired by this idea of, oh, you can go create a company or you can build an idea and you can have that be successful and then have a bunch of people that you get to work with that you love to build a dream. And so I think for me, you know, people are always like, oh, is it hard carving out your own name with your father being Bill Gates? And the reality is I am so inspired by both of my parents that I honestly think it's a huge privilege. I mean, my college was paid for. I was able to go to Stanford where I got the education to learn how to found a business, how to create, you know, the first prototype of our app.

3:17I wouldn't have been able to do that without the support of my parents and just the incredible amount of privilege that I have for being, you know, both of their child. I do think it is really nice, to be honest, that I'm a daughter. I think it would be a lot more challenging if I was a son building in B2B SaaS, similar to what my father did. But frankly, I'm building in fashion tech, which is a very different space and not something my father's an expert in. And so that, I think, is also a huge privilege yeah so look you've launched fear we recently connected growing super fast you only launched we went public in april and uh look this this this product is really really clever what you're building as well so i want to dive deep on how you built the product how you came up with the idea so take me back stanford how did that influence building and and like how you brought this product to life.

4:10Yeah, I love this story, Nathan, because it's really a winding path. And I think for anyone who wants to build something, you know, the overnight story is me and Sophia whipped this up and we launched three months ago and we already have half a million downloads. That's the great, you know, shiny of the iceberg, right? But the reality is that me and Sophia met as college roommates. We argued over clothes all the time. We knew we wanted to start something together. We were really interested in a bunch of different pain points. We started out by building a prototype of a smart tampon. We looked at different B2B applications.

4:42We looked at everything and we had so, so many failed ideas that didn't even make it past, you know, the first prototype stage. In fact, the first version of Fia was actually for a class project and we created a desktop version where you could instantly find an alternative secondhand. And that prototype was so bad that you can imagine you're looking for a really nice person you want to get it secondhand or on sale and it would show you a cane. And yet we gave it to about 200 users and there was such high retention. And we actually started to see purchases come through. And we thought, well, that's interesting.

5:13And we realized we were making money from it. And our professor for that class that we did the class project for was actually the first person to give us 250K in seed funding. And that's what it took for us to say, okay, it's time to go all heads down and build this out. Throughout the path of getting that funding and then actually going heads down and building, we learned, okay, people don't want it on their computer. They really want to shop on mobile. That's the future. and number two we can't just do secondhand we need to actually hit an even larger market and you know get those people to also shop secondhand but show you hey does an item exist on sale and as we continue to like pull these threads we realize there's a lot more we're really excited about just generally in the fashion and shopping space because if you think about it shopping really hasn't developed in the past 10 years i mean amazon's great i can get my toilet paper instantly but this idea that there's you know some reason that i shouldn't be able to have a personal shopper in my pocket just doesn't make any sense because we can automate all of it, personalization, curated recommendations, outfits, closet management, all with AI.

6:14And so I really feel like the tool that we've launched with today where instantly get an item cheaper is just scratching the tip of the iceberg of what we want to build. Yeah. So I'd love to delve a lot deeper. So tell me about your first failed product with Sophia. Tell me about that. Yeah, well, our first product idea was a smart tampon that could basically act the way a blood test does. So it would tell you about your health. A couple key things that we realized in that is you actually have to be the right person to build it. It might be a smart idea. I'm not actually a scientist. I have, you know, no applicable skills that would be helpful with that product.

6:53And number two, you have to want to work on it for the next 10 years. And then number three, there actually has to be a tangible market for it. And we kind of realized as we went through that idea, okay, we don't have any of those three. And so we were like, okay, that idea isn't going to work. The first prototype we built, we were like, wait, there's no way that this would actually work. You know, in order to do this, we would need to be quite literally like mechanical engineers to build something new. You can't, you know, just use an Arduino thing up there. So really, you know, just experimenting, but it became so, so fun, right?

7:25After that, we thought, okay, let's build a subscription box service. That would be really fun. And so we modeled it out. We create a financial model. We created the first subscription box. We sent it to some people and someone sent us a note back and they said, you know, the most sustainable subscription box would be a box you would just open and it'd be empty. We're like, yeah, that's a really good point. OK, back to the drawing board. But it became this game of like, OK, try and fail, try and fail. And every time we failed, we were like, well, that's kind of interesting. We learned something.

7:55And we had the luxury of this because, mind you, we were also in college at the time, right? So we're able to be around, you know, a large market of different people that we could quickly talk to, get feedback from. And, you know, our jobs at the time were class. And so we were able to do this on the side, which was really, really incredible. So how long ago was this? This was probably my sophomore year of college. So about two years ago that me and Sophia were just in our dorm room playing with different ideas and figuring out what we could build. And then really, it's been a year since we founded Fiat and worked on this.

8:27Okay. So how many product ideas do you think you conceptualized and spoke to people, created a prototype, spoke to customers, getting feedback? How many products or ideas do you think you went through? I mean, in that year when we were in college before we built Fiat, I mean, probably 50. But I learned so much from doing it. And I would talk to so many fascinating, assassinating people that I never would have spoken to. And even through this, I really just thought this is kind of me and my best friend's adventure, right? I never thought, hey, I'm going to start, you know, a billion dollar company.

9:02I want to build an AI shopping assistant. It really was this kind of, you know, intellectual journey for the two of us where we're like, well, let's just learn about different industries. Let's see what different things look like. Let's talk to different people under the guise of, hey, we're two Stanford nerds who want to learn about this space. And it actually ended up opening this door where I realized, oh, wow, there actually is a reality where our full-time job could be working on something we deeply care about for a consumer we deeply care about, talking to those consumers, building with the smartest people that we know, and consistently learning.

9:35And the fact that that was actually a tangible career path, I don't think we realized until we were a year in. Yeah. So what I really respect about how you're building fear is and you you know i've done a bit of research you guys have like every week you invite people to come into your office is it for pizza right for pizza and wine yes and you just get feedback for the product now you've taken that same kind of you know early stage lessons of this just aggressive feedback loop right and i think if more founders actually focused on getting feedback not tattooing their idea to their body and going this is my idea this is what it's going to be this has to work and try and will it into existence and just get feedback and and really focus on creating something that people want and actually want to pay for and there's a commercial model about it it'd be far more successful founders so i'm curious like for you what were you looking for for you and your co-founder what were you looking for and and to go hey this is the thing besides you know the personal aspirations on you know this is what I get to do for work because I agree with you I'm the same with founder like life is too short to not do work that you don't enjoy and I feel so privileged to do the work that I do every day I get to speak to some of the greatest founders of our generation I get to help change people's lives for all of our products and education coaching platforms.

11:07But like for you, what were you looking for to know this is the product, this is what people care about, this is what's going to, this is something I can build into a real business. You know, I don't think that there was a moment where I was like, wow, this is it. But what I can tell you is that when we saw that initial traction with our first horrible, you know, MVP of it, I was like, wow, maybe there really is a space in this market. And I think that's where we got really excited about the idea of, well, you know, in every stage when you move to a new platform, whether that's when we move to e-commerce online, when we move to mobile apps, shopping adapted through all of those different layers.

11:45And every, you know, we saw a revolution in shopping with each of those different platform shifts. And then the question becomes, OK, wait, but aren't we in a platform shift right now towards agents? Well, what does shopping look like in that platform shift? And we started looking around and saying, OK, who's got the answer to this question? you know we're just two kids in our dorm room we realized very quickly no one had the answer to that and that's where i think we saw an incredible market opportunity and we're like who better to build this than two young girls who are the target consumer for this right i'm gonna use this tool because i love to shop online because me and my roommate argued over clothes all the time because we were always looking for a cheaper secondhand alternative because we're always curating collections for different people and so it was about okay what is something we are we the right people to build this?

12:29Is there a market opportunity? And could you spend the next 10 years doing this? And for us, frankly, it checked all of those boxes. And we're like, okay, let's go all in on this. And I love the thought of, could you spend the next 10 years? Because from my experience, this is something that one of my mentors once shared with me, who's now a billionaire. It does take you know seven to ten to twelve years seven it does take seven to ten to twelve plus years ten plus years to build something of true worth and significance that's just how long it takes no matter how much money you raise all that different stuff this just takes a long time so i'm curious i really want to go deep on what this first prototype looked like the exact steps you guys went through to build it did it cost you any money how did you build it did you vibe code because vibe coding only really started earlier this year right like it's a massive movement like at founder we are we are working on time like quite like one in particular really cool vibe coded software app and we'll build many more but i'm curious like tell me the specifics because i think this is where sometimes in podcasts people gloss over this stuff and i really want to go in depth around the app piece.

13:52Yeah. Well, before we even built it, what we did is we, we actually designed it. So we use like Figma to create like, okay, an outline, a sketch of what this is going to look like. And we started to get feedback from people. We're like, if this existed, is this a tool that you would use? And I think that's where we were like, okay, now let's go and build this. But working on it, we got another classmate to work on it. We had, eventually we, I remember we called DM'd a girl who now is a full-time product designer here at FIA. um but at the time she was what you know 18 years old less than 18 years old we we dm'd her like we think your graphic because we didn't know anything about what a graphic designer versus a product designer was like we think your design is amazing like could you design this this is our idea and you know our idea is a bunch of box and circles and we're like could you design it and so then she gets in our figma and um designed it out and then that's how we build the the first version of it and you know it sounds like oh wow that's incredible no it didn't work like it barely worked right you know it would you know you were looking for a bag and it would show you a cane and yet people were still using it and so i think that's where it was really exciting because we knew it was buggy we knew it wasn't a full-fledged product it was like something we'd thrown together with sticks for a couple hundred bucks and we're like okay there's something here yeah okay and then talk me through that piece where you talked about traction and people actually bought and used the product and you activated like talk me through that and how you found those people because some For some people, that's a really scary thing, you know, just like asking random people to give feedback or is this something like that's a scary thing.

15:22We DMed thousands upon thousands of people. And so we would reach out to people and we would say, this is what we're working on. We're two students. We would love your feedback if you have time. I think over the course of Instagram actually cut me off because I DMed so many people. And it was over the course of probably two months, we had DMed over 20 ,000 people. And mind you, we only got maybe 200 installs for this beta round that we wanted to do. And we curated, we'd interview the people typically before they joined, or we'd have them, you know, pass a couple of parameters. Hey, do you like to shop?

15:56Do you shop on desktop? Are you willing to give feedback after you test it out? Will you report bugs? And so we'd weed out people who weren't, you know, our target users. So we get about 200 installs. It's really hard to, especially when you're doing mobile outreach for a product, you know, with really no incentive. We're not paying people to get feedback. It was really tough, right? And so we actually cohortize because at first we used to give it to our friends and family and they would be a lot more positive, right? They would actually use it every day because they love us, not because they love the product.

16:26And so we realized after two weeks, we're like, we're getting really positive signal, but this doesn't make sense. It doesn't work. And so we're like, okay, let's just put that in one cohort and make sure we label all the people that we actually know. and then let's get a bunch of cold strangers that we go find and get them onto the product. And when we actually started seeing that group of complete strangers actively using it and reporting bugs and saying, hey, Fia was down today. You know, why wasn't it working? I wanted to use it for X, Y, Z. That's when we got really, really excited. And then we realized, okay, well, if we drive a sale to a site, we should be making an affiliate commission on that.

17:00At the time, we had no idea. Me and Sophia have never done sales before. We don't understand, you know, affiliate marketing. And we actually called outreach to all the secondhand companies. So eBay, Poshmark, Vestair, RealReal. And we had for the MVP, we had about 35 partnerships that we locked. So you locked in these partnerships post the 200 users that activated or before? We locked them after. Okay. Okay. Okay. Okay. All right. So then, so after that launch, like after you had 200 plus people kind of using the product that's when you knew you were on to something i knew we were on to something and then we came went to new york for the summer and both of us you know went heads down and worked on it i mean and we tried to keep building the desktop version and then we realized months later hey wait a minute people really only shop on their phones we kept trying to talk to what we thought was our tar consumer and they'd always say well i shop on my phone and that's the important thing about those feedback nights for us because we never want to waste the summer like we did in the past, where we focus on the wrong platform, right?

18:05We spent so much time obsessing over the desktop extension. How's it going to look? How's it feel? Is that design right? Is that color blue right? And when we got to the end of about two months of hacking on that, we realized actually we've just been building in the wrong spot. And we should have started at the top of the funnel and asked our users where they're shopping before we just made all of these decisions ourselves. And so that is why feedback loops are so important now for us as a team doing those sessions every single other week. We have 40 of our power users come in and we ask them to roast the app and we get really honest feedback.

18:37We show them designs for future features we wanna do. And then we run at the top of every single week. Our team sync is honestly all of us reviewing data and figuring out, okay, what experiments did we run last week? What did we learn from our shoppers? And what experiments are we gonna run this week to learn more from them? And so I think this kind of mindset shift that I had of needing to always be right as a founder into my job as a founder is to be a scientist and to lead a team of incredible scientists where we're just learning about our users and adapting to their feedback has been honestly an incredible shift in my mind.

19:11And it's helped a lot with, you know, the pride and the ego around, I can't tell you how many features ideas I've had where it hasn't worked out or it hasn't been correct for our users. And having that mindset of, okay, we are scientists and learning has been really, really helpful yeah yeah i love i love this mindset it's uh it's where it's at it's it's key it's key so uh you raised you wrote your first check from one of your professors 250 grand what did you use that money for that was all for paying engineers paying designers yeah and then Then you launched publicly in April. And now you have half a million users and we're in September.

20:00We also raised from Kleiner Perkins, which will be public when this episode comes out. And that was really important for us, right? Because we wanted an institutional investor like Kleiner Perkins, who is blue chip, to say, hey, we really validate this idea. We believe not only in the vision that they've created today, but also the long-term vision of being the AI shopping assistant. And so it's really important for us to, you know, have a firm like that, importantly, because we wanted to bring on best in class tech talent. So we go ahead and we raise from them. And then we launched, yeah, about three months ago.

20:29And we've had honestly incredible traction since then. And I think a function of that is one thing we did that was really important before the launch was really building a community around the product, whether that's the podcast where we bring on, you know, entrepreneurs that we want to learn from and ask them questions. We got our community kind of excited. And so we had people from the get-go who were willing to download it and give feedback so we could continue improving. Yeah. So I've got a ton of questions I want to unpack here. So before we get to like the traction piece, I'd love to talk about the investment piece, right?

21:03Because you have also – so congratulations on raising from an institutional investor. I know you've raised some from some other really notable founders like Kris Jenner, Sarah Blakely, who's one of your mentors. Like talk me through how you raise money from them. For Kris, we actually got connected through another female entrepreneur and we met her at a dinner and we ended up following up with her and pitching her. And I think there was a ton of synergy there, particularly because she has Kardashian closets, right, where they're already selling secondhand clothing. So she got it right away. And then for someone like Sarah Blakely, you know, her entire background, she's a genius marketer from the get-go.

21:44And so that's really, really why we wanted to pitch her. And you talk about, you know, for us, it was really important to have women on our cap table, really strong female leaders who we felt like we looked up to, and then also people who resonated with the pain point. And that's also why we chose with Kleiner Perkins to have, frankly, a female partner. Got you. And so tell me more about these conversations, right? Like when you pitch Chris, like tell me, take me back to the story. Or when you pitch Sarah, did you know Sarah before, you know, before you started building and going, yep, this is what I want to build.

22:18Or like, yeah, talk me through that. Because a lot of, a lot of founders want to have like really notable investors on their cap table. Yeah. I'm honestly trying to think back to the pitch with Chris. We were so nervous, to be honest. I can't tell you when we did a pitch, how many times we would practice, how we think back to, you know, the words that we would say or, you know, how we were going to phrase certain things or different questions that people could ask. I think for us, it was always starting with, hey, we would love to, you know, talk to you about coming on as an advisor. And that's really how we started with Chris.

22:52And then she did invest because she wanted more equity as well. But when we were introduced to her, it was under the guise of, hey, we want to give you, you know, equity for free in this business, because if we're building the next shopping assistant, you have so much credibility within the fashion space. You are known as a media mogul. And so we would love to give you free equity because we want to have you as part of this vision. We want you to have a slice of this pie and help us as we create this. And then from there, then she was so excited about the vision that she was willing to invest more capital.

23:24And so I think that hack of approaching people is, okay, Nathan, you're so incredible. We'd love to bring you on as an advisor. And then you see, okay, here's the traction that this company has. And okay, I'm going to put some more money in is really important. Yeah, that's clever. And then Sarah, how'd you meet Sarah? And like, what did that look like when you said, hey, I want you to be an advisor? Oh, so for Sarah, we trying to think of how we, I had met Sarah through a family friend a while before when I was just a child. And I have always been, you know, I've looked up to her so much. I mean, she is incredible.

23:59You know, going back to selling fax machines and she pulls the car over on the side of the road and she says, I'm in the wrong movie. And she decides she wants to go and start a business. I mean, even when Spanx is blowing up, she's driving around the country to different Bloomingdale's, different Bergdorf's, and going in and pretending she's a sales rep. People don't recognize her to get feedback on the product. So I've always been so fascinated by Sarah and her innate marketing ability and also just her hustler and go get it attitude as a founder. And so for her, when we pitched her, it was honestly under the guise of wanting her advice on marketing.

24:33And she does invest in a lot of, you know, female founded companies. She's got, you know, her own stuff going on with sneaks. So that was a pitch we were really excited about. So when did you decide to build in public? Because I think it's really clever and it's really like the unfair advantage. You don't have to do it but it's an unfair advantage now for founders uh when you're when you're launching any product like building in public building a personal brand when did you decide and when did you start kind of like building in public was it earlier this year was it late because because yeah you're like it's still early days for you like it's really impressive what you've built so far phoebe but like yeah i'm just curious for us it was really april i want to say it was april because we launched the podcast April 1st, and then we launched the company April 24th is when we decide to really build in public.

25:25And I think for us, it was this idea of we're sick of brands, we're sick of advertisements, sick of logos. And we wanted to bring people in and actually get them as part of the journey of, okay, here we are, here's what we're building. We want your feedback on all of it. Because for us, if we're building the shopping assistant, we want the women who are actually going to be using it to give us feedback in real time. And the only way to do that is not through just like a logo that they can't, you know, associate with a real person, but it's us being really honest about, hey, this is what we've built and we want your thoughts on it.

25:55And I do think it is a huge advantage. One thing I've learned and I do think it is a huge advantage because one thing I learned from Gary Vee, who we recently had in our podcast, is he says as tech becomes more democratized, as you have more of these, you know, vibe coding tools where anyone can build their ideas, which by the way is incredible. And I think it's going to democratize access to ideation, to, you know, building the future that you want to see. The thing that really is going to matter is distribution and personal brand. You know, another one of our investors is Haley Bieber. You think about, you know, the personal brand that she has created and the world that she's created with Rode is so incredible.

26:33And so I think we are consistently seeing examples where personal brand and being able to relate to the founders is really, really key. Now, the product needs to be incredible as well, just as it was with road and so the product needs to take it to the next mile but bringing people in is really important yeah so um you really want to build that relationship with your customers at scale as deeply as possible so um you you clearly see the power in you know building that through building in public building a personal brand and that that is the future of i think marketing in many ways especially for us like you know when we're launching we don't have a giant marketing budget.

27:13So it's all about, okay, one thing we did that was really great was we started doing collaborations with other content creators, right? We can't afford these influencers. I have amazing friends who are influencers that I know how much they're paid. And as a startup, we're not going to be able to afford that, right? And so we started doing joint collabs, whereas we build up the FIA social following of, okay, we have this audience of women who love shopping. Hey, you're a shopping influencer. Why don't we do a collab together and we'll drive a bunch of followers to your account. And those really, really helped us grow as well as founder-led marketing where we do different content with these founder accounts.