Hugh Fahy, the CIO of luxury online fashion group Net-a-Porter, once helped run a VC-funded startup called betNow. The experience left a lasting impression. Ask him the one piece of advice he would give to aspiring CIOs, and the reply shoots back: “Make sure you run a startup. You learn an awful lot.”
Fahy, a former director of development at online betting firm Betfair, joined Net-a-Porter last year. Prior to Betfair, he was COO of Open Vantage, which operated text message betting service betNow.
A founder member of a five-strong team, he was responsible for building and operating the technical and customer operations, HR, supply chain management, legal and regulatory and business development - basically most areas of running a business.
Technologists don’t just learn from the day-to-day running of a startup, says Fahy. The experience also gives them insight into aspects of business such as private equity funding (the startup was backed by VC funders including Balderton Capital) and into developing intimate relationships with actual and prospective customers.
Continuing the innovation
Although betNow is no more, Fahy now has access to the innovation side of startups through his role at Net-a-Porter group.
He describes the company, which was founded by former journalist Natalie Massenet in 2000 in London, as a “dot.com startup that succeeded”. His job is to “continue the innovation”, which has involved getting the group’s 300-strong IT team to work as small, startup-like teams that are more closely aligned with the business.
Instead of being grouped by technology function, like operations and administration, the team is now aligned by group function and the brands, which comprise the women’s fashion website Net-a-Porter, the men’s version, Mr Porter, the discounted luxury fashion site, The Outnet and Porter magazine.
“We’re organised into about 22 teams. Each one of those needs to operate like a startup.
“What’s nice about a startup is everybody knows what the outcome is, intrinsically. Everybody knows what they’re trying to achieve. Nobody can wait a year to see the results. They don’t want a big, risky, lengthy, programme of work. Seeing the outcome of their labours in a couple of weeks gets people in the headspace,” Fahy explains.
Working like a startup means operating in a much more agile fashion. This mindset is a big attraction of Net-a-Porter for software developers, Fahy claims.
“[Agile] is a big part of our DNA. We’ve done surveys about why people join us and agility is at the the top of the list.”
He lists Google, Betfair and Sky as other places that candidates might apply to for work, as well as Net-a-Porter, for their sense of innovation and agile working.
But why would they choose the online luxury shopping company over such big names? Fahy says first off, the work environment - a glamorous, chandelier-draped, open plan office is a big draw for the type of person who is “probably not too used to wearing a suit”. They’re also more likely to be talking to people in the tech startup scene in Farringdon, rather than interviewing with banks, he says.
The Net-a-Porter office in above Westfield shopping centre in West London ©Flickr Herry Lawford
“And when they first hear about us, they want to hear about our tech credentials, our agility, our thinking,” Fahy says.
“In the survey we just undertook with staff on ‘why did you join us’, the autonomy and empowerment pieces shone through. I don’t know whether they acquired it after they joined, but as well as the technology, that’s why. We’re known for doing our own thing and being innovative.”
It also uses commodity software, such as, Salesforce.com for CRM, Alfresco content management and Dematic robots and IWS from Invar for automation in the warehouse, CubiScan for product measurements, Crown Computing for workforce management and Route Monkey for delivery routing.
Among its current top IT priorities, Net-a-Porter is investing in its platform to make it more nimble, to support its agile team and enable them to deploy new services at the push of a button. This has involved replacing point-to-point connections in the technology estate with more service-oriented architecture.
Using SOA gives Net-a-Porter an interface where IT can just go to one place to make a change. Fahy uses Net-a-Porter’s payments service as an example.
“We have just finished our payment service, so all our brands point to the same place when it comes to payments.
“That’s useful for many reasons, including, for example, introduction of payment methods. You go to one place, so it’s good for the site; quick introduction of the payment, good for the payments team; and it’s easier to implement tests because they run on the new platform that’s developed using our agile principles.”
Experimenting through The Netbook
Alongside the replatforming, the company is conducting a number of experiments to help make Net-a-Porter stand out.
For example, it operates what Fahy refers to as a social commerce incubator, which it calls The Netbook. Unlike department store chain John Lewis’ startup incubator JLAB, which launched last year to develop startups with new retail technological ideas, Net-a-Porter is not currently looking outside of its business for innovation.
“[The Netbook] is where we do a lot of our R&D, and right now, it’s really focused on changing consumer behaviours and on social,” he says.
Luxury fashion throws up different challenges to the typical technical innovations of retail. For example, where a high street brand wants to sell as many of an item as possible, one of the challenges of luxury fashion is to sell something that will desired by many, but bought by few.
Luxury is a concept embedded in the Net-a-Porter's office, starting with the welcoming reception area © Net-a-Porter
“Most of our stock, we wouldn’t carry more than 50 of each item, which is a unique challenge to luxury fashion retail.
“There’s an emotion attached to what are pretty expensive items of clothing. So what you probably wouldn’t want to do is to turn up and look at Net-a-Porter and see 568 five-star ratings, because you want something unique,” Fahy explains.
Net-a-Porter is therefore looking at more “subtle” ways of curating the products it sells, without talking directly about the products or opinions of the products.
“We’re creating a community around opinion and style and allowing a conversation around people and the social life [associated with the products]. So the conversation is there, but one step removed from an individual item.
“The fun thing is integrating people’s purchases and opinions of the articles they’ve purchased into that process as well. There’s a closed user group of 6,000 invited individuals we’re experimenting with.”
Although the idea is not brand new, Fahy says that launching an augmented reality-enabled magazine, Porter, allows the company to experiment with combining e-commerce with the traditional publishing format.
“That’s been a fabulous success,” he says.
Every page of the magazine has an augmented reality element, using AR software Layr. So when a reader hovers over a page with the phone loaded up with the Net-a-Porter mobile app, icons will appear on their phone to allow them to buy the product on the page.
The group’s startup-like operations are likely to be influenced by its founder Massenet, who, Fahy says, is “very keen” on startups.
“We keep an eye [on startups],” he says, adding that areas of interest would be around fitting. However, Net-a-Porter would need to find a unique, luxury slant on this type of technology too.
“In luxury, there is a relatively high level of returns. Anything we can do to improve fitting [would help to reduce this].
“But again, we might be slightly different to a high street fashion retailer, in the fact that seeing an item of clothing put on a simulated you, in 3D, might not be what our customers aspire to.”
The technologist DNA
After studying computing at Plymouth Polytechnic and being a software programmer for most of his career, Fahy confesses that his mind tends to work in “boxes and lights” and he has clear ideas of the valued skills of a technologist.
As well as being agile, innovative and experimental, he also believes that technologists should be led strongly by data.
At Betfair, his job was to redevelop the technology platform of the online betting firm. He is repeating the process at Net-a-Porter.
“For me as a technologist, [replatforming is] the thing that most excites me. But also at Betfair, the product direction changed, which was great, but I spent a lot of the time listening directly to customer feedback and understanding, face-to-face, what our customers needed or wanted. That data-led experience of channel optimisation is something I personally think is valuable in a technologist.
“I make sure my team is being data-led, making sure we’re doing a lot of multi-variant, A/B testing and making sure we’re not just relying on intuition. Intuition’s great, and there’s a lot of that in fashion for all the right reasons. But in e-commerce, whether that button is blue or green - there are ways of checking that.”
But these valuable skills for a technologist are not necessarily the building blocks of just a CIO. Fahy admits that becoming a CIO was not always in his career plan, and that he actually sets his sights even higher - to running his own business.
“I’d like to be a CEO of something I could describe in two words,” he says,
“For me, a proposition with that simplicity has a much greater chance of succeeding than if you have to put out a long prospectus about what you do.”