We’ve long heard about the PayPal mafia, the self-named group of key employees at PayPal who went on to found some of the largest and most prominent companies in the Valley. It is a hyper-connected group of former colleagues and friends, whose roots are traced, unequivocally, to PayPal soil.
The PayPal mafia supports the belief that innovative companies often act as wellsprings for further innovation and success, not only for the corporation but also for the employees themselves. These men are the reason that VC investors are constantly on the lookout for companies whose employees give birth to extraordinary progeny – if you invested in all of the PayPal mafia’s offspring, you’d have successfully invested in seven unicorns, the valuations of which total nearly $90 billion.
With the explosion of large, successful technology companies like Facebook and Google in the Valley, there is a new generation of mafia on the West Coast who are applying their learnings to new problems and opportunities.
However, in New York’s nascent but quickly growing tech community, we at F Cubed are betting on a new mafia. Quidsi, the parent company of Diapers.com, Soap.com, Casa.com, Wag.com and BeautyBar.com, was founded by Vinit Bharara and Marc Lore and acquired by Amazon in 2010 for $545 million. Quidsi (Latin for “what if”) has provided us with the next generation of talented digital entrepreneurs. Unlike their PayPal brethren, the Quidsi mafia’s constituents are almost exclusively marketers, MBAs, and, thankfully for us, female.
F Cubed is an investor in three companies founded by former Quidsi senior management – Manicube, Minibar and Primary. A fourth portfolio company – ELOQUII – counts a former Quidsi manager as its VP of Marketing.
Manicube offers manicures to professional women at their workplace. The idea for Manicube came from the founders’ personal desire to create efficiency at the workplace. Using learnings from their days running BeautyBar.com, Katina & Liz created a business model with zero acquisition costs and an attractive recurring revenue model that is scalable nationwide.
Minibar is a mobile service for on-demand alcohol delivery. Their success is dependent on three factors: building a strong brand, creating a delightful customer experience and strong customer retention. Drawing on learnings from her role at at Soap.com, Lindsey’s vision is to create a superior experience that encourages customers to view Minibar as a core, indispensable convenience.
Primary is a direct-to-consumer kids clothing. According to both Quidsi founders, Christina and Galyn are among the top e-marketers in the country. This duo is creating a brand that parent’s love by offering high-quality evergreen products at great prices.
ELOQUII is a direct-to-consumer plus-size fashion brand. As part of the ELOQUII management team, Kelly analyzes in-depth metrics regarding the scale a retail brand while managing customer acquisition on a daily basis.
These women, who collectively have nearly 20 years of Quidsi experience, are all deeply influenced by their tenure at the ecommerce platform.
Most of these women’s learnings are directly applicable to the manner with which they run their companies today, and the skills and values that Marc and Vinit treasured most are the foundations upon which their organizations and practices are built. We interviewed our six mafiosas to learn more about how their experience at Quidsi sets them, and their growing companies, apart.
From the interview to the on-boarding process to employee performance and reviews, it is clear that Quidsi had a distinct point of view vis-a-vis people and skillset. These are our findings.
At Quidsi, data was formally reviewed weekly, per Galyn, but informally “definitely daily, sometimes hourly, sometimes by the minute (not kidding).” Management closely analyzed customer cohorts, which drove how employees thought about marketing.
“The business model itself was about acquiring a customer,” says Christina. She continues, “because we were delivering their most basic necessities, it was vital for us to get to a customer, start a relationship, and create loyalty. We were super focused on what it cost to acquire a customer.”
In its pre-launch and pre-funding stage, Primary performed in-depth COA, LTV, benchmarking, operating margins and other data-heavy analyses. F Cubed’s Anu Duggal commented, “Primary’s data was among the most granular I’d ever seen, particularly for a company in pre-launch stage. They were trained to get the formula perfected between marketing spend vs revenue per customer. Galyn and Christina went deep into this from Day 1 especially compared to most start-ups I meet in the e-commerce space.”
Kelly is a self-described “data dork” and was drawn to Quidsi and ELOQUII due to her interest in the intersection of marketing and data. As the 11th employee at ELOQUII, Kelly was excited about the opportunity to be a part of a quickly growing consumer brand where she would be able dive deep into business analytics, flex her marketing muscles and make a real impact on growth.
Quidsi also invested in algorithms and technology to ensure they had the best stock fit for all shipments and optimal inventory. The back-end infrastructure around logistics and fulfillment was hugely analytical, and serve as the basis for Primary’s operational strategy, says Christina. As a result of this data-driven, analytical focus, Quidsi churned out employees that were better trained in marketing and analytics than their peers. And honing in on data has made the members of the Quidsi mafia better professionals and even better leaders.
In addition to acquiring a customer, Quidsi’s goal was retention – “how do we keep customers coming back?” This applied to moms buying diapers, stocking up on pet food and/or replenishing household goods on a weekly basis. Given these are commodity purchases, Quidsi differentiated as a brand by providing a delightful customer experience.
In some instances, decisions had to be made wherein the impact was difficult to measure via data analytics. Quidsi management solved these conundrums by always putting customer experience first. “We were implored to do whatever it took to make the customers happy,” says Galyn. This ruthlessness as it relates to customer satisfaction infused in Quidsi employees the passion to empower customers and bring them infinite “delight.”
Liz recalls a time at Quidsi when baby food hadn’t been delivered to a customer by the time it was promised due to unforeseen circumstances. An email blast was sent out to the entire company. An employee immediately responded, indicating that he lived two blocks from the customer, and that he would deliver the items personally. This is Quidsi culture in a nutshell. Each customer problem or issue was “a jump ball” for all employees, says Whitman, and was, by default, everyone’s responsibility. There are millions of stories of employees “tripping over themselves” to help customers out, says Bernard.
Customer service and care are vital to the operations of all Quidsi mafia companies. Katina and Liz view Manicube as a tech-enabled service company and have set up their own training program for their nail techs to ensure quality of service is uniform for all customers.
Further, Minibar is very clear that customer service is a #1 priority. For the first three months of operations, both founders handled all customer service calls themselves, switching between nights. Maintaining this consistent level of quality was the foundation of their brand-building strategy.
Having a strong brand identity was also crucial to the customer experience. This started with the domain name itself and Marc and Vinit’s belief in powerful one-word domains as vital to maintaining brand consistency and equity. Marc and Vinit’s latest ventures, Jet.com and Cafe.com, are testaments to that principle. Likewise, all of our Quidsi mafia companies have invested in strong brand names that consumers will remember.
Beyond the brand name, Quidsi believed that the customer’s interaction with a brand was indicative of her overall experience. Employees were motivated to bring Quidsi’s incredible brands directly to the customers. Per Liz, “we talked endlessly about whether or not we were going to keep the branded box…Marc saw them as little mini billboards all around Manhattan.” Primary took this quite literally especially as they thought about their customer experience, especially around packaging.
A lot of companies boast about hiring smart people. Quidsi is no different, although Marc and Vinit had a very particular definition of smart. Quidsi had a strong talent pipeline and hiring process, with Marc and Vinit self-selecting by hiring people like them – intelligent, first and foremost, but also curious, supportive, entrepreneurial, informal, respectful, and hard-charging. Everyone who worked at Quidsi was “super smart and super capable,” says Liz, whether or not they had the direct, prerequisite experience for the job at hand. And while the interview process was arduous – hint: Marc and Vinit love brain teasers – it worked. The people are what made Quidsi “a fun place to go to work every day,” says Bernard.
Quidsi had a formal onboarding process that included sessions with each functional head, a visit to its fulfillment center and WOW training (time spent answering calls with customer care). As it relates to performance and reviews, each employee had customized goals and metrics that tied back to overall company objectives. Employees were evaluated against their own guiding principles. In general, Marc and Vinit “encouraged everyone to think like an owner,” says Galyn, “understanding the full context of what the company was trying to do, and their impact on it. It was never just about hitting a number for the number’s sake.”
Vinit commented in a recent Quartz article that he and Marc “spent a lot of time in [Quidsi] focusing on our core values in hiring, in managing that place…It made it unique I think. People came in, and it was down to earth. You weren’t walking in the elevator on your way to work with one personality, and then switching.” His biggest advice on finding great people is focusing on what qualities you don’t want in your employees and sticking to these.
Quidsi values included (i) bring the magic, (ii) find a way, (iii) be real, (iv) be kind; and (v) believe in the art of the possible, among others. “What if?” was not a limiting question; it was one that was meant to spur curiosity and innovation. Quidsi employees were encouraged to think big and the culture was such that no idea was too crazy to throw out there. While debate and disagreement were common, employees respected one another and “sharp elbows” were forbidden. The Quidsi mix of values provided the right “balance of ingredients that are critical for any entrepreneur,” says Galyn. Christina, as Quidsi’s third employee, agrees. These same values are the key differentiators for companies like Primary.
This is also where the beauty of the mafia comes in. As a result of the values-based culture and recruiting process, Lindsey says that there are “tons of people [I’m] still in touch with [from Quidsi] that I would refer for any job.” That is a bold statement to make, but one that is entirely believable given the Quidsi name.
Perhaps one of the most valuable aspects of working at Quidsi was the autonomy Marc and Vinit granted to their employees. This autonomy extended beyond the workplace and into granting support and encouragement for employees to start their own ventures. Marc and Vinit were and remain sounding boards for our mafia’s concepts.
All of our F3 founders talk fondly about their experiences in sharing their ideas with Marc and Vinit and their encouragement in taking the entrepreneurial leap. Their leadership inspired many others to pursue their own dreams and ideas. Per Galyn, “as passionate and driven entrepreneurs themselves, Marc and Vinit understood and supported people pursuing their own things, and doing things that made them happy. Their philosophy was that if people weren’t happy at Quidsi and with what they were doing, they should do something else that does!”
With Marc and Vinit’s support, our Quidsi mafia has gone on to build exciting businesses that attract great talent, have beloved brands and provide great value and service. We at F Cubed are proud to back these founders. We believe that, armed with the learnings of the Quidsi experience, they are more than able to deliver and build the next generation of New York’s best tech companies.