Founder Stories: Chris Kaufman of StockX

If you’re a sneakerhead, then you’ve definitely heard of StockX. And if you live in and around Detroit, you’ll also know it’s one of the great entrepreneurial success stories from that city over the last decade and a half. All of which means you’ve probably also heard of Chris Kaufman, one of its founders. 

But in researching his founder story here - the first we’ve ever published on our pages, as far as we’re aware, of someone who has actually built a unicorn - he tells us the site now known globally for rare custom sneakers and streetwear didn’t start with a bunch of sneakerheads, a resale obsession… or even a clear category for that matter.

It started with a mental model.

“StockX came from an idea around applying stock market mechanics to a secondary retail market,” he told us early in our conversation, when we met in early February. “So, we were kind of basing it on this hypothesis that secondary retail works a lot like the stock market.”

The hypothesis came from the idea that bid/ask dynamics, limited supply, and high demand could all help determine whether a ‘retail’ price is actually just the opening number in a much larger market. The core work was identifying what the stock market gets right, and what sneaker resale was getting wrong when he and his cofounders created StockX in 2015.

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The stock market of sneakers, with no sneakerheads.

The focus on stock market fundamentals also informed the core tenants upon which StockX was (and remains) anchored as Chris explains it: transparency, authenticity and anonymity.

In an actual stock market, the last traded price is visible. You’re not negotiating in the dark. You’re not guessing what the last buyer paid. You don’t have to wonder whether your share of Google, Berkshire Hathaway or GM is ‘real’ or not.

And then there’s anonymity. You don’t need to know who’s on the other side for the market to function. StockX’s early product choices flowed directly from that template: not “like eBay” as he puts it, not identity-driven bargaining, nor a messy trust game between strangers that many ‘after-market marketplaces’ tend to struggle with.

When they founded StockX, they determined that users “aren't going to know who the buyers and sellers are. We are going to verify the authenticity of products and we are going to provide total price transparency,” Chris tells us. 

But the most interesting part of this ‘genesis’ story is what the team actually lacked: “We didn't know anything about sneakers.” 

Yes, you read that correctly. 

According to one of the co-founders of StockX - a business valued at its last fundraise in 2021 at $3.8 billion according to Dealroom - none of the founding team were actually sneakerheads. Well, almost none of them.

StockX was co-founded in 2015 and launched in early 2016 by Kaufman, Josh Luber and Greg Schwartz along with business titan and Detroit native Dan Gilbert, founder of Rocket mortgage and its associated businesses. His presence in the StockX story is actually more crucial than many may realize. 

Luber had created a site called Campless, a “sneakerhead data” company according to his own blog post from 2013, still visible on the StockX site. Meanwhile, Schwartz and Kaufman were building their social calendar app, UpTo. At that point, UpTo had raised $5.6m from investors, but growth was, in his words, “pretty stagnant” and the pair were entertaining an acquisition offer from Yahoo. Had they accepted that deal, it would’ve meant moving to Sunnyvale, in the Bay Area of California. 

That’s where Gilbert came in. 

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Should I stay or should I go?

Kaufman had interned early at Gilbert’s Quicken Loans, the business that became Rocket Mortgage. His telling of the story is basically Detroit entrepreneurship lore.

“Dan came to us and essentially said ‘Hey, you're Detroit guys. You've always been here. You told me you want to be a part of revitalizing the city and creating jobs and… being a part of what's happening here. How the hell are you going to do that in California?’ And we said ‘Well we're not but we're out of money. [A] Silicon Valley acquisition. It's not a bad resume builder.’” 

Gilbert convinced them to stay.

“He basically said, ‘You guys can start a new business. I'll fund it … show up… at my office next week. You can sit with me while you figure it out.’ We loved Detroit and we wanted to stay in Detroit and it was an opportunity to stay and it all worked out.”

There was a catch though. 

“We had done back-to-back startups for years and didn't have any ideas.”  The idea that began percolating was something Gilbert had floated: “what if you could apply stock market mechanics to [a] secondary retail market?” 

This idea was the genesis behind StockX, but what the team lacked at the time - just like Kaufman admitted - was a genuine sneakerhead. That’s where Luber came in. Unlike the other founders, he was the very definition. The Philly native had even talked profusely about the subject in a TED talk that now has more than half a million views on YouTube. 

As Kaufman told Entrepreneur at the end of last year, StockX “combined his [Gilbert’s] capital, the acquisition of Campless and shared resources across his portfolio.”

It was a combination that gave the team liftoff. 

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Designer, builder and a very specific kind of hustle

Kaufman says he is a “Michigander for life… metro Detroiter for life specifically.” Born in the suburbs and raised in Livonia, he’s been living in Detroit proper for the past 13 years. 

He did his undergrad in Fine Arts at Eastern Michigan University, where he continues to be involved to this day in boards, teaching and mentoring.

That internship at Quicken was as a user research intern. Which is a job he says he did for only about two weeks. “They quickly figured out that I could design stuff,” he says. “I would get done with these… calls with customers and then I would go design an interface that solves the problems that they were talking about.” 

That problem-solving instinct - design as a discipline, not decoration - is one of the threads that appears to run through his career and experiences as an entrepreneur: “Design is… a problem solving discipline,” he says.

He later did a stint at a digital agency building lead-gen landing pages at an absurd volume of around a hundred per week, and found it soul-numbing. 

But his earliest “workplace training” wasn’t actually in an office. It was on a paper route.

“I delivered the Livonia Observer… from the time I was… 10 until… 13 or 14. I think every kid should have a paper route.” Although neither of us can determine - through laughter about how much times have changed - whether paper routes even still exist.

He describes the process as discipline-by-design: assembling the papers after school, delivering by 5pm, and learning quickly that your customers know who you are and where you live, and you them. He was barely a teenager and was managing sales - having to pitch price rises -  as well as logistics and distribution. “You had to… knock on every single person's door and collect the money… it was $3 a house,” he says. “You would get people that would hide from you and you'd see the curtains move… it was… an interesting way to learn a lot about human behavior at 10 years old.”

These learnings helped further when he was around 14 or 15, with what he describes as one of the first things he did that was ‘entrepreneurial’ when he realized he had a rare skill that was quite useful in a large high school: Photoshop.

“In a high school of 2,000 people, I was the only kid who was good at Photoshop. I was not a kid who drank or went to parties … but I was skilled enough to make fake IDs. The kids who did [drink]… would pay me 50 bucks a pop to make them,” he says, describing the printer and paper he purchased alongside the refurbished industrial laminator, sitting on a bookshelf in his bedroom. 

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Why Detroit is ‘big enough’

Kaufman’s argument about why Detroit is a great place to live, work and build companies isn’t just about grit. It’s cultural, structural, and personal.

He points to the city’s “long history of hard work… roll your sleeves up, get s**t done attitude,” and the reality that for many Detroit families, auto work wasn’t abstract — it was what put food on the table. 

“My dad, my uncle, my grandpa… all worked in prototype engineering and manufacturing at Ford,” he says. He talks about “the virtue in labor,” about being “hungry to do something,” and then he lands a line that feels like it might as well be on a billboard: “Detroit is big enough to matter in the world, but … small enough that people matter in it.” He implies this is part of the reason why he stayed, and why others came. Because one of the outcomes of the success of StockX that he seems happiest with, is that people who had never even been to Detroit moved for the job… and stayed.

“They've stayed here… they've met significant others… started families… bought homes… and many of them will probably spend the rest of their lives in the Detroit area: because of this little sneaker startup.” 

Leaving Detroit, as may have happened if the Yahoo acquisition of UpTo had gone through “didn't feel like an opportunity. It… was something that I didn't want to do. I mean none of us… wanted to leave. Detroit is home.” 

He believes the much-maligned city “is a place where… you can make an impact. You can actually move things here… in companies, in culture, in people, in neighborhoods.” 

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Empathy as a discipline

Kaufman stepped away from the day-to-day at StockX at the end of 2023. But his thinking on leadership didn’t stop when he did. Having built a strong idea of how to build companies that last across his own experiences in research, design, management, and startups, he even went back to school and completed a Masters at Northwestern and with all that knowledge he’s written a book on the subject of what happens to people when leaders make decisions. “Empathy at Work: Building Better Businesses Through People-First Leadership” was released in November last year.

“It really came from a… culmination of my experiences,” he says. “I've always paid attention to the people side of business and how… decisions impact people… how decisions are communicated impact people.” He says that “Empathy… is a discipline… it is what you do… It's not just a feeling. It's not just a vibe.” 

That belief is what led him to formalize the lessons into a guide for other leaders:

“these are the things that I've learned, these are the things that I've done wrong, the things I've done right… realistic ways that you can implement some of these practices.”

He describes a pattern he only saw clearly over time:

“If you create trust in a psychologically safe workplace, it's going to make people feel safe to take risks… which means they're probably going to engage in more creative problem solving… which in turn improves long-term performance.” 

Which might just help explain how this “little sneaker company” pulled people to Detroit and, in many cases, kept them there.

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