(Chris Devlin) #1

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FORTUNE.COM // JUNE .1 .19


profitable for seven of the last 10 quarters.”
But really, he seems to view the very subject
as a distraction. “The best piece of advice I
got in the early days was, when it comes to
investors, don’t try to sell them anything.
Just tell them what you’re planning to do.
If they find it interesting, maybe they’ll buy
the stock,” he says. “In the end, you’ll get
the investors you deserve.”


M


ASSACHUSETTS IN MID-APRIL, when
spring is a state of mind: “It’s
currently 48 degrees and rain-
ing in Boston,” Siri says. “Today
you should expect more of the same.”
Conine is undeterred. Whereas Shah pro-
jects a bookish intellectual prone to oxford
shirts and pushing up the bridge of his
glasses with the middle of his index finger,
Conine is a competitive mountain biker
who’d just plain rather be outside. His
hair is perpetually tousled, and he favors
weekend casual: nylon pants, hiking boots,
a co-branded Patagonia vest. This morning
he’s extended an invitation to go paddle-
boarding on the famously dirty water of
the Charles River.
We meet at a launch point a couple
blocks from his home just after dawn and
joke about the over/under on how long be-
fore someone falls in. As it turns out, about
10 minutes. “I wouldn’t worry too much,”
Conine says dryly as I pull myself back on
the board. “I think it’s relatively clean this
time of year.”
We continue on our knees alongside the
bucolic Back Bay neighborhood while he
narrates Wayfair’s early days. He recalls
repeated visits to the annual furniture
conference in High Point, N.C., where
he and Shah would walk the show floor
trying to connect with manufacturers and
distributors to learn the business and to
understand their frustrations.
He tells me about one of the decisions
the partners made in the early years when
it came to hiring. The company would hire
for analytical strength, the ability to think
strategically, and mental dexterity rather
than for experience—including at the
highest levels of management. During two
days in Boston, I interview, among others,
the CTO, who has an MBA in finance;


a director of data science, who has a Ph.D. in physics; and the
head of global talent, another MBA whose background includes
private equity at Bain and consulting with McKinsey but excludes
personnel management experience. (The place is crawling with
ex-consultants.)
When such an approach goes wrong, employees gripe on the job
boards about their clueless managers. But the rationale was that
there’s no true precedent for the Wayfair way, so the best strategy is
to hire for cultural fit, educate new hires, and trust they’ll catch up.
To this day, Conine tries to explain this strategy to the new hires at
every weekly orientation when he’s in town.
We dry off and head back to Copley Square, where Shah picks up
the thread about some of the key early inflection points. By 2008,
he says, drawing a timeline on a whiteboard, those 250-odd micro-
sites had $250 million in sales. “At that point, we noticed one of the
big weaknesses in our model was that customers were very happy,
but the repeat purchase rate was something like 10% or 20%,” he
says. “For the next two years, we focused on driving repeat orders.”
They rolled everything into an umbrella company called CSN
Stores, designed a common header to connect everything visually,
and started an email marketing program to drive traffic to sister
sites. Repeat rates doubled—then plateaued. It was time to build
a brand that customers could easily understand and develop trust
with across product categories. (There’s no real origin story with
the Wayfair name. They paid a branding firm a bunch of money.)
In 2011 they unveiled Wayfair.com and raised their first round of
capital with an eye toward driving awareness.

W


AYFAIR STILL PUTS a tremendous amount of effort and
money into building its brands, which now include
Wayfair.com, AllModern, Birch Lane, Joss & Main, and
Perigold. But it’s not a typical approach to marketing.
Executives repeatedly tout the company’s “build your own” culture,
and marketing is no exception. Rather than outsource creation and
media placement to agencies, it employs internal teams to cre-
ate and handle its ubiquitous TV commercials, email campaigns,
postcards, catalogs, magazine ads, Instagram influencer posts, and
collateral around various promotions like Way Day, Wayfair’s ver-
sion of Prime Day. A/B testing is the norm. Data scientists crawl
over every bit of copy, color palette, and product placement. And
there’s no set budget. Wayfair expects to spend close to $1 billion
on marketing this year—but that could go up if the returns justify

NIRAJ SHAH : CEO of Wayfair

DON’T TRY TO SELL


[INVESTORS] ANY THING.


JUST TELL THEM WHAT


YOU’RE PL ANNING TO DO.”


FORTUNE 500