Mack reported that 15% of home decor will be sold online by 2015. Sales would be derived mainly from women customers who are much more social (read: viral) users than men.

One Kings Lane (OKL) started out in 2009 and now boasts 2M members. Their business encompasses both Silicon Valley AND Silicon Alley. The company also reports that 75% of their sales come from repeat shoppers.

So why all the growth for private sale sites? Mack explained 4 factors, or what he called “pillars”.

1) Cultivating a Daily Habit and some Serendipity vs. Occasional Hunting behavior
I admit that I don’t perceive OKL’s daily morning emails as junk. Instead, I want to see what goods they have curated and consider to be tasteful. I WANT exposure to beautiful things.

2) Curated Selection vs. Massive Breadth
Mack talked about the paradox of choice. Too many and we fall apart. Curated goods get more screen real estate and are celebrated more. Apart from that, I think it’s the bread and butter of these experts to know what is good; I expect them to deliver on their years of experience. Trust and reputation in the curator is critical here.

3) Urgency and Fun vs. Pure Convenience
I don’t know if I would be into this personally, but I can see how the game mechanics here can be exciting for many avid shoppers. You know there is a limited quantity of the item; you also see items selling out; you want to be the one to snag it over the others. Follow up thought: wouldn’t it be great if some of OKL’s customers chose to be public, and customers could actually SEE who got what items and have a discussion around it? Would probably add a lot of drama to the shopping experience and not all positive, but hey, those who don’t need it don’t need to go public.

4) Social Commerce vs. Shopping Alone
Everything became “social” as soon as customers started posting ratings and reviews about their purchases. “It’s a Darwinian world we’re living in,” Mack said in a kind of reverential but happy tone, referring to how the great companies will succeed faster and the not-so-great will tank faster.

From a business operations perspective, what’s so special about a private sale site? Mack shared with us having to undo all of his previous learnings on how an ecommerce site works:

• OKL has unique merchandise 365 days a year so there is no such thing as keeping inventory.
• Nor is there a real supply chain. Mack called it “transient supply” and described it as “complex”. OKL’s 3rd party logistics providers and FedEx need to work together to get the product from supplier to customer. I imagine the purchased supplies getting shipped in bulk to a distribution center somewhere in the states and then going out via FedEx. I am also imagining a lot of customer with VERY high expectations surrounding the delivery of these unique goods.
• Off-the-shelf/standard tech solutions will break. Everything has to be custom developed.
• Customers are dying to hear from OKL. Mack previewed some customer emails demanding to be put back on the mailing list.
• Suppliers win. Gives them exposure, brings new sales to their own sites, and gives them access to the coveted retail distribution channels.

Where is the private sale industry going?

I couldn’t say it was all that clear or obvious to me, but Mack believed that only the first movers could win at this point, that there would be leveraging of big data, and that segment leaders would start moving into new verticals, new geographical markets and adopt new business models.

The Takeaways:

1. Choose your attitude.
There is always a choice about the way you do your work, even if there is not a choice about the work itself. You create your day. Are you being world famous?

2. Know how to play!
Business is serious, but there’s no need to be uptight. Let things flow. Be a bunch of adult kids having a good time. Having fun in a respectful way means creating more energy. (Some Silicon Valley companies take this literally!)

3. Make their day.
Engage your stakeholders, welcome them into the fun.

4. Be Present.
At work and with each other.

2. Even wearing sneakers, my feet were tired and sore from a day of walking. Spare yourself, don’t even think of wearing heels or formal shoes.

3. Besides the general “word-on-the-street”, Twitter and Facebook were key for being in-the-know on the location of show and social events.

4. It’s great to be a blogger at CES. The CES Blogger’s Lounge provided breakfast, lunch, refreshments, wi-fi access and even nice shoulder bags for bloggers.

5. Driving through Death Valley at sunrise is amazing.

GETTING STARTED
Keep your product simple and manageable so you can love working on it.

STAY LEAN
Keep your organization light, open, and able to wear many hats.

PRIORITIES
Focus on the vision and forget the details. Stay in the present.
Deal with future problems and issues in the future.

FEATURE SELECTION
Build half of what you want to have.
Say no to new features A LOT.

PROCESS
Brainstorm, sketch, mockup HTML screens, code.

THE ORGANIZATION
Make sure to celebrate the small victories.

STAFFING
Look for quick-learning generalists who are happy, reliable, and good writers.

INTERFACE DESIGN
Start with the interface of the core function first.
Context over consistent design.

CODE
Less code is best.
Let the programmer decide what tools to work with.

WORDS
Documents for websites are inefficient; create stories, sketches, and prototypes instead.
Give your site a personality and voice.

PRICING AND SIGNUP
Give away something for free.
Let users come and go easily and give them full access to their data.

PROMOTION
First put up a teaser and invite the mavens, then put up a promo site with a tour and highlight the monetization areas. Last, launch and communicate progress.

SUPPORT
Build a product that doesn’t require training. Do your own support and respond quickly!

POST-LAUNCH
Stay active on your site and stay aware of your competitors.

CONCLUSION
Success is about great execution so focus on your weakest links.

9. Reliability first, then skill set. Hiring the right people means valuing dependability over ability.

8. Blogging is for keeps. If you maintain a blog, keep in mind that your posts should become MORE valuable over time.

7. Have a bootstrap mentality. Keep your startup costs down. Buy all your office equipment used. There’s plenty of supply if you look on Craigslist or in Sunnyvale warehouses.

6. Know your Cost Per Customer. If you can calculate the exact cost of acquiring one customer, you’ve got a pretty good handle on your business.

5. Define, Test, Measure, Feedback. Rinse and Repeat.

4. Social issues make for media relevance. To get publicized, tie your business to a larger social issue and the media outlets will be knocking on your door.

3. Think Cash Flow ASAP. Getting to cash flow should be the number one priority for a startup. It’s also a key metric of success.

2. The market is now a conversation. Join that conversation. Yes that means nurturing your Twitter community and Facebook Fan Pages.

1. If it’s your passion, follow it. follow it, follow it.