If I was an angel investor or a VC, the company I would put money into is Ellie, a new startup incubated by LA-based Science. Ellie blends a love of fashion and fitness to create high quality activewear for women. Lululemon has been wildly successful by targeting women, and Ellie is positioned to compete with Lululemon by offering comparable activewear, at half the price. Beyond price, Ellie’s primary point of differentiation is to utilize a completely different distribution model to reach their end consumers. Ellie is based completely online and women can buy individual pieces or join the “Fit Fashionista Club,” a monthly subscription that uses free shipping to deliver a new outfit once a month for $49.95. Similar to Lululemon, Ellie will rely on limited edition collections to try and train their customers to purchase based on scarcity.
Ellie is disrupting an existing market, and I am drawn to this startup because I still believe the market for women’s activewear is underserved. Prior to Lululemon, women’s activewear was largely neglected and Nike and UnderArmour are still not doing a good job of meeting the needs of women. Lululemon has made wearing yoga pants fashionable, and women love Lululemon’s clothes, but the tradeoff is premium pricing. Ellie not only offers affordable pricing, but they also offer women with busy lives a new distribution model. I believe the ability to get high quality, fashionable activewear without going to the store to try it on could be very appealing to many women. In addition, if women want to take advantage of the subscription model, they will be sent a complete outfit, which means they will always have the newest look.