"It does fit into my view. Our first shareholder letter, in 1997, was entitled, “It’s all about the long term.” If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details."
"Don’t be so f-ing strategic."
Update - Rent the Runway Addresses Scaling Issue
Well it looks like Rent the Runway is actually doing more than I gave them credit for with regard to the scaling issue I was whining about a few days ago. They’ve hired a pretty heavy-hitting engineer from Google to run Engineering for them, and he seems genuinely excited to tackle the very obvious scaling problem RTR is currently undergoing. He definitely addresses that the operations side of things is really the difference between this company being a small startup forever and becoming a “billion dollar business.” Looking forward to seeing how that goes.
Oh, he was on We Are NY Tech today.
Reed Hastings is the man
“I messed up. I owe everyone an explanation.”
This is how Reed opened a monster of a blog post apologizing for and explaining the logic behind the decision to split DVD and streaming at Netflix, effectively increasing the price for the streaming-only customers. CEO’s, take note: this guy gets it. Netflix is a game-changing company (you can tell by the way the old guard treats it), and that sort of thing starts with the guy in charge.
I could launch into a full-blown analysis of the impact of this decision, what it means for Netflix, Hollywood, content creation and distribution in general, and the overall consumer internet landscape, but Bill Gurley already did that better than I ever could. Read it here.
Business Insider has a story today about Warby Parker, a clever prescription glasses e-tailer, raising money at a $100-120 million valuation. I like this company, I think it has a great solution to a problem I’ve heard about over and over (though have never experienced myself) - glasses should not cost $350+. True. But let’s be honest…this isn’t a tech company. This is a retailer. Companies like this, Rent the Runway, Birchbox, etc, are billed as “tech” companies and are raising huge rounds off that classification. But if you dig into the company itself, you’ll see it has incredibly troubling internal operations, and is bleeding money because of it. Amazon is a “tech” company because they innovate in infrastructure, logistics, fulfillment, stocking, reordering, vendor management, the list goes on…from what I’ve heard and seen, none of these innovations are happening behind-the-scenes at these startups, and in fact it’s much worse back there than at any traditional retail company, because they’re learning as they go. Now, maybe these rounds will help them poach experts from that world to help them scale those ops using software solutions, but it seems like that’s kind of a backwards approach, if all the investment is based on them being a tech company at heart.
I do love Warby Parker’s approach, particularly their design. It’s perfect for their products, and is super easy to use and enjoy. Even as a lurker I’ve had fun poking around (their monocle option is hilarious and a great touch, too). And I think Rent the Runway really has something with their model, perhaps some sort of subscription service might do them well, it seems to have been great for Birchbox and there are certainly some overlaps between the two. I just wish there was more emphasis on innovating in the not-so-sexy space of retail operations and logistics, because it’s such a necessary piece of the puzzle and would open up so many more doors to disruption. Maybe it’s already under way, but the fact that no one’s actively discussing it makes me think it’s not moving fast enough.
Trying New Services Just Because - B2Brev
I sign up for most “compelling enough” startup web services that cross my radar. If there’s a decent value prop, even if there’s plenty of haterade on Hacker News or Techcrunch about competitive advantage/too few features/too niche of a focus, I still like to see what people are doing. Something I signed up for the other day was B2Brev.com, billed as a “Yelp for B2B”, which could have some legs. Right now they’re focusing on businesses experience with daily deals sites, which is a good vertical to start in because its got so much emotional capital and people seemed pretty worked up about them. So I wrote a review of our company’s experience with Living Social…we ran a deal last February with them on their newly launched Family Edition in the Southern Connecticut Region. I’ve since learned that the list size at the time we ran was incredibly small, so our conversion rate overall was actually pretty astounding, and our overall experience wasn’t too bad either. Here’s the review:
We approached LivingSocial for a deal on our new line of children’s toys back in December ‘10. We got approval to be run in the newly launched “Family Edition” for Southern Connecticut, a regional vertical that was still building its user-base. The planning for the deal was very easy, our rep was helpful and we worked with the IT team to help plan how to handle redemptions (we redeemed the vouchers through our website)…they were super helpful as well.
As far as results go, the type of customer we got was not what I had been hearing on the blogs etc (unruly, coupon-clippers, angry, and so on), they were all great and very cordial. Some even posted reviews for us on Facebook and elsewhere. The problem was scale: it seemed the list size at the time of the deal (February ‘11) was pretty small compared to some of the national sites, so our overall sell-through was pretty small. Given the costs associated with redemption and fulfillment, plus some hiccups with shipping costs, it wasn’t quite break-even, though we did have about a 20% return customer rate, which was great (again, if the overall customer number had been higher I would have considered this a success).
All in all, I didn’t experience many of the issues most local/small businesses seem to be complaining about, though I can see how they might arise. We probably won’t be running another daily deal, but it was a nice experiment for sure.
Who knows if this site will make it, I certainly like their focus. Though the quality of the reviews seems pretty lame right now. If they can take a few more pages out of Yelp’s book from the early days, that might be good.