Lot18

» see lot18.com as it lived, on the wayback machine

~ the last words ~

Lot18 went live in October 2010 out of New York with a simple transplant: take the Gilt Groupe format, a members-only sale on a short clock, and fill it with wine. Philip James had already built Snooth, a wine information site, so he knew where the producers were. His co-founder Kevin Fortuna had run Quigo until AOL bought it, so he knew how to buy traffic. The pitch to drinkers was access to small producers you would not find on a shelf, and the pitch to producers was a channel that moved inventory fast without visibly cutting the retail price.

It worked immediately, in the way things worked in 2011. Three million dollars from FirstMark in November 2010, ten million led by NEA the following May, then thirty million led by Accel that November. Forty three million dollars of venture funding inside thirteen months, for a company that was thirteen months old, selling a product that has to be shipped in a temperature-controlled box to a signature at a residential address in a country where every state writes its own alcohol law.

By May 2012 Business Insider had it on track for more than fifty million dollars of revenue for the year, with a new iPhone app. That is the high point of the story, and it is already the year the model started coming apart underneath it.

~ the record ~

~ the early days ~

The expansion was as fast as the funding. In June 2011 the site added gourmet food to the wine, which is the standard flash-sale reflex of widening the catalog to keep the daily deal fresh. That December it bought Vinobest of Paris, founded a year earlier by Paul Guillet and Thierry Rochas, as a way into Europe, and in early 2012 it opened in Britain with a general manager who told the Evening Standard he was hoping for a million British members.

What the buildout shows is a company that believed the constraint was geography. If the model was sound, more countries meant more revenue, and Europe drinks a great deal of wine. The constraint was not geography.

~ the fall ~

The British operation shut down in July 2012, six months after opening, and the reason Lot18 gave TechCrunch was that the supermarkets' hold on the UK wine market was too strong to fight. British supermarkets discount wine as a permanent condition, so a site whose entire proposition is a temporary discount has nothing to offer. Decanter covered the other half of that summer: a third of the staff gone in what the company called a rethink of strategy.

Turkey never had a version of this to lose. The private shopping club boom absolutely happened here, Markafoni and its imitators were in everyone's inbox around 2010 with the same countdown clocks, but they were selling shoes and jackets. Wine over the internet was a different question, and in 2013 the answer became a legal one when internet alcohol sales were closed off. I watched the flash-sale era from inside it, on the clothing side, in a country where the wine version of it was never going to be allowed to exist.

~ where the traffic goes now ~

In January 2013 Lot18 bought the assets of Tasting Room, a Santa Rosa company founded by the former Apple executive Tim Bucher, whose technology filled 50 milliliter sample bottles. Four months later the flash-sale site relaunched itself as a personalized wine club under that name: taste six small bottles, rate them, and the algorithm picks the full-size ones it ships you. By July it was running the Forbes Wine Club as well. The subscription was the business from then on, and the original Lot18 was a brand the subscription happened to wear.

Tasting Room's management and fulfillment moved to Gold Medal Wine Club in 2022. The company closed in 2023 after laying off its staff. lot18.com had been redirecting to tastingroom.com since at least early 2021, turned into a GoDaddy parking page by the end of 2023, and today answers with a permanent redirect to firstleaf.com, the subscription wine company Philip James started in 2015 and still runs. The tracking parameter on that redirect reads utm_source=lot18.com, so somebody is still measuring what the dead name brings in.

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