Chesterton's Fence
"Don't ever take a fence down until you know the reason why it was put up."
Hey,
For most of my life, I’ve heard people say “History repeats itself.” The concept of historic recurrence is that over time, things seem to happen in similar patterns, causing a sense of deja vu for people that realize the similarities. Some historians may study the past to build a better future. But the critical portion of this is understanding and learning from the past.
British writer and philosopher G.K. Chesterton was a historian, but also a literary and social critic. In his book “The Thing”, one of his more noteworthy quotes is:
There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, 'I don't see the use of this; let us clear it away.' To which the more intelligent type of reformer will do well to answer: 'If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.'
The idea behind Chesterton’s thinking is that to change something, you must first understand why that thing exists. You have to understand the context of how someone arrived at their original conclusion, the history surrounding their thought processes, and the decisions they made before you should undo that decision. Chesterton’s fence analogy can be boiled down to: “Don’t ever take a fence down until you know the reason why it was put up.”
A lot of social and technological innovation these days promises to disrupt current industries. For example with cryptocurrency, those disruption plans also promote the prosperity that can be obtained via deregulation. But these social or technology companies fail to realize that their industry-leading competitors are in place for a reason and that consumers have indicated a preference to have things as they currently are. Not everything needs to be disrupted, especially if you don’t understand how that organization ended up reaching its summit in the first place. Change isn’t needed or wanted in every scenario, and that disruptive mindset can occasionally come back to haunt a company.
Stitch Fix is an online clothing company that provides members with a stylist and data-driven algorithms to recommend clothing options. The company ships clothing bundles, known as “Fixes”, to customers in a set cadence. The company was founded in 2011 and did well enough to justify an IPO in 2017 at a $1.6B valuation. Stitch Fix, which began only selling women’s clothing, soon began to branch out into men’s and children’s clothing. Their CEO Katrina Lake received the Disruptor of the Year Award in 2018, but then things began to unravel for the apparel company.
The 2020 pandemic led to fewer people going to school and the office, and, by proxy, needing fewer new outfits. By that time, Stitch Fix had begun investing in physical fulfillment centers to keep up with the growing demand, but with fewer members and sales, they were stuck with inventory no one seemed to want. Their expansion into all sorts of clothes, and the offering of an online marketplace in addition to the Fixes, left them with tons of excess inventory. Lake left the company in August 2021, but due to the company’s lackluster sales and stock position, Lake returned to the company earlier this month and announced job cuts for 20% of its staff. If only Stitch Fix would’ve been more mindful of the Chesterton fence they found themselves approaching.
Stitch Fix’s business model of stylist-selected outfit packages was doing well because history indicated a gap in the online purchasing industry. However, the attempts to become everything for everyone backfired on a monumental level. Before attempting such a drastic expansion, the company could have benefitted from some introspection. They would have realized that there was a reason they didn’t sell children’s and men’s clothes when the company first launched. They would have realized why they didn’t have huge overhead costs from inventory stockpiles and multiple fulfillment centers. And finally, they would have realized there are limited customers interested in algorithm-based seasonal clothing deliveries and that their product wasn’t going to appeal to everyone. Unfortunately, it seems that they’ve taken these course-corrective actions after their dot.com bubble burst.
Because history always repeats itself.