Dropout SRL
About the Company
"dropout" is an Italian retail business specializing in limited-edition sneakers and streetwear, with a focus on high-demand, exclusive releases. Located in Milan, the store attracts a mix of dedicated sneaker enthusiasts, trend-conscious shoppers, and newcomers drawn to unique designs and quality streetwear. Alongside its physical store, dropout operates a thriving online platform, serving over 500,000 visitors in early 2022 and garnering the majority of its revenue from sneaker sales. The company’s pricing and inventory management rely on Tytler’s proprietary algorithm, HypeAnalyzer, which utilizes data to adapt pricing and consignment rates to market demand.
Recovering from the pandemic's effects, dropout achieved substantial sales growth, and December 2021 marked a significant milestone with $100K in monthly revenue. The business continues to expand its product line to include dropout-branded items, catering to the preferences of streetwear fans and staying ahead of market trends.
Idea Behind Company
Tytler’s interest in sneakers began during his university years in London, where he initially funded his studies through part-time jobs. After purchasing his first pair of Jordans, he delved into the underground sneaker resale market, eventually teaching himself coding to create a sneaker bot for automated purchases. His deepening involvement led him to connect with prominent figures in the sneaker world, enabling him to launch "HypeAnalyzer," a tool that uses data analytics to forecast trends and price fluctuations in sneakers. These insights allowed him to strategically invest in sneakers, eventually leading him to finance dropout.
Driven by a desire to create a sneaker hub in Italy that offered a unique buying experience, Tytler decided to introduce a shopping environment where analytics determined prices, making the process fair and transparent. Inspired by his struggles in academia and diagnosed with dyslexia and dyspraxia in 2018, Tytler chose the name "dropout" as both a personal statement and a homage to Kanye West’s album "College Dropout."
Creating the Company
The initial stages of dropout’s creation were highly experimental, with limited formal planning. Tytler and his co-founders set up operations without external funding, relying on in-house resources for every step, from interior design to marketing. They leveraged their sneaker collections and consignments from their social networks to stock the store’s opening inventory. Tytler and his partners prioritized community engagement and utilized social media groups to attract interest.
Overcoming various logistical challenges, the team gradually established the essentials: business objectives, operational strategies, and a loose business plan. Without formal training, they relied on online resources and their existing network for support. By building strong community connections and carefully managing early investments, dropout successfully opened its flagship store, allowing the founders to test their concept and adapt as they went.
Launching the Business
dropout officially launched in September 2018, drawing a crowd of over 1,000 visitors in its opening weekend. To build excitement, the founders kept store photos and online sales unavailable until after the opening day. They built the initial inventory from their collections and consignments from active members of online sneaker groups, leveraging the "YEEZY Italia" Facebook group, where Tytler was an admin.
The founders funded the launch solely through savings and relied on their network for launch logistics, from insurance and flyer distribution to event permissions. To strengthen brand identity, dropout utilized subtle social media advertising within streetwear communities, helping it maintain a robust presence online and locally. Strong word-of-mouth, combined with successful event planning, attracted thousands of in-store and online customers, establishing dropout as a reputable sneaker retailer.
Earnings
dropout has seen considerable financial growth, hitting a $140,000 monthly revenue milestone. While the pandemic posed challenges, the company sustained profitability and adjusted to changing market conditions by increasing its digital presence and securing €750K in an October 2021 crowdfunding round. This funding enabled the company to enhance its e-commerce platform, open new retail locations, and develop HypeAnalyzer further.
In-store sales remain high, but dropout has been expanding online to diversify revenue. Plans include temporary stores across Italy and improved digital offerings to balance in-store and online revenues. By consistently adapting to market demands and utilizing its unique analytics approach, dropout’s business evaluation has exceeded $2.5M, securing its position in the streetwear and sneaker resale market.
