This story was originally published Oct. 13, 2008.
BOSTON — When Greg Selkoe was in grammar school, he would often drop to the ground and break dance for money here in his hometown. About 15 years later, Selkoe used that same gift of gumption to buttonhole potential investors for his urban streetwear website, Karmaloop.
Once, in a local boutique in 2001, Selkoe overheard a man telling the owner about his oil and gas investments. Selkoe asked him if he'd consider other types of investments. The man, real estate broker Frank Celeste, gave him his cellphone number.
Selkoe, 33, called Celeste before he got to his car and set up a meeting for the next day. After lunch, the two visited Karmaloop's offices, where Celeste found about 20 people "all pierced and tattooed" working in a run-down old piano factory that reminded him of a wind tunnel. Wires hung from the ceiling, samples filled the bathrooms and people were working on laptops on the building ledge.
Still, Celeste "got caught up in the euphoria" and became an investor. About five years later, it paid off.
Selkoe's website will sell close to $40 million worth of cutting-edge clothing this year. He sells everything from eye-catching $20 T-shirts to $200 sneakers and $300 dresses that are popular with hip-hop artists, electro and rock musicians and their fans.
Karmaloop.com, which includes videos, contests and blogs, gets 2.5 million unique visitors a month. It's ranked No. 359 on trade magazine Internet Retailer's 2008 Top 500 Guide, far ahead of more established retailers' sites, including Timberland and Fye. Karmaloop's online sales grew 143% from 2006 to 2007, more than six times the growth of online retail. During the economic uncertainty of the past few weeks, Karmaloop's sales were still up 100% over the same weeks in 2007.
"Karmaloop may be an example of what it will take to be a successful retailer in the future," says Kurt Peters, Internet Retailer editor in chief. Selkoe, who worked in urban planning while attending Harvard's Kennedy School of Government in the late 1990s, has spent years listening to both his customers and mentors, including late former Filene's Basement CEO and Gap president Sam Gerson and former Marshalls CEO Frank Estey.
In his first meeting with Gerson, the father-in-law of a friend, Selkoe recalls him saying, "Kid, you're going to have your (expletive) head handed to you." He also told Selkoe he liked his attitude and agreed to meet weekly to give him advice.
Something the more established retail executives couldn't have taught Selkoe was how to cater to and communicate with the often-fickle 18- to 35-year-olds who make up his audience. That, Selkoe learned, required him to be in constant contact with customers on the phone, his site and at events. "That keeps us pretty close to the street," says Selkoe. "We want them to feel like part of the Karmaloop family. That way it's not like we're dictating what we think kids think is cool."
All that advice didn't pay off right away. Until he turned a profit in 2006, Selkoe asked investors, friends and family for loans at least eight times to cover his payroll. Childhood friend Marc Daniels, who launched a snowboard fashion line recently, says Selkoe "never accepts no for an answer."
"He'd be like, 'Can I borrow $30,000 or $50,000?' " says Daniels. "The second time, OK, but by the third time, I'm like, 'Again?' "