Chris Dixon wraps his Founder Stories interview with Gilt Groupe’s CEO and Founder, Kevin Ryan by discussing the early sales strategy of Gilt – a strategy that was designed to build customer and brand loyalty, but not the bottom line, at least initially.
Revisiting the launch period around four years ago, Ryan says, “we were going to make $4,000 for us on a sale and I spent $7,000 on the photo shoot, and you would say that is not a good business model, but what happened was the brands loved it, the customers loved it … and so now we sell $100,000, $200,000, $300,000 …. on a sale.”
The benefit was clear. Businesses liked selling excess items online in a classy environment and customers liked buying them at discount.
While the idea was gold, Ryan was quick to point out it was probably the least important part of the equation. He goes on to say, the key to success is “execution, and execution is hiring great people, managing them well and moving quickly.”
If you missed any part of Dixon’s interview with Ryan make sure to watch the entire clip below, or Part 1 and Part II separately.
Prior episodes of Founder Stories including Foursquare, GroupMe, and Tumblr are here.