For my interviews, I interviewed two Stanford undergraduate students (Nadine and Sarah) and a Notre Dame undergraduate student (Ian). I thought it was important to hear from both users in our SOM (Stanford students, costume/niche outfit wear) and a larger SAM market (college students, costume/niche outfit wear). Our TAM would be all costume niche/outfit wearers in the US. The costume/niche outfit wear would include wear for holidays, themed parties, sporting events, etc. Think of those times when you buy something and you know it’s likely you may not wear that outfit again, or at least for another year.
We started with the idea of a niche clothing rental company at Stanford. Many of our group members have had those themed parties where we had nothing to wear, but knew that someone at the University had exactly what we needed. At first, we began with the question of whether our service would connect two people; one the renter and one the rentee. Nadine and Sarah conveyed that they would be comfortable letting someone they know rent or borrow their clothes, but they would not be comfortable letting someone they didn’t know rent or borrow their clothing. This seemed to be a shared sentiment and led to the idea of a centralized rental service that would acquire clothing from the students through donation (**possibly low prices or discount on service if necessary) first and rent those clothing items out second. Even further, similar to Rent the Runway, a student could choose to buy a piece of rally wear if they so desired (if item was purchased by service, this would be at a higher price than the rally wear was purchased for by our service, generating a profit). In the SOM and SAM stages, the rental service would be a monthly subscription with the option to get clothing weekly. The weekly rental was touched upon by my other interviewee Ian, as he talked about the main need for college students is costume wear “fast, for cheap, with quick turnarounds for the next weekend”. He touched on that students often have many themed parties, weekend after weekend and that many students will order a “niche outfit” once and never wear it again.
Our SOM is where we begin. These are not only Stanford undergraduate students, but further Stanford undergraduate students in which the costume wear rental service would be of use for. Based on our assumptions, we estimated that the main group to use the service would be students in Greek life, along with other students participating in social life. After calculating the number of both undergraduate students in this group, we assumed somewhere between 1/4 and 1/2 of them would participate in the service (this number was partially pulled by Nadine noting that in our sorority house group chat, about a third of the people participate in clothing exchange). After multiplying that number of students by 8 (number of months on campus) and 10 (price of monthly prescription), we came up with $73k of revenue per year. On top of this, we calculated a little under $2k a year for clothes that were bought by students, coming in at $75k total.
In our SAM and TAM calculations, we also considered similar factors when thinking about our total number of possible subscribers in final model (TAM) and then a more realistic number for our market of college students (SAM). One of the restrictions around our SAM were Ian brought up was that at more affluent schools or within more affluent groups, people may not want to buy used clothes. On the other hand, some students may not be able to afford costume wear due to budget constraints. Therefore, we decide that those people were not available for the rental clothing market. Using the same two sources of profit (rentals and selling used clothes), we calculated the profits to be around $350 million. For our TAM, our market is to all niche clothing and costume wearers in the United States. Through much in-depth thought and calculation and when and who this target would apply to we found the TAM to be $5.8 billion in net revenue. This is not accounting for cost of purchased goods to acquire the clothing for rent.
