They voiced some concerns about my business plan, and I used this opportunity to tweak my business model. I got a sense of the type of business they would want to work with.
What kinds of concerns did they have? Everybody was very concerned about having their off price merchandise available for long periods of time online, polluting their sales pool.
And this was in , so flash sales sites were mostly in Europe. But that business model was perfect, so I decided to make JackThreads a private shopping club with daily deals. And the rest is history. Do you still talk to these contacts you made?
Oh yeah. Jason : Right. Andrew : Why did it cost so much and take so long to build out the website? You know, I had not a clue what I was doing.
I never built a website before, never built an ecommerce platform. It started out with this Ohio State computer programming class. After that, I brought two of the students on from that class. They came on board and worked through the summer. Then I was looking for two or three months, looking for a new developer.
Finally found a guy in Atlanta who I got introduced through a friend. He did a great job for the next year on and off. The work was never being done constantly.
It was like slowly progressing. I was not paying them a ton of money. Andrew : Can you tell me more about that? The slow progress and maybe some of the set backs of building out the website?
Can you tell us about that? Andrew : Give me an example of what you wanted, what kind of functionality you had that took longer than you expected. I think just, like the way the site operates today. Jason : Selling product, sales start at noon, new sales go up everyday at noon, all those things that kind of go into that.
I think every aspect of that functionality took longer than we thought it was going to take, so. Andrew : Was there anything that you wanted to build that in retrospect was way too big for first version. Maybe that took too long? Andrew : Okay, I remember actually when I interviewed Ben from Thrillist and I asked him because he has a beautiful site.
I said what did the first version look like? He made this face like he just ate an onion. Like he just bit right into it, this nasty. What was your first version like? Yeah, and, and. Jason : If I could make that same face I would. Andrew : Oh, really, okay, so describe it. What was it like in design and features? Jason : It was, oh, my gosh, stupid simple.
I mean, it was really, it was a product, one product being sold for 24 hours at a time. It was stupid simple. It was a picture of an item, a description, a buy-it-now button and then a little bit of JackThreads branding at the top.
The page, it was all white with a picture. It was very, like, minimal and just ugly and embarrassing. Andrew : The email piece, was that in it also? The registration? Jason : Oh, yeah, it was. But it worked, it worked, I think there was a compelling reason for our audience to want to come to our site even though it looked the way it did. Because they were getting the brands that they liked at the prices that we were selling.
Andrew : Okay, what else did I want to ask you about? You launch, how do you get customers in the door? How do you get users? It goes back to what I explained earlier. We had brands that were working with us. Name brands that guys already wanted and there were blogs and magazines and newsletters out there that were already writing about these brands. Thrillis was one of the early partners that featured us. They wrote about us three months into our business. That was kind of the first time that we saw the power of putting the JackThreads brand in front of their audience.
Jason : The goal was to find, like, 20 other Thrillists to write about us. We did that in the first year. It went from zero to 35, members. Like, cool restaurants, cool clubs, cool clothing places. So, you told them about JackThreads, they said this is perfect for our audience, they featured you.
Jason : Yeah. Andrew : What about the brands? How did you get the brands be okay with you selling their stuff at a discount? Jason : Yeah, that kind of goes back to the start phase, right?
The first six months, focusing on women then decided to kind of change the whole path of the business. I guess the easiest way to explain it is, I found out that there are a lot of different trade shows. There are trade shows in New York and Las Vegas and Los Angeles where every six months, like, all the brands of fashion are located in one place. So, like, if you travel there, you have the ability to walk booth to booth.
Meet with pretty much everybody in the industry in one trip. The first one I ever went to, I bought a ticket on my credit line. Did it as cheap as I could, walked into this trade show for the first time. You know, it was like white mink carpets, the techno music playing, and everybody seemed to know each other. They were all dressed very well. I walked in, I almost walked right back out because I was so nervous.
I was kind of intimidated. I just, really, I went booth to booth at that show. They had a lot of negative things to say. I got a lot of the same answers over and over again. I came back to Columbus and realized, like, everybody, all these brands are telling me this. My business model, my plan, says this. In the next six months, before the time, up until the next trade show, I was on the phone with a lot of different brands.
Then by the time I went to the next show, I knew some people and pitched them on this new concept. Got more, instead of all the negative comments that I heard on the first trade show, I got a lot more positive feedback that time.
I realized I was onto something. We signed up six brands to start with us on day one. That was enough for us to launch. Andrew : What kind of feedback were they giving you? Beyond the price, which apparently was higher than you expected. What else did they tell you that was different from what you expected? So, why. Jason : Yeah, it did. We want discreet. We want to be able to control the message.
The fact that it was private seemed like it was going to be a lot harder to get people to want to come through that door but the more we heard the brands say that. I want it want it to be available to more people. Price, exclusivity, what else did you adjust based on the feedback you got from brands at the show? Jason : I think those were the key things. Andrew : Those were the two things. Jason : Then just realizing how important it was going to be, just presenting the product and how important the photography was going to be and the models, and the descriptions.
These brands, who had spent years building a following and an image, we were going to have recreate that same image. Present them in a very positive way on our site. That was going to allow us, when that brand looked at a sale that JackThreads was having and they felt comfortable. It was really just making the initial guys happy and leveraging those relationships to meet a lot of other brands and get a lot more participation. Andrew : Then you had to buy the product before you offered it for sale.
Take it in inventory, you said? Jason : We did, yeah. Your home? Jason : In my house, yeah, actually. All those room mates that I moved in, I kicked them all out.
I moved into the smallest room in the house and our master bedroom was the warehouse for a while. Andrew : So there was actual, there was shirts in there, there was shoes in there? Jason : Everything, shirts, shoes, jackets, I mean it was like a clothing warehouse, yeah.
It was crazy. Andrew : Inventories kind of tough. How did you know that you could move enough of each size that you were buying? Andrew : What happened when you over shoot? Jason : Well, I was super conservative in the beginning. Then undersell and have this stuff sitting in my house. Jason : Exactly, just because, I mean, the amount of money that we had to start this was so small.
How much were you spending on inventory in say the first month? Andrew : Roughly, how much of that was for inventory, would you say? Jason : A lot of it, a lot of it.
Andrew : So, about 50, 60, was inventory? Andrew : So, anyone who was walking in your house, say a girl came over for dinner. It, I have pictures of it. Like friends coming in to try on clothes, it was funny. I gotta see it, is that online somewhere?
I remember packaging them in like manila envelopes with the metal, you know, the envelopes where you fold them over and they have like the metal prong that you spread to the side? Yeah, exactly, we packaged the product in that. Hand wrote the users shipping address and their info on the package. We had to learn really fast. We went from fulfilling orders out of our house that way to having JackThreads boxes, tons of tape, thermal label printers.
It was a very painful process getting from nothing to that point. We just kind of learned as we went. It got to the point where semi-trucks were showing up in my cul-de-sac because of the amount of product we were buying started to come on pallets. We moved into a warehouse space like 20 minutes from my house shortly thereafter.
That was kind of how we started growing. Andrew : What did the neighbors say about having a truck in front of your place? Jason : They were just laughing, like, what is going on, you know?
You know, just in case. They were just laughing. Andrew : At one point in our conversation, I noticed you went from I to we. What, I guess that means you starting hiring people. What period did you hire people? It was the first hire that we made. Up until that point, it was. Andrew : Who was that? Andrew : Who was the first hire? Jason : It was a web developer.
Over that two and a half year period, we went through a number of web developers. Finally got the site to a point where it was working because I hired a firm here in Columbus that was supposed to be, like, really well-known and did really great work. Of course, they were more expensive. A few weeks ago we made changes to meaningfully reduce the burn and to enable these various conversations to reach their conclusions. Those who have gotten into e-commerce find the brand development, sourcing and shipping and customer service hard to do.
In the shadow of Amazon, smaller retailers have struggled. Clothing is a crowded market. Lerer, realizing the lower value investors placed on e-commerce ventures, insisted that Thrillist was a media company. Everything gets destroyed by Amazon.
But it was never clear how the two parts worked better as a whole. Another big risk was the try-at-home sales model, called TryOuts. Then there were execution problems. JackThreads became known for customer service snafus.
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To learn more or opt-out, read our Cookie Policy. Mark Walker had two goals for his startup this year: Get its new line of clothing into as many guys' homes as possible and get them to pay full price.
He would have to get creative. Walker, after all, is the CEO of JackThreads , a men's clothing site that has mainly been known for its discounted prices since it started in It had grown rapidly for years on the back of flash sales — short-lasting, deep discounts that spurred impulse buying. As the flash fad faded, though, JackThreads was forced to move away from the model, meaning it would have to rely less on discounts.
But as revenue growth became a problem, it found itself turning back to its old tricks, even after it launched its own JackThreads clothing label to help it stand out and boost profit margins. JackThreads is not alone in this predicament.
It's tough going, selling clothing online as a venture-backed startup in How do you keep growing fast to satisfy investors without relying on short-lived gimmicks? The fast-growth days of flash sales are mostly over , and subscription-in-a-box successes are few and far between.
Then there's the Amazon problem. Some fashion startups have resorted to opening their own stores to get in front of new customers while also acknowledging that many people still won't buy clothing they haven't tried on.
In December, Walker had a come-to-Jesus meeting with the rest of his board of directors, led by chairman Ben Lerer. Lerer had bought JackThreads back in , as the CEO of the digital media company Thrillist, when the idea of melding content and commerce was hot.
Last year, he split them apart. Walker's task: "Getting out of this death spiral of discounting.
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