Alexis Maybank Cashes In With Gilt Groupe FashionMay 29, 2012
Investor's Business Daily
by Curt Schleier
Alexis Maybank discovered early that it wasn’t necessary for her to be one of the boys to be successful.
After graduating from Harvard in 1997, she became an investment banker, one of the few women in the field at the time.
“I remember thinking it was a rough and tumble industry,” Maybank, 37, told IBD. “I was going to have to wear my hair a certain way, talk a certain way.”
It didn’t work.
No matter how hard she tried, she felt like an outsider. Particularly stinging, she wasn’t invited to the guys’ weekly touch football games in the park, even though she was the one with college athletic bona fides, having played lacrosse.
“A big moment for me was when a year in I realized that (while) there might be a certain (behavior) expected, a certain protocol, it didn’t seem very effective for me personally,” she said. “I was going to be more comfortable just being myself, meeting clients without the standard bare-knuckles approach. I became much better at my job.”
Ultimately, Maybank left investment banking and was co-founder and first CEO of Gilt Groupe, which through its Gilt.com offers designer fashions at bargain prices.
The privately held company, headquartered in New York City, vaulted from its 2007 startup to over $500 million in sales in 2011.
She is also the co-author, with Alexandra Wilkis Wilson, of “By Invitation Only: How We Built Gilt.”
Maybank grew up splitting her time between her mother’s home in New Jersey and her father’s in North Carolina. It was from him that she inherited her entrepreneurial genes. He’d started his own business, and she turned to him once she started Gilt.
The road to Gilt traveled through eBay (EBAY). It might have been a bumpy ride for Maybank, since her father called the auction firm “an online flea market.”
But in her banker position in late 1997, she met Jeff Skoll, eBay’s first president, and he wooed her to his revolutionary company to start as a strategy analyst.
Leaving a secure position in a conservative industry for a new firm using an unproven medium was risky. But Maybank saw it as a learning experience at the very least.
Among her lessons: the importance of flexibility. “Some people float with change and some don’t,” she said. “When you are in a hypergrowth situation, your role changes every few months. It means instead of managing one or two people, you’re managing 15 or 20. Instead of managing revenue in the hundreds of thousands, you’re managing revenue in the millions.”
She embraced the chance: “I dived into the deep end of the pool and loved the thrill and uncertainty. It certainly allowed me to gain experience very quickly.”
She grasped that eBay — it had only 50 employees back then — was “growing quickly and needed people with a willingness to get things done. I was willing to take on any kind of challenge they were willing to throw my way.”
It certainly paid off for her and eBay. During her four-plus years there, ending in 2002, she started eBay Canada and helped found eBay Motors, which grew into a business with $2.5 billion in sales.
Toward the end of 2006 after a stint at AOL (AOL) and landing a Harvard MBA, Maybank founded Spinback, a website that rewarded bloggers for carrying ads. It died six months in.
She calls it “one of the most gut-wrenching experiences of my life, and having it fail was really painful.”
Spin It Back
Rather than dwell for long, “I realized in my optimism to get that last business off the ground that I had glazed over a lot of red flags” — one of which was a conflicting goal with her partner.
So it was on to another teammate, this time Kevin Ryan of AlleyCorp, a network of Internet technology and media startups.
Ryan was familiar with a French website that ran flash sales — that is, sales of limited duration — that liquidated mass merchandise. He saw room for something similar on this side of the Atlantic.
Maybank had a similar idea.
She knew that at the end of every fashion season, top designers were left with samples and returns from department stores. Instead of trashing the merchandise, they sold it by holding invitation-only friends and family sales where dresses, handbags and other luxury goods were discounted as much as 70%.
Maybank figured the idea would transfer well to the Web. So she approached Ryan — and he liked it.
By late 2007, Gilt Groupe was born, but with some turbulence.
Many contacts scoffed at the Gilt concept. All they did was make Maybank perfect her plan. She realized right away that she had to solve two riddles:
1. How to get enough customers to buy clothing online.
2. How to convince designers that selling their products online was not too low brow.
Maybank tried to deliver a profitable solution by requiring invitations for would-be Gilt members. That created an aura of exclusivity that she felt would please site users and potential designer/suppliers.
By now, Maybank’s friend Wilson — they’d gone to Harvard and shopped sample sales together — was on board. The pair started off by networking with everyone they knew, inviting them to join and asking them to invite their friends.
They also shot emails to the heads of organizations, such as the Garden Club of America and the National Association of Realtors, inviting them to sign up.
They combed the top colleges and wrote the leaders of every pertinent outfit — women’s, fashion, retail clubs — with a link to Gilt.com.
Besides sending those personal notes, Maybank and Wilson visited five-star hotels in New York and left fliers in ladies’ rooms.
It all worked. In the four months before its first sale, Gilt signed up 13,000 members, a substantial amount for an organization that had nothing but promises to offer.
Signing up suppliers was even trickier. “It’s an image-driven industry,” Maybank said.
As a result, she decided the online presentation had to be in magazine style, with models, rather than typical Web fashion, with mannequins.
Such a move involved substantial fees at a time when startups try to limit costs, but Maybank decided it was worth the extra expense. “It was critical we portray brands in an image-conscious way that had never been done before,” she said.
It was this attention to detail that attracted Susan Posen. She’s the chairwoman of House of Z, which makes and markets the clothing and accessories created by her son, Zac, one of the hottest designers in the fashion industry.
After listening to the Gilt concept, she agreed to participate — and Zac Posen handbags quickly went up for sale on the new site.
“I was loath to do designer sales,” Susan Posen said. “My image of them was of people pawing and grabbing and disrespecting the clothes. Gilt seemed to address the issue, because it would be done in a very high-level way, with no pawing through the garments. It seemed a very intriguing solution.”
The handbag sale was “a complete success,” Maybank said.
Today Gilt — with Maybank as chief strategy officer and Ryan as CEO — features a sale every weekday at noon Eastern time. The products are more than women’s fashion merchandise. Also in the mix are high-end men’s wear, housewares, even travel, with the site offering reduced rates at tony hotels.
“My understanding is that business stops at Wall Street at noon and all the women are glued to their computers,” Posen said. “I didn’t know that those people were our customers before.”