A Q&A with Visionary Entrepreneur Stephanie Benedetto
Spotlight articles shine a light on designers and design materials we admire. Our founder and principal designer Rebeccah Pailes-Friedman has met many wonderful designers as an educator and career designer, and in our Spotlight interviews we ask them about their work and their design journey. In this interview we spoke with Stephanie Benedetto, the attorney-turned-fintech entrepreneur and visionary founder of Queen of Raw, the company that created Materia MX, a groundbreaking excess inventory management software. Stephanie is on a mission to make fashion more sustainable by tackling one of the industry’s most persistent problems: waste. Her platform leverages blockchain technology to connect brands, retailers, and factories in a cloud-based marketplace where unused textiles, once destined for landfills, can be sold to new buyers. Her company has already saved over a billion gallons of water— enough to provide clean drinking water for 1.43 million people for three years—and has turned the concept of a circular economy into a profitable and scalable business model. Stephanie’s approach is not only about reducing environmental impact but also about transforming the industry’s supply and demand dynamics to benefit people, the planet, and profits. We asked her about how she was inspired to start the company, the challenges along the way, how the platform works, and how she measures impact.
Q: What was the turning point when you realized the extent of the waste in the fashion industry, and how did this inspire the creation of Queen of Raw?
A: Before Queen of Raw I was a Wall Street attorney, but I ended up specializing in fashion, technology and sustainability. And then the market crashed in 2008, and we were seeing the height of waste and greed and excess around the world. I took that as my opportunity to go out on my own. I always wanted to go build a business and change the world and I had a prior startup before Queen of Raw, which was called Paper No. 9. My co-founder and I had invented a new leather alternative and it was truly unlike any other leather alternative I had ever seen out in the market. As we were building that business, we would go to all these companies and brands and manufacturers around the world, and they would be buying this new innovative sustainable leather alternative from us. But we would go to the warehouses and see all this perfectly good stuff just sitting there, and we’d ask them, It’s great, you’re buying this from us, but what are you doing with all that stuff? And they said, Nothing, I’m going to landfill it, or burn it. That just seemed amazing. I was proud of what we were doing but we were still making something new. So that became this bigger problem that I really dove in early on and wanted to tackle head on: what could we do with all that perfectly good stuff?
When we started trying to solve it, the next step was trying to figure out how much stuff like that is out there. We did a survey. We sent it around to a couple thousand companies and manufacturers. It was a one question survey: How much do you have in excess inventory every year? And some numbers were lower, some numbers were higher, but the average was fifteen percent. Fifteen percent of every single step of every production run ended up as waste. It was crazy. Some were as high as thirty percent. Some claimed it to be as low as six to nine percent, but the clear average was fifteen percent. And at that point, when we started looking at those numbers, we knew this was a huge opportunity.
Q: How did you know you had a great idea on your hands? At what point did you know that this business could be profitable?
A: When we were just starting to look at the market and validate the idea, it was 2013, 2014. There was a lot of amazing work happening with companies like Thread Up, Poshmark, Depop, and the RealReal. I loved what they were doing. It was the hottest market, and it’s still growing, but at the time they all were dealing in one unit at a time finished goods. Don’t get me wrong, every unit matters, and for finished goods that matters. But that led me to ask, What about all this other excess in inventory and supply chains? What about all the regular stuff; all the fabrics and trims and some finished goods, too, but the business to business stuff? And nobody seemed to be paying attention to that side.
The thesis was that if we could solve that up-the-chain waste for businesses, maybe that could help inform and support all the downstream supply chain waste. That’s when we started to see that this was a huge opportunity, and we started with the low hanging fruit. We had to test it, so we put up a marketplace. We barely even had a product to sell, but we had this point of view that a B2B resale marketplace for raw materials was a huge opportunity and we posted the site. The first few SKUs were actually our Paper No. 9 sustainable leather excess fabric. People started coming to the site like crazy, asking questions and looking for more. We saw the demand and we knew we had a real opportunity.
We want buyers and sellers who are participating in the circular economy and buying and selling with each other to recoup all the value with each other. Making money on materials is not our business model. We sell SAS software subscription fees to companies. They pay us annual membership fees to be a part of our platform and to use a whole suite of tools, and that’s it. All the reuse, resale, recycling, and donation happens on our platform. Everyone gets the best prices for participating in the network.
Q: You’ve been at the head of Queen of Raw for many years now. What challenges did you encounter along the way, especially early on?
A: We were early to the market for sure. We would go knock on doors in the fashion district, talking about this problem. And the world was not where it is today, we got plenty of doors slammed in our faces. But all it took was two. We had two early adopters: Marc Jacobson and Kering. They keyed in early on and believed in what we were doing and saw that there was an economic and an environmental opportunity here. All you need is one or two early adopters to really believe and then you can grow from there; get the case studies, get the learnings, and keep doing it. So, fortunately, some of those slammed doors have since turned into clients, but we had to find those early believers and keep pushing forward.
Q: How has your personal journey shaped your vision for Queen of Raw?
A: It’s why I do what I do. I had my first child right as I was starting to get the company out there, and the moment I had my eldest son, Jacob, right at that moment, I knew we were on to something. When your kid is born, it’s not about your life anymore. It’s about your children’s life and their children’s life and future generations. You want to do everything you can to ensure that that life is going to be a positive one. We had to build for this future. I want my kids to have clean water to drink, clothes that aren’t toxic to the earth, a planet to live on, and I think that’s what inspires me every single day. Early on as a working mom I was pushing the stroller in the New York City streets, and there was all this noise because it’s New York. I remember hearing something coming out of the stroller, he was four five at the time. I leaned into the stroller to hear what he was saying and I heard, Are you naked right now? You’re not. You’re using fabric. It’s everywhere, it’s polluting your water. I mean, he was literally doing my 60 second pitch! And on the one hand I’m thinking, I’ve been pushing this stroller and doing this damn pitch way too many times! But then I laughed and thought, You know what? If my five year old can get it, anyone can get it.
Q: What’s the most surprising material or fabric you’ve seen saved from waste through Queen of Raw?
A: You’re not just getting a fabric when you deal with clothing and fabrics. There’s plastic and paper packaging around it, there are hang tags, there are labels, there is metal on the zippers, there are trims. There are all these other commodities and materials involved. So, although we got known for our work in textiles, we realized very quickly that our platform could also handle finished goods, trims, metals, packaging, and so on. We’ve grown in those verticals and categories into food and beverage and CPG [Consumer Packaged Goods] and other industries. Now in food and beverage we have hops and flavors from Anheuser-Busch and other things I never imagined when we started.
Working in fashion is amazing and it’s powerful. But I wondered what it would look like if companies could cross industries and leverage each other’s resources. Textiles are used in everything; car interiors, carpets. How do we get industries across industries to participate in these kinds of exchanges? That definitely got me excited, just to see what was possible. We’ve done some amazing work with Ralph Lauren, with Nike, with Cotopaxi, with Victoria’s Secret. These companies are participating and they’re selling, but they’re also buying and making incredible products while saving a lot of water, chemicals, carbon emissions, and waste while doing it.
Q: Can you discuss the role that technology and innovation play in making this all possible?
A: Our CTO always had this view of platforms and systems-baked thinking. We can create the coolest technology in the world, we can use machine learning and blockchain and all the buzzwords but it still needs to make sense. We use this cool technology to deliver a good business result. You need to have platforms to facilitate, to make it quick and easy to participate and to have a network and a community that trusts and is willing to participate while incentivizing everyone to act. That kind of point of view is embodied in the platform that we’ve created. Yes, it’s great technology. Yes, we want everyone to be able to participate in the circular economy while also making it fun to do so. At the end of the day, we just wanted to deliver a kickass result and save a lot of time, money, and resources for everyone.
Q: Could you walk us through how a typical transaction works on Queen of Raw?
A: Once we’ve done our work with the sellers and we have centralized in one place all the excess they have with clean images and clear product histories, and we know what is available to sell, then it’s about matching it to the greatest buyers in the world who want what this company has. As a buyer, when you log into our portal, it’s in the cloud. You don’t need to download anything. You don’t need to integrate. You login and, like any good software, you have your own private dashboard, which starts to learn based on your actions. What kind of volume are you looking for? What materials? Where are you in the world? The platform analyzes it and brings you the inventory that you want to see. And the beauty as a buyer is that this is not just a marketplace where you want to buy and click a button. You want to swatch something, you want to sample it, you want to produce it, you may want to reorder it. We manage that entire process but out of excess and deadstock. Our platform is a full suite of tools to help you do that.
Q: Can anyone shop your platform?
A: Yes, we have two versions. If you just want to see what we have and buy, we’ve got a freemium version for anyone to participate, especially at a smaller volume. If you do need the swatching, the sampling, all the data, all the procurement tools, we have kind of pay to play structure at different price points based on how big you are to be very fair and to cover our needs.
Q: What do you see influencing decisions about material selection? Are you seeing more of a shift toward the use of sustainable materials?
A: I use “circular economy” as opposed to “sustainability” because we talk about why we’re doing things for people and the planet, but it has to also be about the economy. If it does not make economic sense, why would a company adopt your solution? And we’ve said that since day one. The reason companies come to us is not just about sustainability. You get great stuff at a discount where you need it. The fact that it has a sustainable story to tell is a value add but that doesn’t have to be the only decision. That’s been what we spend a lot of time showing; the time, money, and resources saved by doing this will also doing good. And if you can say it’s a win-win, then how can they say no to that? Consumer demands and regulations are all supporting this move to sustainable materials and procurement, but they also need to deal with what’s there right now. Our hot and most searched fibers right now are cotton and polyester, but the fact that it’s dead stock means that you can cut down on your consumption of new polyester by using what’s already been made: deadstock polyester. So it’s a great way to fill out your portfolio sustainably while also saving money.
Q: How do you measure the water and environmental savings for businesses? Could you talk about why this focus is so important?
A: There are a lot of tools out there. I’m sure you’ve seen LCAs, Life Cycle Analyses, and other tools that say that they are measuring and reporting tools. What we found is that there was not a good methodology for excess and deadstock. It’s one thing if you’re making it from scratch and you can measure every step, but how do we think about excess and deadstock? We spent over two years with MIT, which is an investor in our company. MIT gave us a team of data scientists and we researched the hell out of this to come up with a methodology to measure the water, chemicals, the carbon emissions, and the waste that is avoided and offset by you rescuing this material instead of making new material. That’s what we’re measuring. So we can verify what the material is, what it’s made of, where it comes from, and who it ships to. And based on those touch points, we use our methodology and we measure and report. It’s been fully audited by Deloitte and other auditors so it is an accepted methodology, and we did it because we had to be specific.This is about excess inventory kept in circulation and what is avoided and offset by doing that.
We tied a lot to water because we felt like everybody talks about carbon emissions and waste, but in the volumes we’re dealing with—it’s trillions of dollars worth of waste and metric tonnage—people don’t understand those numbers. But everybody understood a clean glass of water to drink. So orienting it to water was relatable. By some accounts the textile industry is the number two polluter of clean water globally. Oil and agriculture are number one, which of course fashion contributes to it as well, but textile production at the current pace is number two. But we love seeing the flip side of that. The flip side is that fashion and textiles can solve the world’s water crisis if we rethink how we do things at scale. That’s why we’re here.
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