StilSOS

What did it do?

StilSOS was a Turkish social commerce site founded by Reyhan Baylan in July 2012. It brought products from many brands and designers together in a single showcase; users could put together their own outfits and follow brands and shops. It sent users on to the site where the product was sold and took a commission on any resulting sale.

Why did it shut down?

Founder Reyhan Baylan told Webrazzi that the first investment had brought significant growth, but that this growth was not enough to reach a tipping point. In a business model based on affiliate revenue, income per member was low, and profitability was possible only if membership grew enormously. That required scaling up marketing; talks were held on a new investment round, but the parties could not agree. Webrazzi also wrote that it had heard the founders had been trying to sell the site for some time before it closed. A 2017 round-up by the Turkish news outlet Habertürk likewise attributed the closure to growth falling short of the tipping point.

The story

In 2012 social commerce was one of the hottest topics in the start-up world. Examples such as Pinterest were changing the way people discovered products. In July 2012 Reyhan Baylan founded StilSOS, which would become one of the Turkish representatives of this wave; the site went live on 28 September 2012. It brought products from different brands and designers together in a single social fashion showcase, letting users put together their own outfits and follow brands and shops.

StilSOS soon attracted attention. According to a Webrazzi report from January 2013, the site offered its users 40 shops and 100,000 different products. At the 11th Winter Summit of the European Business Angels Network, held in Istanbul, it had competed against many start-ups from across Europe and taken first place. The same month it received its first investment, USD 230,000, from members of Galata Business Angels; the investors included well-known names such as Melih Ödemiş, Burak Divanlıoğlu and Serkan Borançılı.

But the model had a weak spot. StilSOS did not sell its own stock; it sent users on to the e-commerce site where the product was sold and took a commission on the resulting purchase. In this affiliate revenue model, income per member was low; for the company to turn a profit, membership needed to grow much faster. That meant a bigger marketing budget, which in turn meant a new investment round.

The round never came. According to a Webrazzi report dated 11 November 2013, the site had been unreachable since the previous day, Saturday night, and had closed. Speaking to Webrazzi, Baylan said the first investment had brought significant growth, but that the growth was not enough to reach a tipping point. When talks on a new round failed to produce a result acceptable to both sides, they had decided to close the site. Webrazzi also noted that it had heard there had been attempts to sell the site for some time before the closure.

StilSOS closed about 16 months after it was founded. Its story shows that a model which brings in traffic but not enough revenue can survive only on investors' patience.

Lessons for founders

• In a model where you take a small cut of each sale, revenue per unit is low; work out from the start how many users you need to be profitable.
• Awards and praise from judges open the door to investors, but metrics are what win the next round.
• A seed investment should give you a runway long enough to produce the evidence that will get you to the next round.

Sources

1. Social commerce start-up StilSOS has closed! [Updated] (Webrazzi, 2013-11-11)
2. StilSOS receives a USD 230,000 investment from Galata Business Angels (Webrazzi, 2013-01-19)
3. A new example of social e-commerce: StilSOS.com (Webrazzi, 2012-10-16)
4. Turkish e-commerce sites that closed before Markafoni: why did online shopping sites shut down? (Habertürk, 2017-06-02)

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