And, apparently, they both got what they wanted.
Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
11–16 of 16 posts
Re: Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
#12Earlier quoted context omitted.
Why would you think that? They charge retail price for their shoes, but don't have retail stores. Second Day Air is a lot cheaper than buying a store in every town.
Because their EBITDA is only 40 MM on Revenue of 1 Billion.
That's a rumor now, but we'll see the real numbers with the SEC filings.
Also, I asked Tony if Zappos was profitable about 4 months ago and he said yes.
Re: Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
#13Earlier quoted context omitted.
But if Amazon is ruthlessly efficient at its infrastructure (running warehouses/shipping efficiently) then won't the result be that Zappos can continue to excel at personalized customer service, but cut costs and distractions by taking advantage of Amazon's shipping infrastructure?
I suppose that's the plan. But I think it's going to be a lot harder to pull off than they seem to realize.
Maybe sometimes self-made billionaires and centi-millionaires know what they are doing.
Re: Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
#14What surprises me most is not just that this is Sequoia, but that it's Mike Moritz, one of the most respected VCs in the biz, and not just Amazon but Jeff Bezos, probably the greatest tech CEO today. This seems terribly shortsighted from Moritz for 2 reasons: 1- Zappos could definitely have exited through an IPO later, which would probably have delivered a better return for Sequoia (a 3.5X return on one investment is…
Zappos has negative working capital? Are their inventory turns that fast?
I'd be interested in your source, if available, just out of curiosity. Getting negative WC for a retailer is pretty impressive, although credit cards certainly help. I seem to remember Amazon also having negative WC.
Re: Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
#15What surprises me most is not just that this is Sequoia, but that it's Mike Moritz, one of the most respected VCs in the biz, and not just Amazon but Jeff Bezos, probably the greatest tech CEO today. This seems terribly shortsighted from Moritz for 2 reasons: 1- Zappos could definitely have exited through an IPO later, which would probably have delivered a better return for Sequoia (a 3.5X return on one investment is…
Zappos has negative working capital? Are their inventory turns that fast? I'd be interested in your source, if available, just out of curiosity. Getting negative WC for a retailer is pretty impressive, although credit cards certainly help. I seem to remember Amazon also having negative WC.
Actually retailers by definition have negative working capital: their customers pay upfront while they pay their suppliers after 30/60/90 days. Which is why retailing is such a great business (see Wal-Mart).
Re: Zappos CEO Wanted To Stay Independent, Sequoia Wanted Liquidity
#16Earlier quoted context omitted.
I suppose that's the plan. But I think it's going to be a lot harder to pull off than they seem to realize.
Maybe sometimes self-made billionaires and centi-millionaires know what they are doing.
Yeah, great business leaders never make mistakes. Which is why 95% of computers come with OS/2 and Lotus 1-2-3, right?