In Good Company with Nicolai Tangen - HIGHLIGHTS: Robert Gentz - Co-CEO of Zalando

Starting point is 00:00:00 Hi everybody, tune in to this short version of the podcast, which we do every Friday for the long version. Tune in on Wednesdays. Hi, everyone, I'm Nicola Tangan, the CEO of the Norwegian Soan Wealth Fund. And today I'm here with Robert Gens, who is visiting us in Oslo. And Robert is the co-founder and co-CEO of Salando, which is, of course, as you know, all of you, Europe's leading online fashion platform. Robert started Salando in 2008 right as the financial crisis hit. And most people thought that selling shoes on.

Starting point is 00:00:30 online was a terrible idea. But now, 17 years later, Salando serves more than 50 million customers across 25 European markets. We own a lot of shares in this company, and it's really exciting to have you here. Thank you very much for inviting me and having me. Now, Rob, let's go back to the start. You founded Salando in 2008, just as the financial crisis was kind of hitting the world. So tell me about the very start. Before we start, Zalando, like me and my co-founder, David, we started like a social media company in Latin America, which was like, you know, student network for in Mexico, Argentina and Chile. And this was like a startup that didn't really work out.

Starting point is 00:01:13 And then we said, okay, well, that shouldn't be it. So we actually wanted to actually try it one more time. And we came back to Europe and thought, okay, well, in e-commerce with soft goods, there's actually very great opportunity here in Europe. and we looked into various categories and fashion and really found shoes quite interesting and in June 2008 we started to sell flip-flops on a domain called Flip-Tops D

Starting point is 00:01:40 and really worked out well. Consumers really liked it. It really picked up to 20 flip-flops a day. Based on this insight, we got our investment for like a big idea selling shoes online and then we got started. When did you realize that there was potential beyond the shoe category?

Starting point is 00:02:03 The scaling of the London happened extremely fast. So we went from like 2009, we had probably like 5 million revenues, 6 million revenues. Then we went to 150 in the next year, then more than 500 million. Wow. And then more than 1.2 billion in the fourth year. Wow. So we literally went from 50 people in 2009 to end of 2011. We were like more than 2.5,000 employees.

Starting point is 00:02:28 So the scaling went very fast because then we realized that we have this flywheel going for us. So we started off with shoes and then we understood, you know, the more you provide selection, actually the better you could actually convert the traffic. So better you could create the experience for customers. So we really had to just, I mean, scale selection and then we were able to convert the traffic in a good way. And then we ask ourselves, is this not only shoes, but as well, a fashion. and can we actually cross-sale fashion what we then started to do.

Starting point is 00:03:01 And then we asked ourselves, this is not only Germany, this is a European proposition, and then we went into a first market and realized that we could actually bring the same selection that we had now in Germany to a smaller market that was very much appreciated. And then we scaled across Europe.

Starting point is 00:03:13 And that was a very, very fast scaling in these first years. What are the most important ways that AI is changing the way you run your business now? I mean, it has a few of components about how we actually interact with consumers. for example we recently launched like a discovery feed so which is actually a great way of how can actually consumers can interact with with fashion beyond actually the only buying but as well in terms

Starting point is 00:03:40 of their discovery and their inspiration entertainment so where we actually surface from like a huge pool of content those items of content that actually consumers might be the most interested in which gives them a great gateway to what's finding or getting inspired or as well having fun with with fashion lifestyle. So that's an interesting new project that we have launched on our mission to inspiration and entertainment with consumers. A second kind of bigger initiative of ours is an assistant that we have built, which actually enables consumers to interact with us in natural language. So we can actually ask us a much more occasion-based question. So I don't know, I'm showing up here in Norway and what shall I actually wear today in Norway, which is something

Starting point is 00:04:24 e-commerce previously couldn't really answer. But now with all these advanced, large language models and as well in our own advancements, we are able to cope with these questions and answer these questions in a good way. So the model told you, okay, you're going to Norway, it's such a depressing country, you need to wear black. Yeah, it could be. What about sizes? How is technology going to help people choose the size? The size and fit is really one of the most

Starting point is 00:04:53 interesting and complex questions in fashion and tier. AI actually helps quite a lot to actually solve these questions. Can I take a picture of myself and get the size? Yeah, exactly. So you can take a picture of yourself at Zilando, which actually one million customers already have done. So you take a picture of yourself with using the Zalano app. And we render you the sizes from your body. And this actually increases our probability to actually predict the right size for you.

Starting point is 00:05:18 Let's talk about leadership. So you run this from the first flip-flop to now. You're like 15,000 people or thereabouts. about how has your leadership style changed? I mean, a lot, yeah, I guess. When I started as I was 24, like never really worked in another company. Outside of the social media company, we started in Latin America,

Starting point is 00:05:39 and never really had any work experience. So I think literally in the first, in the first years, it was about just being in the front row and just, I mean, doing the, like playing on the field, and just doing, doing stuff. Over time, obviously, like, you know, we have grown a lot and I had to as well learn about how to actually scale myself and how to how to scale the leadership. What I would describe now how I would lead is I'm quite an enabling leader. So I trust by default the teams or like the DSAT actually work for me directly. And I try to actually spend quite some time in just understanding and being curious about like what's, what's happening and then only really get involved in the areas where I feel that only I can do that. So it could be some very ambiguous decisions or like some more long-term decisions

Starting point is 00:06:32 where you need a certain conviction and risk budget or stubbornness as well. And I think on topics around culture, like corporate culture, like those kind of elements where you just have to really get involved and take a stance as no one else can do. You've been very vocal about kind of the European dream for entrepreneurship and I'm very concerned about that. Just what are your thoughts about Europe as a place to start a business? I think what I'm missing sometimes in the European debate is like a positive Northda idea. So because if you don't really have a positive North idea, you kind of get into a lot of detailed discussions and negative discussions.

Starting point is 00:07:21 what really I think we need here in Europe is first of all I think positive positive kind of idea what is actually what we want to do and and I felt like you know that actually like creating that such a European dream is actually like a good and good and north star idea because I feel the American dream which was I think like a big it's like a big brand of the US I think it actually has has suffered quite a bit in recent recent which is a brand around you know come to come to the US and we cheer you up and build your dream and it's the right kind of inclusive place and I feel the American dream has suffered because it went from a very inclusive idea not to much more exclusive idea so not everyone is really welcome in

Starting point is 00:08:05 US and I feel Europe really has has a big big chance to actually tap into this void and actually create like a European idea because it's a it's a free space it's a it's a very values-driven democratic space we have in Europe. And I think we have all the great talents and we have a lot of potential. And we just need to, I think, formulate like a positive, like north-the- idea and make us work clear that we are, I mean, we're here in a race. We are in a race between China and US. And it's about relevancy and we want to win this race. And I think that's some of the positive ideas. I think that we need here in Europe. If you try to abstract what it is that makes a good founder, what is it?

Starting point is 00:08:54 Who are successful? What for me is a trade for like active investors and many funds that I always look for is some element of curiosity and some element as well of humility. Because that's what I realized we're doing this for 17 years is curiosity is a very, very important leadership trade for for me because I mean you can only really take good decisions when you listen yeah and when you are interested in and you can and you can learn actually from from everyone so from a newly joined person or two of your company from a customer from a partner you can you can literally learn from everyone and this is what important that you're curious in all to actually take a good decision and the second element of humility is as well for me important because I mean you need to

Starting point is 00:09:41 be respectful for what is in front of you and not get ahead because I mean just because whatever you build until here doesn't always predict that you as well be successful in the next kind of challenges that you have in front of you. And I think that's, I think, two kind of important trades. I would always look for founders when I invest into their companies. How much do you work? I think I don't really differentiate that much between like when I work and not work. I mean, I think about Zalando, when I get up, when I'm at work, when I'm at home, I think it always When you found, I think it's a very, very special kind of relationship that you have to the company, like a very deep care.

Starting point is 00:10:22 And it doesn't really matter where you are and you always think about it in a way. So it's very hard for me to say like what's work, what's not work.

In Good Company with Nicolai Tangen - HIGHLIGHTS: Robert Gentz - Co-CEO of Zalando

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