The Thrillist Media Group CEO on e-commerce, what went wrong at Fab, and why he believes his company can be a $1 billion business.
FORTUNE — With 9 million active readers, Thrillist Media Group will bring in more than $100 million in revenue this year, according to chief executive Ben Lerer. During a recent visit to the Thrillist New York offices, Fortune asked him for his thoughts on the future of commerce.
It’s the first in an occasional series we’re tentatively calling “Five Minutes on the Future.” Here’s what Lerer had to say.
First there was Commerce 1.0. That was Amazon (AMZN), eBay (EBAY), Zappos [which now belongs to Amazon -Ed.]. This was all about easier, faster, and cheaper. How do you find things fast? You go to Google (GOOG) or you go to Amazon. Both are about fulfilling existing demand. You know what you want and you go and get it. It’s not about discovery. It’s a very deliberate process, and efficiency is of the utmost importance.
Then there was Commerce 2.0. That’s Web 2.0 sites like Gilt or Fab. It was all about inspiration shopping. They’re creating demand out of thin air. And some of those businesses are really good businesses. Many of these businesses hold less inventory, do more consignment, do more drop ship, but ultimately don’t have the staples in their categories available at all times. They are all about creating new demand and really not focused on capturing demand that already exists [which is where the most volume ultimately sits]. It’s inspiration shopping. It’s all about curation, deals, and time-based events.
But, at the end of the day, most people spend money on things they need. That’s why Fab isn’t the multi-billion dollar opportunity the press wanted it to be. Sure [the well-funded e-commerce company] had its mismanagement issues, but at the end of the day there was nothing on that site that was something that you really needed.
Now we’re at the beginning of Commerce 3.0. Every day you surprise and delight people by showing them interesting things, and then you layer on great storytelling on a daily basis. But then you also have the persistent inventory in the staple categories. People come to your store more often because they never know what they’re going to find and what they could discover. When they get there, they spend more money buying the basics that they actually need. It’s been four years since we acquired JackThreads, and we’ve gotten really good into making a reader into a shopper and a shopper into a reader. We will do more than $100 million in revenues this year, and I believe we can be a $1 billion business.
How do you compete with Amazon? By having things that Amazon doesn’t have. At Thrillist, we sell you stuff you need that you can’t find anywhere else. Almost half of what we sell is exclusive to us, with a big portion of that stuff actually being made by us. You can’t price-check an item on Amazon that they don’t cover.
Plus, fashion is a category that is particularly tough for a company like Amazon that is so focused on the Commerce 1.0 model. Inspiration isn’t in its DNA, and it thinks about curation as something that an algorithm does, not a brand or a person. This is counter to what social media is all about, and people who are raised on social media don’t only want an algorithm telling them what they should buy. They want to trust the brands that sell them things, and fashion is a category that Amazon doesn’t have trust in.
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