Basic.Space is Replacing Influencer Marketing With an Influencer Marketplace

Influencer marketing is nothing new. Influencer marketplaces, however, could be the future of ecommerce, particularly for Millennials and Gen Z. Basic.Space, launched in 2018, is betting big on this idea, writing the playbook as it goes along.

Serial entrepreneur Jesse Lee has been called a lot of things. Bloomberg called him “LA’s new hype king.” Grazia referred to him as a “marketing guru.” MoneyWeek led their profile on him with: “DFM founder Jesse Lee has mastered the art of getting Millennials to spend their cash.”

Regardless of the accolades and respect he’s earned from peers and competitors alike, Lee remains both humble and an open book, a rare combination for someone that’s been at the forefront of Millennial marketing for over a decade.

Lee first made a name for himself in 2008 when he founded the marketing agency Dub Frequency Media, better known as DFM, in Downtown Los Angeles. Over the years, the agency has done campaigns for Millennial-favorites such as Impossible Foods, Uber, and Sweetgreen, and hosted parties attended by A-listers including Kanye West, Katy Perry, Justin Bieber, and Ed Sheeran.

Among his many businesses, DFM is the one that brings in the big bucks. At the same time, it’s also just one part of Lee’s business universe. There’s Westwood Westwood, a content platform spotlighting emerging artists, designers, entrepreneurs, and chefs. There’s Mirage, a glossy photography magazine dedicated to architecture, art, and design interweaved with forgotten utopias, unsung heroes, and cinematic staging.

The idea is to bring in creatives on the ground floor, showcasing their talents across Westwood Westwood and Mirage. If they blow up or a brand with cash wants to team up on a campaign, they’ll bring on DFM as a creative agency, at least in theory. The idea works consistently enough that Lee’s had the time and resources to expand the model, launching a marketplace in 2018.

Basic.Space, a marketplace that gives creators and influencers a digital storefront, is like a cross between Depop and your favorite luxury store. It blends new and pre-owned seamlessly, the same way a mix of high and low has dominated the fashion retail landscape since the early 2010s.

And while creators and influencers are at the core of Basic.Space’s proposition, what distinguishes it from a traditional influencer marketing exercising is the lack of barriers. Basic.Space doesn’t care if you have two thousand followers or two million followers. If you’re doing something interesting that fits the marketplace’s design sensibilities, whether that’s running your own brand, dominating a sport, or simply documenting your lifestyle, Basic.Space likely makes more sense than running your own shop or selling through social media.

Alongside creators with more modest followings, sellers on the platform include Naomi Osaka, Steve Aoki, Playboi Carti, and Tommy Genesis, among others. Each seller can choose what type of products to carry. In the case of tennis phenomenon Osaka, her storefront features a mask that benefits UNICEF. Aoki’s storefront features products from his personal wardrobe.

Within the Basic.Space environment, whether a product is new or pre-owned is noted in the description, but presented in such a way that the difference between the two is almost indistinguishable. This is by design, reflecting the Millennial customer journey, which doesn’t place as much emphasis between the two, blending new and pre-owned seamlessly into their life.

Like all of Lee’s businesses, Basic.Space is part of something bigger. What separates it from the others, however, is the possibilities it presents to define what an influencer marketplace looks and feels like. To learn more about where Basic.Space is heading, we spoke to Lee over Zoom. See our conversation below.

Hey Jesse, let’s start at the beginning with Basic.Space. Where did the idea for it come from?

Sure, so my first real business that’s still active is DFM and we were doing influencer marketing before it was called “influencer marketing.” We were discovering talent across music, fashion, art, and design, and then producing events or content in conjunction with these people and brands.

About five years ago we realized that influencer marketing is no different than any other paid medium. It’s like a form of sponsorship or paid-post advertising, and it just didn’t feel authentic to us. Now everybody sees it and knows that but we always felt like there was this whole segment of creatives that have great taste, amazing talent and a unique point of view, but they weren’t getting the same exposure as YouTubers or social media influencers.

So it was really a counter to that. If you just went off social follower count, a creative wouldn’t be considered as big of an influencer as a TikToker, but we would still want to give them a way to connect directly with consumers. Not only do they get the right exposure with that, but they get to sell products directly to their following. And that’s how it started.

What kind of products were sold at the start and who was selling them?

Initially it was just pre-owned because that was the easiest way to get stuff going. We started with 20 sellers and those sellers started asking if their friends can be sellers, and it snowballed into having around a hundred sellers after the first year and a half.

Around that time we started working on the idea of “experiences” because we knew we were limited with how far we could go with pre-owned. Basically, after a couple hundred items you’re going to run out, so we started thinking about how we could scale this business model.

“We’re enabling and encouraging behavior that isn’t just about buying on impulse, but rather about investing in a product.”

Before we get into scaling, I want to backtrack a bit and go back to the value proposition of Basic.Space. You’ve been marketing to Millennials for years, picking up a thing or two about their consumption habits along the way. So in your opinion, what kind of shopping experience is the Millennial consumer looking for?

Our value prop broadly speaking is buy smart, not cheap. So if you take that concept and look at our categories—fashion, design, and art—it becomes about products holding their value whether they’re new or pre-owned. Take fashion. If you buy a high-end streetwear or luxury product, you might resell it after a year of wearing it and get 50% of your money back. Or take a $4,000 Chanel bag. That’s the kind of thing you’re going to keep for 20 years.

By buying smart you’re also not contributing to pollution and we all know fast fashion is the second most polluting industry in the world. We’re enabling and encouraging behavior that isn’t just about buying on impulse, but rather about investing in a product that you’re going to wear a bunch of times and eventually put back into the market.

On the home and design side all of us are guilty of purchasing cheap furniture because it’s inexpensive and easy. But as you get older, you might start to get into mid-century modern furniture, whether it’s Vitra or Cassina or Design Within Reach where you start spending $2,000 on a chair. Again, you invest into that piece of furniture because it sits in your room for 10, 20 years and if you want you can resell it and get your half your money back.

I know “sustainability” is such a buzzword when discussing Millennials and Gen Z but it’s really just part of our DNA at this point. No one’s trying to contribute to pollution, so people are willing to spend a little more on fashion, home, and art knowing that it’s a 10, 20-year investment.

“Why should there be a flea market next to a Neiman Marcus? We have both in one environment and it’s curated by a creative or seller you trust.”

Let’s stay on that theme for a second. Basic.Space doesn’t beat you over the head with a message about sustainability. At the same time it presents new and pre-owned items in a way that’s almost indistinguishable. What’s the intention behind this and how do the brands you work with feel about this?

That’s a great question because we have some luxury brands who are a bit reluctant in the sense that if we’re selling pre-owned items of theirs through a seller and it’s from 10 years ago, and then we’re selling their new products, are they cannibalizing or competing against themselves?

Now, on the surface level that may be true short-term, but we’re trying to educate luxury brands, explaining it like, “Listen, the circular economy and resell are not going anywhere. It’s only getting bigger. So instead of fighting it, be the first to embrace it.” The more brands adapt to this, the better the customer experience is going to be.

What about on the seller and consumer side? In what ways does that kind of mix speak to their experience?

What we want is a seamless user experience where we have pre-owned and new together in the storefront. We make the distinction between the two but not overtly because we want to educate and promote a type of behavior that is the same regardless of whether a product is new or pre-owned. Why should there be a flea market next to a Neiman Marcus? We have both in one environment and it’s curated by a creative or seller you trust.

To your point, a lot of our sellers embrace pre-owned and new mixed together. We also believe that’s the future of consumption and experience from the customer side.

I imagine mixing new and pre-owned is easier said than done given the variation in quality of pre-owned products. How do you ensure buyers feel that premium sense of quality Basic.Space is all about regardless of whether or not a product is new?

It starts on the photo side. Most platforms selling pre-owned have a hodgepodge of imagery. We intended from day one to shoot and fulfill all of our products—that’s number one. Number two is: all the pre-owned items are shipped to our Culver City office. We shoot everything, we fulfill everything, because we want to make sure that not only is the viewing experience seamless, but that purchasing, customer service, and shipping are all coming from the same source.

We set all of that up in the first year and a half, and now we’re going to start selling exclusive new products from some luxury brands, and they of course want to make sure that the user experience is seamless.

Think about a company like Farfetch. They typically do drop shipments based on an affiliate marketing model. We receive all the inventory from Italy, shoot everything, and fulfill it just the way we do pre-owned. And it’s all for the precise reason of your question: because we want you to feel like everything is consistent, both in the marketing aspect of it and the actual shopping experience.

Got it. Picking up where we left off earlier, what was the idea behind experiences?

There are really two ways we do experiences. Our mutual friend Caleb Flowers is a perfect example of one way: taking IRL to URL. For those, the question is how do we take a physical pop-up and give it enough texture that it feels like you’re there and experiencing it? It’s a kind of experience that is very bespoke and creative, while presenting all the products available for sale.

The second one is someone like Love Watts, which we did with Entireworld. That’s the kind of situation where we want to have a more voyeuristic look into their day-to-day.

Between the two we have a good balance; some sellers will want to be creative and create a pop-up that we can broadcast, while others may feel more comfortable just going behind the scenes.

Staying on something you mentioned there: how does Basic.Space work with brands like Entireworld?

That’s where DFM and our relationships and histories with brands come into play. We have a history of working with brands like Entireworld or K-Swiss on the marketing side. They already know we understand the brand so instead of hiring us as an agency and then finding an outlet to sell those products, we essentially become a retail partner and a marketing partner.

With Basic.Space, we have a retail platform that reaches consumers directly, so the value proposition from the brand side is that they get to save time and money because we’re a one-stop shop. On a practical level, we essentially lead the creative as well as execute the whole project, because again we have historical context with the brand.

I literally had a call earlier about this, talking about how you can go to an agency that’s amazing for creative and comms agencies but they’re only going to help you with marketing, not the distribution. On the other side of that, if you work with an amazing retail partner, they’re going to have an audience but they don’t have the creative or the partnerships team to connect the dots on the marketing end. Because of the connection between DFM and Basic.Space we get to cross leverage both of those.

“The number one principle in anything we do as a business is discovery.”

On that note: DFM has massive clients like Victoria’s Secret and Virgin Hotels while Basic.Space mostly features creators that are not household names. Beyond the business connection, what’s the red thread between the two?

The number one principle in anything we do as a business is discovery. That’s a word we’ve used since day one. DFM actually started as a blog for music and fashion, and I actually have a print magazine background, and that world was all about finding what’s new and next.

On a personal level, I always liked the idea of supporting amazing talent because it’s not always the most talented musicians that become the most famous. So what’s really been fun with Basic.Space is that we get to still showcase individual talent.

People like Caleb Flowers and Benjamin Edgar should be as celebrated as whoever HYPEBEAST or GQ are talking about. They influence the influencers.

Personally when I think about discovery, I think about how so much of what’s introduced to me comes from algorithms. I’m thinking of platforms like Shopify and Netflix that tailor recommendations based on consumption habits. What role do algorithms or AI play within the Basic.Space environment?

That experience is going to happen through our app. On the iOS version, the first page is more personalized because of its AI base. You’ll see rotating collections in the top bar, which are editorial-driven and then the subsequent three collections you’ll see are Newest, Trending, and For You.

Under For You, it depends on what you’ve looked at, where you were on the page, what you might’ve liked, or purchased before. Trending is going to change depending on the day, what’s been looked at, or what’s been purchased; same thing with Newest of course. The whole idea is that depending on your previous searches and user behavior, all three of those sections will be personalized for you.

Another feature we’re about to roll out is a gamified onboarding system where a customer answers basic questions around sizing, color preference, preferred brands, etc in the form of a mini game. At the end you have a personalized profile, which accrues a certain amount of points.

Points?

When you accrue a certain amount of points, you become a Basic.Space Select member, which grants you free shipping for life, access to exclusive storefronts, and, eventually, exclusive experiences where only members can view and purchase.

How does that tie into the wider Basic.Space customer experience?

We’re banking on a closer, tighter, more personalized relationship with each customer. It’s our version of Amazon Prime.

The way we’re going to reward you is: imagine next year at South By Southwest or Coachella, where we do these big parties, you’re a Basic.Space Select member and you get invited to one of those events where Heron Preston or Diplo is DJing. At that point, not only do you have a personalized shopping experience, but you’re a part of our ecosystem and network that gets access to all the things that other ecommerce players just won’t be able to provide.

What other benefits do Select members get? I’d imagine as some of Basic.Space’s most loyal customers, they play a role in the growth of the company.

Right, so once you’re a Select member, you’re able to become a seller on our pre-owned portal. Most of those products live under the seller profile Selects.

As we scale our Select memberships, we can take someone’s amazing collection, put together a selection, and sell through selects for them. If that does well, then that person can become a seller too.

The whole idea is that we’re bringing in more sellers, knowing that to scale we need to have thousands at some point. We start that process by building a relationship, all the while knowing that if you have good taste and a unique point of view, we want you to be a seller. To bring it back around, part of being a member is that it’s a way for us to learn about someone as a customer, some of which might eventually become sellers.

“Instead of talking about which is better—brick-and-mortar or ecommerce—we’re saying they’re all the same.”

Awesome. One last question: what does 2021 look like for Basic.Space?

For consumers, there’s no longer any difference between shopping online and offline. Over the last 20 years we’ve seen any number of brick-and-mortar stores go out of business because they never adapted to ecommerce. Places like colette and Opening Ceremony, where we all enjoyed going for that sense of discovery and curation, are no longer in business from a retail standpoint.

At the same time we’ve seen companies doing well that started as ecommerce but never adopted the retail side. Take Farfetch again. They do a great job on the ecommerce side but it’s more of a convenience play and you don’t get that fidelity of an in-store experience.

What we’re trying to say is that instead of talking about which is better—brick-and-mortar or ecommerce—we’re saying they’re all the same. So when 2021 hits, our vision is to go back to doing pop-ups in real life, while having a seamless purchase experience. That way you don’t have to carry shopping bags when you go to our Miami pop-up during Design Week. Instead, you buy something on your phone and it ships from our fulfillment center, reaching your house by the time you’re back in town.