Photo: JackThreads / Thrillist
In 2010, Ohio-based JackThreads was acquired by the cool guy’s site, Thrillist, for an undisclosed amount.JackThreads is a discount clothing site for hipsters.
When Thrillist acquired JackThreads it generated about $5 million in annual revenue.
Today JackThreads pulls in $50 million. Thrillist co-founder Ben Lerer tells us JackThreads generates more for Thrillist in one day than it did in an entire month in 2010. Members grew three-fold; from 500,000 to 1.8 million.
We asked JackThreads co-founder Jason Ross how he quintupled growth in 1.5 years. It took a lot of hustling.
Business Insider: Tell us how JackThreads was founded and about the early days.
Jason Ross: I graduated from Ohio State in Finance in 2003. I did that for two years and took some time off to search for a high growth business opportunity and something I was passionate about.
I grew up a discount shopper who was into having cool shit. I realised the brands I cared about weren’t offered at an off-price for guys like me. Cool brands had no place to liquidate their male merchandise, but female brands did.
I saw the off-price model working in Europe for Vente Privee. So I got on the phone and started cold calling my favourite brands from Columbus, Ohio in 2006.
I spent the next two and a half years in my house trying to figure out how not to go broke, how to get someone to work with me, and then how to build an e-commerce platform.
I traveled to trade shows, met with brands, came up to New York and built relationships with suppliers while working with a local developer in Columbus. At night I worked for bars and for my uncle. I did anything I could not to go into too much debt but I also tried not to get locked into a full-time job so I wouldn’t have my days taken up.
You were bootstrapping against competitors like Gilt Groupe who had hundreds of millions in venture funding. How did JackThreads survive?
We launched in July 2008. Gilt had launched and I realised we were onto something, but being in Ohio and having never raised money we were up against significant competition.
I had to figure out a way to get on the map and grow quickly enough that nobody would take us out. I had no money for a marketing budget so for the first twelve months I got on the phone and found as many online content communities as possible with a male audience. I’d try and get publications to write about us. Thrillist actually wrote about us pretty early on so that was the first time I saw the value of having our brand in front of their audience. Their users quickly signed up and invited their friends — they were just a really engaged group of customers. From that point on I was calling every Thrillist editor trying to get our JackThreads story in every city’s edition.
We grew to 35,000 members and the business started to slowly scale with a little bit of profit that I could reinvest into online customer acquisition.
How did the relationship with Thrillist and acquisition talks start?
Once I had money, Thrillist was the first place I turned to because we saw how valuable their audience was. We started running advertisements in some of their editions.
I didn’t have the budget to pay them a lot of money though, so I called their marketing department to propose a revenue share concept where they would feature us and instead of us paying for ads we would give them a cut. One month later I heard from Ben Lerer.
I don’t know if the timing was just right or if it was me being persistent that got on his radar, but he and I connected and we hit it off.
Two other businesses were looking to acquire us and we had also been approached by a few different VCs.
Thrillist seemed like a strategic and cultural fit. On our two year anniversary we closed the deal with them.
How big (or small) was JackThreads when it was acquired by Thrillist?
We were 150,000 members with 8-10 full time employees. I think revenue was in the single digit millions.
How big is the business now?
We are 65 full-time employees within Thrillist, hiring aggressively. We sign up 5 to 6,000 new members every day and have 1.8 million members total. We launched our mobile app recently and reached 150,000 downloads quickly. We’ll do over $50 million in revenue this year.
Why did JackThreads’ business explode?
One of the obvious things is that Thrillist had an audience that was really engaged. I think also being able to plug into the infrastructure they had developed really helped. Thrillist had been around for 4-5 years and they had already gone through the growing pains we were experiencing. They had grown and scaled a business before, and that experience helped us avoid mistakes. We also opened an office in New York next to Thrillist which has given us a presence here for fashion brands.
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