Once upon a time, Thrillist was just an email newsletter with a circulation of about 600 New Yorkers. It could tell you where to grab a nice cocktail, sit down for some amazing pasta, or get a good deal on a fashionable pair of pants.
But today, Thrillist is more than that. It's a massive online machine designed to stoke the consumerist impulses of young guys across the country and then satisfy those impulses. Basically, it's a vast network of blogs and email newsletters that will tell you what (very trendy) stuff you want and then shuttle you to an e-commerce operation where you can buy that stuff. In some cases, Thrillist even manufactures the goods it sells. Melding content to commerce, the service creates a potentially perfect---if vaguely insidious---circle of materialism.
For Thrillist, the result will be something north of $100 million in revenue this year, according to co-founder Ben Lerer. He claims that's higher than the sales of any of 27 online media brands, including Vox, TechCrunch, Business Insider, and The Onion. But Lerer, 32, wants even more. For starters, he wants to grow Thrillist to $1 billion in annual revenue, expanding beyond the narrow clothes-and-cocktail-shakers-for-dudes category the company now plays in. And, more broadly, he wants to reshape how people think about media.
He asks why publishers should settle for online advertising revenue that's relatively meager when publishers are ideally positioned to know and anticipate what kinds of products their readers want. They see what types of products make readers click, he says, and in some cases, they know how much readers spend. Why not tap into that knowledge? Only commerce, Lerer says, gives online media companies the scale they need to be taken seriously as businesses. He wants to see men's mag Esquire team up with clothier J. Crew, the New York Times with fashion-glasses seller Warby Parker, ESPN with StubHub.
>Only commerce, Lerer says, gives online media companies the scale they need to be taken seriously as businesses.
"My thesis---the entire thesis of building Thrillist Media Group, and basically the only reason I get up in the morning---is a belief that there is an answer and it's commerce," Lerer says. "You have an audience of people who are captive, who you have built trust with, who you create content for, who you understand... Instead of just helping the other brands sell them products, you sell products to those people yourself. It makes perfect sense."
He isn't alone. Other outfits---such as PopSugar, Nasty Gal, and Net-A-Porter---have a similar vision. If these companies can prove the value of the content-meets-commerce hybrid, they stand to remake media sites from mere observers into active participants in the industries they cover, turning online shopping from an exercise in redistribution and intermediation into something much more seamless, an experience that vertically integrates taste-making with recommendations, retailing and design. "The next generation of retail brands are all really good at telling a story," says Brian Nicholson, an apparel veteran turned venture capitalist (with no stake in Thrillist). "I'd point to Thrillist for being able to navigate the path better than anyone."
In the world Thrillist is built for, knowing the customer becomes more important than quality or independent taste. Retailers must develop their own distinctive voices and build their own audiences, while publishers must shoulder the responsibilities and risks inherent in actually making things. Those unable to do so will fall away. Those who succeed will find their revenue has grown an order of magnitude beyond what was otherwise possible. Or at least this is how Lerer sees things.
Thrillist used to be a conventional online media company. From 2005 through 2009, the company went from zero to $8 million in annual revenue selling ads just like everyone else, growing through simple geographic expansion. Lerer added newsletters in large cities like Los Angeles, San Francisco, Chicago, Las Vegas, Boston, and Seattle. He also added a Thrillist blog to the newsletters.
But Lerer was itching to build a much bigger business and thought he saw a way to do so. Based on its ad deals with online retailers, Thrillist knew it was driving tons of e-commerce business. The company was also growing increasingly adept at recognizing what specific types of products would make its young male audience open their wallets. He was tired of making money for other people, of renting out reader trust to advertisers as he puts it. So, in 2010, Lerer pounced on a Columbus, Ohio-based startup called JackThreads, a flash-sale site for men that had been profiled by Thrillist.
"I see JackThreads and I go: 'this is fucking fascinating,'" Lerer recalls. "So I get in a plane and I go to Columbus, Ohio, and I get to know Jason." Jason is Jason Ross, the CEO of JackThreads, and their meeting was the beginning of a brand new business model. To hear Lerer describe their encounter, it was match made in materialistic heaven.
"I go: 'Why are you advertising with me?' And he says: 'Well, the guys that I'm getting from you are my highest lifetime value consumers. They're my biggest buyers, they're my biggest sharers. They're the exact consumers I want... And I said...'Why don't I buy you? And why don't you teach us how to sell products to these guys and we do this all under one roof and we see if we can build a new kind of media company?'"
The 2010 JackThreads acquisition led to "turbo charging" growth, as Lerer puts it. The company has doubled its revenue for several years running, and fully 80 percent of it now comes from commerce. The company is profitable, with margins "much better than virtually any ecommerce business but not quite as high as some pure-play content businesses," according to Lerer.
Thrillist has also developed a closer relationship with readers. The company has more than a million credit cards on file, along with people's home addresses, where they'll receive more than two million packages this year. It is, Lerer says, an intimate relationship. "We own millennial dudes in a way that no other media company does," he says.
Part of Thrillist's success is that the company owns a customer experience from the moment of desire through the mailing of a finished product. Someone reading about a product on Thrillist---say, a camera case that doubles as a cooler---is one click away from a Thrillist ordering screen. Once there, the reader can use the same account associated with their Thrillist email subscription to get the product is shipped out. If there are any problems, Thrillist handles the customer service call.
Lerer plans to eventually grow Thrillist Media Group far beyond Thrillist.com, which caters to a relatively narrow audience of about 8 million. In November, he launched Supercompressor, a newsletter and blog focused on "lifestyle tech:" gadgets and gear for your living room, car, and bar. Eventually, he'd like Thrillist to publish and sell across a variety of brands, in the same way that media companies like Condé Nast (WIRED's parent company) and Gawker Media create different titles for different audiences.
There's a huge downside to Lerer's model: risk. He's combining three very risky businesses: media, retail, and clothes manufacturing. Although each of those businesses is getting less risky---costly printed media and physical storefronts are now optional---perils abound. Media is susceptible to the unevenness of the creative process, retailers to inventory risk, and clothiers to the changing whims of shoppers.
That puts a lot of pressure on executives like Lerer to manage aggressively across very different lines of business. New York-based fashion publisher Refinery 29 abandoned its own online store because all the work associated with inventory and merchandising became a distraction from the booming media business, says Nicholson, who sits on the Refinery 29 board. "The juice wasn't worth the squeeze," he adds.
Then there's the issue of trust. Thrillist might "own millennials" now, as Lerer says, but it remains to be seen if the company can retain the audience it has built around its media business if readers know the Thrillist newsletter is trying to make them buy things from the Thrillist warehouse. Lerer says commerce stories are written by a team separate from Thrillist editorial and are specially labeled and that, in any case, he has a lot to lose if he pushes crap.
As he navigates this new landscape, others are following. There's PopSugar, the San Francisco startup that runs a commerce search engine and makes money on affiliate fees. Nasty Gal, also in San Francisco, built a $100-million-dollar-plus business in part through lively social media updates and a biannual fashion magazine. Online fashion-retail powerhouse Net-A-Porter recently launched an every-two-months print magazine to supplement its monthly electronic publication. And Gilt Groupe, the online luxury flash-sale promoter, partnered with luxury magazine Du Jour.
But Lerer argues that Thrillist is the only player pairing hyperactive web commerce with hyperactive web publishing. And that's why he's so bullish about the company's prospects. In a talk at the South by Southwest conference in March, he publicly stated his goal of turning Thrillist into a billion-dollar business. But the 32-year-old is taking things slowly. "First," he says, "I'd like to be a $500 million business."
Correction 1:13 EST 08/18/2014: An earlier version of this story mis-stated Thrillist founder Ben Lerer's claims about the scale of Thrillist's revenue relative to other online media companies. Lerer said Thrillist's sales are larger than any one of the companies, not the combined revenue of the companies. Also, he compared Thrillist's revenue to BuzzFeed's revenue in March, and now says BuzzFeed has greater revenue due to growth in the intervening months.
