Magnises Wants to Create Your Social Network — Offline

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To solve the problem, Zumwalt joined a club. But the club, called Magnises, isn’t what the term usually brings to mind. The company is bringing the benefits of an online social network — immediacy, convenience, interactivity — into the real world, building a digital and physical layer over the city accessible only to its paying members. It’s a strategy that community-focused businesses like Soho House, WeWork’s newly launched residential WeLive branch, and Cliq, a social app crossed with an urban events guide, are also using to monetize millennial isolation. Even the Los Angeles-based PodShare, a terrifying live-work human beehive, describes itself as "a social network with a physical address."

Call these companies lifestyle startups. Playing off our IRL insecurities and the need for constant, on-demand social stimuli created by the likes of Facebook, lifestyle startups are working to occupy every facet of our lives, not just on the screen, but at home and out on the town. Socializing is just the beginning. "In a perfect world we want every one of your major life connections and milestones to happen through Magnises," says Billy McFarland, the company’s 24-year-old co-founder.

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Magnises originally launched in August 2013 as a members-only bank card designed to look like the exclusive American Express Black Card, though the company only copies the information on a pre-existing card. The offerings quickly expanded, adding benefits like VIP club access, an app-based virtual assistant, hotel discounts, and secret restaurant menus in hidden dining rooms, as well as private member spaces. "We built Magnises as a platform to integrate all these young people into the city they live in," says McFarland, who dropped out of Bucknell University to become an entrepreneur, first founding the ad company Spling. Magnises’s made-up name "represents the idea of leveling up your life."

The benefits of Magnises are tangible, if less aspirational than McFarland describes. "The entire membership is $250; I’ve gone to a hockey game and had front row seats and had an open bar. That pays for itself," says 26-year-old Kaine Cahill, who works in creative marketing. Cahill goes to Magnises events once every few weeks. "It gives you an excuse kind of to get dressed up and go out and do something fun and new," she says. Alexis Zumwalt appreciates the virtual-assistant "concierge" service, and once used it to book a restaurant for clients while in a meeting.

Members must apply for the opportunity to pay Magnises’s $250 annual fee. They are selected to create a mix between genders and industries, McFarland says. Membership is in demand. The company recently hit 12,000 customers in New York and Washington, D.C., its two current locations, and plans to launch imminently in Chicago, Boston, and Los Angeles, though similar plans were publicized in 2015, according to The Awl. It has taken on $4 million in investment and expects $5 million in revenue this year. "We’ve been cash-flow positive," McFarland says.

"The best value I had in it was really the community, the people in there," says Greg Willybiro, a New York-based French entrepreneur who founded Public Factory, which he describes as "a WeWork for fashion." He uses Magnises to connect and collaborate with artists and designers who are also members. "Anything that’s exclusive in New York is 90 percent finance bros," Willybiro continues. "With Magnises, they get a good mix."

The company wants to be your cool friend who can always inform you about the latest hip spots, recommend activities, and make any introduction, whether it’s to an industry colleague or the former head of Ogilvy, who happens to be an investor. Magnises provides what CEOs might call a turnkey solution — functional software for your social and professional life.

Yet Magnises’s core moneymaker isn’t its member fees. Rather, the majority of revenue comes from providing a convenient interface between millennials and big brands, according to Grant Margolin, a former classical double-bassist and the company’s vice-president of brand development. Companies like Tesla, Ilegal Mezcal, and Johnny Walker have paid handsomely to host branded events for this curated group of young consumers, who aren’t necessarily aware they are being advertised to.

"It’s a whole new way of doing marketing," Margolin says. "Facebook and Instagram are so over-saturated" by advertising. The exclusive social club provides a veneer of authenticity for the paid-for product placement. "We’re not going to push brands that the members aren’t predisposed to," Margolin continues. "Members really trust us, so the feedback loop is pretty self-fulfilling." The formula is as simple as it is cynical. We build our lifestyles from brands, so why not join the two?

That Magnises double-dips on its members, collecting revenue from both sides, doesn’t appeal to everyone. "I didn't appreciate having to pay for a metal card and membership that acted exclusive, but everything I was invited to cost money," says Marc S., a New York City sales director who joined in 2015 (he declined to give his full name, citing business concerns). A 2014 review of Magnises on Wall Street Oasis described the clientele as "borderline upper-class white guys whose parents are without a doubt paying their rent on the UES." A letter sent to BroBible derides the company but cites the joys of the clubhouse bathroom.

There are some clear bugs to work out as the lifestyle business model is refined. In its early days, Magnises rented a townhouse in the West Village for members. It then moved to the penthouse of the Hotel on Rivington, but now collaborate with spaces like the Mad Men-chic midtown restaurant Wayfarer and the Jue Lan Club, where the Limelight nightclub once stood, rather than run its own. In June of last year, it emerged that the West Village landlord was suing McFarland for damages to the luxury pad, which the company was renting for $13,000 a month, caused by Magnises parties. "It’s all been settled," the founder says. "We realized we’re not a hospitality company."

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Facebook, Instagram, and Twitter give their social benefits away for free in order to attract users to sell to advertisers. Lifestyle startups require more from their members, even if they are still being sold. Whether or not it’s worth joining depends on how much you like the pre-packaged lifestyle the company offers, if you find yourself identifying as a WeWork drone or a Magnises aspirant, the same way you might read Kinfolk.

One Saturday evening I attended Magnises’s second anniversary party, at the club Space Ibiza New York on the Midtown waterfront. The sunken dance floor was packed with thousands of members in gingham shirts and miniskirts. Budweiser, the event’s sponsor, flowed freely. One gentleman vaped while he danced on a raised platform. Ja Rule, "a good friend of the brand," Margolin says, perched in a corner of the VIP lounge, surrounded by a pungent penumbra of weed smoke.

The scene didn’t look like any Internet-facilitated gathering I’ve ever seen. But it resembled a kind of millennial Sex and the City that was freely available for purchase, a vision of what life in New York City might be like before you learn to ignore celebrities and hang out in Brooklyn. Soon, in Magnises’s grand vision, this party will repeat itself all over the world as its community grows. "When you’re in Dallas, when you’re in Austin, when you’re in London, when you’re in Abu Dhabi, you’re able to go to one of our partner venues and say, ‘Hey I’m a Magnises member,’" Margolin says. "If we had a million members, it’s a million more people you could meet."