John Shegerian: It’s the latest Impact Podcast right into your inbox each week. Subscribe by entering your email address at impactpodcast.com to make sure you never miss an interview. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com. This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and Impact Partners. Closed Loop’s platform spans the arc of capital from venture capital to private equity, bridging gaps, and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.

John: Welcome to another edition of the Impact Podcast. I’m John Shegerian. I’m so excited to have with us today, Vanessa Barboni Hallik. She’s the founder and CEO of Another Tomorrow. Welcome, Vanessa, to the Impact Podcast.

Vanessa Barboni Hallik: Thank you so much for having me. I’m thrilled to be here.

John: I’m really excited to talk about sustainable fashion and your wonderful brand, Another Tomorrow. But before we get into all those discussions, let’s hear a little bit about your background and your journey. How did you get on this fascinating journey of sustainable fashion?

Vanessa: I always like to give the long story as short as possible, because the whole thing makes a lot more sense. Although I’m sitting here speaking to you from New York City, I am, at heart, an Iowa gal. I was born in Grinnell, Iowa to an academic and early technologist father and an artist mother. I basically grew up in small college towns throughout the Midwest in the Rust Belt, and it really gave me this incredible interdisciplinary purview. And one that was really steeped in, I would say, maybe what you would call progressive values around solving future relevant problems. So, I grew up in Iowa and Western Pennsylvania, where I got really kind of a first look at what happens when the bottom falls out a really good-paying jobs, and what that does to the social fabric of a town and of a society. And then wrapped up high school in Columbus, Ohio.

I initially thought that a really amazing interdisciplinary career, and I got a lot of early tech and coding in high school, I was actually going to potentially be in architecture. And so, I went out to Berkeley, and I was torn between economics and architecture. But I really thought that made a lot of sense. Now, I hadn’t spoken to a lot of architects at that point in time, and I started to do that, and I pretty quickly disabused myself of that career path. My mom passed away in college, and I made some pretty quick personal pivots. I moved back east to be closer to my family. I switched majors at Cornell. I ended up an economics major, and I accidentally found my way to Wall Street. I found my way to Wall Street, in many respects, through a court or a failure. So, I really thought that I would go to a think tank or do international development work. I applied for all these fellowships my junior year, summer. Really cool academic fellowships, and I got none of that, literally zero. And yet, I had done some research at Cornell on electricity pricing of all things.

I co-authored a paper. Then I had all these friends who were applying for these Wall Street jobs, and I thought, “All right, well, I guess I may as well give it a shot.” And I got all these Wall Street offers. So, lo and behold, I made my way to New York City as a junior in college. I worked in research and foreign exchange and emerging markets research, predominantly at Morgan Stanley. I had a mentor who thought, “Ah, you’re meant to be a trader,” and he ran the options trading desk at that point in time. And so, I got a job offer to be a currency options trader. So, that is where I cut my teeth, initially, in Wall Street. I did that for a few years. And then ultimately, I was always trying to figure out how was I going to come back home and start to build some future relevant businesses.

So, I left to do a degree in Energy and Environmental Policy up at Columbia. And then they talked me into coming back. “No, you can do both. You can do your degree. You can work on Wall Street.” I bought a hook, line, and sinker. Then the financial crisis happened, and I was super grateful to have a job and working about 20 hours a day. I ended up staying there for another 15 years, got super involved with Council on Foreign Relations, with the foundation there, with the sustainability component of the business, but ultimately, build a bunch of businesses in emerging markets. Finally, in 2017, I got the guts to say, “Okay, what’s next?” I’d made [inaudible], and that was important to me, particularly as a woman. It’s been an amazing institution to grow up in. But I saw the power of Capital really changed the world. I’d done some early-stage investing already at that point, and so I wanted to move into ESG.

There wasn’t a perfect fit within Morgan Stanley, and so I ended up taking a sabbatical and completely, accidentally fell down the rabbit hole of sustainability and fashion, and just how incredibly damaging this trillion and a half dollar industry is. It was the first time in my life that I felt, I want to be a part of, specifically, the solution to this problem. We’ve talked about EVs. I was already driving an EV and had solar panels and all that jazz. But I was just enthralled by the complexity and the magnitude and the urgency of getting fashion right at the future and fundamentally built Another Tomorrow. It’s kind of a living, breathing case study for how we could do it differently.

John: Well, that leads us to, and for our listeners, and viewers who want to find Vanessa and her colleagues at Another Tomorrow, you could go to anothertomorrow.co. So, explain then what Another Tomorrow’s mission is, and how you merge fashion and sustainability and the pillars of circular economy into this great model that you’ve created and are growing.

Vanessa: We really believe deeply that the whole system needs to change. A lot of what I had seen initially in fashion and consumer products more broadly was that there were businesses that were changing the sourcing, but they stopped there and the rest of the business models were the same. We believe that sourcing is really important, and so our three key value pillars are animal, environmental, and human welfare, with really a Northstar[?], of traceability back to the farm. But we also think about the fact that clothing should really be treated as an asset, again, move away from the disposability of fast fashion, and 50% of product that ends up in a landfill in the first year, to treat clothing as an asset and create circular systems for the customer to easily, and I’m really underlying easily, participate in that.

And so, every item we’ve ever made has its own unique digital ID. It has its own unique digital twin that allows the customer to scan that code on the care content label, see the whole supply chain, activate the product for authenticated resale. And so, we’re super excited about that. We’re really looking to model change through our supply chain practices, through our manufacturing practices, which are increasingly demand-responsive, and through our approach to resale and circularity, which we think is a really key tenant. So, really, our aim is to just show that this is viable, show that this is scalable, and hope that in collaboration with the rest of the industry, we can really move the industry forward, and fundamentally, to create products that our customer loves.

I think that that’s something that was really I found was missing in the industry. There were so many brands that were, I think, really well-considered on the sustainability front. But oftentimes, the product or the brand didn’t pull on the heartstrings, and therefore the purse strings, frankly, as much. We believe that we need to deliver value every single day to where our customer is and what she values, they value.

John: Got it. When you got involved and created Another Tomorrow, was the fashion industry, in your mind, did it reach a tipping point at that point? Or had it already been broken for a long time, and already, the pendulum had started to swing in the other direction? Where were we in the pendulum swing of trends and opportunities when you created Another Tomorrow?

Vanessa: I would say that we were somewhere in the middle. I would say that fashion was one of those categories that has bucked the trend of inflation. It’s gotten cheaper and cheaper and cheaper. It can pretty much continuously, throughout most of even the 2000s up until COVID, when obviously, inflation had every sector. And so, the cheapening of the product had really led to, I think, significantly damaged consumer appreciation for the value of fashion. And the advent of fast fashion, which has only continued to grow and still does, really enhance the disposability.

At that point in time, then and now, we really have had a real crisis on our hands. We already had seen that there was a tailwind of resale. So, the third-party platforms were alive and well. But there was really a significant resistance on the part of most individual brands, with the exception of Patagonia and Eileen Fisher, which would really have been pioneers in this space to adopt it themselves. And regulation was pretty silent at that point. So, I would say, disposability major issue, fast fashion, a major issue, some positive signs in terms of resale, specifically on platforms, but not a lot of brand embrace[?]. And regulation was pretty silent, and that looked to me like an emergency. I think that there’s been a growing recognition that it is, and now, I’m also seeing some really exciting green shoots as well.

John: And just so our listeners, we hear again what you said earlier, these three things, in my understanding, that the numbers have shown are filling up the landfills the fastest, are old electronics, food that doesn’t get composted, and, like you said, clothing that is part of this whole fast fashion trend that really is not done in a sustainable way. And with great people like you around and other great entrepreneurs in the other sectors, composting, recycling of all electronics, there’s no need to needlessly fill up our landfills anymore with any of these items and fashion is right there. So, what are today, what do you see as your biggest obstacles in the fashion industry? And how are you specifically moving the conversation forward with regards to circular economy behavior and sustainability with Another Tomorrow?

Vanessa: I would say that, on a positive note, I think we’ve seen cultural attitudes towards resales shift dramatically. So, that’s no longer the impediment that it once was. Now, it’s, I think, largely behavioral change, and really easy tool sets to keep product in circulation as long as they possibly can. We’ve solved for that internally at Another Tomorrow, and we’re really excited about how easy that is. And so, now, we’re just excited to hopefully be able to scale what we’re doing also to other brands as well. I think that’s really, really exciting. I would say the biggest impediment, and there are many, one is on the production cycle. I mean, it’s an inherently speculative industry.

I think that’s one of the reasons why, as a former trader, I was intrigued by the challenge of that. Because we’re making tons of product that we, and I say we, collectively as an industry, make tons of products that we have no idea if anybody wants to buy. We’ve got to align our manufacturing processes to be super demand-responsive, and that’s something that we’re still a long way away from, and it’s not insurmountable. I mean, you see the car industry made leaps and bounds in this direction decades ago. And the infrastructure of fashion, the production side just isn’t there yet. So, that’s something that we’re tackling within our business. But there are very few factories that are really actually equipped and interested to operate that way.

I think that is, truly, one of the biggest issues. The other is really regulation to level the playing field, and I think we’re starting to see that out of Europe, which is very exciting. But we need a set of common standards across suppliers, we need transparency across wages. We’re happy to do the heavy lifting around that auditing on our end, but we see that in the absence of accessible tool sets and comprehensive regulation, there’s a tremendous amount of unevenness on the supplier side in terms of how equipped they are to really meet those challenges. So, I think there’s some positives, again, coming out of regulation on that side, but there’s a lot, a lot of work to be done. And then I think the third piece is, the sustainability challenges in fashion are complex.

They’re very complex. It’s not the same as looking at two tomatoes and saying, “This one’s organic and local, and this one’s conventional and flown from halfway across the world.” The issues that you’re facing are at the fiber level, their animal welfare, their land management, their dying practices, their water management, their energy management. So, it’s really, really challenging, I think, for consumers to wrap their heads around this. And so, I think we also need a set of more commonly understandable standards for consumers to digest, to make the positive choices that I think many consumers want to make. We view B Corp as one of those things. We’re B Corp certified and have been since six months within our launch, but there’s a broader nut to crack there for sure, to help consumers make the better choices they’d like to make.

John: The B Corp, how does that help you in your messaging of what you’re truly trying to accomplish? Explain what a B Corp is to our listeners and viewers who are not familiar with it, please. And then also, what is the ultimate goal of a B Corp?

Vanessa: So, B Corps, explicitly in a legal construct, create a stakeholder structure. If you’re a regular corporation, you’re duty is of course to obey the laws, but beyond that, it’s to maximize for your shareholders. And obviously, a core part of our mission is demonstrating the economic viability and ability to thrive with our model. But it also incorporates this governance structure that takes into account, stakeholders are just really, really important. But the other thing that B Corp does is, it requests verification, so you have to back up, you do the things that you say that you do. That’s on the environmental side, that’s on the social side, and it’s also very deeply on the governance side. And so, that’s something that I think for consumers who understand what B Corps are, when they see that certification, they feel the confidence that, like, “This is a company that does what they say that they do,” because of that verification. I think it’s an accountability mechanism in its core.

John: Got it. So, it’s not only talking a good talk, but really, it’s walking the walk. It shows that the folks behind that organization are walking the walk, and it’s going to be reviewed, it’s going to be audited, there’s going to be radical transparency to it.

Vanessa: Absolutely. And I think that their voucher leaves another set of standards, which are going to be even more rigorous, which is really exciting. So, this is a really important direction of travel, and it creates an amazing collaborative community of companies as well.

John: Now, in Another Tomorrow, you and your colleagues create a line of clothing, there’s a line of clothing that can be purchased?

Vanessa: Indeed. We are positioned in the luxury segment, kind of an entry luxury segment. We create a collection line, as well as our AT essentials. We have an omni-channel distribution model, which means that we sell directly to the consumer through our website. But we also sell through our wonderful wholesale partners. You can find us at Saks, Bergdorf Goodman, Neiman Marcus, Net-a-Porter, Matches Fashion, soon to be Holt Renfrew up in Canada, for those Canadians. So, you can reach out to multiple facets.

John: Is there a specific age range of clientele that you’re finding are enjoying your products more than others right now? And will that expand in the future?

Vanessa: We have a pretty wide customer demographic, which is really exciting. We have direct customers, and now, I think it’s 56 countries. So, just culturally, it’s really broad, and from an [inaudible] perspective, yes, we have a lot of customers who are your more traditional luxury customer, who are at that point in their lives, where they’re really investing in their wardrobes. And that’s really exciting. They tend to buy our full collection. They tend to also be more often the sellers on our resale platform relative to the buyers.

But we also have a really exceptional younger clientele that starts, I would say, just out of college that’s buying our AT essentials, our denim, we have kind of hit denim. And oftentimes, they are more of our buyer on the resale platform, although not always. So, it’s really beautiful to be able to see so many customers from so many different spaces come to us. One funny anecdote is that we have a number of mother-and-daughter client pairs who came to us completely independently, not speaking to each other. And so, I think that demonstrates the intergenerational customer range, which I just love.

John: Wow. Let’s talk a little bit about being an MD, which is rare air at one of the most prestigious banking institutions on the planet, and now, being a sustainability on fashion entrepreneur in what is truly, as you pointed out, a complicated and difficult industry to move culturally in the right direction. So, you’re truly not only an entrepreneur, but you’re climbing up a hill. It’s not like you have a lot of tremendous tailwinds, as some other [inaudible] cybersecurity or AI, for instance. So, how is the life of an MD at one of the most unbelievable and great brands on the planet in terms of banking institutions, and an entrepreneur in an industry that still is undergoing and needs more change?

Vanessa: Well, it’s certainly wildly different, that’s for sure, and I knew all of one person in fashion coming into this. So, it was certainly a deep-dive learning experience. I would say, I get about the same amount of sleep, which is not a lot. I have never learned more in such a period of time. I have to say, one of the amazing tailwinds that I have had is that, who knew how the industry was going to embrace us? Like I said, I basically didn’t know a soul. I am incredibly grateful to the amazing collaborators that we found at every space in the industry, whether it was the reception from the New York Times in British Vogue around our launch, or the mills and manufacturers and team members in the early days that took a chance on us when we were nothing more than an idea.

So, while it is an uphill battle, I would say that there’s such an appreciation that the system is broken. And as a result, there’s been a really generous, truly generous receptivity to those who are genuinely trying to create change in this industry, and I’m a grateful beneficiary of that, from the beginning and today. It’s a diverse, crazy job, but it’s really a privilege to be able to do this work, and I learned all the time.

John: What’s next? Entrepreneurs get out of bed in the morning with a purpose and with a mission, and with the excitement of what’s coming down to execute on their vision. So, what gets you out of bed, and what are you most excited about, not only as we close 2023, but as we go into 2024 and beyond?

Vanessa: There are a few different areas that I’m really passionate about. One is what we’re building on the technology side to really accelerate circularity. I am a deep believer that circular solutions are a key part of sustainability for this industry in many, many ways. Material Science, we don’t use anything that asks to kill or harm the animal. And after many years of seeking a truly, solely biobased leather substitute, we finally found one that we’ve been working on, again, for years, that we seek to commercialize next year.

So, that’s coming down the pike. I’m really, really excited. Equally, I’m really excited about regulation, and we’re working with both a bunch of nonprofits as well as folks in government to really set the stage for truly scalable change. And then finally I hate to come back to the dollars and cents, but we’re excited to scale what we’re doing and demonstrate the commercial viability of our model because I think that’s absolutely crucial to show that we can add value to customers, and that we can build a business sustainably and globally, to show others that they can thrive in the same way.

John: Do you feel that your omni-channel approach will continue to grow as well? Will you have more channels in the months and years ahead to sell your great products?

Vanessa: For sure. I think in particular, internationally, we’re seeing that very organic reception of the brand, and a lot of that’s come with almost no marketing. And so, I think that from a geographic standpoint, that’s a big direction of travel, particularly for ’24 and beyond. So, you can certainly anticipate that. We believe that you have to meet the customer where they are, and so by definition, I think that means omni-channel is the way to go.

John: Got it. So, I just want to say thanks for all that you’re doing to improve an industry that definitely needed a new direction. For our listeners and viewers to find Vanessa, her colleagues, and her great products, and support and buy them, not only can you go to great stores and retailers like Neiman Marcus and Saks, you could just go to her website, anothertomorrow.co. anothertomorrow.co. And support her great work and the shift from a linear to circular economy in the fashion industry. Vanessa Barboni Hallik, thank you for not only being a guest on the Impact Podcast today, but thank you for making the world a more sustainable and better place.

Vanessa: It’s really an honor. Thank you so much for having me.

John: This edition of the Impact Podcast is brought to you by Engage. Engage is a digital booking platform revolutionizing the talent booking industry. With thousands of athletes, celebrities, entrepreneurs, and business leaders, Engage is the go-to spot for booking talent, for speeches, custom experiences, livestreams, and much more. For more information on Engage or to book talent today, visit letsengage.com. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.