Greg Selkoe’s Bad Karma

Before their company filed for bankruptcy, Greg Selkoe and his wife, Dina, built Karmaloop into an e-commerce powerhouse. (Photograph by Boston Globe/getty images)

Like many well-heeled kids drawn to alternative culture, Selkoe never quite fit in at home. He grew up on a leafy street in Jamaica Plain with loving parents who wanted the best for their only son. His father, Dennis, a world-renowned Alzheimer’s researcher, has a lab named after him at Harvard. His mother, Polly, was a Brookline city planner. It was a lot for anyone to live up to, especially someone who struggled— as Selkoe did—with ADHD.

Distracted and often truant, Selkoe was kicked out of the elite Park School and bounced between public and private institutions. He finally graduated from a third-tier boarding school in Winchendon, just south of the New Hampshire border. Selkoe went on to earn his BA from Florida’s Rollins College, a school with a reputation at the time for attracting freewheeling playboys, and returned to Boston in 1996. He married a Harvard Law student named Dina and pursued a degree at Harvard’s Kennedy School of Government. Around the same time, he took a desk job at the Boston Redevelopment Authority, trying to maintain a balance between partying and the daily grind.

On weekends, Selkoe still donned the clothing of his youth: the discontinued Puma suedes and indie-brand T-shirts screened with brazen statements and co-opted corporate logos he’d find at the ’90s Boston club-wear boutique Allston Beat. But all the while, something nagged him: What about the other Selkoes of the world stuck in Indiana or Kansas? No doubt they too hankered to get the gear their heroes wore in videos and magazines. Who would bring streetwear to America’s landlocked?

By 1999, Selkoe saw an opportunity: He would become the apostle of streetwear. Online, he could bring the clothing he loved to kids from Boston to Boise who hungered for that fresh urban look you couldn’t pick up at the local mall. Selkoe called his company Karmaloop and set out to prove not only that an online-only company could exist, but also that the alphas could run it in their own image. He would ensure authenticity by speaking directly to the demographic, because he was the demographic. Selkoe took out a sizable loan from his parents, maxed out his credit cards, and started Karmaloop in his family’s basement.

The initial premise was simple: Selkoe would contact the vendors in New York and L.A., get the clothes on consignment, consolidate them in a warehouse, sell the goods online, and then pay the vendor and take a cut. Unfortunately, the first dot-com bubble was bursting at the same time. After an initial explosion of commercial growth online fueled by wildly speculative overvaluations, the market was undergoing a huge correction. Some startups, such as Pets.com, went belly up; Amazon, meanwhile, saw its stock price go from $107 to $7 a share. In that climate, most streetwear vendors were wary of handing clothes over on consignment. Lots of doors slammed in Selkoe’s face. All of that would change in 2001, however, when he met a punk rocker named Jon Regan.

Regan was a fast-talking hipster with a pronounced Boston accent who had worked for a local skate-wear company in the early ’90s. His job was to drive carloads of silkscreened T-shirts down to New York’s East Village and sell them to underground boutiques. He later moved to New York to work for a record label, promote bands, and market large independent clothing labels such as Triple Five Soul and Freshjive. In those pre-Internet days, marketing independent brands meant pounding the pavement. Regan, who had been booking punk and hardcore concerts since he was 17, built a street team of guerilla marketers—kids like him who loved the same bands and brands, and had a knack for connecting the two. “I could sell a flaming bag of shit to a fireman,” Regan says.

Regan met Selkoe through a mutual friend, and the two bonded instantly. To maximize Karmaloop’s customer base, Regan steered the company away from rave gear and toward the broader skate, punk, and indie market. Selkoe had a feel for subcultures; “he just wasn’t connected yet,” Regan says. “I was the connections.” Regan knew the people behind the most influential indie brands and the artists who led youth culture, and together they decided to try taking Regan’s street-team marketing online.

Under Regan’s direction, customers were encouraged to apply to Karmaloop’s “rep program” by submitting photos of themselves and filling out a questionnaire asking about their favorite DJs and bands. Regan vetted the applicants using his own idiosyncratic algorithm. Candidates who passed his coolness test got a few hundred business cards with a unique code offering discounts on merchandise. When friends used the code, the reps would earn a commission—at first in cash, later in Karmaloop discounts. The model wasn’t all that far removed from Tupperware or Avon, but it was a powerful tool for getting kids invested in the brand.

In many ways, Regan was ahead of his time. It would be nearly a decade before bestselling author and business guru Seth Godin came to the same conclusion: that there are “tribes” of customers or investors in the Internet age “just waiting for you to connect them to one another and lead them where they want to go.” Regan and Selkoe understood this instinctively and were quickly building the hottest table at the high school cafeteria. All anyone needed to get a seat was an Internet connection, a credit card, and Karmaloop.

With the rep program in place, Selkoe and Regan hit the road. It wasn’t easy: The e-commerce sector was still a tough sell. During one early meeting with Triple Five Soul, in Brooklyn—with a view of the original twin towers—Selkoe presented a PowerPoint with his vision for the future: “Here’s the Internet…this is where it’s going to come. Everyone’s going to be shopping online.” He was met with blank stares. “They were like, ‘No one’s going to shop online,’” he says.

So instead Selkoe sold them on the idea that getting onto Karmaloop’s site was also a form of marketing. His company wasn’t just posting hundreds of sneaker pictures online like his competitors. Every Karmaloop product shoot became an opportunity to define cool and sway tastemakers. The company used models of all races and kids with tattoos and piercings. They wore the clothes a certain way; they were buff and struck fuck you poses. Maybe they were demonstrably cooler than you, but at least they would let you buy their pants. “Instead of paying for ads, put your product on [Karmaloop],” Selkoe told his potential vendors, “and we’ll promote it, and you can make money.”

Karmaloop’s goal “was to be effortlessly cool,” Regan says. “We just wanted to be ourselves. We were a bunch of goofballs, lots of yelling, and music wicked loud.” They were having a ball capitalizing on the fact that teenagers in Ohio wanted to be cool, too.