Bringing Together Content And Commerce In Men’s Fashion: JackThreads Founder Jason Ross (Part 7)

Sramana: I am a big believer in putting user-generated content on your site, because it captures a huge amount of organic search traffic that you do not have to pay for. What is your current traffic level, and how do you propose to grow your traffic and subsequent business?

Jason Ross: We were acquired in May by Thrillist, an online publication for urban-dwelling guys. They have editions in 16 cities and write a daily newsletter showing the newest and coolest in fashion, nightlife, and dining for urban guys who are 18 to 35 years old. We were an advertiser with them and we saw that the brands JackThreads were selling were the same ones that Thrillist wrote about.

We saw them as a trusted voice that put a brand in front of an audience who trusted whatever they said. On the other side of that story, we are selling the same products. It is a great, cohesive strategy for us to be the same company.

Sramana: How big is Thrillist?

Jason Ross: They have over 2 million subscriptions now.

Sramana: How many members does JackThreads have?

Jason Ross: Our membership is in the mid six figures right now, heading toward seven figures.

Sramana: So, you were excited about the acquisition due to all the new potential customers?

Jason Ross: Absolutely. There is a lot of value in the trusted voice, and the audience they have access to is a major opportunity for us.

Sramana: What was your revenue level last year? Close to $5 million?

Jason Ross: Yes, but we are heading toward eight figures now.

Sramana: Did JackThreads have more revenue than Thrillist when the acquisition occurred?

Jason Ross: No, we were smaller in terms of revenue. Their business model is advertising to their niche. They are based out of New York, and they focus on various urban areas.

Sramana: Both companies were private when the acquisition happened. Generally, private-to-private transactions are very difficult because it is hard to put a valuation on the two assets. How did the two companies negotiate this transaction?

Jason Ross: That was a five-month journey in and of itself. We were an advertiser of theirs, and I approached them about doing something bigger. I proposed some sort of revenue share and we had a conversation with their marketing team that did not go anywhere. Shortly afterward I was introduced to their CEO, which is when the potential acquisition discussions began. That was in the fall of 2009. It took until May of 2010 to close the deal because of the complexities and paperwork. It was a huge learning experience.

Sramana: Was it a cash or stock transaction?

Jason Ross: It was cash, although I am still an owner of the business. I did get a cash amount as part of the sale.

Sramana: How was the value of JackThreads determined? How did you set a price on your company?

Jason Ross: JackThreads at the time had been approached by a number of other firms. As a result, I was able to understand what was going on in the market and what position JackThreads had. I was able to use all the different meetings I had with VCs and other potential buyers to determine what the business was worth and come up with a fair number based on growth and timing. That is what we settled on.

Sramana: What is the size of your operation in terms of people, and how does that compare to Thrillist?

Jason Ross: Thrillist has 55 employees, whereas JackThreads is closing in on 20. I think the two companies are showing that content and commerce are being paid attention to now.

Sramana: Content and commerce need to come together, and it must be done in context.

Jason Ross: Absolutely. We are showing a lot of success in that niche. We are going to prove that it is the way of the future.

This segment is part 7 in the series : Bringing Together Content And Commerce In Men’s Fashion: JackThreads Founder Jason Ross
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