By Invitation Only: A Story of Entrepreneur Passion and Leadership
“Alexis had certainly never waxed on about her shopping habits in front of a room full of middle-aged men clad in blue shirts and khakis. She knew a big part of a VC partner’s job is to assess people’s judgment; they don’t tend to be fond of frivolity. Yet our business would live or die on the basis of people’s passion for fashion—our members’ love of a deal. Alexis had to convince the VCs of this and to project ‘CEO.’ Both were equally important.”
That’s an excerpt from By Invitation Only: How We Built Gilt and Changed the Way Millions Shop, which hit the shelves last Thursday. Alexis is Alexis Maybank, founder of Gilt, the New York-based flash sales site that offers limited-time, members-only sales on designer duds, home goods, gourmet food, and luxury vacations. Maybank authored the book with Alexandra Wilkis Wilson, her co-founder, Harvard Business School friend, and overall partner in crime.
It’s the story of how the duo convinced venture capitalists to give them money, how they convinced Internet-shy luxury brands to offload excess inventory to an upstart website, and how they convinced millions of people to drop everything at noon for deals on designer merchandise. (That last part didn’t actually take that much convincing. Just lots of viral marketing.) The story reads as a how-to manual for any entrepreneur looking to start something big and disruptive. Those lessons aren’t cliché or contrived, but were lived by Maybank, Wilson, and co-founders Kevin Ryan (now CEO), Mike Bryzek and Phong Nguyen as they got the fledgling Gilt off the ground and turned it into a company worth an estimated $1 billion-plus today.
“We really wrote the book hoping that it would inspire entrepreneurs and entrepreneurial thinking in large organizations,” said Wilson (an Xconomist) on a phone call while she and Maybank were cabbing between media appearances Friday. (A lot of Gilt work and communication is done in New York taxis, the book shows.)
You’ll see them face classic e-commerce startup challenges, like learning how to evade e-mail spam filters, scale servers to avoid a website crash, and fine-tune warehouse operations. And other hurdles that seem more unique to a luxury-focused company like Gilt. Not every startup, for example, will have to fret about Madonna showing up unexpectedly to a marketing event and rush to squeeze in a seat for her (between Gwyneth Paltrow and high fashion designer Valentino, nonetheless).
But most startups will need to tackle raising a Series A round. In recounting their venture fundraising experience, Maybank and Wilson, offer a slew of practical, actionable tips for entrepreneurs looking to court VCs for the first time: Build a sense of competition among different firms while being just mysterious enough. Say you want to raise slightly less money than you actually do. Give investors a clear deadline.
But one of the most striking revelations to me was the importance of displaying passion—even at the risk of looking ridiculous. That brings us back to the excerpt above, where Maybank is just about to enter her first pitch meeting at Boston’s Matrix Partners, alongside Ryan and Bryzek. Maybank and Wilson write that Gilt “was ultimately shaped by a series of good ideas that we enhanced, tweaked, and rejiggered along the way.” But one of the key inspirations for the business was their own experience hunting down bargains in New York designer sample sales together. They were convinced that other women shared the same passion, and that Gilt would give these shoppers an unprecedented opportunity to get the thrill of a luxury bargain online.
So Maybank had to figure out how to convey her startup’s potential by positioning herself as the target customer—willing to drop everything for a designer deal—without undermining her abilities as a shrewd, capable CEO. “She decided not to hold back; her passion and enthusiasm for the Gilt business could only help her pitch, she figured,” the book reads.
The risk paid off. That meeting was on a Monday, the term sheet came from Matrix on Tuesday and was finalized on Thursday. Three weeks later, after due diligence and legal work, the deal was closed.
Matrix’s Nick Beim (also an Xconomist) cited his decision to invest as one inspired by the impressive, top-performing Gilt founding team, a business model that could acquire customers and scale quickly at a relatively low expense, and potential for solving a big problem for brands. But arguably, most of that would not have been communicated as well at the pitch meeting by a toned-down Maybank looking to fit in with a room full of male VCs. This same passion and authenticity fueled both Alexis and Maybank as they wooed customers via e-mail, toured the country to build up Gilt’s cache in target cities, and deepened relationships with Gilt’s most loyal customers.
I asked Maybank if this pressure to look serious in order to score funding still exists today. “Young professionals and young entrepreneurs still struggle with the dichotomy of coming off as very passionate and uniquely qualified to do something, and garnering that respect that they feel like they deserve,” she said. “There’s always going to be that twinge that young entrepreneurs face.”
“Our bit of advice is to identify what makes you unique—stick with that,” she added. “You don’t have to reshape how you look, how you speak, or how you project yourself forward. If you do, you really undermine your own confidence.”
By Invitation Only is dripping in this same tried-and true-advice from the pair. Maybank and Wilson are unapologetically advocates for their own distinctive personalities and qualities as leaders, and don’t subscribe to the idea that a good executive needs to embody the perfect balance. “It’s OK to be lopsided—instead of well rounded—when highlighting the elements of your personality, appearance, or convictions that truly make you one of a kind. Neither of us is good at everything, but we’re both very good at some things,” they write.
Wilson is painted as the uber organized, get-everything-done-way-ahead-of-time go getter. She’s adept at making and building meaningful relationships, not just by collecting business cards and e-mailing when she needs something. For Wilson, this means doing more favors than you ask for, treating all contacts as true friends, remembering birthdays and sending gifts, and attending weddings. This type of behavior helped Wilson accrue the 9,500 (yes, you read that right) contacts who she wanted to persuade to join Gilt or connect her with designers. (Five hundred of those contacts were even lost in a harrowing BlackBerry synching accident, but that didn’t seem to trip up the company too much.)
Maybank meanwhile is the perpetually late, entrepreneurial risk-taker who can keep her cool in the hairiest of situations. She loves her four-inch heels but can speak directly, anticipate complications among employees, and act swiftly to prevent them from turning toxic to company morale. She’s the scrappy strategic thinker, and as Gilt scaled up, she decided the role of CEO involved too many meetings and not enough hands-on idea generating and problem solving. She’s since bounced around to other company slots like chief marketing officer and chief strategy officer (her current position).
These personalities come to life in loads of colorful detail throughout the entire By Invitation Only story—from Gilt’s first-ever sale to its expansion to Japan—which is full of plenty of nail-biting moments and bloopers. It’s a fun, almost fiction-like read that offers lessons on startup musts. For example, there are tips on how to hire top talent (invite engineers to just hang out at the office and show them how fun it is, particularly by having models around for photo shoots), and how to transition from the sustained sprint of running a startup into the healthier marathon pace of scaling a big business. Part of this is knowing that pieces will break—”that’s a sign things are going well,”—and prioritizing what to fix first, Maybank said in our chat.
Ultimately, By Invitation Only shows that it’s possible to build something massively successful while staying true to yourself, cultivating your passions, and keeping important friendships intact.