Entrepreneur Stories

The most critical factor contributing to Gilt Groupe’s early success was the strength and varied expertise of its founding team.

Talent First

Inspired by the popularity of New York’s designer “sample sales,” Alexis Maybank, Alexandra Wilson, Michael Bryzek and Kevin Ryan wanted to use the Internet to bring Manhattan fashionistas’ favorite pastime to a nationwide audience. Together, they created Gilt Groupe, an invitation-only shopping Web site where members could get access to limited-time sales of coveted fashion brands at steep discounts.

The founders had varied, yet complementary backgrounds, and each of them contributed a vital component to the business. As the former chief executive of online advertising engine DoubleClick, Kevin brought with him the experience and perspective of having built an Internet business from its early days and leading it to a $1.1 billion acquisition. Alexandra had been in charge of retail operations at Bulgari and led leather goods planning for Louis Vuitton. Alexis was formerly general manager of AOL’s ecommerce businesses and had founded eBay Canada and launched eBay Motors. Michael Bryzek, a winner of MIT’s $50K competition, started an Internet payment company and served as the chief technology officer for a subsidiary of the United Way of America.

Alexis became Gilt’s founding chief executive. As an eBay alumna, she understood how to create viral marketing concepts and give shoppers the rush that comes with purchasing in a competitive environment. The exclusivity and time-based nature of Gilt’s sales meant that items would never get stale, and the moment of purchase would carry a high degree of emotional satisfaction for the buyer, while giving merchandise companies an efficient way to sell their excess inventory without damaging their brands.

Alexandra became Gilt’s chief merchandising officer. Her contacts and reputation helped bring in nearly 400 prestigious brands, while her understanding of high fashion informed their decision to photograph items in great detail but with a glossy, editorial feel.

“Alexis and I were both very familiar with the bricks-and-mortar sample sale business model in cities such as New York, London and Paris,” says Alexandra. “When shaping the idea for Gilt, we kept our closest friends—and ourselves—in mind as target consumers.”

“We knew that in order to build an exciting shopping experience we had to sell ‘lust, not must.’ We wanted it to be emotional so that when people saw an item they loved, they would be moved to buy it quickly,” says Alexis. “Our goal was to create the simplest, most streamlined online platform where we could offer the best assortment of merchandise.”

Michael became Gilt’s chief technology officer. He took control of the online user experience and ensured that the backend technology was powerful enough to scale when the company’s user numbers began to accelerate. “We all felt that ecommerce was fundamentally changing and we wanted to drive it forward,” he says. “We chose to put a timeline on sales to create a sense of urgency and competition. We also wanted to respect our members’ time. When they visit Gilt they can scan a single page and know within 30 seconds whether want to buy something, then check out in 15 seconds.”

In August of that year Kevin called Nick Beim, a general partner in the Waltham, Massachusetts office of Matrix Partners. Nick had invested in a number of east coast Internet companies including TheLadders.com, an online recruiting marketplace for executive-level jobs, where Kevin had been a seed investor.

When Kevin first told Nick about the idea, Gilt had no business plan or financial model. “If he had asked me, ‘What is the exact cost of a Valentino dress?’ or ‘How many of those dresses will you sell a year from now?’ I would have had no idea,” says Kevin. “All I knew is that it was a big market with an existing problem, and a similar idea was already working somewhere else. Sometimes you just have to take a risk!”

Nick was immediately intrigued. “The service had yet to be launched but it had significant potential for viral customer acquisition and high customer monetization,” he says. “The founding team was very impressive and had deep domain expertise in ecommerce, fashion and luxury goods.” 

Kevin had led DoubleClick through its most accelerated growth period, as well as the depths of the tech depression and back up again. DoubleClick was one of few first generation dot-com companies to not only survive the tech crash but to reach a billion-plus valuation. He could help the team stay focused on its goals, no matter the challenges around him. “Kevin is a very driven, high-IQ, accomplished individual. He is one of the brightest lights on the New York startup skyline,” says Nick.

Gilt and Matrix signed a term sheet in October 2007. The next month, the site went live, and Gilt started bringing in revenue the week it launched. The company spent very little money on marketing yet momentum quickly began to build, and the company’s growth continued on a steep trajectory.

While the founding team was busy perfecting the user experience, attracting new brands and increasing the member ranks along with revenue, Nick pitched in on recruiting. He helped identify and attract new talent, including the head of engineering and the general manager of Gilt Japan. “The founders had done a tremendous job building the business, and they wanted to bring in new executive team members who could help manage Gilt’s rapid growth,” he says.

In June 2008 Nick reached out to Susan Lyne, who had just stepped down as chief executive of Martha Stewart Living Omnimedia. They knew each other from decades earlier when Nick conducted research for her late husband who was then writing a book, Charlie Wilson’s War. The timing, as well as the opportunity, seemed perfect. Susan signed on as chief executive of Gilt that September.

“Susan has experience building consumer brands and a deep understanding of Gilt’s target market. She has been successful starting new companies such as Premiere Magazine and running large companies such as Martha Stewart,” says Nick. “If you want to build a really big company, an outstanding team makes all the difference.”