Marc Lore’s chief technology officer at Jet.com came to him with exciting news years ago.
The company had just received a commitment from a highly-skilled programmer/engineer to join Jet.com — an e-commerce company which Lore, a serial entrepreneur, founded — at a director level.
There was only one problem. When the CTO described the employee to Lore, she sounded overqualified to join the company at that level.
“It sounds like she’s more of a VP level than a director level,” Lore said.
“Yeah, yeah, I know,” the CTO said. “But we got her at director. Isn’t that incredible?”
At Jet.com, every employee at a certain level made the same salary as part of the company’s push for transparency and effort to remove biases. A director made about $50,000 less than a vice president, and received fewer stock options.
So hiring someone at a lower level helped the company financially. The problem was, that went against one of the company’s other core values — fairness.
If this new employee was VP quality, then that would be her title.
“Call her up and promote her,” Lore told his CTO.
The woman started to tear up on the ensuing phone call.
“Not tear up because of the extra money, but because of the principle and the value of fairness,” Lore said. “That gets to people. It’s a visceral reaction. It’s not dollars and cents.”
Lore said that woman was the most loyal employee the company ever had. She would boast to everyone about the company’s culture and gave Jet.com everything she had. But while that was a positive byproduct of the company’s actions, Lore said that’s not why those types of decisions are made.
The core values Lore established at Jet.com — which was sold to Wal-Mart for $3.3 billion in 2016 — were fairness, trust and transparency. Those were what the company was going to live by and exemplify in everything it did.
“You expect there to be long-term benefits of that type of culture. But it’s not about ‘do something to get something,’ ” Lore said. “It’s about just this value is really meaningful to me, it’s meaningful to the team, it’s meaningful to the company. We’re going to live it, and then people are going to feel it and then good things are going to happen. Magical things are going to happen. That’s the way it works.”
In August, Lore and former baseball star Alex Rodriguez purchased a 20% stake in the Timberwolves and Lynx, and are in line to become the organization’s controlling stakeholders within the next two years.
From The Pit to Diapers.com to Jet.com, just about everything the 50-year-old Lore touches turns to gold. His recipe for success is simple: vision, capital and people. And while “people” may be listed last, it’s what he believes matters most.
Lore was originally a banker and risk manager. Early on in life, he had a self-described “mercenary” mindset. He had set ages by which he wanted to achieve certain amounts of cumulative wealth. Money was the mission, as is often the case in private equity.
“It’s a sport,” Lore said, “and money is your scorecard.”
But he grew tired of the culture. It wasn’t diverse. It was condescending toward women. There was no place for empathy or kindness.
So when he left the industry to start The Pit, a sports stock market of sorts and his first start up with his best friend, Vinit Bharara, the two friends knew they wanted to create a certain environment for all involved.
“We learned so much in that first venture about … the people part, the culture, about how it is when you come in every day and how do you rally folks, but also for yourself,” Bharara said. “We wanted to be an entrepreneur and build companies, and one of the reasons you want to do that is you can, yourself, now shape the culture that you live in. The majority of your working hours is going to be at work. So to be able to do that and form a company with certain values and cultural traits and bring in certain people and share those, that goes to the happiness factor of what you’re trying to do.”
Amazon bought Quidsi, the parent company of Diapers.com, for $545 million from Lore and Bharara in 2010. Lore continued to run Quidsi, and brought on Kristin Reilly to help manage employee experience and drive company culture.
“Marc was, not surprising, leading the path for this kind of role and how he thought about HR,” Reilly said.
When Lore left Quidsi to start Jet.com, he brought Reilly with him. He hammered home the idea about the company’s three values, and told her “my vision is to have the best culture and the most amazing employee experience in the world.”
“It was kind of telling in that he always sort of believed that culture and employee experience were sort of the most critical components of how people function,” Reilly said.
Lore said people are the most important component of a company. You want to hire the best people and motivate them to get the best out of them. You do that, he believes, by “building a foundation of a culture where those people want to work and thrive.”
“The best people, they’re not accepting to come and just work to make a buck. They want more than that, especially the younger generations — Gen Z and millennials — they want to be part of something bigger than themselves,” Lore said. “They want to be part of a mission they can be proud of. They want the company to live by a set of values they can be proud of. So I think it’s really important to focus in, as a company, early, and get the values straight.”
Lore is the rare analytical thinker who fully recognizes the human element.
“He’s a total unicorn. I’ve never seen someone sort of with that level of analytic skills and that ability to crunch numbers as quickly as he does. It’s mesmerizing, to be honest,” Reilly said. “But also, just to have all of that and just be incredibly caring, and he’s attentive. He really, truly listens to people. He wants to help, he wants to make a difference, and he wants to learn and understand all different kinds of people.”
Lore loved sports growing up. He watched and played whatever he could. One summer, Lore and a group of friends became consumed by the Strat-O-Matic baseball board game.
“I mean, it might be like 90 straight days, like 10 hours,” he said. “That kind of craziness. It was insane.”
Lore always had a dream of being a professional athlete. He ran track and field for Bucknell and even made the national bobsled team, which he trained for by pushing cars around a parking lot after work before eventually deciding he couldn’t make the time commitment to the sport.
Lore realized he didn’t have the size or skills to play professionally in the major sports.
“My brain immediately went to, ‘That’s OK. One day, I’m going to own a team,’ ” Lore said.
And sure enough …
Lore said he’s “going all in” on how to apply start-up principles to basketball teams. He’s looking at ways to apply technology, such as bringing augmented reality to the in-arena experience. He even has considered the Moneyball-type approach from baseball, “which I was fascinated by,” and pondered if there might be an equivalent to basketball.
“Which I know teams are trying it, but there definitely seems to be opportunities for this kind of like arbitrage,” Lore said. “Just learning, talking and thinking about things has been super fun. I’m really looking forward to learning more and more.”
But how do the ideas of missions and values apply to sports?
“Marc believes that if you have a strong mission and a strong set of values, that those can be applied to anything you do,” Reilly said. “Sports is that area that’s already so exciting and so inspiring that the thrill of competition and of winning and of teamwork, all of those things are so important that if you have a strong set of core values and you believe in an ambition, I think it could actually be a game-changer for bringing a team together.”
While still early in the thought process, Lore said the organization’s values and mission might be even more important as an NBA and WNBA owner than it is for a business. He pointed to the concept of max contracts, and noted that if one team can’t pay any more than another, then perhaps a team’s values could be a differentiator.
“I think if the culture of the organization and the team were to a level where people said, ‘You know what? I really want to be a part of that. It’s bigger than dollars and cents, bigger than basketball. It’s winning, not only on the court but off the court. I want to be a part of that organization,’ ” Lore said. “There is going to be free-agents where, if it’s done correctly, would choose to go there based on that set of values.”
That may sound far-fetched, but Minnesota sports fans already have a recent example of how a team can be elevated by acquiring higher-level talent thanks to a value-driven culture. It’s the exact approach P.J. Fleck has taken successfully with the Gophers’ football program.
The similarities between Fleck and Lore don’t stop there. Both have a love for acronyms. Along with VCP, Lore relies on SPOTAKE in his hiring process — identifying people who are smart, passionate, optimistic, tenacious, adaptable, kind and empathetic.
Fleck managed to turn many local skeptics into believers through actions and results. Lore has always been one to back up his words.
Lynx coach and general manager Cheryl Reeve said Lore and Rodriguez “sort of confessed to not really knowing much about our league” upon initially joining the organization’s fold. But Lore, she noted, is a “very, very quick study.”
“We’ve been able to have some really interesting conversations around the WNBA, and I think he’s going to be an owner that helps us,” she said.
Lore recently messaged Reeve asking her “why on earth are the WNBA salaries so low?”
“I had to blink and rub my eyes and read it again,” Reeve said.
That led to a phone call during which Reeve explained that the WNBA has long been a league with a balance-sheet approach. Revenue and expenses need to match. That’s far different than how men’s sports are operated, Reeve noted, and it’s not the way to grow a league.
“I didn’t have to tell Marc that. Marc knew that,” Reeve said. “Marc said, ‘This is an investment. You have to think about what it’s going to be 20 years from now.’ It’s so refreshing, and it’ll be a departure that is much, much needed.”
A small form of investment came this week. On Thursday, Reeve encouraged her Twitter followers to subscribe to The Next, a women’s basketball media outlet. Within an hour, Lore sent a reply tweet, saying the next five people to comment would get a subscription to the site on him. He supplied 12 subscriptions.
And that’s just the start.
Reeve also has discussed the Timberwolves’ side of the organization with Lore and is “encouraged and enthused” about that, as well.
“Interesting guy and very, very talented in an array of things,” Reeve said.
And, perhaps most of all, bold.
Lore and Bharara’s plan for starting Diapers.com was to purchase mass quantities of diapers from big box stores and sell them online, at cost. So, after shipping, they lost money, and continued to do so for a long time.
The plan, which they eventually executed, was to get parents to the site with the diapers, then also offer a convenient user experience where parents could purchase other baby items that featured higher profit margins. It worked, but there was certainly inherent risk involved at the outset.
Early in his professional career, Lore put together a certification exam, essentially out of thin air, for financial risk managers. It’s still being widely used today around the world.
Lore is currently working on a new, long-term project — to create an entire city from scratch. The name: Telosa, derived from Telos, a term used by Aristotle meaning “the highest purpose.” The mission of Telosa, Lore said in a video released this week “is to create a more equitable and sustainable future.”
That’s the city’s “North Star.” The values are to be the most open, inclusive and fair community.
An article in Bloomberg Businessweek dove into the details of that project, and also pointed out the lack of success similar endeavors have had in the past. In the story, even Lore admitted Telosa could have maybe a 20 percent probability of being successful.
But, he noted in the story, it’s worth the risk.
“It’s not logical to not take a shot at doing something with a 20 percent chance of changing the world,” Lore said in the story. “But people don’t do it. That’s the city. The size of the prize is to change the world.”
Lore and Co. are in the process of determining the vision and values of the Timberwolves and Lynx. Jessica Agarwal — who was instrumental in establishing the core values at Jet.com and also worked with Lore at Wal-Mart — is currently conducting interviews with those in and around the organization to flush out what’s important to people based on who the Timberwolves and Lynx are and where they’re located.
“What do people get really excited about?” Lore asked. “What do we think we can live like no other team in the league?”
The vision statement — a paragraph Lore said can take 100 hours to write — will be written and the values will be determined. When they are, the teams will abide by them in “pretty extreme” ways. Values, Lore has explained, live above profits and are not deviated from regardless of the situation.
For instance, if one value was transparency — Lore simply used this as an example — “it means we’re going to be the most transparent team.”
With everyone from analysts to players to fans.
“Does that mean you’re going to talk to a player (on your team) before a trade to see and get their opinion and talk to them about it? Every other team would say, ‘Hell no, you don’t talk to the player before the trade. You talk to them after the trade gets announced,’ ” Lore said. “No, no, we’re transparent. We’re going to talk to the player before.”
If a value was to be “player-centric,” it could mean making decisions that are costly on the spreadsheet.
“You have to really believe in the value,” Lore said. “You believe in it to such a point that you’re willing to take financial risks and suffer financial hardship as a result of living it.”
If you say “that’s crazy,” Lore’s response would be, “Thank you.”
New owner Marc Lore brings bold ideas and strong commitment to values to Timberwolves, Lynx – West Central Tribune
Marc Lore’s chief technology officer at Jet.com came to him with exciting news years ago.