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Refinery29's Philippe von Borries and Justin Stefano on Refining their Model

In a new series, Founder Stories, BoF highlights the personal and professional journeys of the entrepreneurs behind some of the most successful start-ups in fashion. First up, we talk to Philippe von Borries and Justin Stefano of Refinery29.
Philippe von Borries and Justin Stefano | Source: Courtesy photo
  • Vikram Alexei Kansara

NEW YORK, United States — Over the last eight years, first-time entrepreneurs Philippe von Borries and Justin Stefano have steadily turned what began as a hyperlocal online guide to New York's cool, independent retailers into a next generation fashion media company that's expected to generate $24 million in revenue this year.

Around their initial product, the founders built full-fledged editorial content and, eventually, commerce. But the path from indie city guide to successful media business was anything but linear. Along the way, von Borries and Stefano experimented with a number of different models, making a series of strategic pivots — some more successful than others.

In their early years, the duo largely bootstrapped the business, raising little money beyond a $160,000 seed investment from Steven Alan, a decision that, they said, gave them the time and freedom to experiment as they tuned their approach. But perhaps more than anything, it's the strength of the longstanding partnership between von Borries and Stefano that has given the co-founders the confidence to pivot, time after time, as they continue to hone their business model.

Indeed, in the coming 60 days, Refinery29 is set to relaunch, yet again, in a move that will more closely integrate content and commerce, and introduce sophisticated personalisation to the site.


BoF spoke to von Borries and Stefano to discuss the genesis of Refinery29, their various strategic pivots, the upcoming relaunch and the underlying partnership that's helped the duo build a successful fashion media business for the 21st century.

BoF: I want to start with the two of you and the partnership that you have built over the years. How do you work together? Who does what?

PVB: Justin and I have an amazing partnership. We really see eye-to-eye. And so, while over the last 12 months, we have started to split up our duties to the extent that Justin oversees the revenue side, while I oversee product and marketing, we really have a very even partnership. We are each other's sounding board on important decisions. And we’ve created something that’s really meaningful. But we definitely couldn’t have succeeded on this journey without two incredible people. One of them is Christene Barberich, who oversees programming. The other is Piera Gelardi, our creative director.

JS: One thing to add to that is that one of the reasons why a lot of partnerships don’t work out is because there’s a lack of balance. I think one of the things that we have is mutual respect. If you can maintain that, it’s easy to keep the partnership tight and effective, because you can really be honest and open and feel like, if you drop the ball over here, someone can catch it, and if someone has dropped the ball over there, you can catch it.

BoF: How did the two of you first connect? And what were you doing before founding Refinery29?

JS: We’ve known each other since we were 17 years old. We both went to college in New York City — Philippe went to Columbia and I went to NYU — and after school, we kind of both went our separate ways. I was working for the City of New York and Philippe was working in D.C. for a political start-up. Neither of us had a strong connection to either media or fashion.

BoF: You first launched Refinery29 as a hyperlocal shopping guide across music, fashion, home and design. What was the opportunity that you saw?

JS: We were interested in stores and beautiful design, great restaurants, great bars. Discovery was a passion point for us. Remember, this was in 2004. So there really was nothing online for local discovery other than Citysearch, which was a total disaster — it was basically the Yellow Pages online. So the initial inspiration for the site really came out of this personal need to have a better guide to living in New York City.


BoF: When did your focus turn to fashion?

JS: It was pretty soon actually after we launched. We always had other verticals sprinkled in because of our belief that style and fashion go far beyond the clothes you buy; it’s also the music you listen to and the stuff you have in your home. But we were also really data-oriented and we realised that the majority of the content our users were engaging with was fashion content and we had this ‘a-ha moment.’ If you looked at the walls of a magazine store back in 2005, one entire wall represented billions of dollars of advertising targeting fashion, style and female lifestyle publications — and no one was addressing that market online other than Daily Candy. All the magazine sites were designed to be flytraps for the print editions. We saw a big opportunity in going after that white space.

BoF: Back in those early days, what was the revenue model?

JS: It was pretty much advertising. I think the first check came from Oak — you know the store Oak? That was our first advertiser ever and it was a $1,600 deal. I think we went out and got drunk that night. We never raised a lot of money early on, so we always had to focus on making money, not spending money. But that wasn’t what got us out of bed everyday and over to the coffee shop where we’d work on this thing. It wasn’t the revenue; it was the audience we were growing.

BoF: Tell us more about that audience.

JS: The early audience was actually very industry focused — and it was consumers who were deeply passionate about the fashion world. Email was something that we grew from the very beginning and it’s funny because when you’re just getting started, you literally get to know by name almost everyone on your email list. Every day we’d export the file and look through the list.

BoF: So when did you first decide to introduce a commerce component to what was, then, exclusively a content business?

JS: Actually, the idea from day one, even when we launched that initial city guide, was to make it transactional for consumers. Out of the gate, the product wasn’t built for e-commerce, but that was always part of the vision.


If you define commerce as a native transaction that happened later. But it all started off as just pure intent creation. That was the first iteration; basically introducing a commerce-like experience to the site and driving people to a product in-store or online. There was no business model tied to that, but we got such an amazing response from retailers that we decided to build a marketplace.

In 2006, we raised $160,000 from Steven Alan, who was our first investor, to build an online marketplace for independent retailers and designers. We had incredible stores, everyone from Steven Alan to Freemans Sporting Club to In God We Trust, Atelier, Number Nine.

BoF: What were the results?

JS: It was challenging at the time because, you have to remember, in 2006 people weren’t spending a lot of money on luxury online. And if they were, they were buying brands they already knew, while we were trying to sell expensive, independent designers and the market just wasn’t ready for it.

BoF: Over the years, you experimented with a number of different commerce models and made a series of pivots. What did you try next?

JS: We ran that until late 2009. But at the same time, advertising started going crazy on the other side of the house. And part of the reason advertising did so well and why brands kept coming back for more was the e-commerce piece. We had people coming to the site and searching for stuff to buy. Of course, they weren’t actually buying as much stuff as we were hoping, but from an advertiser’s standpoint we were able to deliver a group of women, and some men, that were already in shopping mode. So, even though the commerce piece didn’t explode, it indirectly led to a really strong ad business, which started really ramping and, between 2006 and 2009, went from $1,600 from Oak to $7.5 million in revenue.

The commerce business kind of continued to travel on, but never really went anywhere. So, in 2010, we made our next pivot on the commerce side, which was when we introduced vouchers and the locally focused, flash sale coupon business, which worked very much like most of Gilt. You’d come and buy a $50 ticket, which would get you $100 at the Steven Allen sample sale. We grew it to $3 million in revenue, but there were definitely issues that hit the entire industry. Everyone was really excited about couponing and the entire concept just hit a brick wall.

The whole sample sale business was very predatory. And the problem with predatory businesses is that they don’t work for anyone long-term. It’s about creating a business model that drives real value in the world and creates just as much, if not more, value than it actually takes. We think the businesses that get really big are the ones that really live up to that principle.

But I want to make one important qualification about this… we still have coupons as part of the marketing mix, because it’s still super important for certain brands. And we don’t position it as a discount anymore. It’s a 'ticket' for entry for people to kind of sample a brand. That’s actually been a really effective pivot.

BoF: You are planning another relaunch of Refinery29 in the coming months. What’s the strategy? What can we expect?

JS: We’re looking at — about 60 days out — a relaunch and complete rebrand of Refinery29, whereby Refinery29 Shops, which has been the vehicle for all these different commerce models, is folded entirely into Refinery29. The goal has always been to integrate commerce with content as an additional way to drive the connection between brands and consumers, not as a way to focus obsessively on commerce for commerce’s sake, but really as another intent driver.

The most important thing to convey about Refinery29 is that we’ve never really looked at advertising and commerce as separate things, because it really creates a sort of bipolar worldview. What it’s really about is: what are the different ways in which we can connect brands to consumers? Advertising was one way of doing that. Commerce in the form of a marketplace was another way. And even though the results for some of these brands may have only been $10,000 a month, the awareness factor was huge.

With the new site, we are also aiming to drive much deeper exploration and discovery through personalisation. We’re actually going to be powering Refinery29 with this very sophisticated semantic database that we built in-house that connects a consumer's personal interests to brands to products.

BoF: Can you say more?

PVB: We’re working on this project internally called Athena. It’s a mini-taskforce of people who are almost scientists. But the underlying assumption is that we are essentially building a knowledgebase on Refinery29.

When you look at any content management system, it actually doesn’t know anything about the content. When it says a brand’s name, like Bottega Veneta, or an entity, like ‘spring dresses,’ it doesn’t make a connection. There’s actually no knowledge. So what we’ve been building is actually this knowledge house that connects entities from brand names to product names to events to personalities and can create a collection, or a topic page, on the fly. It’s pretty abstract, but it’s going to start rolling out over the summer and it’s pretty amazing.

BoF: That's fascinating. How else are you using the data?

JS: We’ve been using it to target better product experiences based on consumer behaviour. So we’re going to note stuff about people, on and off the platform, as well. It’s very powerful in terms of understanding what people’s interests are and then showing them certain things that they’re going to love.

BoF: You have said you will generate $24 million in revenue this year. Can you break that down?

JS: That’s all ad sales.

BoF: How has your approach to advertising evolved over the years? You mentioned 'native advertising' earlier, which has become something of a buzzword.

JS: It’s funny, that’s been our special sauce since like 2007. Right when we started ramping, that was when we were working with brands to create articles on our platforms that were written by us and sponsored by them. We’ve actually been doing that since way back. It’s only been in the past year and a half that people have been calling it 'native advertising.' Before that, it was just called custom content, content marketing, sponsored posts, whatever you want to call it.

We approach it from the mindset of being a mini-agency that works strategically with brands to see how we can create something unique for Refinery29 and its audience. Part of our belief is that the ads on a platform should be as good as the content itself. There have been times in the past where we haven’t lived up to that promise, but most of the time we’re pretty good about.

BoF: Being the founder or co-founder of a business comes with a lot of pressure and expectations. Through all the twists and turns and pivots that you guys have been through, how did you keep the faith?

PVB: Literally, for a long time, we didn’t raise any money — besides that initial start-up capital that we raised from Steven Alan — so we didn’t have the constraint of someone breathing down our necks and forcing a pivot. Actually if we had raised more money early on, there’s a chance we might not be in business today, because the expectations might have been so harsh that we may not have had the freedom to explore. We’ve had so much time to explore. Even in the moments of thinking ‘Is this going to work out?’ we’ve tried something new.

JS: You have to have complete faith in yourself and the people that you work with and your partners. Because you go through hard times — every day. And there are lots of peaks and valleys. At the beginning, what kept us going is that small wins felt like big wins, because we didn’t really know any better! Being able to kind of inspire and entertain yourself is a big piece of it.

BoF: Finally, as you look into the future, what potential exits do you see?

JS: It’s a good question. Right now, we’re focused on building and growth, but obviously we have investors and there's the expectation that, at some point, we will see a liquidity event, whether it’s the sale of the company or going public — whatever it is. This is going to be an incredibly valuable brand to a pretty broad range of companies, everything from large media conglomerates to e-commerce companies that want to get into media and content, so we think we have a pretty broad range of exit potentials for when that time comes.

This interview has been edited and condensed.

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