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>>Sandra: Hi everyone my name is Sandra Leung Li and I'm one of the many volunteers that
help organize the Authors@Google events. So thank you all for joining us today. Today
I am very honored to extend a warm welcome to Alexis Maybank who is the co-founder of
Gilt Groupe. Alexis has dedicated her career to building and launching innovative and compelling
e-commerce experiences for consumers. In 2007, Alexis along with a founding team,
launched Gilt Groupe. She served as Gilt's founding CEO and today she serves as the company's
chief strategy officer. Alexis holds a BS and an MBA from Harvard University and is
actively involved in the Robin Hood Foundation. She currently mentors many emerging entrepreneurs
in both the technology and fashion sectors. Along with her fellow co-founder, Alexandra
Wilkins Wilson, Alexis recently released "By Invitation Only: How We Built Gilt And Changed
The Way Millions Shop". Alexis thank you very much for joining us today.
[Applause] Alexis: Thank you for having me. Do we have
any Gilt members in the audience, or people familiar with the Gilt model?
[Laughter] So I don't have to give too much background
before you get started. That's good to know. >>Sandra: Yeah, I think we have a lot of customers
in here, I've seen a lot of the bags and boxes in the mail room.
>>Alexis: Yes. >>Sandra: Well to start it off, I wanted to
ask how the book tour is going, I'm sure you've racked up a lot of frequent flyer miles.
>>Alexis: Yeah and I have actually been doing a lot of day trips so I think yesterday, excuse
me last week I was in Dallas for a day and I was in Austin for a day. And the week before
that I was in New Orleans and Atlanta. So it's actually been exciting because I've met
with thousands and thousands of not just customers but emerging entrepreneurs. People with ideas
they want to pursue in all parts of the country over the past four weeks. And that has been
so, so exciting. Something I didn't expect actually as a byproduct of going on a book
tour. But it's been rewarding and so energizing at the same time.
>>Sandra: And what is been your favorite city to visit?
>>Alexis: Well, I always love coming home to New York.
>>Sandra: Of course. >>Alexis: That goes without saying. But it
was very exciting to see how, something that was really relegated to Silicon Valley. A
kind of entrepreneurial buzz and here's what's happening and dollars flowing to support ideas
in different areas has come to New York. I saw that in Atlanta in a major way. Boston
has always been a bit of an entrepreneurial hub, but seeing it in Austin and Atlanta as
strong as it was rooted there was pretty exciting to see and get more familiar with.
>>Sandra: Yeah. >>Alexis: And not as much is happening quite
in Miami yet. Not as much is happening quite as much in Chicago although Groupon's done
quite a bit there. So I've been getting a greater pulse on entrepreneurial stirrings
in different cities too. >>Sandra: Got it. So tell us why did you and
Alexander decide to write the book? >>Alexis: We found it interesting that as
we met with customers, as we met with entrepreneurs, as we met with just people in any kind of
professional standing how similar the questions we were getting were. It was how did you find
capital, how did you find engineering talent, how did you go about convincing Grandeur,
your first partners, to take a plunge in a time like 2007? The questions were common
no matter the walk of life you found the person in. We actually, it was expected that when
we met with customers and others they'd want to know about, is Valentino really that tan
in person? [Laughter]
What are you gonna have in your next Hugo Boss sale? So we thought those would be the
questions we get most often, nah never. So it showed to us the common interest that people
have in pursuing an idea that they are passionate about. Common interest that they have and
understanding how to go about it. Because it's a wish or a dream that many people harbor.
And it's not just viewing it in the form of a startup but like here in my family business
here's something I'm thinking about pursuing. Or in the context of a larger company here's
something I've been tasked to do and how can I think about it differently?
So we took these questions that we would get asked so often, the kind of common interest
in, and also the story of Gilt as kind of a fun story in many ways. And we wanted to
just take a moment to document it and reflect on our past five years and a situation that's
been one of the fastest-growing businesses in recent memory. And just documented. You
know memories get fuzzy quickly, but also it was a good way for us just to put those
answers down on paper from our point of view. You know there's not one right answer, but
it was our opportunity to just state it, put it there and relay it to a larger audience.
>>Sandra: The Gilt handbook. >>Alexis: At least some of our thoughts and
lessons learned from the past five years in the trenches.
>>Sandra: Perfect. And how is the actual book writing process? This is your first book.
>>Alexis: So everyone in this room knows what the pace of technology is like today right?
We took four months from okay were going to do this to launching our business. Which is
even a long time frame now when you look, then it was ridiculous. Our investors, everyone
said you're going out way too fast for this idea. I think maybe slow it down, maybe take
another month and make sure things are perfect. The pace of innovation today is measured in
sometimes weeks. From idea to launch. And so when we spoke to the three publishers that
approached us to do this project, and they said it would take two years we really almost
fell, I think both of our mouth fell open at the same time. You know two years, it took
us four months to get Gilt up and running. But it was a two-year project, we ended up
using every single moment because we had full-time jobs so it was the Thursday morning we met
regularly every week and then the weekends that we would spend working on this. And it
was just a testament to the different timeline you see in tech versus publishing, but also
writing is a bigger endeavor than I would've thought two years ago.
>>Sandra: Did you and Alexandra split up chapters or how did it work in terms of collaborating
it? >>Alexis: We split up chapters, we would have
brainstorming sessions where we would kind of record a moment and flesh out down to okay
well what was the color of the room we were walking into? We were really trying to flesh
out our memories in certain instances that were formative in the Gilt experience. And
given it's a big challenge tying together a point of view of two people, we actually
brought on board an editor to help tie together the voice and the thought process and to have
it more of a coherent story. >>Sandra: Well, you mention how Gilt was launched
in only four months. I wanted to touch on that more, why did you guys decide to launch
it so quickly? >>Alexis: We decided to launch it so quickly
for three main reasons. The first was two months in there was a European business that
was comparable to Gilt's who all of the sudden out of left field raised capital at a billion-dollar
valuation. We were like whoa. One, that's gonna set off the alarm bells in every venture
capital around country. To put money behind similar ideas so competition is gonna come
quickly. Two, our business in face of competition I
think those who are familiar with Gilt or are familiar with at least e-commerce or you
know how competitive the space is today. Back then there was no one, but we realized, okay,
if competition is coming, if there's gonna probably be VC dollars flowing towards the
idea in many forms, we've got to scale quickly. And so being out the door quickly and focusing
on being able to move initially from working with a partner like a Ralph Lauren and saying,
okay, we want $100,000 of your product and trying to get quickly to a stage where we
could say we won $1 million worth of your product so that we. So that that scale in
terms of size of the business could build that competitive barrier which was really
important for us to do. But third, just much simpler. We had the holidays.
So we launched November 13 which is the last kind of moment we could to capture what is
the biggest season in any sort of retail. So if we'd gotten out the door in kind of
a frozen tundra of January, we would have missed a very important season.
>>Sandra: Yeah, well it worked out for you. >>Alexis: It did.
>>Sandra: Well, I wanted to focus on you a little bit. You've obviously been very successful
in your career. So what do you attribute that success to?
>>Alexis: I, well, first of all, I've been a little bit on the venture capital side as
this is my third start-up through Gilt. And I think to the extent you're operating in
an environment driven and fueled by technology, if you're operating in an environment that
is so rapidly evolving as our world is, jointly and talking to the room here. There is kind
of two characteristic traits that you need to have. One is flexibility. Flexibility to
take any new challenge and adapt readily to that challenge. Flexibility to say, in our
case you know looking at our business, "Wow, I watched 12 months just pass where he went
from 0% of our revenue coming in of people shopping over mobile devices to now it's almost
30% of our revenue people shopping over mobile devices. What does that mean for me and my
context in my business?" So I think you need a lot of personal flexibility.
I remember being thrown into the trenches at eBay when it was 40 people and I was right
out of college. You know I was 22 years old or something. And in hypergrowth, you get
so many opportunities you'd never get, and I benefited not just because I was in the
right spot at the right time but also because I was flexible or maybe even naive enough
to say yes, I want to run Canada as you launch a new business. Or yes, I'll learn about the
automotive space and help you run eBay motors, launch it and get it up and out the door.
So I think flexibility is just really important as you look at being open to changing context
and changing opportunities that come up in a gross scenario. And just personally, I get
some weird rush when I'm thrown in the deep end of a pool where the water level is slightly
above and over my head and where I have to learn about so much so quickly and come up
to speed really fast. I just love that experience of feeling stretched and incredibly challenged.
So there is no better environment than the entrepreneurial environment because if I look
at the first four months of Gilt not only did I have to do the things I knew, be it
product marketing, product development. Thinking about acquiring an audience through viral
marketing, social marketing really quickly. I had to learn things that I never knew I'd
have to ever confront like how to find warehouse space in the New York, New Jersey area. And
identify if through certain cues if there would be Mafia involvement in that space.
I never thought I'd have to ever learn about something like that, but I get kind of a weird
thrill or rush out of it. >>Sandra: Had you figured that out?
>>Alexis: Well, one, is it unionized? That's one of the first things that you're supposed
to look at and I won't bore you because this is something you'll never have to use in your
day job. But second, I would walk into facilities and you could tell based on the trust level
between the employees and the management. So I walked into facilities where literally
during work hours there was not a window and all the doors were closed with chains. I was
like what happens if there's a fire? And warehouses have fires, what happens? And so I was told
to look for subtle cues in terms of the work structure, the organization of that workforce
and then the trust level between the workforce and the management. I mean it sounds rational
but I was, like, wow, I'd have to think about that? Interesting.
>>Sandra: I think chains are a good thing to watch out for, we don't have them at Google.
>>Alexis: Yeah, can you imagine if they had chains on all these doors, that's what those
employees that that once they've had. >>Sandra: We should do that is a test sometime.
>>Alexis: I'm sure they'd love it. >>Sandra: See how people react. So you talk
about the thrill of starting a new business, do you still feel the same thrill today as
when you first started Gilt? >>Alexis: I do because our business is evolving
every day. So we, a year and a half in, started building our Japanese business. So I was very
involved in building Gilt Japan from ground up. I was highly involved in our expansion
as we moved into Gilt Home. I was at the helm of the marketing team as CMO when we embraced
and knew that we had to start investing heavily in data and personalization and mobile as
not just the form of customer acquisition but in distribution of our product and services.
So it has evolved so much every year, again something that everyone in this room can relate
to. So that every quarter our business never feels the same. And that has led me to what
I love best, the kind of pursuing new ideas, new opportunities and getting them up and
off the ground. >>Sandra: Who would you say are your most
significant influences past and present? >>Alexis: My biggest influences have been,
I would say, and this is the easy one, my dad was somewhat of an entrepreneur. So that
was a big influence and still a person in my life that I go to for a lot of advice.
I played college athletics and I think I had coaches who were highly influential. But that
taught me a lot about the kind of tenacity you need to have is an entrepreneur. You know
on the field if you fall down you get right back up and keep going. You fall down on your
face so many times in business and that's to be expected and you need to keep up and
keep going. Whether you like or don't like her political
stance, I put it to the side, I actually learned quite a bit about seeing Meg Whitman at the
helm of a business as it scaled from 40 people to about 15,000 employees. And seeing that
person as she morphed from a start-up environment to leading a Fortune 500 business. Like the
stages of leadership in transition that you need to undergo and undertake in order to
remain successful. We're not there yet, were only at 1000 people which is tiny from a Google
standpoint. [chuckles]
>>Sandra: You're getting there, you're getting there. Let's talk about Gilt, how is the actual
idea of Gilt of born? >>Alexis: Gilt was born out of personal interest
that I had with my co-founder Alexandra in part and in part through a first seed investor
that we had who is now full time at the company, Kevin Ryan. He saw this model working in France
and thought well, there are elements of it that could be interesting here. And then we
shaped it from a personal past time of sneaking out of offices here in New York to attend
New York designer sample sales in the city. I mean we would drop everything, there was
no location too far, no line too long. We just thought it was amazing to be able to
get recent collections at 70% off. So that model and the fact that we'd get calls from
family members saying when you're at the Fendi sample sale, you pop into Louis Vuitton sale
if you could ever get me something like this just buy it, I don't care, and I'll pay you
back. So that gave us the confidence that there would be other people and perhaps a
nationwide audience that could perhaps also want to drop everything, in our case, at noon
every single day to shop this way. And that was the formation, the idea and gave us a
sense to of the emotion you'd bring to shopping in a format like this. And then from that
we try to translate that online in a number of different ways.
>>Sandra: And so that's how the flash sale idea came about? I mean how did you guys pick
the 36 hour time limit? >>Alexis: We wanted to create an experience
where every single time you came to the site the selection would be different, the experience
would be different. There was never a guarantee that you could come tomorrow and find the
same item. So 36 hours, in fact we even considered shortening it to much shorter than that. But
it gave that sense of freshness every day, it was fleeting, it was going away. But honestly
we could've had probably the same revenues as a business by having three-hour sales.
Over 65% of everything we sell as a company happens in an hour and a half a day.
And that's, I mean our idea, the business idea is quite simple at the face of it but
it's quite complicated to execute. Because starting as a small company we had to build
a business that looked like Amazon for that hour and a half. And not over invest in hardware
and systems and employees, etcetera. that accommodated a business for the rest of the
day was a startup. So we had this massive spike and still do today for just really 90
minutes each and every day that impacts us dramatically from how we think about customer
support to how we pick up and package 15,000 items, boxes going out the door every single
week from our three warehouses. It impacts how we keep our site stable and scaling again
without over investing in technology, using the Cloud in many unique ways.
>>Sandra: So we love data here at Google, and I'm sure you have a lot of data and analytics
at Gilt. So can you see that people are mostly logging in mostly right at 12 PM for the sale?
Is that when you see the highest spike? >>Alexis: Well, first of all we call them
our shopping athletes. Men are just as competitive if not more than the ladies on the site. But
we see a huge spike in traffic, a huge spike in inbound traffic at about 11:50 every day.
And really what is happening is people are warming up the mouse, they're like stretching
a little bit, they're like getting ready to just dive into the virtual doors right at
noon. Into the sales as they open up. So the traffic spikes 10 minutes before the sales
will go live. We generally have about 4 to 500,000 people at this very same instance
enter the sale at about noon so that they can get in, elbow others out-of-the-way, get
items into their shopping cart quickly so then they can take a breather for about 10
minutes which is the cart limit. And that you exclusively have access to that item and
then decide what they want to buy. So the peak spike in traffic happens from 11:50 till
about 12:10 every day. >>Sandra: So I mean is that the right strategy?
Getting there 10 minutes early? >>Alexis: It's kind of exciting. Well, it's
something we talk about and it's something we always talk to customers about too. Should
we have various spikes? Is 9 AM good for California as it is 12 for people in New York, actually
we see it more often now, it's the lunch escape that people have jumping into the site. But
it's also my 12 o'clock meeting is starting right now and I just got to pretend I'm checking
e-mails quickly. And they're going in on iPads, iPhones, larger and larger amounts. But is
it the right strategy? What is working really well for us, and what was very new at the
time is a thought that, the kind of consumer psychology around e-commerce was shifting.
It wasn't about having everything available all the time for all people. It was the curation
of the best stuff, some stuff for the right amount of people and the expectation that
I could come in, find something amazing and be out in under 5 or 10 minutes. That was
the big change. The change in psychology of if I don't get there soon enough and it gets
old out, it's not Gilt's fault it's actually my fault as a consumer. That, that's a big
shift, if you went into a store, if you went into Amazon and saw nothing left you'd think,
'oh my God, what a terrible experience'. So in some ways it's worked for us but we know
that is not without its frustration for some consumers. And we've had to really address
that through the experience in terms of investing a tremendous amount in understanding just
how many size 6 MARC by Mark Jacobs we need. Or how many size 11, or let's just say size,
and neck size 17 Brooks Brothers shirts that we need. Or whatever is. We've got to always
invest in understanding what is the right exact point in supply and demand on every
single item and getting it as right as possible because that psychology can flip very much
to anger, anguish if people are constantly frustrated and can't get the item that they
want. Or it sells out too quickly, so it's a very fine line that we walk.
>>Sandra: And have you had any angry e-mails? >>Alexis: Oh never.
[Laughter] Well, one of the funny stories that just emphasizes
high emotion people have when shopping on Gilt. And this is something also that's exciting
because it could never happen in off-line world. Our first moment our servers were brought
to a standstill is when we had at Christian Louboutin sale. Or maybe the guys in the room
who might not know it, some of the ladies know about the famous red backed shoes and
how much excitement there is around it. We had at that sale six months in the business
200,000 women try to buy the exact same single pair of shoes in one size at the same second.
And you know literally not just did every single member of our engineering team freeze,
but the site froze for about 45 min. Because that's something we wouldn't have been able
to sustain in any other environment. But points to the spike in activity that we had and still
have on the site today. >>Sandra: So I want to ask you, you and Alexandra
knew each other in school. How would you know each other before you actually launched Gilt?
>>Alexis: We went to college together. We went to business school together. We became
very much glued at the hip. We had talked about ideas in business school we wanted to
pursue. But we had spent a tremendous time together as friends before we took the plunge
to work together. And we actually reflect on this quite a bit in the book, like how
to think about the partner decision especially if you're going into business with a friend,
if you're going into business with a former colleague or even a family member. Because
not everyone should go into business together. So we called it our form of premarital counseling
that we went through. But some of the things we thought about before we jumped into business
together as friends is one, how would we handle disagreements and even fights? Because you
fight very differently as friends than you do as colleagues. And if you don't manage
what is a natural form of tension or disagreement that comes up in the work environment productively
it can be really detrimental. So friction causes better ideas, that disagreement you
have actually causes better ideas at the end of the day. But you've got to figure out ahead
of time how you're going to fight well. And so that was one thing we spent time thinking
about. Second, there is always an emphasis on how
differing skill sets should come together to form a really good team. But in our case,
we really believed it was more important to think about how differing personalities come
together to form a strong team. One thing that always happens in any situation is you
have a natural human tendency just to hire people like yourself from a personality standpoint.
Whether you're much more detailed forward focused or you're more of a big picture thinker
or if you're always task oriented, you always tend to hire people like yourself which is
natural. But you have to get good at identifying, okay what are my blind spots, what are my
weaknesses? What are the weaknesses in the team? And be good at complementing and having
a very differing group of people around the table so that, in our case as the start of
team, we weren't all starry eyed optimist, never saw an idea we didn't like. Were pursuing
them all at the same time and weren't as good at making decisions on anything else other
than intuition. So we spent time thinking about whether we
were good personality fits. And as we actually matured as a startup team we started using
things like Myers-Briggs which were really good at identifying what were major holes
that we had around the table because there is no more common killer to ideas, startup
teams, internal teams than having a group that doesn't work well together. Because they're
all rushing down the same wrong path in the wrong direction at the wrong time. Or there's
a sense or lack of trust. Or there's kind of a red flags that in your optimism to make
things work you glossed over in a partner. So we spent a lot of time talking about all
those things. >>Sandra: Well, do you know your Myers-Briggs
type? And Alexandra's? >>Alexis: I am E N T P to an extreme which
means I am an extreme extrovert, I am very good at making decisions on intuition. I'm
terrible about taking time to look at details around the research. And I am extreme on the
P which I think, or one of them which, oh no T which I think means I'm not very structured
thinker, I'm not very good at schedules and a lot of those things which is not very healthy
as the CEO [laughs] which I was at the time. So it meant I really had to focus on those
elements and bring in in which I actually did a COO of who was good at and complemented
me in a number of different ways. >>Sandra: So I want to leave a little bit
of time for Q and A and we'll just go through a couple more questions. You know you talk
earlier about a lot of people having their own ideas and wanted to pursue them. And a
lot of times people have those ideas but they don't have the courage to actually move forward
with them. So what advice would you give them, for that extra push?
>>Alexis: Two thoughts. One, if you have an idea and you want to pursue it, look at who's
doing it already and who did it and tried and failed. And be really mindful of why.
So if people are doing it already, can you, are you equipped, is your team equipped to
do it better and why? If someone has done it already and failed again why? Was it too
early? Were their legislative issues? Was there something in the context that made it
really hard to pull off? And actually we throughout the book you'll see there's some checklists.
But think about the idea and if it's sound. But second of all, I think when pursuing an
idea to the extent you're incredibly passionate about it and you are the target audience have
confidence in the fact that regardless of your background that you are better equipped
than anyone to think like that customer. To market to that customer. To develop a product
for that customer. And bring that confident in to any meeting with investors, any meeting
with senior management, any meeting with anyone else that is integral to getting that idea
the ground. I think sometimes people get too reflective and just okay what is my resume
say. And if you are tackling an idea for an end user that you are so intimately familiar
with or are that end user yourself, you are better equipped than almost anyone to understand
the mindset. So take confidence in that. >>Sandra: What keeps you up at night?
>>Alexis: Everything when it comes to startup. I think one misconception is that you get
to a point and you're like and you're like okay we've made it we're done. Or the thought
that you just have as an entrepreneur some sort of brazen confidence that makes you impervious
to anything else. And the truth of the matter is you're deeply fearful at every single moment
that one, that first sale no one will show up. That wow that competitor could take off.
And I think actually it's a good thing because that fear gives you an edge that makes you
never, sit back and say we made it, or we're done. Because that's a point when you really
start losing ground to someone else. So things that keep me awake have to do with competition,
to shifting trends in the business and how we're going to adapt as a team or company
to any number of things. And not to steal Andy Grove's line but it really is truly the
paranoid that survive. [Laughter]
>>Sandra: All right good to know, we'll all be paranoid then.
>>Alexis: Yeah, it's just really not to say being fearful. Now there's looking over your
shoulder but you're never done. You never finished. And as quickly as things get built
something else can emerge and you can similarly be sidelined too, as a business and idea a
team or whatever it is. So you just have to be nimble intellectually. Think about broader
context and be able to pivot your idea or your team in increasingly shorter and shorter
time periods. >>Sandra: What do you do for fun?
>>Alexis: For fun, well, one right now I have two kids under a year and a half. So for fun
it's like chasing after them most of the time and finding free time, as much free time to
see them as possible. But I've always been an athlete so I spend as much time as I can
too, just running the skiing or any number of different hobbies I have in that area.
And then fashions pretty fun, too. >>Sandra: Just a little bit.
>>Alexis: So there's lots of fun parties, events and others that are just a side perk
of my current job. So I'm looking forward to Monday night going to the CFDA awards.
Last year Lady Gaga showed up at it with fishnet stockings up to here and I don't even know,
I saw her sit two rows in front of me in a thong with 4 inch spikes on the back of it.
So how she did that is still beyond me. >>Sandra: Sounds really comfortable.
>>Alexis: It will be a fun event on Monday night as well, too.
>>Sandra: Cool, last question before I open up to questions. Tell us something about yourself
that we would find surprising about you. >>Alexis: That I balance a career mostly in
fashion by making sure that I do at least a one or two week excursion, camping excursion
every year, usually in Alaska. So I feel like I've got to still be able to get my hands
dirty. So even though I operate in fashion, people always find, that I reveal this to
most look at me in horror when I tell this to like that Zac Posen. That I still go to
the outback of Alaska or other spots, try to at least a week a year.
>>Sandra: Didn't know that. >>Alexis: I know it somewhat strange but I
feel I need something at the other end of spectrum given my day job.
>>Sandra: Cool, well are there any questions from the audience?
>>Male #1: Thank you for being here. My question has to do with sales channel conflict. I'm
quite curious as a discount seller of big fashion clothing, you mentioned Ralph Lauren.
What were the steps that you had to take and the trials that you had to overcome in getting
big brands to sign up without conflicting with their existing sales channels?
>>Alexis: It's not something that, well, first of all of morphs to give in each area. So
when you talk about sporting-goods it's very different than fashion. And all of it we have
to be mindful of now given how many categories we're in as a business. But in the early days,
first year, we would always come up against pushback from department stores saying, you
know, if you start working with these guys. So we faced a lot of channel conflict there.
And a couple of things, basically our end brand partners needed us. They needed us because
of the returns that they get back from department stores. Any number of things that just weren't
functioning well in their own distribution channels out to market.
But the second thing that's much more important today in terms of every brand we work with,
and something that we had to pivot our original idea around. We really thought we just be
a liquidator initially of desirable, desirable product that given the seasonal construct
of fashion they're already about to sell fall. And are we thinking about buying fall woolen
products right now? No, were thinking about buying summer but that's a season old and
that's what we're selling. We thought that would be our business opportunity is just
as messed up seasonal cycle in fashion and being able to help brand partners with end
of season goods. But it more quickly, to our partners, really
wanted to work with us because the context their business was changing. Those that were
coming into the stores were, tended to be 50 years old or older. They're having a really
tough time reaching younger consumers who are increasingly behind flat-panel monitors
for 80 hours a week and not spending time in stores. And they saw Gilt as a really unique
way to reintroduce their brand, to acquire customers, to even just reposition their brand
in a number of different ways to an audience that they were reaching otherwise.
And that was our magic. That was why they wanted to work with us. And it's still the
case today. So they view us as a marketing partner, marketing channel and customers often
come to us for that sense of discovery of a known brand, but being able to buy from
it. And being able to discover something new that they hadn't thought to buy before. And
that's how we get over today is the fact that we are equally a channel to reach a certain
customer in a new way as a department store is or even other channels like their own website
might be for them is the business. >>Sandra: Next question.
>> Female #1: Hi, thank you so much for being here I'm a huge fan, I use Gilt all the time
so thank you. I was just wondering because I think a lot of us who are here are entrepreneurial,
and I was just wondering you're very positive and I love that and I love your confidence
and I like your advice. But I was just wondering if there was anything that you or your co-founder
were really afraid of? Because it seems to me it was obvious there was a target audience
for this. So that wasn't really a fear like you knew that people would like this. But
I was just wondering if there is anything that you were afraid of taking the leap to
start your own business? >>Alexis: Well, in terms of the idea, there
was a great possibility that first morning when we got started that no one would come.
There was no guarantee, there really wasn't. We had sent out lots of invitations to many,
many, many people but when you're standing there, your first sale and you're trying to
move through what was our first purchase of about $8000 worth of Zac Posen inventory.
Like there was a real possibility no one would show up and then no one else would sell to
us and that we wouldn't be able to get a number of different things. But it shifted a lot
over time and there is no more gut wrenching experience than starting your own business.
It's filled with lots and lots of lows and you just have to know that that's coming.
But one thing that was pretty scary in the early days was would we be able to raise money
for this idea? In 2007, no one was investing in e-commerce
it was still close enough to 2002. Certainly no one was investing in fashion online. And
nothing got us laughed out of the room faster than when we said that we would get guys to
shop for themselves one day on Gilt too. And then they were like yeah, whatever. So it
was, then we really thought we'd have to go to Europe to raise capital for this because
of the fact we were e-commerce, the fact we were touching inventory and the fact that
we are touching fashion, all pretty bad words at that time.
So raising money it's a very scary process and so much hinges on your ability to do that.
And that was wrought with a lot of issues. One, because of the perceived lack of it but
also two, you know having to go in and convince people that, wow, I'm so passionate about
shopping that I would drop everything, just trying to convince a room full of people that,
often guys, who care nothing about fashion. But this was a big opportunity. You know there
were really many moments that we really thought we wouldn't be able to raise money for.
>>Sandra: Sorry guys I think we only have time for one more question, I saw you walk
up first. >>Female #2: Oh, I hope this is interesting
enough. So my sister and I were talking about this a few weeks ago. We're both Amazon prime
members and we both now don't buy anything online if we have to pay for shipping that
says the psychology of it even though we pay for Amazon prime.
>>Alexis: Have your bought on Gilt? >>Female #2: Yes, but there are many times
that I don't buy something because I don't want to pay the shipping.
>>Alexis: Uh-huh. >>Female #2: Even though you do have free
shipping for the next X amount of time. Is this something that ever comes up where you
think about the psychology of this? >>Alexis: All the time, all the time. And
not just shipping because any e-commerce business the top thing, if you do any of the surveys
or other work to get a sense of what's driving your customer satisfaction score, shipping
is always the primary thing. So customers are taught, too, that shipping is something
that you shouldn't pay for. So we think about it a lot. We recently have invested in bringing
down the shipping by nearly 50%. The truth is that you're always paying for shipping
as a customer is just where you're paying for it. In the price of the good or the shipping
itself. So we do think about a lot. We're working on something right now that I can't
reveal but hopefully you like it. But I'm curious to know when you do buy on Gilt and
given your statement about Prime why did you buy with us? What drove you to make that purchase
regardless? >>Female #2: Most times that I buy something
on Gilt, it's either something that's just an absolutely amazing deal and the shipping
added onto it, it still makes it an amazing deal or it's something that I absolutely must
have. Like especially for some cheaper items like jewelry and stuff I just won't buy it
because I don't want to pay for the shipping. >>Alexis: Yeah, and that's commonly what we
are across our membership is that the pricing and availability I can't get anywhere else.
And then I must have it. So that has made it so that we can do a little bit more. You
know we can pass on the lowest prices through the cost of the item and try to just push
our pricing lower and lower on shipping. But yeah it's something working on a spending
a lot of time thinking about. So it's a great question and we know it's at the top of every
single person's mind who shops anywhere online, it's a top driver.
>>Female #2: Thank you. >>Sandra: Alright well, Alexis, thank you
very much for joining us today. >>Alexis: Thank you for having me.
>>Sandra: Thank you for your time. [Applause]