Peer-to-peer business models have been on the rise: from Uber to Airbnb – consumers, in a looming recessionary period of history, are more apt to share their items with others for profit. raxapp is capitalizing on this trend, specifically for the fashion industry. Marley Alles, founder of raxapp, shared some valuable insights into her success and failures as an entrepreneur, along with her goals with raxapp.
Alles graduated from Queens Commerce in 2018. She began working at a big four accounting firm, EY, but couldn’t shake the thirst for entrepreneurship. Despite this, she began working in accounting simply because that's what everyone did. Her peers were immersed in the bubbles of consulting or investment banking, and as she worked so hard to get into her program, she thought that she needed to conform to standard business careers, too. While at EY, she was offered free admission to the MBA program at Hult Business School, in London, England, where she was eventually introduced to the technology space and the world of consumer preferences, along with the art of disrupting industries that were slow to adapt. Alles was also introduced to the peer-to-peer industry and how consumer behavior was shifting from ownership to access – we are now in a sharing economy. Alles recognized, although the peer-to-peer industry was developing fast, fashion wasn’t in the equation, and that's when genius struck.
With an idea in mind, it was time to build. But Alles didn’t have a technical background, and for a technical startup, with the main product being around the idea and the app, this would be a huge barrier. So, she decided to get quotes from different developers and agencies, but some of these quotes were outrageous, nearing $100,000. With no technical co-founder or development agency in mind, Alles turned to no-code technology. These no-code sites are similar to Wiz, which helps someone with a non-technical background create an app with a template-like format. She built raxapp on a no code site, but it wasn’t very functional and ran quite slow.
With a barely functioning app, Alles still decided to launch to gauge market interest – and she got great feedback! There was a market for peer-to-peer fashion – people wanted it! So, with enough traction, Alles met her Chief Technology Officer (CTO) on Y-Combinator (a site to meet co-founders, both technical and non-technical). Her CTO developed raxapp 2.0 from scratch, and they launched this past March. Despite the common practice of ditching your 9-5 to focus on your startup, Alles stayed at EY and built raxapp on the side. Even today, after some continued growth, she has been working at a few local Canadian startups and gaining a steady paycheck to help fund raxapp’s development. Alles found that having a steady job while creating a business has helped alleviate stress without compromising her company's growth.
The peer-to-peer business model, particularly in the fashion industry, is majorly unexplored. It requires a level of trust, both from the borrowers and lenders, that can be difficult to create. Alles tackles this issue with a founder led approach, through which she creates content that
shows the behind the scenes of the brand, to help put a face to the company. Historically, we aren’t familiar with the founders of the companies we purchase and use daily, but today, creating a business around the founder’s persona builds a level of trust and investment in a company that is hard to mimic. While creating this content, Alles is able to talk to users and find her niche, which has been in formal attire, including dresses, blazers, and wedding attire. The growth has mainly been organic, through social media on her Instagram and TikTok profiles.
Alles found market research to be paramount for starting her business. She was able to speak to her actual customers, even when the app wasn’t to standard, and gained valuable insights into what consumers wanted. Although raxapp 2.0 has now been developed and is being refined to high standards, Alles wished she had launched later. Starting as lean as possible would have saved a lot of time and effort. Though, her failures taught her the most valuable lessons, allowing raxapp to be relaunched better than ever. For Alles, raxapp has been her ‘real life MBA’, teaching her more about business than any class she has attended.