StockX co-founder and CEO Josh Luber 99BBA 06JD/MBA treated undergraduate and graduate students to a lively discussion last week. His co-speaker? Finance professor Tom Smith, who looked to provide an academic focus on the real-life, real-world work of StockX.
Luber last visited Emory in April of 2017, serving as the keynote speaker for the third annual Emory Entrepreneurship Summit, just over a year after launching StockX, the world’s first “stock market of things.” StockX is an online marketplace that operates on the same principles as the world’s stock markets, allowing buyers and sellers to bid and sell based on a transparent, authentic market. StockX inventory has expanded from in-demand sneakers to include other limited-quantity luxury goods such as watches and handbags. StockX has since teamed up with the Cleveland Cavaliers to release a LeBron James sneaker and gained the support of celebrities like T.I. and Eminem.
“Somehow this is my job, to come talk to you guys and make videos with Eminem,” Luber joked.
And the company is growing. After a new round of funding, Detroit-based StockX recently announced it will hire more than 1,000 new employees.
Most students in attendance had heard of Luber’s success so, instead of going through his standard StockX presentation, Luber had “an idea to do something different… and debate the fundamental economics of what we do.”
Luber says StockX is the best and only true measure of consumer demand for sneakers in the world. Smith touched on the value of academic modeling, explaining how StockX compares to the business models of companies like StubHub and Uber, and the particular difficulties of data collection when trying to understand such complicated consumer demand.
Luber then took questions from students.
In the future, will you have exclusive IPO deals with brands, or are you planning on being able to do it with Adidas, Nike and whomever?
“… Almost every brand, when we first started talking to them, had a gut reaction of, well, it’s got to be exclusive for us,” Luber said. “We’ve always pushed back and said, ‘Listen. It can’t be – and you don’t want it to be.’ We are the neutral, unbiased market, right? You want to know what other products your customers are buying. Every single brand has then said, ‘Oh yeah, you’re right. You guys can be in control.’”
Why hasn’t eBay come up with something similar?
“On eBay, anyone can sell whatever they want – and humans write the descriptions. The original company I created, which was called Campless, scraped eBay data. But the problem was, you would have a title line that said, ‘Air Jordan 12 Wings,’ and then it would say, ‘Kanye, LeBron, Nike, Kobe, Adidas,’ and like 14 other keywords. What is that? It’s not a catalogue, there’s not a structured data process. On StockX there is one product page for one fit. You search for a pair of shoes on eBay, you will get 1,000 listings. But if you go to buy a share of Nike stock, there’s one trading symbol for Nike stock. That’s where the fundamental difference is from a commodity standpoint.”
It sounds like you’ve taken on a lot of costs in terms of authentication of the products, and even just building up the platform. Where are you bringing in revenue?
“We’re a marketplace model. Online e-pay. We take what ends up being about 9 percent of the transaction. We have operation facilities, but at scale, it’s really not that expensive. It’s somewhere between two to three dollars a pair of sneakers, because our facilities can process – I think last week we averaged about 17,000 pieces a day. One sneaker authenticator can see between five and six hundred pairs of sneakers a day. It’s a relatively simple process. Shoes come in, shoes go out…
“When we started this two years ago, you couldn’t go to LinkedIn and find a sneaker authenticator. So we literally invented it. Today we employ, I think, around 60 sneaker authenticators. And it’s created a career path. We have supervisors and trainers.”
Andrea Hershatter, who teaches entrepreneurship and is senior associate dean of the BBA program, closed the event by thanking Luber and Smith.
“I think there are moments at Goizueta that signify really special opportunities,” she said. “And, for me, when you get the intellectual curiosity and engagement of our students, the wisdom of our faculty, and the insights born of incredibly hard work and a lot of talent from our alumni, that signifies one of those moments. I feel really lucky to have been here.”