a little more than two years ago there
were two people who had the vision for
the buying and selling of sneakers in an
open market place that looks kind of
like a stock market well somehow these
two people managed to find each other
one of them was Dan Gilbert the other is
my guest this morning Josh the CEO
of one of the most fascinating business
stories anywhere much less just Detroit
and that's docx Josh thanks very much
for coming thanks grab me have I kind of
got that right that you two managed to
maybe were the only ones who kind of got
this and managed to stumble across each
other yeah you know I had had this idea
around using stock market mechanics for
sneakers for almost two years and I
talked to everybody within the sneaker
industry Nike eBay footlocker complex
you name it everybody and nobody really
bought into it right everyone was sort
of interested in the data in the fund
but but no one was like yeah let's go do
that and then lo and behold maybe the
only other person in the whole world
that had the exact same idea at the
exact same time happens to be Dan
Gilbert and there's a long and crazy
story about how the two of us get
together but we did and we ended up
joining forces to create stock X a year
because you're not local you came from
Philadelphia so yes I'm sure the had to
be a crazy it'll make a great book one
day yeah the way that you two found each
other but if in your wildest dreams the
day that you both made your agreement
and said yes let's put this together if
I had told you that this is where you
would be today more than 400 employees
handling two million dollars worth of
merchandise a day you would have said
yeah that's crazy because here's the
thing fundamentally the idea the logic
made sense right the hypothesis that you
could buy or sell anything the same way
that the stock market works the same way
the stock market brings together buyers
and sellers well logically that make
sense why can't we do we didn't make
this up right the stock market's been
the most efficient form of commerce for
hundreds of years so all we did was
point it from these commodities to those
but the rate of growth and the scale has
been absolutely extraordinary and we've
been fortunate and we're in the middle
of dealing with the problems that come
with hyper growth but those are the best
problems to have and and so it's a lot
of fun well it's not only sneakers but
purses other streetwear all kinds of
other goods all of which have this
problem of lots of forgeries and
out on the market and one of the things
that has really started to kind of
become your stock and trade we'll get to
the software part of this in a moment is
your ability to authenticate where do
you find people that can say this is a
real air Jordan yeah that's right you
know so we physically authenticate every
single product that sold on stock X the
seller sent it to us here at our
Operations Center in Detroit we also
have operation centers in Tempe New York
and now in Europe we make sure not only
the product is real but it's what it's
supposed to be and we send it off to the
seller and when we started this we
started looking for this this job three
years ago that job didn't exist I
couldn't go on LinkedIn right so we
literally had to create it and we and we
worked with people and we've trained
people and now we go out and we acquire
fake products and we rip a little part
and we document it and there's
technology and there's apps and there's
a training program it's a mentorship
program there's a hierarchy I mean we've
literally created a whole career path
and now it's gone from one sneaker
authenticator who used to sit in the
desk next to me so we have over eighty
authenticators across all the different
verticals and there's hierarchies
there's Supervisors there's training I
mean it is it is a whole career I was
there the other day and watched the way
that they go through their paces it's a
it's pretty fascinating but what really
is separating you all is this that the
software that makes the place run where
if I'm someone who was willing to spend
$800 on this newest easy from Kanye West
and somebody's willing to sell it you
bring us together right right when we
talk about stuck X as a stock market
right it is the way the stock market
connects buyers and sellers and that's
what's what is known as it's a bit a
system right buyers are placing bids how
much they want to pay for something
Sarah's place asked how much we're going
to sell and when it didn't ask me the
transaction happens and so the price
that anyone pays for anything on stock X
there's a true market price it is not a
retail price it is not what one seller
thinks something is worth it is a true
market price where the entire market
comes together to essentially negotiate
together and say this is what a Yeezy
350 zebra size-10 should sell for in the
same way that how we get to the price of
Nike stock on the New York Stock
Exchange it's a product the entire
market bidding and asked to figure out
this is the market price so the model of
this then is people buying something at
retail and then reselling it for more
than that some would suggest that that
is what
ruined the concert industry people by
getting ahold of tickets brokers that
managed to get ahold of them and then it
makes it impossible for somebody to go
see Beyonce
yeah I'm wondering what your your
thoughts are on whether or not that's
sort of taking some of the the fun for
some people out of out of sneakers yet
there there's a that is a huge can of
worms and it is is 100% a valid question
and vowing concern that happens and not
only the sneaker industry but ticketing
and in many many industries and it's all
function of scarcity it's all function
of supply and demand that's stock X is
just supply and demand I mean this is
like econ 101 at its most basic and the
scenario that you brought up whether
it's beyoncé tickets whether it's a pair
of Yeezys fundamentally the brand's the
whoever's creating the product is
choosing to create less supply then
there is demand for that product and
when that scenario exists that product
whatever it is that widget is gonna sell
for more than what it's worth it's gonna
be worth more there's more people that
want it's gonna lead to sellouts it's
going to lead to secondary markets so
that's just because econ 101 the
question then is is how does all the
players in that ecosystem manage that
and in in ticketing when they were
allowing the brokers to go in and buy
all the tickets up at once like that's
what creates the the unfair system but
then when they change and said oh you
can only buy one ticket or time or it's
a raffle it's a lottery there's some
democratic way of distributing limited
product more then that's fine there's no
problem to that so it's really about the
the process of what happens but
otherwise like you're not gonna be you
know economics like that's just how it
works and to borrow a line from Trading
Places
the beauty of it for you is that whether
the stock wins or loses money whether
the sneakers go up or down do can do can
that in the movie stock act gets its cut
yeah yeah I don't know if I'd rather be
Randolph or Mortimer in that scenario
but a hundred percent right like our our
motto is from a business standpoint it's
very similar to like the eBay model
right we're just a consumer marketplace
so we do take a piece of that that
transaction about nine and a half
percent right right and that's for first
sneakers and street wear watches and
handbags it's slightly different but you
know where we try to just place ourself
in the same way the rest of the market
is and right now it's the night of
we've mentioned but I think that you see
that this can be a stock market of
things it doesn't it's not limited to
any that's part of it yeah a hundred
percent you know there are some things
that will never work on this system
unique works of art one of one right if
there's only one of something there's no
market for there's no liquidity sure and
things that already have infinite
liquidity toilet paper
Cheerios things that sell on Amazon that
you have this there's they will make as
many Cheerios as people want but
everything else everything in the middle
that has some finite amount of supply
and which is almost all consumer goods
well now you ask the question again
supply and demand what are people
willing to pay for it and the hypothesis
is that that this is a better way to buy
anything that sits in that supply and
demand worth lastly you announced forty
four million dollars in new infusion of
investment money so obviously there's an
awful lot of bullishness and what you're
doing you also though talked about maybe
needing to hire another thousand people
is that hyperbole or can you know
yourself hiring a thousand people in the
next year probably more we could easily
hire a thousand people today if we could
find the right people part of the
benefit of hyper growth is that there's
a lot of opportunities out there and
pretty much today our largest bottleneck
across the board in every part of the
business is just people because you can
only find me recruit hire people so
quickly and you know our engineering
team today is is right around 50
engineers I would gladly quadruple that
tomorrow right our customer service team
is about 50 people I would gladly double
that tomorrow our operation centers
sneaker authenticators everywhere else
and that's just the the core business
then we get to talk about adding other
product categories and growing and then
growing internationally we're about to
open up operation centers in Europe and
Asia so there's just there's a lot of
ways that and you know hopefully it
doesn't you don't need to grow linear
forever with the number of people but
right now we're still in that space
where there's a lot of people left that
we want you're like a lot of other
businesses now the problem is is the
talent and whether or not you can you
can feed it thanks so much for being
there fast and we look forward to
following along on one of the really the
wildest business stories we've seen in
Detroit in a long time
gosh Luber from stock ex we come back
more on the Detroit home coming expats
who are no longer expats