America’s fastest-growing company started with 15 people working out of a New York City apartment. “If you see my apartment, having that many people in it is not right,” Ideeli‘s CEO Paul Hurley told us.
Since its early days in 2007, the flash-sale site for luxury goods has risen to the top of Inc.’s 500 list of fastest-growing companies, with revenue of $77.7 million last year and 40,882 per cent growth since its launch.
In 2011, the New York-based company raised $41 million in its series C round of funding to focus on hiring employees and developing new categories.
When Hurley started the company, the economy was moving into a recession and fashion-conscious people were looking for a way to satisfy their luxury goods appetite at an affordable price.
“Most people in America still don’t know what a flash sale is,” Hurley says, referring to the model where deals are astronomical — up to 80 per cent in many cases — but only available to members.
With 5.5 million users and 3,000 suppliers, Ideeli became a behemoth player in the retail market almost by accident. Its original business model didn’t focus on retail, but rather served as a marketing platform where brands were able to connect with consumers through giveaways and some limited-time sales.
When Ideeli’s data illustrated that consumers were more interested in sales than the marketing side, the company pivoted its position in 2009 to satisfy this need and focused on truly becoming a flash sale model by running multiple sales and operating as a retailer.
“[Our idea] was a good idea, but it was actually someone else’s idea that was better,” he says.
The “someone else” is the Parisian private shopping club Vente-Privee.
“One of the things I’ve learned throughout my career is to always try new stuff,” says Hurley, who launched seven businesses before Ideeli. “You have to have a good understanding of what’s going on and aim high. If you’re just surviving, that sucks. Who wants to do this? We want to be incredible and incredible for our customers.”
Hurley believes his Internet retailer is a multi-billion dollar opportunity, but he’s not focused on profits. Instead, he’s focused on scaling.
“The key is that all the horses have to be running at the same speed, so if you’re an adrenaline junkie, you need to watch out. Scaling is about putting the right infrastructure and foundations down to win, and we’re laying down the foundations to be a much larger business.
“People underestimate how hard it is to make money, to actually make a profit. I’m not even thinking about the people who build a company and then sell it right away. I’m talking about building something where millions of consumers are actually happy you exist.”
For competition, Hurley keeps a close eye on stores like H&M and J. Crew as well as e-commerce competitors Gilt Groupe, Rue La La and HauteLook.
“The retail business alone is $350 billion per year. We’re thinking about how the consumers shop. They have a lot of choices here. E-commerce is not some new unicorn. It’s retail. But this business is super unforgiving if you’re not good at operations.”
Since its launch, Ideeli moved into a downtown building in May 2008, but within a year, the company packed up again and moved into its current Chinatown location in the same building as Dolce & Gabbana. After taking over two additional floors in the same building, the company’s space is “packed tight” again with around 250 employees.
“The fun thing is, whenever you move into a new place, you think it’s giant and wonder how you’ll ever fill it up,” Hurley says. “Then 20 minutes later, you’ve got people sitting on each other’s laps. It’s a joke here that as you get a promotion, you also get smaller desks.”
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