GOING DEEP

If you’ve been around the fashion space for awhile, you know certain truths

These truths include:

-Seasons change, so at least 4 times a year, you get to launch new products

-It’s super competitive. There’s always a new, new brand that’s hot

-The world is global. The same trends happen in Paris, New York, Tokyo, London, Bangkok at the same time

-It’s cheaper and easier to make almost anything in China than say, the U.S.

On the last point, this has been a fact for as long as I can remember

I took my first sourcing trip to China back in 1997 and pretty much every factory had been doing their thing for a couple of decades at that point

You can make a t-shirt there for $5 and a pair of jeans for $10, maybe even less

To make a comparable t-shirt would be $20 and a pair of jeans $75 in the U.S. Maybe, that is if you can even find a reliable factory

This is well-known amongst fashion folks

China has for decades been the world’s factory

Unrelated to fashion but still related in a way, the world (America) got the shock of the year this weekend from China in the form of something called DeepSeek

DeepSeek is an AI company that built an AI model, a reasoning chatbot, similar to ChatGPTo1 and Perplexity AI

No biggie there. There are machine learning experts all over the world working on AI

I talk a bit on this newsletter about AI models that I use

I’m a daily user of ChatGPT, Perplexity, and Claude, depending on what my purpose is

I gave Deepseek a test drive and it’s pretty good

It seems more like ChatGPT than the other 2

So what’s the big deal?

Why did the markets drop $1 Trillion yesterday?

The world (America) freaked out over the cost

Famously, Open AI spent $7 Billion last year building and training ChatGPT to talk to you

Deepseek spent just $6 Million. That’s Million with an M

That’s less than 1% of Open AI’s spend

We’re kinda used to this cost difference in the fashion space, but not to this magnitude

Is it a big deal?

I think it means that we’re going to see more and more competition in the AI space, and that’s a good thing

More competition means better tools and performance for cheaper, which is a win for you

It enables more AI tools built around fashion, analysis, and forecasting that can be free or inexpensive

The freakout case here is this:

If China evolves from the world’s factory to the world’s IP creation, where does that leave us?

While China’s been exporting goods, the U.S. has been exporting ideas, services, and dollars

I think it’s a natural evolution that things continue to change

It’s an evolution of our economy from the industrial age to the digital age

It seems that tech is now changing just a quickly as fashion

It’s about time they caught up to us 😊

CHAD’S ROUND-UP

📚 What I read: Vanderbilt- The Rise and Fall of an American Dynasty by Anderson Cooper- There’s a famous saying that goes something like “Wealth is made in one generation, maintained in the second, and lost in the third” and it rings true in this incredible account of the Vanderbilt family. An easy-to-read narrative full of drama, intrigue, money, and of course fashion, written by the famous son of Gloria Vanderilt about the world’s richest man and his clan.

🎧 What I heard: The Diary of a CEO: Daniel Priestley- This episode features entrepreneur Daniel Priestley describing the evolution of economies, the skills needed to succeed in the digital economy, and how to build your own business in lieu of getting a job. Great listen for knowledge workers and for budding entrepreneurs.

🕵🏻‍♂️ An interesting discovery: The power of convenience- an observation on vending machines while touring Asia recently. There are vending machines for anything you can dream up. I discovered excellent coffee (TAO BIN Thailand), books (BookBot Malaysia), Cheeseburgers (Tateishi Burger Japan), and cars (Ten Square Singapore). It’s the ultimate creative retail solution- available 24 hours a day, no staffing needed, low-risk. I’m a big fan of these concepts.

It’s the last week of January.

Have you started the year as strong as you planned?

I’m rooting for you!

Chad

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