Kevin Ryan

How Kevin Ryan, founder of Gilt Groupe and Business Insider, built the New York technology scene

By Lee Lusardi Connor / Photography by Mindy Best

Kevin Ryan likes to use sports metaphors. He might, for example, compare building a management team to recruiting stars for a basketball team. Or he’ll compare checking references to assessing defenders on a soccer team.

So it’s tempting to use a sports metaphor to describe Ryan himself. “Triple threat” might work except that, as a serial entrepreneur and the chairman of six groundbreaking technology companies, he is at least twice that.

With equal justification, he could be called the MVP of the flourishing New York City technology scene. When he started out in New York in 1996, the tech action was all in Boston and Silicon Valley. Since then, Ryan’s ventures have served as a force multiplier for the technology business in his adopted hometown. For example, nearly three dozen alumni of Ryan’s first startup, DoubleClick, are now CEOs of their own companies, most of them in New York City.

Furthermore, Ryan acts as a key liaison, both formally and informally, between city, state and federal government officials and the city’s technology sector.

Level-voiced and khaki-clad, Ryan, 52, has an easygoing mien that belies his drive to be the number one player in all his ventures. It’s clear, though, that he also relishes — well, the game.

“Even 30 years from now, we will look back and think of this as a golden time of new business creation, with change in so many sectors. I happen to be in the middle of it,” he says. “You just can’t have anything more fun than what I’m doing.”

A GOOD EYE

Throughout his career, Ryan has demonstrated an extraordinary ability to see opportunities for internet-based businesses.

In 1995, he was working for the media company E.W. Scripps, which owned the rights to Dilbert and other comic strips. Ryan saw that, via this relatively new thing called the World Wide Web, you could bypass newspapers and go straight to the consumer. The result was Dilbert.com, which racked up millions of visits. To pay for the costs of upkeep, the site began selling ads and merchandise.

It’s a commonplace setup now, but at the time it was groundbreaking — and few could see the potential for a huge internet business powered by paid advertising. Ryan did, and so he joined longtime business partner Dwight Merriman at the internet advertising firm DoubleClick in 1996. The company had been founded just six months earlier by Merriman and Kevin O’Connor. First as president, then as CEO, Ryan grew the company from about a dozen employees to a peak of 2,000 employees worldwide. Ryan left after the company was sold to a private equity firm for more than $1 billion in 2005. (Three years later, it was sold to Google for three times that amount.)

In 2007, Ryan and Merriman launched Gilt Groupe, the first U.S. online luxury flash sale site, based on a business model Ryan had observed while living in Europe. That same year, they founded 10gen, a software company that has since evolved into MongoDB, a global database business with a valuation over $1 billion, per its latest round of fundraising in January 2015.

In 2009, Ryan launched BusinessInsider.com, an online publication that has become the most visited independent business news site in the world, he says.

But wait, there’s more. In 2013, Ryan started Zola.com, an online wedding registry that is upending the ways in which soon-to-be-newlyweds indicate what wedding gifts they would like. And in 2014, he debuted Kontor.com, the first and only comprehensive online resource for architects and designers of office spaces. By year’s end, he will announce yet another venture, this one aiming to disrupt the field of healthcare. He will, of course, be chairman of each.

It’s an impressively diverse portfolio of companies. “I have no focus,” Ryan says with a laugh.

“I’m always thinking about the impact of digital on various industries and consumers and life in general. If you think about that all the time, you start getting struck: Wait a minute, why does it take me 20 minutes to do something online? There’s an opportunity there. I tell people, if anything takes more than three minutes to do online, you should think about starting a company.”

IDEAS EVERYWHERE

Ryan admires companies like OpenTable, which transformed the process of making reservations at a fine restaurant from a weeks-long effort into a three-minute one; and ZocDoc, which does the same for scheduling doctors’ appointments. That drive for simplification inspired Zola, which streamlines what is usually a tedious, multi-site registration process. Zola allows couples to register for a wide range of things — home décor, experiences, cash for a honeymoon, donations to a charity — on one site, choose dates on which they will take delivery, and even exchange one registry item for another.

Like most of Ryan’s business ideas, this one came from his own experience. “Let’s imagine we’re both 32 and I went to college with your fiancé, Fred,” he says. “You register at Bloomingdale’s. I need to buy you a present, so I go on the site and see a bunch of plates and forks.

“This is not a good present. I know Fred doesn’t care about plates and forks. He and I used to play basketball together and go skiing together and play poker together. That’s our thing. None of that’s on the registry. How do I solve it? That’s Zola. And Zola’s going to do $100 million [in gifts given] next year. We already have 15,000 weddings [for 2016] on the books.”

As for Business Insider, it came about, Ryan says, because “I didn’t have the publication I wanted to read. I had the Wall Street Journal. I had the Financial Times. But there was no online publication giving me deeper, faster coverage, suited for the internet — a punchier combination of short pieces and super-long, in-depth pieces.

“I wanted something I could check multiple times a day. The idea of what’s ‘current’ has changed over time. Now when I see the New York Times in print, I feel like it’s all old because I read it all yesterday.” With 90 million monthly global unique visitors as of September 2015, Business Insider is on track to outpace the New York Times site in 2016, Ryan says.

On to Kontor. Given his eclectic business background, Ryan has designed his share of offices, and knows the inefficiencies of the process. “Let’s say you’re designing a law firm and you want to see what 25 law firm lobbies look like, to set a context for your architect. Or you need 17 conference room tables, each about six feet long, and you’d like them to be glass-topped. Try to do those searches online. You can’t. But you can do those searches on Kontor.” The site will also facilitate collaboration between designers, architects and clients — and, of course, shopping.

“Sixty billion [dollars] a year is spent on office interiors, yet there was no website [to address that]. It doesn’t make any sense,” says Ryan.

Ryan is also a seed investor in a company (not yet named at press time) for children’s activities, set to launch by year’s end. The concept is similar to that of ClassPass, in which a monthly membership gives access to a wide range of fitness facilities and classes. In the new company, parents will pay a monthly fee that allows access to all kinds of local activities, from finger-painting class to ballet to rock-wall climbing to museum visits. “Each one of these things can cost up to 25 bucks. It’s expensive,” Ryan says. “Pay us $80 a month and you can go to all of those, all the time.” He predicts the company will have $100 million in gross revenue within a few years.

And so another industry faces disruption. In a twist, Ryan, though the initial investor, will not be chairman of the activities venture. “I can only be the chairman of so many companies,” he admits. “But if I had the time, I would start more companies.”

FROM NOTION TO NEW BUSINESS

When starting a new company, Ryan doesn’t worry much about financial models (he doesn’t do a financial plan until it’s time to meet with investors) or elaborate market research. For the children’s activities venture, for example, he talked with some vendors and with some parents who work at Gilt Groupe.

“I only need to have a clear product vision for what I’m building,” he says. “I need to know there is a big enough market for this product that does not exist today and that a bunch of people will probably like. That’s all I think about.”

Nor does he concern himself about skeptical reactions to his ideas, having weathered negative feedback when starting DoubleClick, Gilt, Business Insider and other ventures. “If I have an idea, I put money in, build a team, and then I just assume I’m going to be able to raise outside money when I need it. And I’ve always been able to raise money. Sometimes it’s a lower valuation than I think it should be, but that just is what it is.”

Nor, in fact, does he worry — too much — about failure. “Lots of things don’t work,” he says. “We made acquisitions at DoubleClick that didn’t work, we launched businesses at Gilt that didn’t work, I’ve hired people that didn’t work out.

“But you have to look at the startup world the way a baseball player would. If you didn’t know baseball and I told you I’m a really good hitter in the American League and I get a hit one out of every three times, you’d say, ‘That’s terrible!’ But no, actually, in baseball, that’s really good.

“So you have to think of yourself a little bit like that and not get thrown by it. If you get stressed out every time you strike out, you picked the wrong sport.”

HIGH-LEVEL HIRING

What he does think about — a lot — is finding the right people to lead his companies. He does one or two informational interviews every work day, tapping the extended DoubleClick and Gilt networks, just to keep his eye on who’s out there. He handpicks the CEOs of his companies. Last year, when MongoDB replaced its CEO, it was Ryan who, working with a search firm, flew around the country interviewing candidates.

Often, he’s called on by his direct-report CEOs to give his opinion on people they’re considering hiring. “Kevin is really good at identifying talent and what may be the one weakness of this person, what is the key question we need to answer,” says Mia Lewin, co-founder and CEO of Kontor and a former executive at eBay and Zazzle.

Other times, Ryan is called upon to exercise his formidable sales skills. “Many times, my role is to persuade someone to join, and explain why we’re such a great company,” he says.

Indeed, Ryan seems to feel that, overall, hiring — even for a red-hot group of companies like his — is less a matter of selecting from among eager suitors, and more about convincing top talent to join. “You and I both know that LeBron James is good,” he says. “It’s not that I know something you don’t know. But if I can persuade LeBron James to come on my team as opposed to being on your team, that’s the important thing.”

That’s because, in the tech world, the superstars are as hotly pursued as their sports counterparts. “A lot of people have great jobs already and they don’t want to [join your company] because they’re super happy at Google or they live in Philadelphia or whatever,” Ryan explains. “So sometimes you get it and sometimes you don’t.”

In fact, while Ryan has been able to hire executives away from any number of top-name companies, he rues the fact that he has not, so far, been able to hire anyone away from Amazon: “Jeff Bezos does a great job of figuring out who his top 10 percent of employees are, and taking care of them. That’s who I want and can’t get.”

When interviewing, Ryan asks questions designed to test the interviewee’s ability to think fast. “I just want to get to know the person, how they think, how they’ve made decisions in the past. I’m trying to smell, does this person have a track record of success?”

Personal chemistry plays a crucial role, for both interviewer and potential hire. “You shouldn’t underestimate [the power of], ‘Do I like this person?’ The plane ride is an important question. If I’m stuck on a plane for seven hours with this guy, am I gonna shoot myself? You want to be able to do great work but still be laughing.”

THE RIGHT WAY TO CHECK REFERENCES

All that said, Ryan maintains that if he could only do either an interview with a candidate or a reference check, he would choose the reference check. His method involves intensive research to find someone he knows (or someone who knows someone he knows) who has worked with the candidate. Because of the relationship with Ryan or Ryan’s contact, such people can generally be trusted to be candid.

“If I do three of those interviews, I’ll start to see patterns,” Ryan says. “If three people say, ‘I like Fred, but he can be a little bit intense. Not saying it’s a bad thing, but he can get upset sometimes,’ I’m smelling a problem here. They’re trying to say, in a nice way, that Fred is a jerk and they didn’t like working with him.”

References are most valuable, he says, because former co-workers have actually seen the candidate in action. “I can interview a candidate for two hours and there’s no way to really know if he is what he says he is,” Ryan explains. “Let’s say we’re interviewing soccer players, defenders. Two guys, they both seem good. How do you evaluate them? There are no numbers. The guy’s here and says ‘I’m a really good defender,’ and he seems like a strong, smart guy, but I have no idea.

“If I watch some games, and see them both in action, then I know who’s a better defender. Easily. And that’s [the value of] the reference check.”

BOSSING THE BOSSES

Having hired strong, dynamic, talented people, Ryan then has the task of managing — or rather, leading — them.

He talks or emails with each of his CEOs daily or every other day. “They need to do the majority of the work, and I’m there to help them. I have more experience than they do — I’m older — and so I have to be a coach, assist them where I can and also stay out of the way if I’m not adding any value.”

Says Kontor’s Lewin: “Kevin has a lot of trust in the CEO and the executive team, but as a whole he’s very hands-on. He’s very good at identifying a key risk, and stays on top of the executive team until that one issue is solved.

“What makes him so successful is that he’s always pushing for continuous improvement — whether in building a team or a product or in speed of execution — and that shows in all of his companies.”

Shan-Lyn Ma, who was a top executive at Gilt Groupe before Ryan tapped her to be co-founder and CEO of Zola, says working with Ryan expands her thinking. “The thing I really admire and like about Kevin is that a meeting becomes a conversation about what is possible. Why are we doing some things that might not make sense and why don’t we stop? What things could be possible that no one has done? Would it make sense for us to do them and if so, why not go ahead and do it?”

Ma also notes that Ryan’s companies have a solid representation of women in leadership positions.

“Whatever is systematically holding women back in other big companies, particularly technology companies, doesn’t seem to be there in Kevin’s companies. That is a testament to the fact that he recognizes talent in whatever shape, and is willing to promote it if he believes in a person.”

“Kevin is exceptional,” says Lewin. “He makes me think that maybe I should be sleeping less,” laughs Ma.

Ryan himself is more matter-of-fact in describing his talent. “There’s nothing I do that is particularly difficult, or that no one else can do,” he says. “It’s just trying to do it a little bit better.

“It’s like asking LeBron James, how are you a good basketball player? I know what he does. I just can’t do it. He shoots, and the difference is that his [shot] goes in and mine doesn’t. He can’t teach me that; it’s not like a formula. He’s better.

“So it’s a series of decisions you make and that hopefully you do well, and that’s how you end up with a good company.” CEO

Lee Lusardi Connor is a freelance writer based in Morris Plains, NJ. Contact us at editorial@smartceo.com.

CEO OF THE YEAR

Each year, SmartCEO magazine names a CEO of the Year. In selecting its CEO of the Year, SmartCEO looks for entrepreneurs who are true leaders among their peers. Beyond company revenues, profits and community popularity, these leaders have proven track records of innovation and bringing value to the marketplace. They lead more than just companies; they lead industries in new directions.

Why Kevin Ryan?

Few would argue with the fact that Kevin Ryan is the founding father of the New York City tech scene. With a resume that lists him as a founder and/or chairman of DoubleClick (ultimately sold to Google for $3 billion), Gilt Groupe, MongoDB (both valued at more than $1 billion), Business Insider (acquired by Axel Springer for $343 million), startups Zola and Kontor, and a few new companies still in early phases of development, it’s easy to comprehend the impact Ryan has had on not only the technology industry, but the New York startup market as a whole. The simplest explanation is that Ryan has fundamentally changed the way consumers shop, search, design, manage and consume information via the internet, and he’s done it time and again. His focus on and successes with disrupting industries and growing companies into market leaders is unrivaled. And his empire can be attributed to one guiding light: He focuses intently on the “impact of digital on various industries and consumers and life in general.” For these impressive achievements and more, SmartCEO honors him as our 2015 New York CEO of the Year.

THE KEVIN RYAN GUIDE TO HAVING IT ALL

Kevin Ryan structures his life so that he doesn’t have to miss out on things that are important to him.

Early on in his career, he determined that he would not let work cause him to sacrifice either family time with his wife and three children (now ages 15, 17 and 20), or fitness. He’s been a regular at his kids’ soccer games and recitals, and takes five or more weeks of family vacation time over the course of a year. He also finds time for competitive pingpong tournaments, skiing, yoga and one or two triathlons a year.

“Giving back” is part of the equation. Despite his considerable work commitments, he spends about 20 percent of his time on nonprofit groups, such as the Yale Corporation board of directors, the Human Rights Watch board of directors, and New York City and New York State political and
policy organizations.

How does he do it all? “As I tell younger people, you can do anything, but you can’t do everything,” he says. “You have to decide what you’re not going to do — and those are difficult decisions.

“At the beginning of DoubleClick, I remember thinking, okay, I’m going to have three A-level priorities that will be my focus. Those priorities were family, work and staying in shape.

“What dropped from my list — which would have been A-level when I was in my 20s — was cultural events, watching sports and seeing friends. It’s not that I did zero, but I cut them back a lot.” From early days, Ryan and his wife also prioritized spending money in ways that would save them time — foregoing expensive “things” in favor of hiring help with chores like cooking and cleaning.
It’s useful, Ryan notes, to keep the perspective that no schedule lasts forever. “For example, in three years, I’ll have no kids living at home, so I can adjust my priorities a little bit,” he says.

Work demands are continually evolving as well. “As your company gets bigger, you keep adjusting your role, because if you try to manage everything, the company will never expand. It’s, ‘I know I used to say let’s review everything in detail — now, if it’s not $100,000, I don’t want to see it.’ You have to keep pushing decisions down.”

And should you eventually ascend to the role of chairman, as Ryan has, your operational constraints will be even fewer, allowing you to more easily take those five-plus weeks of vacation each year.

That doesn’t mean Ryan doesn’t keep in touch with work while away but, characteristically, this time is strategically planned: “Last summer, when we were in Europe, I set my schedule so that I worked almost every afternoon from 4 to 6, which is morning in the U.S.”

HE LOVES NEW YORK

“New York has been a colossal success story in the last 20 years, going from nowhere to an enormous number of successful internet companies,” says Kevin Ryan, speaking of the city with the same pride with which he discusses his companies. “We have created hundreds of thousands of jobs and billions of dollars of value, which ends up being [realized in] tax dollars.”

As vice president of the NYC Partnership and a member of the NYC Tech Talent Pipeline taskforce, Ryan considers himself a spokesperson for the technology industry. “I’m probably the only person who was here in ’96 when it all started. At the time, the number one question was, ‘Why would you start a tech company here, and not in Boston?”

Government was a bit slow to realize tech’s importance. “It was easier to see a J.P. Morgan, with 25,000 jobs in the city, as a job creator, than to see a thousand companies here with 25 employees apiece,” Ryan says. “And the great thing is that employees in this sector are always looking out for other companies they can start. It’s like, if you had something in your garden that you knew was going to multiply, you need to get that going.”

“Now [Mayor Bill] de Blasio, [Governor Andrew] Cuomo, and [U.S. Sen. Chuck] Schumer — I speak to all those guys quite a bit and they believe this is a very important sector. But it took us years to get there.”

What do Ryan and other tech titans want for the sector? At the federal level, the issue of visas for engineers from overseas is a hot button: “There is an acute shortage of engineers. But Congress refuses to pass sensible immigration [laws], which is so horrible and so shortsighted. It’s costing literally billions of dollars to the U.S. economy.”

At the state and local level, New York government is investing in better computer science education, Ryan says. There are also ongoing discussions about improved infrastructure and better bandwidth, which have long been issues in New York City.

Not least, local governments can keep their cities attractive places for technology workers. “Lots of people who grew up somewhere else moved to New York because it’s a cool place, transportation is better and it’s not perceived as dangerous now, the way it was 20 years ago,” Ryan says.

He maintains that the most desirable cities are the places where technology companies thrive. “We need the smartest 10 percent of graduates of the top 50 universities, and where do they live? New York, San Francisco, maybe LA, maybe Chicago, and then it goes down. New York doesn’t just have twice as many internet companies as Washington, DC; it has 10 times as many. That’s because, unless you want to work in government, cool people who graduate from college don’t move to DC.

”As an industry, all we have is human talent, and where they want to live is where we have to be.”

KEVIN RYAN’S BUSINESS INTEREST BREAKDOWN

DoubleClick
Former President and CEO

Founded in 1996 by Kevin O’Connor and Dwight Merriman (who would become a co-founder and longtime business partner in many of Ryan’s startups), DoubleClick is an internet advertising platform that was sold in 2005 for $1 billion, and ultimately bought by Google for $3 billion.

Gilt Groupe
www.gilt.com
Founder and Chairman

Launched in 2007, Gilt Groupe is the first U.S. online luxury flash sale site, providing insider access to today’s top designer labels, at up to 70 percent off retail. Estimates have put Gilt’s revenue near $600 million, with a $1 billion “Unicorn” valuation. Source: gilt.com

MongoDB
www.mongodb.com
Founder and Chairman

MongoDB, founded in 2007 as 10Gen, is a database that helps businesses harness the power of data. The world’s most sophisticated organizations, from cutting-edge startups to the largest companies, use MongoDB to create applications at a fraction of the cost of legacy databases. MongoDB is the fastest-growing database ecosystem, with more than 10 million downloads, thousands of customers, and over 1,000 technology and service partners. MongoDB is valued at $1.3 billion. Source: mongodb.com

Business Insider
www.businessinsider.com
Founder

Business Insider is a fast-growing business site with deep financial, media, tech and other industry verticals. Launched by former top-ranked Wall Street analyst Henry Blodget and DoubleClick executives Dwight Merriman and Kevin Ryan, the site is now the largest business-news site on the web and was recently acquired by German publisher Axel Springer for nearly $343 million. Source: businessinsider.com

Zola
www.zola.com
Founder and Chairman

Zola is an innovative registry, founded in 2013, that is transforming how couples and guests share, buy and ship wedding gifts. Driven by the belief that today’s engaged duos should have access to offerings that reflect their current tastes on a platform that can keep up with their daily needs, Zola is reinventing old systems and providing easy-to-build, easy-to-manage and easy-to-share online registries full of products people actually want. Source: zola.com

Kontor
www.kontor.com
Founder and Chairman

Launched in 2014, Kontor connects designers of innovative offices with forward-looking products and visionary clients. For business leaders, Kontor makes the process of finding and collaborating with architects into a simple, engaging experience. Kontor’s mission is to create inspiring workplaces and find architects whose design philosophy matches the way we all work. Source: kontor.com

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