Operational excellence from LVMH to a startup: Valerie Hoecke of Dia&Co

Operational excellence usually gets discussed as a process problem. Valerie Hoecke learned a different version of it at a company with more than 75 brands and over $50 billion in revenue, and what she took away was not a framework. It was the combination of hard financial rigor and genuine respect for creativity, which she says is rare and which she is now trying to install at a company of about 150 people.

Hoecke is chief operating officer at Dia&Co, the retail service built around the plus-size community's full range of style needs, backed by Founder Collective, Sequoia Capital and Union Square Ventures. Before that she was global chief digital officer at LVMH.

A gap year that never ended

Hoecke started as a web developer and project manager during what was supposed to be a gap year to earn money for college. It went well enough that she never went back, which makes her a college dropout, and she notes how unusual that is in her line of work.

Her timing was extraordinary. She was at a publishing company when the first graphical web browser appeared, and concluded it would transform publishing. She and a colleague persuaded the corporation to launch a think tank to decide what to do about the internet. While there they built experimental products, and spun software out through Mayfield. She had her first exit at around 20 years old.

Her honest read on that period is worth repeating, because it resists the usual founder mythology. Nobody else knew what they were doing either. The wave was coming and there was no choice but to swim.

She launched a web development agency next and sold it a couple of years later, then spent years running agencies in Silicon Valley. That is where she became a generalist. She worked on early commerce systems, including on Netscape's early commerce server and what she describes as the first e-commerce site launched anywhere, and on digital marketing as each new frontier opened.

The agency years are the part she credits most for how she thinks. Working across nonprofits, trucking companies and enterprise software businesses gave her exposure to more business models than almost any role other than investing. Her framing is that if you are strategically curious, that range teaches you what actually makes each kind of business work, and builds pattern matching you can apply later when you specialize.

Why the brand job mattered more than the corporate one

In the late 2000s Hoecke moved to Benefit Cosmetics, an LVMH beauty brand, to run e-commerce and build digital marketing programs. Then she moved up to the parent company as global chief digital officer for the beauty division, working on strategy and digital transformation across 16 brands, with an incubator alongside it.

What made the corporate role work was the brand role that preceded it. She is direct that there is real skepticism about agency people inside brands, and that arriving straight from an agency would have been harder. Having operated successfully inside one of the brands, built relationships and shown she could translate abstract concepts into what worked commercially, she had credibility LVMH rewards.

The deeper point is about what a brand teaches you that an agency cannot. In the agency world she learned theory. At Benefit she learned why her clients had never done all the smart things she suggested. A brand is a proving ground where you take the buzzy new thing, make it work in the market, and then live with the long-term consequences of decisions like how you built the website. She thinks her time at Benefit was more valuable to the brands she later advised than anything else on her resume.

What LVMH does that startups do not

Asked what she carried from a company of that size, Hoecke names two things and then the combination of them.

First, financial rigor and a strong focus on results, at a depth of expertise and analysis that a smaller company simply cannot staff. She is clear Dia&Co does not have that, and that running tight and fast is a different thing.

Second, an unusual respect for creativity and the power of brand. LVMH builds brands intended to last through the ages, oriented to long-term value, and does it through creative work. The houses employ some of the strongest creatives in the world.

The lesson is that the same organization does both. Left brain and right brain, rigor and creative empowerment, held together. Hoecke thinks that combination is rare, that very few startups understand it, and that it is sometimes missing in Silicon Valley specifically.

She is equally candid about the whiplash of the move. There was what she calls a trough of sorrow in months two and three, wondering whether she could do it. She went from an executive assistant who functioned as an extension of her, after years working together, to scheduling her own meetings. The software changed. The scale changed. The altitude of the tasks changed. She notes that LVMH's corporate headquarters actually runs lean, because resources are pushed into the operating companies, so it was not a question of losing a large staff. It was that everything changed at once.

The reason she went back to operating

The pull was immediacy. In a strategic role you influence. As an operator you pull a lever and almost instantly learn whether it worked.

Her image for the alternative is a cruise ship. At a large conglomerate, even in a data oriented division, you make a change and it turns slowly, and you do not find out whether you over-rotated until much later.

The second reason was purpose, sharpened by the pandemic. She is careful to say LVMH is purpose-driven in its own way, about elevating experience and delivering products that show what excellence can be. What she wanted was to do that for people who are underserved, and women who wear larger sizes are deeply underserved and face real discrimination.

The mandate, and the CEO it was built around

Dia&Co was founded around 2015 and had raised $90 million at the time of recording. Hoecke had been in the role six months.

Part of her mandate is structural. The company has a CEO, Nadia Boujarwah, who is articulate, externally facing and has been the face of the brand. Bringing in a COO was about giving her more leverage on the things she is strongest at and taking day to day operation of the business off her plate. Hoecke describes the internal language for this as superpowers, hers meant to complement rather than duplicate.

The other part of the mandate is the ambition. Build the best retail brand there is for plus customers, on the conviction that brands of the future will all be inclusive size and this is a transition period.

Her description of the current customer experience explains why the market exists. The plus customer has been relegated to a small rack, a strange section of the store with a few items in a few sizes and few styles, forced to navigate a labyrinth just to assemble an outfit. Her prediction is that in 20 years people will look back and find it absurd that in the United States roughly 70% of women could not find clothing in their size.

There is also a market structure insight underneath the business. As more brands extend their sizing, including partners like Madewell, the customer often does not know, because she stopped looking at those brands years ago after they failed her. Dia&Co can aggregate that audience and tell them, which serves both the young inclusive brands that struggle to reach the customer and the established ones extending their range.

Returns as a competitive advantage

This is the operational core of the episode, and it is a genuinely instructive example of turning an expensive problem into a moat.

Dia&Co runs two connected businesses. Customers can shop the marketplace directly, or subscribe to have a stylist send clothing monthly. Any customer can put down a $20 deposit and take ten items home to try.

The reason this matters for the plus customer is specific rather than generic. Finding clothes is hard, trying them on is harder, and she needs to try more items than her straight-size counterparts because there is a wider range of body shapes across plus sizing. So trying at home is not a convenience feature, it is the service.

The consequence is a returns volume most retailers would consider a disaster. Dia&Co's response was to run its own operations center rather than outsourcing to a third party distribution center, and to become genuinely excellent and cost-efficient at returns, which Hoecke notes few businesses of their size can claim.

The payoff is that this capability sells. When brands want to sell through the marketplace, Dia&Co can handle returns in a way other retailers cannot, and can move returned inventory quickly into style boxes rather than watching it become end-of-season markdown. The two halves of the business feed each other.

And it produces the data. When a customer sends items back she reports what fit, what did not, and why, across style and fabric. Hoecke's expectation is that this will become the largest dataset in the world on how clothing fits plus customers, which in turn makes them a better partner to brands entering the category.

Survival mode and growth mode need different people

One of the sharpest observations in this episode is about the transition out of the pandemic.

Hoecke's framing is that the skills required to survive an economic shock and the skills required to run a high growth company are different. There is overlap in the Venn diagram, but not much. Her team was scrappy and did survival mode well. Moving back into growth required consciously switching gears.

She also thinks the combination is an advantage. A team that has been through both famine and hypergrowth carries a range that a company which has only known one does not.

What she does about it is mostly attitude, and she is unembarrassed about that. Coming out of the pandemic her team defaulted to seeing challenges rather than the opportunity on the other side of them, so she deliberately became the cheerleader, giving more positive reinforcement than she would in normal times, particularly when people took good risks or doubled down on a bet.

Her argument for why this is strategy rather than sentiment: this is a moment for big bets, and companies choosing slow incremental growth coming out of a slowdown will get left behind.

Remote, honestly

Dia&Co was primarily remote before the pandemic, a deliberate decision made long before Hoecke arrived so the company could hire the best talent anywhere in the US. Her chief retail officer and chief technology and data officer are on the West Coast while most of the company is on the East Coast.

She does not pretend it has been easy. Six months earlier she describes it as grim and glum, with endless video calls. When a group finally got together in New York, she had never met most of her team face to face, and she calls it a small miracle. She also notes that a startup cannot afford to do it often.

The tactics are small and deliberate. A Halloween contest where people submitted childhood photos to be posted in Slack as a guessing game. Turning off the setting that holds people out of a video call until the host arrives, so early arrivals can talk. A donut style app pairing people in Slack. And her own behavior, which she describes as extremely chatty on social channels, on the theory that the water cooler has to be rebuilt somewhere.

Where retail goes next

Hoecke has two bets, both traceable to LVMH.

The first is wardrobing. Most e-commerce apparel is a product detail page with a cross-sell underneath. Dia&Co already has the expertise to assemble a whole look through its styling business, and she thinks people genuinely want style help. Doing it in a marketplace rather than a style box will require different tools, likely including more intimate chat-based selling.

The second is live commerce. Her reference point is China, which she considers the most advanced e-commerce and digital marketing market in the world. Winning Singles' Day on Taobao is effectively impossible without top influencers selling on livestream, and consumer response to demonstrations and to reviews from people they trust is undeniable. Dia&Co has had a few viral hits where a good TikTok reel converted into real sales, and she is candid that they have not cracked the code and that the US audience is not there yet.

Interviewing your future boss on purpose

The best career advice in this episode is about how Hoecke evaluated the CEO relationship before joining.

Nadia and co-founder Lydia asked her to do an exercise on the Dia customer journey and where it could be strengthened, with the usual impossible framing of not spending more than three hours while boiling the ocean.

Hoecke used it for her own purposes. She deliberately filled the conversation with ideas she thought were a little out there, because what she wanted to learn was what it felt like to put a controversial idea in front of them. What happens in disagreement. Whether conflict there is constructive. How these people engage when they have to tell her she is wrong and she has to argue back.

Her summary is that she already knew she was signing up for someone intelligent and a strong communicator, with strengths she does not have, because that is visible early. What is not visible early is what the relationship is like under friction, and that is what she went looking for.

The generalizable version: in any interview, ask what is in it for the company and what you need to give them, and separately what is in it for you and what you want to learn. She credits nearly 30 years of experience for knowing what she needs in the people she works with, and specifically what she wants from a boss.

The employee who fired himself

Michael's standing question produced the coldest open in the show's history. At a previous company, someone demanded an expanded role. When Hoecke declined, they fired themselves on the spot and said she would be hearing from their attorney. There was a lawsuit.

Her conclusion is the one that generalizes. Business surprises fall into patterns and you learn them. People are the wild card, and also the magic, because people are who solve problems and build customer intuition. Managing personalities is where a large share of the difficulty of the job lives, and part of why she loves the job.

She adds a piece of managerial discipline worth keeping. When something genuinely unusual happens with an employee, the first question is what that person is going through and whether something in their life explains it. A legal threat removes that option.

Size discrimination, named plainly

Michael returns to something Hoecke mentioned in passing, and she expands on it.

Her analysis starts structurally. Societies favor the middle of the bell curve, and the people holding power there resist change. Meanwhile bodies vary enormously in how they hold weight, and gaining weight over the years is a normal part of aging for most women. Against that reality sits a standard, rooted at least partly in sexism, that treats small as better.

The asymmetry is her sharpest point. Unusually thin people do not experience workplace discrimination. Larger people do, and it shows up in wages, where the larger a woman is the less likely she is to be paid well. She notes that as awareness of discrimination has grown generally, size remains one of the least addressed forms.

She ends on visibility. Roughly 70% of American women are size 10 and up, and you still cannot readily find stock images of a plus-size businesswoman for the presentations everyone makes. Women of larger sizes are effectively invisible in media, which damages self-esteem and reinforces the bias, because the images tell everyone what size it is acceptable to be.

The 5 things I took away from this conversation

1. Rigor and creativity are not a tradeoff, and most companies pick one. This is the LVMH lesson and it is the one I keep returning to. Startups tend to be analytically rigorous and brand-thin. Creative organizations tend to be the reverse. Holding both, and building brands intended to last decades, is a genuinely different operating posture.

2. Turn your most expensive operational problem into the thing you sell. Returns should be a cost center for a try-before-you-buy business. Dia&Co built an in-house operation, got cost-efficient at it, and now offers that capability to brand partners while recycling inventory into style boxes. That is the cleanest example of an operational moat I have heard on this show.

3. Survival and growth need different muscles, and the switch has to be deliberate. Teams do not exit crisis mode on their own. Hoecke consciously changed her own behavior toward optimism and positive reinforcement because the default after a shock is to see every situation as a threat. Naming the transition is the job.

4. Interview for what disagreement feels like. Everyone evaluates whether a CEO is smart. Almost nobody engineers a chance to be told they are wrong before accepting the job. Deliberately floating uncomfortable ideas to see how conflict is handled is the most useful interview tactic I have come across.

5. Work at the brand before you advise the brands. Hoecke's agency years taught her theory. Her time inside Benefit taught her why clients ignore good advice, and living with the consequences of her own decisions is what made her credible at the parent company. That sequence is worth copying deliberately.

FAQ

What does operational excellence look like at a large luxury group? In Hoecke's account of LVMH, it is deep financial rigor and a strong results orientation combined with real respect for creative work and long-term brand building. The unusual part is the combination. The organization empowers world class creatives while holding a high analytical standard, which she says few companies manage in either direction.

How does a big company operator adapt to a startup? Expect a difficult period. Hoecke describes months two and three as a trough where everything changed at once: support structures, tools, scale and the altitude of daily tasks. What transfers is judgment and pattern matching. What does not transfer is the depth of specialist resource a large company can put behind any given question.

How can returns become a competitive advantage rather than a cost? By building the capability in-house and treating it as a product. Dia&Co runs its own operations center rather than outsourcing, is cost-efficient at processing returns, and uses that to offer brand partners something other retailers cannot, while routing returned inventory into its styling business instead of into end-of-season markdown.

How do you move a team from survival mode back into growth? Recognize that the two require different skills, and that a team which has just survived a crisis defaults to seeing risk rather than opportunity. Hoecke's approach was deliberate and behavioral: more positive reinforcement than usual, explicit praise for taking good risks, and a stated position that this is a moment for big bets rather than incremental ones.

How should a COO evaluate a CEO before taking the job? Test the disagreement, not the intelligence. Hoecke used a pre-hire strategy exercise to deliberately present ideas she expected pushback on, so she could see whether conflict at that company is constructive. Knowing what you need from a boss, and testing for it specifically, is what she credits her experience with teaching her.

Also mentioned

• Dia&Co, its style box service and marketplace, and its partnership with Madewell
• LVMH and Benefit Cosmetics, where Hoecke ran e-commerce before moving to the parent group
• Founder Collective, Sequoia Capital and Union Square Ventures, Dia&Co's investors
• Stitch Fix, the reference point for the styling box model
• Singles' Day on Taobao, and the livestream selling model Hoecke expects to reach the US
• Research on weight-based discrimination in hiring and pay, summarized here, the pattern Hoecke describes
• Valerie Hoecke on LinkedIn

Listen to the full episode

Valerie Hoecke on Between Two COO's

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