Ben Lerer: My Make or Break Decision
Founded in New York City in 2004, Thrillist, which has annual revenue of $100 million, started out as a fast-growing media company with a newsletter for urban guys. Today, it also sells pants. And shirts--a lot of shirts. The acquisition of online men's-clothing retailer JackThreads in 2010 was a big risk for Thrillist co-founder Ben Lerer. He spoke with Inc. senior writer Christine Lagorio-Chafkin about how he chanced the future of his company on one massive bet.
I never conceived that a media company would sell products. About four years after launching Thrillist, we were growing, but it was no longer exponentially--and no one was coming to us with a $125 million acquisition offer like they did with DailyCandy. We never hit a wall, but there was a pretty hazy future in front of us.
At the same time, the flash-sales space was blowing up. I thought, Why are these guys killing it when they have such a similar subscription model to what we have? One day when reading our newsletter, I saw an ad for a company called JackThreads. I realized they were selling clothes that we'd covered editorially on Thrillist. That's when I realized that we'd built this demand from a tremendous group of users. These guys, JackThreads, had built the supply.
You can't hope your way into a deal. You have to look at it with eyes wide open, knowing what the possible outcomes will be. It was a huge risk. There was the opportunity cost of taking the time and energy to fail. And there was the potential of becoming the media business that tried to figure out commerce--and failed. It was the biggest decision I had to make for the future of the company.
It took six months for us to hammer out our vision and settle the terms. I was in Mexico for an off-site the weekend we were supposed to be signing the deal. "Unpleasant" would be a really nice way to put it. The back-and-forth-and-back was massively stressful, and a little bit of me was saying, "What am I getting myself into? Business is good--am I sure I want to invite more stress into my life?" I definitely had all those second-guesses. This was my life's work, and JackThreads was [founder] Jason Ross's life's work. So neither of us was taking this lightly. In the end, we signed the deal.
Since we acquired JackThreads four years ago, the business is more than 10 times bigger than it was before. It's not like it's been a "nice little change." It's been huge. Half of our employees are working on commerce, and the physical company is a crazy thing: We have our 50,000-square-foot office in [New York City's] SoHo along with a 110,000-square-foot warehouse in Brooklyn, and editors in 30 cities. More than half of our revenue comes from retail--and I think eventually 80 percent will. We'll do upward of $100 million in revenue this year, even though we've raised less capital than most other businesses of our scale.
Now, we can look back and say, "Oh, we were so brave!" I think we were probably naive. I don't think I understood how much of a bear commerce is in general--managing your own fulfillment and handling inventory at scale, manufacturing and design, operating customer service call centers. And having a relationship with UPS. And building technology and data infrastructure around inventory management. We didn't know what that was about. But we knew that if we didn't try, we couldn't win. I'm just glad we won.
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Previously in Inc.: Ben Lerer was one of the "30 Under 30" in 2009.
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.