How Knot to Succeed in Business -Interview with Carley Roney and David Liu of The Knot.com

When Carley Roney and David Liu were newlyweds in 1996, the two new media professionals were quite unimpressed with the wedding industry. All of the media was geared toward mothers of the bride and traditional weddings.

There were no resources that applied to Roney, a woman with a modern aesthetic, a child of divorced parents, entering into a multicultural marriage. All the puff and fluff highlighted in the media did not appeal to Roney, who wore a short dress instead of a wedding gown. Turns out, Roney and Liu weren’t the only ones frustrated by the lack of resources for modern couples.

The couple saw there was an opportunity to have an attitude and a sense of humor about weddings. In addition to taking a fresh approach to the content, Liu and Roney were using an emerging platform—the Internet. Back in 1996, most Internet users were male, and online advertising model did not exist yet. However, culture caught up with Roney and Liu’s vision for a modern media company. Through innovation, Liu and Roney were able to grow their business and expand it to include two additional brands—The Nest, geared toward newlyweds, and The Bump, media for expecting parents.

Today, The Knot, Inc. has four major sources of revenue: online sponsorship and advertising, registry services, merchandise, and publishing. The company is publicly listed on NASDAQ and provides online and offline services through various media, such as magazines, books, syndication, television, websites, and social media. Since 2009, the company has launched four iPhone apps: Wedding 911 by The Knot, Pregnancy 411 by The Bump, Baby 411 by The Bump, and Wedding Dress Look Book by The Knot. They also launched GiftRegistry360.com (a one-stop website where brides can register at several retailers) and WeddingChannel.com Reviews (a community-driven review site).

Both Roney and Lui attribute their business’s growth and survival in an economy that has been devastating to the media business to the fact they maintained the bootstrapping mentality that was necessary when they started The Knot with few resources.

Recently, NY Report executive editor Daria Meoli spoke with Liu and Roney about modernizing a tired industry, hiring based on potential, not resumes, and the impossibility of work/life balance for a couple in business together.

Daria Meoli: Why did you and David decide to start a business together?

Carley Roney: David and I started anothercompany right out of college that did production work for hire. We would build CD-ROMs or the first iterations of websites, and we always thought it would be better to own our own company. When you do work for other people, you never know if they’re going to market the product well or if they’re going to do what they need to do to be successful. We wanted to own our own product, market it, and grow it from start to finish, rather than just being on the production end of things. So, we got together with two partners (Rob Fassino and Michael Wolfson).

One was from an ad agency and the other was just sort of a connector—a guy who knew people and had ideas. He’s the one who knew people at AOL who had a venture fund and were looking for a good idea to invest in. The funny thing was that the partner who suggested a wedding website was the bachelor of the group. David and I, who had just gotten married, said, “Oh, God no, not weddings. The industry is so tired. It’s so not sexy and it’s totally disaggregated.” As we were talking, we realized that these were all the reasons that it would make a good business. We realized this industry could use a makeover and we were the people to do it. We went to AOL with the idea and they said that, not only was there a lot of money in the wedding industry, but it seemed like there was a real opportunity online, since it was going to be a young people’s medium and it was mostly young people who were getting married. They gave us $1.7 million and said, “Go.” They basically didn’t look at us again and we just had to make it all happen on our own.

This was long before the Internet boom, and that was not a lot of money to start a business. Two years later, people were getting $10 million investments for the same level of idea. But what was great about starting out with so little money was that it taught us how to be very conservative about how we grew the business. We were not one of those the high-flying, ergo-chair, big cocktail-party companies. We were just a bunch of really hard working people in a little loft in Chinatown. I think it really set us up to have a strong, guiding DNA for cost effectively building a business and being more creative. Instead of relying on spending money, we relied on doing things that were inventive.

DM: Essentially, you were establishing an inexpensive Internet start-up that was quick to scale before that was the popular thing to do.