October 7, 2019
As told by Joseph Heller, Founder and CEO
As the founder of The/Studio, I’ve been thinking a great deal about The/Studio’s vision and mission for 2020 and beyond. To preface how The/Studio articulates its purpose, I define vision as a company’s unchanging, long-term, moonshot goal, while “Mission” is more the practical implementation of that vision. The mission can change and evolve whenever a better way to fulfill the vision is pursued. But the vision shouldn’t change in a company’s conceivable lifetime.
To democratize manufacturing, creating a renaissance in human creativity and progress.
Although technology has given people access to many products and services, it is still extremely difficult to manufacture products.
We will democratize manufacturing by building out technology and a network of factories, so that literally anyone or any organization can easily bring a product to market. Furthermore, we will build tools to prepare factories for the future of commerce, which will require that they accept orders in any quantity, on-demand, and with rapid turnaround times.
We are building a supply chain infrastructure for a future where anyone with a creative idea can effortlessly create it for their audiences. Starting with manufacturing, we will democratize the supply chain down to the last mile delivery, enabling anyone to bring new products to market competitively, quickly and affordably.
“Without art, we’re not human. The ability to imagine and to take that imagination and make it into reality is one of the things that is really distinctive about humans. Whether it’s painting, building airplanes, or figuring out how to make a paycheck last to the end of the month, it all stems from the same creative capacity. And there is no better way to flex that creativity muscle than to do art, be exposed to art, and to think about art.”
Augustín Fuentes, PhD, Anthropologist and The Creative Spark: How Imagination Made Humans Exceptional
Technology companies have created a lot of value for humanity. However, there is a real threat that they will erode our ability to be creative, which is a literal threat to our species.
This threat to creativity is on full display with Amazon’s war against brands and retailers. Tens of millions of jobs globally are based on the human ability to think of innovative, cool and unique products that we want to consume. However, in a world dominated by Amazon, millions of creative jobs will be lost to algorithms that dictate what we want and what we should buy.
Every business leader has watched the ascent of Amazon with awe and has been inspired by Jeff Bezos’s ability to outmaneuver the competition at every turn. It started with books, then grew into DVDs. Then Amazon became the “Everything” store and disrupted the cloud business with AWS seemingly as effortless as they disrupted retail.
But awe is turning into fear. Amazon now has the ability to destroy almost every brand and retailer with just a few clicks. With the advantage of scale, data, cheap money—not to mention a customer base bigger than most countries—Amazon is the judge and jury on its competition.
With Amazon’s scale and infrastructure allowing it to currently offer two-day shipping for virtually every product, one-day shipping is an inevitability. And with its imminent infrastructure of drones, warehouses and transportation network, one can easily imagine a future where it’ll probably get down to hours. Their product is extremely easy to use and their selection is vast.
The numbers are telling: Amazon now represents 5% of all retail spend and 50% of ecommerce spend. These numbers will only increase. Consumers love the convenience of Amazon and in terms of growth, Amazon is fueled by cheap money as investors universally look past Amazon’s low margins, seeing it as more a tech company.
Traditional brands and retailers don’t have the scale of Amazon. As a result, they’re punished by investors for anything less than stellar margins. Nearly every brand and retailer is just a small business compared to Amazon, and that size difference means that, within the status quo, their margins and market share will erode, the Capital Markets will ostracize them and, unable to pivot or change, they’ll cease to exist.
But there’s something more nefarious about Amazon, far beyond simple market dominance. It’s clear that Amazon’s vision is to take advantage of the consumer desire for convenience, control what they buy, make sure that they buy it from Amazon, and eventually any brand or retailer that is not fulfilled by Amazon or an Amazon basic will be snuffed out or tightly controlled.
There’s little that brands—from SMBs to former retail giants—can do about this. Most are incapable of making long-term investments because the stock market will penalize them for any short-term profit reduction. It’s a Catch-22: Brands are forced to not innovate, which eventually lowers their margins at which point the market eventually punishes them. Meanwhile, Amazon has nearly endless access to cheap capital to continually invest in ventures that kill brands and strengthen Amazon. And then they deliberately use data to find out the best selling products, then they make their own cheaper white label version. Amazon’s search algorithms erode the importance of brand loyalty because within Amazon’s Prime-powered platform, consumers are more likely to just buy the product that comes up first and delivers fastest. Finally, with the advent of voice-based search and purchasing, it’s almost guaranteed the average consumer will be likely to purchase whatever Amazon recommends first—which will undoubtedly be Amazon’s choice, too.
You could rightly argue that brands and retailers did this to themselves—and that a world where Amazon totally controls retail and the products that we buy in return for ultimate convenience wouldn’t be so bad. But at The/Studio, we believe this is shortsighted and would be the death of widespread creativity as we know it; and potentially, the death of what it means to be human. Unique, inspiring, artist-driven products would be once again a thing of the rich. It will no longer be profitable to be a brand or a designer, except perhaps for ultra-premium brands.
The reality is that Amazon does not create or design physical products. They use data and infrastructure to make it easy for you to purchase products, typically the ones that have the best margins for Amazon. And instead of sharing that value, they capture all of it for themselves.
The/Studio’s “Holy Trinity” for humanity’s creative spirit is the Brand, the Designer, and the Supply Chain. We believe that human beings are by nature creative, and their ideal marketplace is one where creativity can thrive. And while Amazon has built an amazing infrastructure, we stand firm that the behemoth has not inspired, nor encouraged, creativity. Instead, Amazon is monopolizing a massive market opportunity they’ve created for themselves.
If they could band together, that is, the Brand, the Designer, and the Supply Chain, they could take down Amazon—or least tame it. But this would only be possible if they had the infrastructure to unite and beat Amazon at its own game. Amazon is able to create massive value for itself because of its extensive global ecommerce operations—something that would be nearly impossible to build without a unifying vision across brands, designers and the supply chain.
Our goal is to be that unifying vision.
We are building an infrastructure that allows factories, designers and the supply chain to leverage their collective power to take back control from Amazon. Along the way, The/Studio will enable the maker/entrepreneur to flourish; SMBs to delight and engage their audiences; and enterprise brands to re-establish their relevance. For our part, we will create tremendous value for both our employees and shareholders—all the while staying true to our core values, growing organically, and not at the expense of brands, creators or the supply chain.
Consumers are hungry for unique products. They yield to the call of Amazon’s ease-of-purchase because they know that they’d find the same low-quality, bland products at retailers, only with more inconvenience and higher costs. Brands like Supreme prove the point that in fact consumers will readily put up with intentional inconvenience—if the end product is unique and valuable to them. But it takes a scrappy, powerful supply chain that most brands don’t have access to.
Our ambitions are massive and our beginnings are humble. We first want to help fashion brands connect to factories so that they can easily and quickly manufacture accessory items. The flip side of that is our desire to help factories connect with brands that can yield better margins for them then massive, low-creativity orders from major retailers.
The result will be an ecosystem in which Amazon is no longer the default marketplace due to its impressive last-mile infrastructure. With a dynamic, responsive and quick-acting first-mile, brands can easily achieve an efficient direct-to-consumer or “D2C” model, and allowing them to stock their own shops with relevant, timely and market share-grabbing products, instead of the “safe” designs that they’ve been forced to create with their former supply chains.
From there, we will provide our customers with the ability to leverage our network of shipping and logistics to further encroach on Amazon’s last-mile advantage. Eventually we hope to even provide shared warehouses for the brands and retailers that we work with.
Our goal is to build an entire ecosystem spanning raw materials, to manufacturing, to logistics, design and eventually last mile delivery that will surpass Amazon. All while never overshadowing the creators that power it.
Once brands have access to the same infrastructure that Amazon has, we believe humanity’s uniqueness and ability to create will restored. And we will be honored to unite and serve those paladins of the creative spirit.