On this episode we have Josh Luber, the co-founder of StockX. StockX is the world’s first online stock market for high-demand consumer goods, namely sneakers, handbags, streetwear, and watches. On the platform, buyers place bids, sellers place asks and when a bid and ask meet, the transaction happens automatically. The Detroit-based startup was launched in 2016 and has expanded to Europe by launching its first authentication center in London. StockX is a GGV portfolio.
Before launching StockX, Josh has built 3 other companies and worked at IBM as a strategy consultant for almost 5 years. He holds a dual degree in law and MBA from Emory University. None of this is as impressive as the fact that he started collecting sneakers from 10 years old and has more than 350 pairs of sneakers in his home.
On the show, Josh shared with us how his online price guide for sneakers became a stock market for things, why the obsession for streetwear and sneakers is a global phenomenon, his definition of global company being a collection of local companies, having celebrities like Eminem as investors and how he found StockX’s new CEO Scott Cutler, who used to be the CEO of StubHub, eBay’s online ticket exchange platform. We also asked about StockX’s plan for entering China and some pro tip for buying sneakers on StockX.
Rita Yang: First question I wanted to ask is actually for Hans, cause I know you’re a big basketball fan, so you’re not really a sneaker head yourself, so can you tell us the story – how did you meet Josh and what about StockX kind of excites you?
Hans Tung: Sure. Our colleague Robin was tracking consumer spending and this trend of people buying street wear shot up on our radar, and obviously there were two companies in this space in the US that’s doing stuff. When we met through – it was Battery Ventures who put us in touch. Roger Battery who is an old friend of mine put us in tough with Greg and Josh. It was very obvious that there was just a lot of stuff that we could do together. And in the process of getting to know Greg and Josh, another friend of GGV – Scott ended up showing up on our radar and we caught up and he has recently joined StockX as the CEO. So it just all came together and it fit extremely well.
Rita Yang: Do you remember the first time you have met Josh? Are there any interesting anecdotes you can share?
Hans Tung: Yes, I first met Greg and then Greg connected a meeting with Josh. So we met at the Menlo Park office of GGV and they were on the way to China or just back from China, so there was a lot of stuff to talk about, about China and its extremely refreshing to see a company from US that were so interested in what’s happening in China and recognizing that what China can do – that you can have the best supply in the world by being in the US. You have all the relationships with the brands by being in the US. You have the US pop culture that’s leading the world in what’s fashionable, yet there’s just a huge, huge market in china that’s number one in the world where you can somehow marry the two – you can build an unbelievable global business.
Josh Luber: Hans was helping us in China before – in fact actually before he and I ever met. Roger who was on our board had connected us to Hans when Greg Schwartz was our COO and third co-founder. Where Greg and I were coming to China and Hans had helped set up that trip before he and I had ever actually met and it wasn’t until we got back, it was after that trip that we actually got to meet for the first time in person and then those relationships stuck. But almost all of the investors that we have, VC’s – strategic and otherwise, they were all people that were actually helping us before those investments took place anyway.
Rita Yang: So why were you interested in China or coming into China in the first place?
Josh Luber: This is one of those most obvious questions in a lot of categories, but certainly for us – we sell and we’ve super fortunate to be able to sell the most highly coveted products in the world. Its Nike, Lois Vuitton, Rolex, Supreme – the products really sell themselves. We’ve built a marketplace. We’ve build a model that has been able to grow very rapidly and build a lot of supply and then the demand has been here and China has become 15% of our business almost without us doing anything yet, to really localize and really grow that market. For us right now it’s the highest part of our business.
Hans Tung: Tell us a bit more about what you were doing before StockX?
Josh Luber: I have started and run three other startups before this. None of them had anything to do with sneakers, almost intentionally, so almost like intentionally separating business and pleasure in my life but the business that would have actually become StockX was a company that was called Campless and Campless was a price guide for sneakers. This is 2012 – 2013 – 2014. we were analyzing eBay data to figure out what are shoes actually worth, to create some idea of a true market value for sneakers and we were just fortunate I guess to be the only people doing real analytics around the secondary market for sneakers at the time and that as the core data layer, the core understanding of market value would eventually become the foundation of StockX as the marketplace which is a marketplace built on market value. On how stock market mechanics work, but understanding the true market value of any asset. Of any consumer good – that’s the real unique part of this.
Hans Tung: Right. You money ball.
Josh Luber: You’ve got to understand the numbers first. You’ve got to understand the numbers, doesn’t really matter what you do on the field.
Hans Tung: Josh, for people who actually don’t get sneakers, can you actually –
Josh Luber: Or sports.
Rita Yang: Or sports yes. Can you help us understand why sneakers? And I know you have a question about – is sneakers closer to drugs or to stocks? I find that question fascinating.
Josh Luber: At the core here – I mean this is supply and demand, this is econ 101 – at its very, very most basic and most pure. Even perhaps more pure than the stock market itself. In the stock market itself the market price of a share or a stock is ultimately actually a function of what people think that company is going to do. What their performance is going to be. Sneakers is just supply and demand. You have these products that the brands, in particular – Nike and Adidas and Jordan – really leverage scarcity in order to put out less product than there is demand for those products, and just based on economics, if there is less of something that’s available than people who want it, then that price will go up. And that’s what’s happening here.
Nike has been doing this for 34 years, dating back to 1985 in the first year of Jordan’s but it was always a very local, underground sort of thing and then in the last five to six years, really on the back of social media, Instagram, the sneaker market became a lot more mainstream, as more people wanted access to this market. And that’s really, really, really what StockX is about, which is access. And creating access for products that have really high demand, that’s hard to get, that’s hard to understand, where to get it? What’s real? What’s the fair price for it? And that’s really the core of it.
The question around stocks or drugs was one of the probably most popular articles that we wrote back in the day when we were just a price guide, at Campless, and it was this idea of actually looking at the data around sneakers to see that the mechanics of essentially the supply and demand and how people were buying and selling sneakers, looks frankly a lot like the way that people buy and sell both stocks and drugs, but the marketplace is fortunately much more legal for sneakers.
Rita Yang: You are a sneaker head yourself? Also a data nerd as well as a serial entrepreneur. Among all of these three things, which role do you think is actually the foundation of StockX?
Josh Luber: Well it’s definitely data, there is no question about that. We are super fortunate that we have been able to grow and become one of the maybe the largest sneaker market place in the world, but it’s almost a red herring. Sneakers are – it’s called StockX and not SneakerX – it really is about the motto, it really is about the economics and the data of creating a marketplace that’s built on those stock market mechanics and sneakers is really just the first category.
Now if all that 14 year old kid knows is that we sell sneakers and they buy the next pair of sneakers from us, we appreciate that and we appreciate that business, but it really is about the bigger idea, which is why I get to come here and honk horn at Speak at Rise and go speak around the world and explain to people that this is about a new form of commerce that is – for lack of a less cliché way of saying it – truly revolutionary. This genuinely doesn’t exist outside the actual stock market and that’s the business here.
Hans Tung: Right, so back to the question that you tried to answer. In your Ted Talk is sneakers more like stock or drugs?
Josh Luber: The interactions of the participants in the market is a lot more like drugs. When you see people that are buying three pairs in order to fund their collection and pay for one. If I can get a hold of three and sell two, I can afford one. The data and the supply and demand and understanding why a shoe sells for a certain price, is actually a lot more like stocks. Where you have this pure supply and demand and we then have built the marketplace around that, but that idea that is really just about how many people want it versus how many pairs exist. So it’s both. The data is more like stocks, the participant behavior is more like drugs.
Hans Tung: A lot of people focus just on the sneakers part of what you guys do, but what intrigued me upon meeting you and Greg that it was very obvious that there’s many other things you could do beyond sneakers. Explain that logic.
Josh Luber: We didn’t make any of this stuff. All right. The stock market has been the most efficient form of commerce for 150 years and understanding supply and demand has been – everybody would have loved to understand supply and demand for any product they sell, but demand has always been a really hard thing to understand. Supply is easy. We know how many widgets the brand creates, but demand has been a forecast. A projection of off last year’s sales. A hope or wish or a percentage of marketing spend. Whatever it is. But in the stock market, demand is real. You know exactly how many people are willing to buy Nike stock at X price in Y time. And so by applying that same model to any consumer good, but understanding demand for any consumer good, you can just create a more efficient marketplace. So any product, any consumer good that you would ask the question – what is it worth? What should I pay for this?
That is a question that is best answered by supply and demand. And so some of the other categories that we sell today, watches, handbags, street wear, collectibles – these are products that are inherently worth more than they are often released for and they become more valuable because they’re a collectors because they’re scarce, because brands put it into the market – but it also works on the downside. It also works on discounting. We’re hearing in Hong Kong and its quite hot – we’ve talked about this quite a lot. So all winter jackets are 40% off on Nike.com or whatever they are. There is some discount because we’re off season, but why is it 40% off? If we understood demand for winter jackets here in Hong Kong in July, well some people might bid 10% off and some people might bid 20% off. You could have true variable pricing if you understood demand around those – that is just a more efficient way to be able to price those particular products in this particular environment. And that’s what it’s about. This is variable pricing.
Rita Yang: So the market it actually creates – I am thinking are there professional sneaker speculators now? Do people just do this to make a living?
Josh Luber: Professional speculators implies that it’s about necessarily buying and selling. When we say that StockX is a stock market of things, immediately people think about investments. That’s not necessarily the case. At the core we’re a consumer goods marketplace. We’re an evolution of eBay. All we do is connect buyers and sellers for the purpose of buying and selling a consumer good. And so there are absolutely professional sellers in the same way that there are professional sellers on eBay and some of those are – like one guy in a basement or it’s a big company.
Now the concept of buying and selling in order to speculate and make money, that’s the evolution of the business. The evolution of the business is not only allowing people to essentially day trade sneakers, to buy and sell sneakers the same way that we buy and sell oil futures. If you trade oil futures, those barrels of oil really do sit in a warehouse somewhere right. No one ships them to your house and you ship them back. That is the logical extension of what we’re doing here.
Hans Tung: So besides Greg your other co-founder, you have a third co-founder Dan Gilbert of Cleveland Cavaliers, how did the three of you guys meet, and how did it go from an idea to what it is today?
Josh Luber: Greg Schwartz is the COO and co-founder who runs the business with me day to day and has been doing this for the last three years, Greg and I both started to run three other startups before. We never had a billionaire as a co-founder. We never had this big of an idea and this much traction this quickly, but the short version of what was a long story of how Dan and I got together was that – essentially Dan and I had the exact same idea independently. And I had never met him and I had never been to Detroit, I had never been to Cavs game but we both had this idea about a stock market for sneakers and for me it was very ground up. I’ve collected sneakers all my life and I had this company Campless that was around the value of sneakers. Dan was coming at it from the opposite end which was the stock market side of it. And you know with Dan it’s been over four years and I can’t get him to sneakers, but that’s okay. Dan had seen this idea from the stock market side and had been a fan of the efficiencies of markets and said well why can’t we buy consumer goods the same way that we buy and sell stocks. And then he saw his 15 year old son buying and selling sneakers on eBay. In 2015 like every other 15 year old kid, he took a closer look at that and said – well that’s a pretty crappy market leader, that would be a perfect place to start a stock market.
Greg was running another startup with Indane ecosystem in Detroit and Dan and Greg had known each other and Dan approached Greg and said – hey listen, I have this idea, let’s create a stock market for sneakers and Greg and his team – those guys didn’t know anything about sneakers but if Dan Gilbert says hey let’s build a business together then you at least take that call.
Those guys stared that business, they get a week into it and realize well man, we need a sneaker guy. Who’s the sneaker guy that’s going to help us run the sneaker stock market. So they go out, they do some research, they found Campless, they found my work around sneaker data, we got together and then we realized that the sneaker guy is also trying to build a sneaker stock market, has also started three other companies and worked for IBM and wasn’t a random guy. So it was a pretty crazy and serendipitous way that we got together but it’s been a pretty great situation for Greg and I to just sit there and have somebody that really understood the bigger idea and to have the resources on day one to just run the business and not worry about the rest of it.
Hans Tung: Then how does Scott Cutler you new CEO fit into the picture?
Josh Luber: We launched the business on February 8th 2016. We started working on it the summer before. February 8th 2016 StockX goes live. On February 10th 2016 I got an email through LinkedIn from a guy names Scott Cutler who at the time was the CEO of StubHub.
EBay owned StubHub and at the time eBay was our largest competitor. At the time eBay was the largest marketplace for sneakers. So Greg and I were like man! EBay is coming after us this quickly! What is going on? But the reality was that before Scott was at StubHub, he was one of the leaders of the stock exchange. So Scott’s email basically said – hey listen, I’m at StubHub, I understand marketplaces, I was at the New York stock exchange, I understand – he was like – I get what you’re doing. I understand why a stock marketer thinks is a better model, I would love to help, I would love to be involved.
Well we vetted Scott to no end, cause we were like man is this guy a corporate spy? But the reality was he just understood the model and honestly has the exact – his background is exactly what we are and then he ended up going and working at eBay but marketplace, ticketing, that whole world and then the stock market. Scott became an investor in the very first round, and became for Greg and I one of our closest advisors over the past couple of years in just helping think through the business and we never – frankly we never really thought that we could be this big this quickly that we could get someone like Scott. And when Scott was thinking about leaving eBay a couple of months ago, I said –hold on! Don’t go do anything else, let’s talk about this and figure this out. It was a very – not unlike meeting Dan, a very serendipitous opportunity came out. We weren’t looking for a new CEO, but it was the perfect marriage and we announced everything a couple of weeks ago and it’s been pretty awesome to have his here moving forward.
Frankly I’d take nine other CEO’s, nine other people like Scott, we are at 820 some people, and it’s still dazier. Everybody is still doing seven jobs. It’s still like when we were three guys in a garage and that’s the fun part of it all. It’s all just about great people so it’s exciting to have Scott here to move forward.
Hans Tung: Right now I assume everyone is based in Detroit and now you just started operations in Europe. What’s it like to build a global business from Detroit and how was that first experience with Europe? What was that experience like?
Josh Luber: As you know as well as anyone, to be a global company, particularly a global marketplace in 2019 you need to be a collection of local marketplaces and a collection of local businesses. So when we turned on the website in February 2016 everyone in the world – most places in the world could buy or sell from StockX, but we weren’t local anywhere. We didn’t have local operations. Local teams. Local marketing. Local customer service, local shipping – and so we put our first team on the ground in London in Q4 of 2018 and have been slowly building that team. There’s close to 30 people now in London including both a business team but also an operations facility where we authenticate all the products. Local payment methods. Local marketing. Local operations. Local shipping. We just rolled out Italian, our first local language about two weeks about and we’ll start to roll out other European languages and then we get to do more local payment methods and then behind the localized site, then its localized marketing, localized customer service and everything else.
Again, we’re fortunate to be able to sell the product to everybody once, but we need to be able to create that very easy local experience so that everyone can buy it how they want to buy products and get products delivered faster and more efficiently and more economically.
Rita Yang: So in other words you have a very global customer base I would assume?
Josh Luber: One of the really interesting things is we have been traveling the world and we have a team now in Tokyo and we have been super fortunate we get to do a lot of press. One of the first questions that almost every reporter asks me in any local market is – what are the differences in taste here? What are the differences in products? The answer is – at the top, nothing! It’s all the same. Its Nike, Louis Vuitton, Yeezy, Supreme, Rolex, Off-white at the top. You have a long tail of different tastes and different markets, but for what we sell and those products, it is all the same globally. We get to be the ones to figure out how do you take that global supply and make it available locally, efficiently and everything else.
Rita Yang: Why is that? Who are the tastemakers?
Josh Luber: Its Michael Jordan, its Kanye, its Virgil Abloh you know what I mean? We get to draft on the back of the most iconic brands in the world and that’s just really a function of the products we sell and the brands that have created scarcity around these products and again, if there is one word for StockX, it’s about access. It’s about creating access for consumers who either didn’t know where to but this product or knew where to buy it but weren’t going to sleep outside a sneaker store for three days or didn’t know how to wade through eBay, or knew how to use eBay but didn’t know what was real. Or know what was real but didn’t know what a fair price was. All these things which made buying these products inherently difficult and a lot of friction, we remove all that and just create access for the products that people want. It’s great, I love the fact that Louis Vuitton and Nike do our marketing for us.
Rita Yang: StockX started with only sneakers and is now entering into handbags, street wear and watches. It comes with a layer of protection and validity by its verification model which is necessary today given the prevalence of knock offs. How do you balance scaling up the volume of goods in your platform and at the same time provide the verification process for all of that?
Josh Luber: I love that we didn’t start with authentication because we get a lot of value out of authentication. There is no question about it. Every single product that we sell passes through one of our now five authentication centers. We have one in Detroit, Tempe, Arizona, New York, London and now Eindhoven in the Netherlands. I’m sure we’ll have at least one or two in Asia very soon and probably have another one in the US and there’s a massive amount of value in that because there are a lot of fake products out there and if you’re a 14 year old kid you could care less what a bid or an ask is or what this means or you know you’re never going to get a fake pair of Yeezy’s – there’s massive value there. But you’re not unlike sneakers being somewhat of a red herring because we’re about a lot more than sneakers. Authentication really just facilities a larger model. It’s almost just the ante to play at this point and for us it’s about the stock market model. It’s about this model built on how the stock market works and if someone isn’t a 100% certain that what they’re going to get is real, it changes their perception of value. It changes how much they’re going to bid for something. If you’re a seller, you think you’re going to get a scam charge back that someone said you sold a fake – it changes how much you’re willing to sell something for. You buy a share of Nike stock on the New York stock exchange, you never worry. If you thought you were going to get a fake share of stock it would change everything. So for us, it’s just part of the larger model and even when Nike and Adidas have a chip in every shoe and every kid with an app can authenticate every product, we will still stand and mill that transaction and we will still run that same process because it’s about the larger model. It will just be easier and quicker for us to do that.
Hans Tung: Speaking of a few big names, you now have Eminem, you have Robert and others being part of the company as shareholders. What’s it like to get them involved and how has that helped your business?
Josh Luber: Not unlike how you and I first met, we created a venue for some of those folks to invest because they were already helping us. We never – never started this business thinking we were going to go out and get the most famous people in the world involved in this business, but it happened super organically.
The first one was Mark Wahlberg. We were in a meeting really early on with Dan and it somehow just randomly came up that Mark Wahlberg wears a lot of Air Jordan’s and Dan says – oh I know Mark. An hour later I’m on an email chain with Dan and Mark, two days later I’m in California at Marks house going through his sneaker closet and he’s like oh we should put this on StockX and I was like – okay! And then a couple of weeks later something very similar happened with Eminem and Eminem’s manager Paul Rosenberg, they are both from Detroit and Paul was in the office working with people on Detroit things and it was also a very organic thing that we came in contact and they were helping us.
So we created that first round primarily to get those guys involved. The greatest value we could give was to let them invest. Me writing a $10,000 cheque to Eminem doesn’t really move the needle. That was the beginning of it and then it was organic growth around – as we came into contact with other people and we’ve been super fortunate. We get a lot of people that are interested in being involved because of the products, because of Dan, because of the NBA, but we get to choose those people that are genuinely in it for the right reason and who can add real value.
Hans Tung: Speaking about Eminem, how many people have told you that you look like Eminem?
Josh Luber: Do you know the first person that ever told me that – the first person that ever told me that I look like Eminem was Eminem! Which was really funny. There’s a scene in this video that we shot where I say – I’m here with Eminem to pick up shoes for the charity auction and Eminem goes – I’m here with Eminem also. And I was like – yeah All right!
Hans Tung: The first time I actually met Josh, that was the first thing that came into my mind and I never said anything because that was the first time I ever met him, but that was exactly what I was thinking.
Rita Yang: That he looks like Eminem!
I actually would think street wear is something that is less global and more local because of the influencers. If you think about the influencers who are in the US, influencing what people are chasing after versus the influencers in China, it’s quite individualized. So what do you say about that?
Josh Luber: Street wear just gets the long tail a lot quicker, but the top – Supreme. Supreme is the Nike of street wear. At the top everybody wants supreme. Underneath that there’s a couple of other brands that aren’t nearly as big but have – BAPE which is a Bathing Ape from Japan and then there’s a few other brands – Palace and then it just gets the long tail a lot, lot quicker. But at the very top, its Supreme. That is the clear leader, I forget at the top of my head the exact number but it is overall majority of our street wear business in terms of dollars and units and its Supreme!
Hans Tung: Yes in China it was pretty obvious that Du (毒) and Nice, and several others are always trying to be in this space and you can tell, it is a growing fan base for sports, for sneakers at the consumer level and its much bigger than people thought.
Josh Luber: It’s so much bigger than what people thought because the end result of this is actually a convergence of the primary and secondary markets together to just be one market. People always ask – what’s the resell market? How big is it? US we think it’s about 2 billion, globally maybe its 7 – 8 billion and growing, but the global retail market is a 100 billion and that’s a fact! That’s ultimately the real market here. It’s the whole thing and for us and for our growth it is about that next customer, that retail customer that bought their last pair of shoes at Footlocker or Nike.com, that never would have tried to wade through eBay three years ago, because you go walk into Footlocker and there’s 300 – 400 pairs of shoes on the wall. There’s 26,000 different shoes on StockX and its not just $1000 Yeezy’s it could just be a $100 shoe that’s a different color than what’s on the wall at Footlocker and its selling on StockX for 110 or 95. 25% of our business is actually less than retail price, and it’s that. It’s that long tail of the product that’s out there and that’s why it’s a convergence of all of this. This is just sneakers – it’s a 100 billion. It’s not 2 billion.
Hans Tung: Correct, and for sneakers, the brands – most of them are based in the US, designed and started in the US – what kind of relationship do you foresee with them over time?
Josh Luber: The sneaker brands and even the street wear brands and luxury and everywhere else, it’s all converging in the same place which is to ultimately work together. The best example of where this all goes is what happened with ticketing. 10 – 15 years ago, teams and leagues were arresting ticket scalpers, they kind of shutdown ticket websites. Today StubHub is the official resell marketplace of major league baseball and other teams and other leagues and other ticketing websites started to pair up and now StubHub has primary ticket deals, of the Sixers, the Yankees and few other teams. What they’ve done is they’ve basically created one marketplace. There’s no longer retail and resell, it’s just one market. And that’s what that stock market is. So for us, that’s the evolution of this. To work with Nike, to work with Adidas, to work with the Street wear brands to release products directly into the market. To literally IPO products into existence.
Hans Tung: Initial offerings of new products.
Josh Luber: Exactly and so we’ve done some of these and stay tuned – in the next 3 to 4 months we’ll probably have another half a dozen IPO’s coming with brands, including some really big sneaker brands and that’s really the evolution of this – where you get to a point where you just disappear this line between retail and resell. There’s just one market and it’s about those brands engaging with us and with the secondary market to say – hey listen, you guys have more website traffic than footlocker. We have more customers than any sneaker boutique or sneaker retailer, so it’s an evolution and an inevitable evolution that we all end up working together.
Hans Tung: Right and these IPOs could be global and launched globally for consumers everywhere.
Josh Luber: Exactly. Yes.
Hans Tung: The other side of the equation is obviously offline retail. You mentioned Footlocker. So over time how would online commerce interact with offline stores?
Josh Luber: We just opened our first brick and mortar location in Soho, in New York, actually about two blocks South of Supreme on Lafayette and I was careful to say brick and mortar and not retail because we don’t sell anything. We are a marketplace. The primary purpose of that location is for seller drop offs. For sellers who have already sold something on StockX. To come in and drop it off. We authenticate in the back of the store, so someone can get paid out much quicker and then we can have that product and get it to the buyer much quicker but the evolution of that location and then we’ve done pop up locations in London, LA, Chicago, Atlanta and we’ll continue to do more and continue to get more permanent. The evolution – it’s about the brand. It’s about having a brand experience on the ground, in these locations where sneaker culture and street wear culture and our customers are and it’s a really favorable situation to be where I don’t have to rely on brick and mortar sales in order to pay the bills and once you do that and think about it from a brand standpoint, you can be more creative. You can take risks. You can have a lot more fun in doing that, knowing that the core business is online. This is how you just amplify it.
Hans Tung: I have seen in Japan and in Korea, Taiwan and now in China, that you can go to offline stores, use the QR code, scan it, buy something, you don’t have to take it with you because they will ship it to your house later. So you don’t have to touch anything, just scan, pay with mobile wallet and go. Extremely easy and frictionless.
Josh Luber: Well so it’s a phenomenal example of consumer behavior because for us what happens is – when we opened the first pop up, we only had people that were working at the pop up, authenticators, intake, and then we very quickly realized that the most valuable people to have on site were customer service and to have people there that could answer those questions that used to come in via email or chat and then we would explain it. So they could buy something and they could – and that was massively powerful, cause it leads to exactly what you just said, because then people are happy to sit there, shop on their phone who otherwise had questions and had friction around using the product and now they can do that and the product will show up at their house in a couple of days.
Hans Tung: Exactly.
Rita Yang: Why is eBay not doing this?
Hans Tung: That’s a question we get asked for many of our portfolio companies.
Josh Luber: EBay is great and will always be great for that long tail product. You want to find some unique one of a kind item, eBay has a scale ready for that, but the eBay model is antiquated. There’s no catalogue basis, there’s no structured data and to implement this for even just that quarter reason – if you would look for the shoes I’m wearing right now on eBay, you will get 500 listings a 1000 listings and then you as a consumer have to figure out should I buy from this person or that person? Why is this for 600? Why is he selling it for 800? How many reviews does this person have? Why is there a cat in the picture? All that stuff is nonsense, it’s just confusing. You go on StockX, there is one product page of that product. You want to buy a share of Nike stock, there is one ticker symbol for Nike stock and everything happens at that one place. That’s the starting point.
The standardization to be able to have a single product page and a catalogue based experience that eBay would literally have to create an entire new – they would have to rebuild their entire site to be able to do that. We’re not as concerned about someone like eBay coming in and replicating what we’re doing as much as – we would be more concerned about someone building something from scratch and competing with us somewhere that we’re not, whether that’s geographically or different products. Every single thing that we have done is in facilitation of that model and how we handle payments and how we handle shipping and that customer experience and what’s great is, it’s taken a while, but every one of those things builds mote around the business because you have to be fully committed to that model in every way that you build the product to be able to actually do that. To Hans’s gut reaction to that question – eBay is probably the last person that can replicate that.
Hans Tung: For someone who has seen NBA just took off from ground zero in China, the big power house today, drawing so many fans. It is not hard for us to see StockX doing well in China. Over time. What are your plans regarding China and what do you think about building the presence there. You already have 15% of your buyers coming from China without doing anything. Its already indicating that something big could be happening. Yet there are also local competitors, players that are very sizeable already. What do you think about the Chinese market?
Josh Luber: This is probably the most important question for us right now, in terms of our short and medium term strategy, China is maybe the only thing that we don’t know exactly what we’re doing and we’re still exploring a lot of different options because there are very formidable marketplaces on the ground in China for sneakers. But we have the supply, and there’s a really unique distinction between what has happened in the past with marketplaces and US companies coming into China versus this scenario that we have the supply – because most of it comes in the market through the US and that’s where our sellers are. We have some big decisions to make very quickly around who we partner with? Who do we try to compete with? And where do we set up those teams and those operations? I mentioned earlier – 100% of bottlenecks in every part of the business is just people and that’s no different here as well.
We still need to hire a great leader for not only China but also for all of Asia pacific and build a local team. And whether that local team sits in Hong Kong or Singapore or mainland China and then where does the operations team sit when we authenticate products? Does that sit in either of those three places or somewhere else? Those are the key questions and then it’s a function of who do you work with here? Do you work with one of the existing sneaker marketplaces and partner with them? Do you compete with them? Do you work with one of the big players? The Alibaba’s or JD’s? Those are all the different decision points that we’re in the middle of discerning right now.
Like I said, everywhere else we have a really clear vision of how to execute this in the short – medium term and man! There are just so many different options for how we can do this, knowing that 15% of our business is already here. A couple of weeks ago, Chris Woo wore a shoe and all of a sudden it was the biggest shoe on StockX for a week. The impact is so, so clear. Over the Chinese new year, there was a shoe – this is the best story – there was a shoe it’s called the Jordan One Mid – this is a shoe that is a discount shoe, nobody in the US wears it, but there was a black and gold color wave that Jordan One made that during Chinese New year it became the number one selling shoe on StockX for two weeks. It was because it was black and gold, it was because it was during Chinese new year and some celebrity had worn it and all of a sudden – and all the US sellers figured out – they were all going to finish line and buying it on sale and then reselling – I mean, it is so clear the impact in China so it is important for us to figure out the right way to do it.
Rita Yang: I was on YouTube last night and there is actually a tutorial on how to buy sneakers from StockX on YouTube – for Chinese consumers and it has 150,000 views.
Josh Luber: Well because we don’t have local languages yet, we just rolled out Italian and we’ll continue to roll out European languages, but obviously it’s a bit more complicated. Rolling out local languages here, local payment methods, WeChat, AliPay there are some parts of this we know for sure we have to do and we’re in the process of doing it, and then the bigger strategic questions around who do you partner with is figure out –
Rita Yang: What do you say to sneaker heads who says to you – having a stock market for something that we love, is kind of ruining the fun?
Josh Luber: The fun doesn’t exist.
Hans Tung: It’s a notion.
Josh Luber: Yes it so is. This idea that you can go find great sneakers for a deal or discover them – it just doesn’t exist anymore. In the mid 90’s there was a guy, his name was Bobbito Garcia and he wrote a book that become the sneaker head bible in the mid 90’s and the title of the book was – Where do you get those? That used to be the seminal question. Nobody asks that question anymore. We have the internet, we know where to get everything. We know when everything is coming out and where its being released. Now, can we get it? Can we physically be able to get it? No, because we’re not willing to sleep outside of a sneaker store for three days or we don’t know the manager of the store. But it’s all a game, that idea of – oh! There’s a community where we can all – no! That doesn’t exist anymore. What we have done is we’ve created access and transparency around what has become a very fragmented and messy game that it is hard for anyone to be able to play unless they really, really have that sort of inside baseball opportunity. It’s an old notion that just doesn’t exist.
Rita Yang: So in other words, sneaker heads nowadays actually really appreciate what you’re doing?
Josh Luber: Yes they certainly have voted with their wallets right.
Hans Tung: What’s your MPS score again?
Josh Luber: Not only between MPS score but just the massive growth. For us it’s about awareness. It’s just an easier way to be able to buy any product and that’s ultimately at the end of the day what consumers want. I had a really interesting conversation last night at dinner with a woman who said – listen, a lot of people want to talk about sustainability, but for consumer good’s people don’t necessarily vote with their wallets on sustainability. They vote on access, price, ease of purchase and that’s what the stock market model creates for StockX.
Rita Yang: As a serial entrepreneur, do you have one piece of advice that you want to pass on to other people who are thinking about doing it?
Josh Luber: I have two related piece of advice that I always use in here and they’re the most basic things ever but they’re so important.
So the first is talk to everybody about everything. Don’t think that someone’s going to steal your idea or show up with an NDA to talk to someone like – the refinement of those ideas and finding those people to work with, it’s just important to get out there and talk to everybody about everything and then secondly, just do something. The idea that you have to have this perfect idea and perfect plan, it’s just completely illogical. I could never in a million years have predicted or planned to meet one of the most successful business people in the world, Dan Gilbert and that he would have the exact same idea as me, I didn’t know that when I was creating Campless. When I was going through millions of rows of excel spreadsheet to clean all this eBay data and build a price guide, but there was something there and we had to just be doing something to push that forward and those things ultimately put me in a position to meet Dan and to be able to do that. Talk to everybody about everything and just do something.
Hans Tung: Great advice.
Rita Yang: Thank you. We’re going into the last part of the podcast which is a round of quick fire questions. Just say the first thing that comes to your mind.
Josh Luber: Sure.
Rita Yang: Can you give us some pro-tip for shopping on StockX?
Josh Luber: Have bids. Bids are by far the most valuable part of the whole system. Almost everything I buy on StockX is – I have a bid out there that’s a beacon to the world and let someone know that I’m willing to buy this product, and so by understanding how to use bids, there’s so much data, there are so many different parts of the product of the business, but the holy grail of all of it is bids.
Rita Yang: Who is the entrepreneur you admire the most?
Hans Tung: Besides Dan. That wouldn’t be fair.
Josh Luber: I’m not going to answer it, I don’t want to put a spotlight on this person but I’ve me multiple people. Different people at different times have really inspired me and helped me along the way and I’ve never had one mentor, but different people at different times have helped where I was in that and its almost always been some entrepreneur that has been 2 – 3 – 4 steps ahead in my journey. It’s not me to Steve Jobs, it’s who is the guy that’s built the company that had three times as much traction as my company. Those are the people that have been most helpful to me.
Rita Yang: What’s something that you’ve read recently that you would recommend?
Josh Luber: I joke that the only thing I read anymore is my email, but I’m in the process of actually listening an audio book, Bobby Hundreds book called This is not a T-shirt and Bobby Hundreds was one of the founders of the street wear brand The Hundreds and one of these really OG originals street wear brands. It started back in the early 2000’s – 2003 I think. So to be around 16 years in that game and is a really good story of the evolution of the culture of our customers and the culture of supply and demand and street wear and how it’s all grown. That’s what I’m currently listening to and its awesome. It’s just a really, really great story of not only an entrepreneur but someone who has built a really successful business that was never a billion dollar business but it’s been going on for 16 years in the industry that it did – I’m a big fan of what he wrote.
Rita Yang: What’s a habit that you have that you think changed your life?
Josh Luber: You didn’t necessarily say changed your life in a good way right? I’ll tell you what it really is and it cuts both ways which is – I don’t really sleep much anymore. I sleep usually about 4 hours a night, I usually go to bed between –
Hans Tung: So you work 996 – out of enthusiasm.
Josh Luber: Man! When I heard about that for the first time -! What happened is, the bigger the company became, the more that was going on, the less time you have to do any real work during the day and so I’d come home, I’d put my kids to bed, my wife would go to bed, and from 10 pm to 2am, from 10 pm to 3 am, from 10 pm to 4am that was the time to do work and have time and all of a sudden – my sleep schedule is pretty horrible, its changed my life positively in the business, it’s certainly not necessarily healthy and at some point I will have to figure out how to get more sleep, but you never plan that. You just stay up five minutes later every night and then all of a sudden you’re going to bed at 4 am, but it’s because there’s just so much amazing stuff to do and it’s just so much fun.
Hans Tung: Now you’re running a more global business, makes it even tougher to find time to sleep.
Josh Luber: Being on this side of the world is so much harder. By the time I’m trying to go to bed, emails are flooding in and everything else, but yes, that too.
Rita Yang: Hans can tell you how to sleep on the plane, he knows all about that.
Josh Luber: I’m really good at – I steal sleep. That’s the other part.
Hans Tung: Yes you have to.
Josh Luber: I sleep on a plane, in an Uber or whatever, I’m sitting here with Katie who runs PR for StockX and she is often very embarrassed for the different places that I can steal sleep but you have to do what you have to do.
Hans Tung: That is exactly that. I don’t really care, you don’t have to fixed schedule about this.
Rita Yang: So what do you do when you’re stressed?
Josh Luber: I don’t know. I don’t really feel stress as much as frustration. Its more about frustration with inability to be able to control certain thing. I’m just not worried about failure, I’m not worried about that. My stress, my frustration really comes around not being at home for my kids and that sort of stuff. You deal with that in different ways. Whether its facetime or whether its canceling a trip to be home, those are the sort of things. That’s the flipside of all of this. My daughter is almost seven, my son is four and it’s amazing to be able to have these opportunities to travel around the world and do this, but the flipside is just managing that part of it.
Hans Tung: What was it like to meet LeBron James for the first time?
Josh Luber: LeBron and Dan don’t really have the best relationship.
Hans Tung: That’s why I asked.
Josh Luber: Yes, so it took a minute for LeBron to see through that I wasn’t just like Dan’s guy in StockX cause he knew about that, but we had done this project where after the Cavs won the championship we did a really swift Nike – where Nike gave us LeBron James first retro sneaker and we created a sneaker box out of wood from the cavaliers championship court. So the Cavs cut up the court and then we included actual Cavs championship ring in the box. The first time I ever met LeBron was after that had already happened and it was funny cause his initial reaction was not very positive but then he was like – Oh! You did that with the – he said – Oh! That was great and we talked about the project for a while and he was super complimentary of the project and it was really nice.
Rita Yang: What’s your favorite pair of sneakers?
Josh Luber: It changes every day but the shoe that I have the most of is the shoe called the Air Jordan 1 Lansmountain White, it is collaboration between the skateboard at Lansmountain and Air Jordan and I have seven pairs. I buy that just by the math of it I think that’s my favorite shoe.
Hans Tung: Have you ever met Michael Jordan? What was that like?
Josh Luber: I have never met Michael Jordan in person, but I have been now on three conference calls with him, all three of which have been me pitching StockX to him as the leader of Jordan brand and I know both of his sons really well. I think it helped that it was on a conference call and not in person. He was super professional, knowledgeable of what we were doing and all that, but they still haven’t said yes to release with them.
Hans Tung: So keep on working.
Josh Luber: Yes, we’re still working on them.
Rita Yang: Thanks for being on the show Josh, we really enjoyed it.
Josh Luber: Thanks for having me, it was awesome.
I would like to receive news and updates from GGV.