Norwegian dress rental start-up, Fjong, goes agile to test new business models, all while they weather the COVID-19 storm.

It’s the classic start-up tale. Two successful women have a problem. They come up with solution to said problem, which happens to be something they think would appeal to other successful women. They team up with a talented developer, create a platform, accumulate a bunch of inventory, and voila, women just like them come running. And while we could end the tale here and put it in the annals of start-up success history, the happy ending for this Norwegian up-and-coming company isn’t quite so simple.

Fjong founders James Larsen and Sigrun Syverud are still leading Fjong today

Two women and one man founded Fjong in 2016, as the tale goes. And yes, their on-the-spot dress rental service had a definite appeal to their target market, but after a few years, the team realized that they needed to pivot in order to secure success in the long-term.

Their CFO, Cristina Zgherea, who joined Fjong on 1 September 2018, believed that working agile was the way forward. This went hand-in-hand with how Fjong decided to approach the development of a new service offering. They ran their first test of this new offering in 2019, using agile methodology of course.

Fjong runs pilot to explore new service offering

The Fjong team worked to create a minimum viable product for the test. From their user group, they drew some conclusions, focused on what mattered and eliminated what didn’t. Their plan was to begin working with two products at the beginning of 2020: their spot rental service and their subscription service. And for a start-up, two products at the same time is a heavy load.

“We saw that subscriptions worked. But our core business was still the spot rentals. We were in a situation in which we needed to push on what was working, but also think about the long-term…and in that sense, subscriptions definitely have a higher customer lifetime value,” says Zgherea.

It was a great plan and the team was optimistic. Then came COVID-19. With everyone locked down and nowhere to go, the dress rental business took a hit. Fjong was forced to temporarily lay-off the majority of its staff, and it seemed that they were headed into somewhat of a holding pattern. That’s when the leaders of Fjong realized that this was the perfect time to dive even deeper into what agile methodologies could do for this start-up-on-hold…though this time they only had skeleton crew who remained on staff to run the test.

“But what better moment than this to test ‘renting without trying’ and gather information about customer preferences, so that we could start building a solid recommendation engine?” reflects Zgherea.

The COVID-19 impact on Fjong

“At the beginning of March, because of the decline in rentals, I was temporarily laid off. At this point, we had only run one test on the subscription model, and we had only just started working with it. That’s when our CEO and the Board of Directors thought why not use this time to run another test and continue to purse agile methods, in order to better understand how this can change the way we work and think.”

The Fjong team ran another test. They knew subscriptions could work, but there were still a lot of variables that they didn’t yet understand. So, with a new group, they wanted to go one step further based on their learnings from the previous test. They told their user group, “You can rent this many dresses, for this period of time, at this price. And we want to suggest some of the outfits for you.”

While the test was running, sometime in April, Zgherea spotted free online training sessions, in small groups, given by expert Agile Coaches from Telenor.

With a bit of agile training under her belt and a thirst for more, Zgherea is eager to get back to ‘normal’ and continue with testing and incremental development of their service.

“What we see is that people are happy to use us and they like our suggestions (for clothing and accessories). And they are happy to get their outfits when they need them. The next step is scaling up. That’s the big question.”

COVID-19 leaves a great deal of uncertainty in its wake, especially for the Fjong team. They are fully aware of the predicament they are in, as fewer events, parties and days in the office mean that women may not need as many dresses as before. However, Zgherea remains optimistic and believes that they have used the time during the COVID-19 crisis wisely, to focus on the future.

 “Subscriptions are the future, we know that. And we know that we also need to increase the use of automation in terms of the recommendations we provide to our customers, moving from a manual process to something that can cover like 1,000 customers per month, for example. It’s a big process. It’s not easy. And the only way to do it is agile.”

“Someday, it will be as simple as, we know you, we know what looks good on you, and we recommend it. You just need to subscribe to our service and you will have the perfect wardrobe at your doorstep.”

Follow Fjong and see what looks good on you. @fjong.co on Instagram

*Update June 2020: Cristina has said ‘yes’ to a new role as CFO of Nordea Direct, an opportunity she could not refuse. She will always love and support Fjong, but now she aims to bring her agile ways to the financial arena.

Produced by Telenor