Marc Lore, founder of Jet.com, which boasts a prelaunch valuation of $600 million, recently announced the Top 10 Jet Insiders on his personal Tumblr blog. These insiders received a combined 190,000 stock options in the startup, a one-stop discount site and buyer's club for consumer products that aims to compete with Amazon.
By the way, Amazon is Lore's former employer. He worked there for about two-and-a-half years following its acquisition of his previous startup.
Why did these insiders receive so many options? Mainly for their role in Jet.com's inaugural membership drive, dating back to November 2014. The number-one insider, 28-year-old Eric Martin of York, Pennsylvania, referred 8,000 members to the site. Jet.com rewarded him with 100,000 stock options. (The other nine in the top 10 each received 10,000 options.)
And here's the rub: The Philadelphia Inquirer last week ran a lengthy profile about Martin, positing him as a future internet multimillionaire. "Martin was awarded stock options that could be worth $18 million if the company is successful, an outcome that some of the world's biggest investors are banking on," the Inquirer reported.
A Leader Talented People Follow
Those investors--including Bain Capital Ventures, Accel Partners, General Catalyst Partners, Goldman Sachs, and Google Ventures--are one reason Martin's options have such potential. But the bigger reason is Lore. His stellar track record speaks for itself: Amazon bought his previous venture, Quidsi (the company behind Diapers.com and Soap.com), for $545 million in 2010.
But there's more to Lore's iconic status than this singular exit, mighty though it was. Lore has a sterling reputation as a team leader whom talented people are eager to follow.
Jet.com was "a huge, gigantic, highly disruptive yet doable idea led by an amazing team," Joel Cutler, managing director at General Catalyst Partners, told The New York Times.
One look at Jet.com's leadership team reveals a group who have worked with Lore before. Jet.com's COO, CTO, and chief revenue officer are all Quidsi alums.
Generating that sort of startup-to-startup loyalty is something young serial entrepreneurs admire and aspire to. "There's a core team who follow him wherever he goes," says Gabe Flateman, co-founder of Casper, a New York City-based manufacturer and online retailer of mattresses. "It shows whatever he's doing, with the business model and the culture, it's working,"
Casper hopes to disrupt the $13 billion U.S. mattress industry by innovating around every aspect of the customer experience: the mattress itself, the online browsing and buying process, the logistics of product delivery, and the stresses over potential returns.
Though Casper has done well--the company made $20 million in its first 10 months--the experience has taught Flateman and his co-founders plenty about the guts it takes to challenge industry heavyweights.
In Lore, the Casper co-founders see an entrepreneurial role model, someone undaunted by big-name competition. "Wherever he is quoted or written about, we always read it," adds Flateman. "His companies are super ballsy."
An Elegantly Simple Business Model
All told, Jet.com amassed 351,474 members (for a free six-month membership) through the 73-day membership drive. No, there isn't revenue yet, but those are still prelaunch numbers any founder or aspiring entrepreneur can respect.
Moreover, members are eventually supposed to become the backbone of Jet.com's business model. The company states that member fees--$49.99 annually--are what will allow it to deliver "profit-free pricing." That is, to make claims like this: "All of our profits come from membership fees, not the products we sell."
It's a business model almost elegant in the simplicity of its promise. The message is: Customers, if you give us roughly $50 a year, we'll give you way more than that in savings on products you're buying anyway.
In addition, Jet.com, which is based in Hoboken, New Jersey, promises to make many of its discounts transparent to customers as they make choices online. For example, once customers start adding items to their carts, Jet.com will flag other products shipping from the same location. Buy them together, and the savings will increase.
Likewise, customers can save by opting out of free returns on items they know they'll want to keep. Or by using a debit card to pay, as opposed to a credit card.
A Founder Other Founders Admire
Casper's co-founders aren't the only risk takers Lore is inspiring. Scan the list of the Top 10 Jet.com Insiders, and you'll find that the swashbuckling ethos of entrepreneurship is well represented. Martin, the big winner, once borrowed $15,000 from his dad to make a day-trading bet on a tech company, notes the Inquirer profile.
The next five on the list also own or operate their own companies. For example, the sixth-place insider, Dave Kerpen of Port Washington, New York, is the CEO and founder of Likeable Local, a social media software company serving small businesses. (Kerpen is also an Inc.com columnist.)
How is Lore motivating these entrepreneurs to take action on Jet.com's behalf? Through a bold mix of inspiration and incentive. The inspiration comes from Jet.com's status as an underdog upstart "ballsy" enough to challenge Amazon. The incentive piece, deftly conveyed by Lore and his team, is the idea that anyone--and they really mean anyone--abetting the Jet.com mission will be richly rewarded.
For example: It was Lore who last November promised on his personal Tumblr blog that the top insider would garner up to 100,000 Jet.com stock options. Tellingly, Lore added gravitas to this seemingly far-fetched promise by adding parenthetically that this six-digit sum of options was "the same amount we've given out to some of our earliest, high-level employees."
"I love how Lore has begun to embrace social media to promote the Jet brand, and become a true spokesperson for the company," says Kerpen, who notes that Lore, in addition to his Tumblr account, is on Twitter and is a LinkedIn Influencer.
The message there is clear and powerful: You, Eric Martin of Pennsylvania, and you, Dave Kerpen of New York, may not be official Jet.com employees. But what you're doing for our startup, in helping us gain members, is so crucial, so essential, so valued, that I, the founder and CEO, will personally--and publicly--promise you a just and worthy compensation.
For Kerpen, another stroke of Lore's mastery is his ability to generate so much buzz--and sign up so many members--without spending money. "Jet is somehow giving away millions of dollars worth of prizes without actually costing themselves a dime, since all of the prizes are in free memberships and stock options," Kerpen notes on Inc.com.
Lore is, in short, a leader who inspires loyalty--even in nonemployees--by presenting a bold mission and offering legit rewards to all who help.
It's too early to tell if Jet.com will sink or swim. But Lore believes the time is right for a price-centric alternative to emerge. "Most companies today are so focused on shipping speed," he told Inc.'s Christine Lagorio-Chafkin. "I think that's a relatively small, niche market, and I think the next [e-commerce] wave [which is predicted to grow to a $300 billion market] is going to care more about price than service."
"And Jet is positioned to be ready for that next wave."