Just over a year ago, Michael Rubin scored the entrepreneurial hit of a lifetime: he sold an e-commerce company, GSI Commerce, to eBay, for ~$2 billion.So naturally, Rubin took the money and sailed off into the sunset, right?
Rubin is still working.
He’s the CEO – and 90% owner – of Kynetic, which is the parent company of three former GSI subsidiaries that he bought back from eBay: Fanatics, Rue La La, and ShopRunner.
eBay still owns 30% of Rue La La and ShopRunner. Insight Venture Partners owns 10% of Kynetics.
Fanatics is an online store selling licensed sporting goods merchandise. It also powers stores for almost all of the professional sports leagues including the NFL and NASCAR. In an interview, Rubin told us it will do $1 billion in sales in 2013, and around $850 million this year. Rubin predicts 20% annual growth going forward.
Rue La La is a private sales business, like Gilt or Vente Privée. It’ll do about $400 million in sales this year, says Rubin.
ShopRunner is a membership product where customers pay a recurring fee, and get all kinds of perks at various online stores. It’s like an independent Amazon Prime. Rubin just hired former Yahoo CEO and PayPal president Scott Thompson to be its CEO.
If you believe Rubin’s numbers give Kynetic the same revenue multiple as Amazon, the company is worth something like $2.5 billion – Rubin’s stake, $2.2 billion.
Anyway, we thought it might be worth picking Rubin’s brain about his companies and the industry in a Q&A that we could share with readers.
Here it is:
Business Insider: Why are you still working?
Michael Rubin: For me, I will work at the same incredibly hard pace until I die. I love it. I am having more fun than I have ever had. To me the money is irrelevant. I love doing what I am doing. I feel really fortunate. I am building three really great consumer Internet businesses and for me, I just want to keep building. To me, that is fun. I like giving a great experience to consumers. I like creating great environments for our employees.
BI: Why did eBay let you walk out the door with businesses that seem to be doing so well?
MR: When eBay decided they wanted to buy GSI, they were really buying the e-marketing and e-commerce service businesses, which made complete sense. eBay is not in the business of owning inventory. So, eBay approached me and said “hey we would really love to buy GSI but it doesn’t really work for us to own inventory and to compete with our sellers.”
BI: What do you think of the job eBay CEO John Donahue is doing? What’s been the trick to eBay’s recent turnaround?
MR: I will tell you I think John has done a really good job. I think there has been a couple tricks. This is my outside opinion looking in. The first thing I’d say is I think he has got the right strategy. One, he has got scaling in e-commerce. Two, PayPal is an incredible business. Three, mobile is a giant benefit to both PayPal and eBay marketplace. I think mobile has helped make eBay more relevant. They are the largest mobile company in the world in the transactions perspective. I think currently, it’s like 10 billion dollars they are going to do this year. Four, I think he’s got a great team. Five, I don’t know him well enough to know how he is as a leader but everything I hear is that he is doing a great job leading that business.
BI: Is Facebook important to e-commerce businesses? Is it a growing distribution point?
MR: We are certainly seeing sales coming from social media and certainly Facebook being the largest. More and more important every day to us. We over-invest in that area. It is going to have a huge impact long term.
BI: Relative to Google?
MR: It’s small.
CORRECTIONS: An earlier version of this story said that Marc Andreessen owned 10% of Kynetic. He does not. Kynetic sold 10% of Fanatics to Insight Venture Partners, with participation from Andreessen Horowitz, for $150MM last month. Otherwise, eBay owns 30% of Rue La La and ShopRunner, while Kynetic owns the other 70% of each company. An earlier version of this story quoted Rubin saying that PayPal had $10 million in transactions. He said it has $10 billion. Apologies for the confusion.