Five years ago, Justin Stefano and Philippe von Borries launched what they call one of their stupidest ideas ever: a one-month pop-up shop at the grimy Port Authority bus terminal in Manhattan. Somehow, the oddly placed little shop run by two fashion newbies generated nearly a million dollars in sales, helping add rocket fuel to the Refinery29 brand. It's now the largest independent fashion website in the US.
"We were literally selling Alexander Wang in the armpit of New York City," says Stefano. "Our logo was on all the trash cans. It was the weirdest mixture of ingredients."
Stefano and von Borries say this is just one example of the "stupid, existential" experiments they’ve tried as cofounders of Refinery29.Their trajectory as fashion moguls wasn't a bold, well-intentioned path. Refinery29 is a story of trial and error, from two poli-sci nerds who loved discovering local restaurants and stores on the weekends.
"Our success is fundamentally due to the fact that we were outsiders," says von Borries.
Refinery29 has reached critical mass featuring up-and-coming designers and boutiques since their early days: Rag & Bone, Opening Ceremony, and Alexander Wang are examples. But the site was born largely by accident.
After Stefano and von Borries finished college, they were both on steadfast career paths. Stefano was working for local government and planning to attend law school. Meanwhile, von Borries had moved to Washington D.C. to work at a political startup.
So how did they even conceive of starting a fashion website?
They didn’t. It sprouted from an interest in local adventures. Stefano and von Borries would hang out after work and talk about artisans or restaurants they’d found in their neighborhoods. "It’s in our DNA. Whether it’s a really cool jewelry store opening on the Lower East Side or a crazy dress shop in Queens, we were always curious," says von Borries.
They toyed with the idea of building a platform to discover those brands.
"We said: Imagine if you could go to a website and find all these things you stumbled upon when you were visiting New York or Paris," Stefano says. "We were never really fashion guys."
Stefano and von Borries faced skepticism from the start. In the beginning, the cofounders were devoted to focusing purely on up-and-coming designers or small boutiques.
"Everyone thought it was completely stupid at the time," says von Borries.
"You’re investing all your resources into designers that spend no money on advertising, and maybe 50 people in the world actually care about. So how do you ever build scale or revenue?" he says.
In the end, they say their narrow focus allowed them to differentiate themselves as a unique brand. Plus, a lot of those little designers ended up becoming big names, such as Alexander Wang.
Stefano and von Borries don’t regret stumbling into fashion media. In fact, they say their "outsider status" allowed them to be creative in building Refinery29 without expectations or outside pressures.
"We literally had to learn every single thing from the ground up. So we were very open to the world, and just trying to build something by any means possible."
They struggled to gain traction back in 2005. It was before social media had exploded as a sounding board, and so they tried unconventional publicity campaigns, such as the Port Authority pop-up shop, to get the word out.
They took hardly any venture money for the first five years, which also rid them of expectations. "We basically entered the industry in undercover mode, and we made a lot of mistakes because few people were watching what we were doing."
Refinery29 has worn many hats since its inception in 2005. It began as strictly editorial, but in 2007 introduced a homegrown retail platform to become a force in e-commerce. In 2010, the website added a daily-deals section called Refinery29 Reserve, imitating LivingSocial and Groupon. The company also creates native advertising campaigns for brands.
Not all of these ideas have panned out; revenues from the native retail platform were largely disappointing, and it was subsequently shut down in 2013. The Refinery29 shops site now simply links to third-party stores to handle transactions.
But there is some magic to the madness, because the site has attracted a cult following. Refinery29 lures more than 8 million unique visitors per month, as well as 1.3 million email subscribers and one billion page views per year.
It was named the fastest growing media company on the 2013 Inc. 500 list, and raised a cool $20 million in October 2013. Advertising is its bread and butter, pulling gross revenues up to $29 million for 2013, nearly double that of the year before.
Stefano and von Borries are on to their next quest: beefing up mobile and video content. They'd like to become a video-entertainment brand, turning writers into interactive video personalities and introducing Refinery29-produced news, how-tos, and documentaries. First up? A documentary series following Swedish pop band Icona Pop as they tour the U.S. with Miley Cyrus. An astrology show with a "pop-culture spin" is also in the works.
The other priority is expanding its mobile presence, particularly on Instagram and Facebook. Refinery29 has spent the past five months redesigning its mobile platform—the new interface will be rolled out in early April.
Going forward, the entrepreneurs say it's a challenge to balance their innovative, muckraker spirit with the responsibilities of a large business.
"We have a lot more on the line, and we need to be more calculated than before," says Stefano.
It’s been a bumpy road for the twentysomethings that jumped into a media business. Stefano and von Borries have some sage advice for other precocious young entrepreneurs: Celebrate the little wins.
"Part of not having experience, is you don’t know what it’s like to win big, so you can really appreciate winning small. 99.9% of businesses are started with years of small wins," says Stefano.
The cofounders remember many "little wins." Each time they gained another 500 email subscribers, or a spurt of higher traffic, it excited them. Opening up their first real office was another source of pride. In 2006 they moved to a 1,500-square-foot Tribeca studio, in a basement below a basement. It "seemed like a castle" says von Borries. When they received the check for their first real angel investment, $160,000, they were "trembling".
The string of small victories propelled them through years of uncertainty and obscurity.
"I remember in year 3, one of my parents pulled me aside and asked: ‘Are you sure you want to continue with this?’" von Borries says.
"If you really believe in something, you always try new approaches," he says. "For us, that meant hosting a party of 30 jewelry makers in a basement in Chelsea, and that was a small win."