- 20 hours ago
"What does it take to build one of Europe's most iconic tech companies from scratch? Eighteen years ago, Robert Gentz and his co-founders started selling flip flops out of an apartment in Berlin. Today, Zalando is a continent-wide fashion platform, and it's still growing. In this conversation, Gentz traces the full arc: the early bets that paid off, the business model that proved resilient, and the discipline behind rapid but sustainable growth. He'll speak frankly about the risks and challenges that shaped the company, the moves being made to stay ahead, including expansion beyond Europe with and a push into B2B, and what the next chapter looks like for a platform supercharged by AI with ambitions that keep growing.
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TechTranscript
00:01Hello, Purple Stage. How are you doing?
00:05Woo!
00:07You had a bit of difficulty getting in here this morning, yeah?
00:10It was a little bit crazy, but sit back and relax,
00:13because we're going to be discussing the business of fashion.
00:17Okay, so we're starting, of course, with a heavyweight, a European heavyweight, Zalando.
00:24Zalando has done what many European businesses have actually failed to do yet.
00:30And we're going to get into that.
00:32It didn't just become a retailer.
00:34It evolved from selling flip-flops into a gargantuan B2B business.
00:39Different languages, different kind of payment systems, regulations, of course.
00:43We are in Europe.
00:44Consumer behaviors across the EU 27.
00:46So how do you build a company at that scale?
00:49One man has the answers.
00:51Everyone, please be upstanding for Robert Gens, the co-founder and co-CEO of Zalando.
00:58Thank you very much.
00:59Thank you so much.
01:00So, Robert, let's get into it then.
01:02Why flip-flops?
01:03Why flip-flops?
01:04Why flip-flops?
01:07It was very hot in 2008.
01:09Just kidding.
01:11Now, I think, like, we know before, Zalando started actually off as a company selling shoes in Germany.
01:18But before we actually did it, we actually started off with flip-flops.
01:21And there was very much that, I mean, my co-founder and I, we, I mean, we were, we had
01:26no idea about, like, you know, e-commerce shoes.
01:28So, therefore, we actually started off with flip-flops to just actually get, like, a sense of, does it actually
01:32work?
01:32Do actually consumers really want to buy anything kind of in the internet, like, full price?
01:39So, what we actually did is we just went into a couple of stores and got a bunch of flip
01:44-flops and put them on the website.
01:47We call it flip-tops.
01:48Let me just ask your background then.
01:49Because I know that there were many founders in this room.
01:51Do you come from a fashion background or business background?
01:54No, I, I, before, before Zalando, I, I came from university and from university actually started first, like, a social
02:01network in Latin America, which didn't really work out.
02:05So, and from that experience, then we went into e-commerce and we had no idea about e-commerce and,
02:11and, and fashion.
02:11So, we started with flip-flops just to actually understand, do consumers really want to order at full price in
02:17the internet?
02:17And we got a bunch of flip-flops.
02:19It works.
02:21The consumers ordered at the full price and then we started Zalando.
02:25So, it worked for you.
02:26And then how did you scale up?
02:29I mean, we, it was like 2008.
02:33So, 2008 was financial crisis.
02:35So, it was, it was not an easy time.
02:38But it was as well, I mean, a great time to, to scale because a lot of companies were very
02:45afraid of,
02:47of the, of the, of the situation.
02:49So, we, so we could actually, like, the advertising price were very low.
02:54So, we could actually scale with, with some money from six million in the first year to 160 million in
03:00the second year.
03:01And then a third year to, to, to, for 650 and then 500 million and then 1.2 billion in
03:07just four years.
03:08By going from, from flip-flops to shoes, from shoes to fashion, from Germany to, to Europe.
03:14Yeah, and then in 2000s, I think, 11 or 12, we did, like, 1.2 billion.
03:20So, talk to us then about how you managed to scale up.
03:22You man, you were talking there about investment, getting a few millions into the business and how you went from,
03:27you know,
03:28shoes into fashion and then now you've expanded, of course, into lifestyle.
03:31I mean, just to give the audience a sense of the figures, 12 billion euros in revenue and that was
03:37up 16% from 2024.
03:41I mean, that's a little bit crazy, right?
03:44I mean, considering the kind of state of the world, geopolitics right now, you know, the fact that not many
03:49people have so much money.
03:50The fact is, you keep growing.
03:52So, how have you done that?
03:56Yeah, I mean, how?
03:59It's, I mean, you know, it's not, it's not really, I think, like, you know, one decision.
04:02Like, it's, I mean, it's a, it's a, it's a series of decisions, like, of millions of decisions and hopefully,
04:09like, and I mean, luckily, more of them were right and fewer of them were wrong.
04:13But I think the, I mean, the basic thing that we actually focused on when we scaled Zalando was, was,
04:20I think, like, two ideas.
04:21One was the complexities of Europe and the second one was the complexities of fashion and solving those two complexities
04:27in parallel and make it simple.
04:29So, essentially, to make it, to, to make it easy from consumers to access a world of fashion, now we
04:37have 7,000 brands, so no matter if you're, like, in the north of Finland or in the south of
04:42Sicily or, like, in the center of Paris, so you had the same kind of access at the same convenience
04:47in fashion, which wasn't the case before Zalando existed.
04:51So, that was the core idea, and I think, in terms of how we executed on this idea, I think,
04:56a couple of things that were important.
04:59I think one was, from the very early days, was they were really focused on, on data, you know, so
05:04we actually called, like, one of our principles as a company, what you cannot measure does not exist.
05:09So, really, a very much focus on data and measurement, and that gives you, over time, a lot of advantages,
05:15and because you, you can calculate investment decisions at the moment,
05:20much longer time horizon, when we actually did, I mean, custom acquisition, or, like, went into TV advertising, with just
05:27much more data, to be able to calculate our ISM, the return on investments.
05:31So, that was important.
05:33I think another important element for us was, was, as well, the, the willingness to, to always consider ourselves as
05:42a small company, and to think, like, you know, it's, it still is only 1% of what this company
05:48actually can be,
05:49and then, to challenge yourself, what kind of pivots can you actually bring to the company.
05:55So, we went from, as I said, like, from shoes Germany, to fashion Germany, then to a European company, then
06:01we went into, from retail to platform,
06:04and more recently, we went from, from a platform to, to as well have, like, a larger, sizable B2B business,
06:11and that we offer to our brands.
06:13Now, one of the things I wanted to ask you about was, what was the one decision you made that
06:17you feel helped you to scale and grow?
06:20Was it, perhaps, identity?
06:24Well, I think, I think this data, this, I mean, this data decision was, was important.
06:32And, I mean, it came culturally from having failed in the, beforehand in the, in the social network, because in
06:38social network, when you actually scale a social network,
06:40there is, there is not a lot of data.
06:42It's very much like, how do you scale it?
06:43It's, it's, it's, it's very much intuitive driven.
06:46Um, and, um, and then, yeah, my co-founder, we were very much, when we, uh, when we started Zalando,
06:52we were very, very focused on data and on measurement.
06:55And I think, um, to this point, I think this has been, like, a very, very important aspect now with
06:59AI.
07:00Um, we, we benefit very much from this, um, yeah, masses of data that we have accumulated and this focus
07:06on measurement that we had, that we always had.
07:08So, your processes have been very data-driven.
07:10But, can you tell the audience, perhaps, about the one time when something didn't work out, even if it wasn't
07:18via Zalando itself, perhaps when, I mean, I know you said you started out quite, quite, quite young.
07:23Yeah.
07:24Or earlier, we could say.
07:25Um, but what decision went wrong and then how did that impact you and help you to grow and to
07:31make better decisions going forward?
07:34Yeah, um, I mean, first of all, I think that there have been many, many failures along the way as
07:39well within Zalando.
07:42Um, but I think what we, what we, what we're always asking ourselves is how can we take our platform
07:49that we have and actually as well create new business on top of it.
07:52So, um, very early on we created, um, on top of our platform like a shopping club, uh, the Zalando
07:58lounge, which today is like a sizable multi-billion business that actually worked.
08:02But there were many, many businesses that were actually started off that actually didn't work out.
08:06So, for example, uh, we created, um, like a consumer-to-consumer, um, uh, marketplace for, um, for secondhand, yeah?
08:15Uh, like many, many years ago, way before Vinted actually became as big and, um, and then, I mean, as
08:22you can clearly see, the idea is right, yeah?
08:24So, it's, I mean, it, there's a side of business that actually went, um, with, with Vinted that actually came
08:29out of it, um, but the execution actually didn't really, uh, work out.
08:33So, and we had, as well, like a platform for luxury, which as well didn't really work out, and, um,
08:39although there's now very big luxury platforms out there.
08:42So, I think the, uh, one of the biggest learnings for me was, I mean, the idea is, is probably
08:48like, you know, it's, it's 5%, yeah?
08:50So, and ideas are many out there and very, very good ideas and right ideas, but I think it really
08:55comes down to 95% on execution and, um, how to actually really get execution right and enable a large
09:02organization to execute.
09:03on the right ideas and help the teams in the right way, um, to, and, and, and pick the right
09:08people as well.
09:09That's, I think, the, the core, I think, of scaling.
09:12And what was the, what was the data telling you about the trends in consumer behavior that perhaps you hadn't
09:17seen in these moments where you feel as if you weren't quite getting it right?
09:21And then how did you pivot towards making sure you got it right?
09:26You mean from this, from this moment?
09:29Um, well, I mean, with, uh,
09:33uh, with, with consumer to consumer models, I think it's, it's so fundamentally different when, uh, from, uh, from e
09:39-commerce in terms, not in terms of data, but in terms of what kind of experiences do you actually create?
09:43Yeah.
09:43And I, I think when you actually come from a e-commerce perspective, I think what you actually want to
09:49do is actually, I mean, solve things, uh, very convenient at scale.
09:53Um, and that's kind of the mentality that you have when you actually run e-commerce.
09:57I think when you run consumer to consumer, it is actually, I mean, by nature, a little bit more messy,
10:04but the messiness is, is, is, is as well fun, yeah?
10:06So it's, uh, and I think from e-commerce perspective, you want to, I mean, solve this messiness with my
10:11process, make it more convenient.
10:13I think that's actually not the right approach for consumer to consumer models as, as we now know.
10:17Um, well, let's come to your AI shopper then, the helper.
10:22Why is it that you wanted to go in that direction where you just perhaps jumping onto, I mean, obviously,
10:28um, you know, we know that AI is everywhere right now, wherever you go, it's AI, it's AI, it's AI,
10:34it's agentic.
10:35Everyone will be saying that word, obviously, um, you know, all across, um, Viva tech, you've got over 10 million
10:42customers using this AI helper.
10:44What is it that you feel as if you've tapped into?
10:47Because if we think about the fashion experience, it's about making a choice.
10:51Now, there was something, there's always a movie that I think of, Devil Wears Pradas, ladies and maybe gentlemen, yeah?
10:57Everyone's watched that, yeah?
10:58Excuse me?
10:59Yeah?
11:00Okay, so there's this one scene in the first movie where, um, Anne Hathaway's character is wearing this ugly, I
11:05think, blue jumper, and then she's told that even that jumper is a choice.
11:09So how are you ensuring that the choice remains individual, that people aren't just being, you know, forced into a
11:16decision, you could say, by AI, by the algorithms, or whatever it is?
11:21Yeah.
11:22I mean, uh, with, um, with our system, which essentially is an agentic commerce kind of experience, and agentic commerce
11:29is, I mean, for those that don't know, it's, um, it's, it's a question in commerce, in e-commerce, how
11:34do you combine, like, the hard data and, and, and, and process of commerce with, um, large language model kind
11:40of contextual understanding of, of, of conversation experiences, huh?
11:44And how do you really create, like, joint journeys, joint consumer journeys in, in, in that field?
11:49And here we, um, I mean, we're trying to solve, like, from a spectrum of, of experiences, we're trying to
11:54solve for, I mean, for very functional questions, such as, I mean, I want to have this, uh, running shoe,
12:01side 38, uh, tomorrow in the cheapest way, so, which is a very functional question.
12:05And then you, I think on the other side of the spectrum, like, very, very personal questions, until, I, you
12:11know, I want you to surprise, uh, my wife, um, with, um, with, uh, with a, with a fashion gift,
12:18yeah?
12:18So, and for such a question, it's not a functional question, so you have to know the wife, you have
12:21to know the sizes, you have to know the taste, you have to know the occasion, you have to know
12:25the dress, and so on.
12:26So, these are, like, very, very, you know, personal questions.
12:28And I think in between, there's this entire thing on the discovery, yeah?
12:33So, and which is huge in fashion and lifestyle.
12:35Like, um, and, and, and I think here, um, there's a lot of open questions of how these interfaces should
12:41actually work, because I think what is very clear is, um, that, I mean, too, too little selection is not
12:48right, because, like, you want to have, you want to be exposed to, um, to, to, uh, like, to, you
12:54know, you want to have to confident that you actually made the right choice from all the selection you got.
12:58But as well, too big selection is as well not right, because we as well know from our consumers that
13:02you can very quickly overwhelm people, huh?
13:05So, so, uh, coming up with an interface, uh, and coming up, uh, rhythmically with, uh, the right kind of
13:11choice that people actually feel comfortable with, uh, is one of the bigger questions when I engine e-commerce.
13:16And just very quickly, you know, on, on, on, on the tech that you're building, what, what are the new
13:22advances, or, you know, the few, because obviously this technology is evolving very, very fast.
13:27So, what are the more recent add-ons you can see, um, that could be in the pipeline for you
13:33at Zalando?
13:34For a gente-commerce?
13:35Yeah, so, um, I mean, uh, I think the, the bigger, the bigger quest is how do you actually make
13:43it actually much more personal, yeah?
13:45So, and, um, and, uh, how do you enable it to actually, uh, based upon consent of the users to
13:51actually access more data and as well use this data in a very good way for the consumer's, uh, utility?
13:56And I think these are very hard engineering questions, uh, but I mean, we, I'm very happy about, like, you
14:01know, every single week we actually ship more and more features into, into our systems.
14:04And I think probably by the end of this year, we will be having an experience that we're very, very
14:09happy about it, that probably should then feel in a way that actually already knows you quite well, you know?
14:13So, I think the, the view that I have of this assistant is very much, um, that it becomes like
14:18a, like the, like a, like a sales assistant in the store that knows you, like, for 15, 20 years.
14:25And actually, at the same time, uh, knows everything in, across fashion and lifestyle and is able to give you
14:31a very good recommendation and a very personal recommendation in a better way than you can actually know yourself, yeah?
14:37So, I think that's, uh, that's the vision.
14:39And, um, yeah, I hope by the end of this year that we're a very, very good step forward towards
14:43this vision.
14:44Now, I know that, obviously, we can see the time is running out.
14:47My God, I thought we had at least five more minutes to do that.
14:50Uh, but let's come to the idea that, I mean, obviously, you're a very successful company.
14:55Like you said, you follow the data, um, you kept it very business-minded.
15:00You're going forward and you will, you know, obviously keep going forward and advancing and innovating.
15:05What is your advice then to European founders specifically?
15:09Because something that you really believe in is this idea of a European dream.
15:13Now, I was sat, I won't tell everyone, at the back, um, of this stage listening to a couple of
15:17sessions.
15:18And they were talking about, you know, AI industry, European marketplace.
15:23What is the future headquarters going to Delaware?
15:28So, obviously, regulation and all of that red tape.
15:31We all know the conversations.
15:32Yeah.
15:33How do you stop that from happening?
15:35How do you ensure that, you know, within the European value chain that, you know, European innovators, founders, et cetera,
15:41they have everything that they need.
15:42And that the European dream that you believe in maintains in place.
15:47Yeah.
15:48Um, I mean, I think, first of all, I think my, my advice to founders is, I mean, I started,
15:54like, Zalando, I think, 2008.
15:56And just comparing it to, like, the, the environment that we have today.
16:00I think it has never been easier to actually start a company, yeah?
16:03So, um, than now.
16:04And I think, for me, as well, the arguments that you actually stay in Europe have never been, like, as,
16:09I mean, actually, as valid as today, yeah?
16:11So, because, I mean, I think what you need, I think you need an idea, you need, uh, kind of
16:16talent, you need capital, and it needs, you need, like, a market, yeah?
16:19So, and I think, given that when you have your idea, like, you need the talent.
16:24And I think, in the, like, 10, 15 years ago, there was a big argument around, uh, well, I mean,
16:30the, the best software engineers, you have more in the US, so you'd rather actually go there.
16:34Or, uh, or, like, you know, people are, like, you know, work, work harder in China.
16:38So, um, but I think now with AI, like, I mean, this is actually now getting table stakes in the
16:42next 10 years, so in the next five years.
16:44So, uh, AI will give you much, so much leverage, so it actually is, I think, very similar now to
16:49actually start now in US or start in Europe.
16:52So, and then, I think, in terms of the market, I mean, we, we have, like, the second biggest market,
16:57uh, in the European Union on Earth.
17:00And then, it's, it's a very welcoming market, so it's, like, it's your home.
17:04So, I, I think, in terms of the arguments, I think there's a lot of arguments, actually, now, for Europe,
17:08and for capital, I mean, it has, as well, developed very well on the Series A and Series B.
17:15And that's why for growth, I think it's now going to be much more soft.
17:18So, I think there have never been more reasons to actually stay here in Europe and, um, and build your
17:22success in Europe.
17:24So, and then, I think when it comes to the question of the European dream, I mean, for me, I
17:29think, but it's, I think that's more for us as Europeans.
17:31I think what, I think what we actually probably need here much more is, like, a more positive view of
17:37the, of vision of Europe, yeah?
17:38Because, I mean, we have a lot, yeah?
17:40But, um, we, um, I think we need, like, to, to articulate a little bit more that we actually want
17:46to win here in Europe.
17:46And, and we can only really win if we do it together as Europe, as European Union.
17:50So, it's not Germany or France or, like, or Netherlands.
17:54I think we can only really do it together because together we have the biggest, the second biggest market and
17:59the second biggest population area.
18:01And then, I think, as a second point, I think we need to really start to, uh, to, to love
18:06and, uh, and, uh, and care for our companies that we have in Europe, right?
18:10Because they are really not, not only the ones that are here, but as well, the ones that actually are
18:15now being started.
18:16And make it easy for them to, to, to scale and, and help them, and help them with home advantages
18:21as well, right?
18:22So, why, um, why it's actually, like, even more reason to stay here.
18:26Um, and then a third element, I think we need, um, I think more of a culture of courage here
18:31in Europe, right?
18:31So, like, dare to fail and, um, yeah, and, and, and, and, uh, and cheer those up that actually start
18:37new companies and, um, and try it, right?
18:40So, and not try to pull them down.
18:42So, rather, actually have, like, a really, uh, European answer towards the American dream.
18:45And I think that's, um, I think that will be something which we, very powerful, which we, I think we
18:50all together can, can nurture and, and, and do.
18:52Let's hope so that the European dream can stay alive.
18:55Robert, it's been a pleasure.
18:56Thank you so much.
18:57Round of applause to Robert, please.
18:58Thank you so much.