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Nice $40M ecommerce company – call me when it scales

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Re: Nice $40M ecommerce company – call me when it scales

#11

Post by kansface »

allochthon wrote: post #10

I'm not that much of a fan of the VC infatuation with winning on a handful of "unicorns" and "super-unicorns." Perhaps better for everyone (but the VCs) would be a healthy ecosystem of thousands of companies on the order of 10-50M dollars, and more financial support for getting to this "stage." (I use quotes because I don't think every company should aim to grow as big as Google or Facebook, or even Twitter or Github…

If this were a viable model, I'd have to assume someone would be doing it. How would a VC even go about chasing ... everything but the fat tail? How would the VCs get a return if they did figure that out? 30$ million self sustaining businesses don't pay dividends, don't raise more money (unless they want to unicorn), and don't exit.

Re: Nice $40M ecommerce company – call me when it scales

#12

Post by jfoster »

kansface wrote: post #11
allochthon wrote: post #10

I'm not that much of a fan of the VC infatuation with winning on a handful of "unicorns" and "super-unicorns." Perhaps better for everyone (but the VCs) would be a healthy ecosystem of thousands of companies on the order of 10-50M dollars, and more financial support for getting to this "stage." (I use quotes because I don't think every company should aim to grow as big as Google or Facebook, or even Twitter or Github…

If this were a viable model, I'd have to assume someone would be doing it. How would a VC even go about chasing ... everything but the fat tail? How would the VCs get a return if they did figure that out? 30$ million self sustaining businesses don't pay dividends, don't raise more money (unless they want to unicorn), and don't exit.

Rocket Internet more or less are doing it with ecommerce. Look them up. They've got presences almost everywhere and probably are the parent company of one or two "hot new ecommerce sites" in your city. Large marketing budgets are required, though. I believe a lot of their operations are loss-making for several years, initially.

Re: Nice $40M ecommerce company – call me when it scales

#13

Post by not_paul_graham »

neotek wrote: post #2

Alternatively, you can base your business model on tricking people into subscribing to a service they likely don't know they're subscribing to. http://techcrunch.com/2013/09/27/not-so-vip/

Relevant links to old discussions on JustFab from the TC article:

[1] https://news.ycombinator.com/item?id=6455391

[2] https://news.ycombinator.com/submitted?id=wenxun

Re: Nice $40M ecommerce company – call me when it scales

#15

Post by ericcholis »

Theodores wrote: post #7

$40 million is admirable. You could do that with a flat team where everyone knows everyone else and operate out the back of an established retail business. Scaling that up would mean having three tiers of management, scores of interns, nobody knowing the names of anyone in the warehouse, the product team not talking to the customer care team, whole departments dealing with accounts things, it just goes on. You could…

> product team not talking to the customer care team

I couldn't agree more. Dare I say it, we've got an "open" floor plan for our customer care and product teams. It helps immensely when you can place a customer on hold and ask a product guy a question without emailing, chatting for calling.

Re: Nice $40M ecommerce company – call me when it scales

#16

Post by keltex »

I think the comparison with Overstock may be a bit flawed. The president of Overstock, Patrick Byrne, has been at war with Wall Street for a number of years. He blames them for naked short selling (an illegal practice of selling stock short that you haven't borrowed) and is actually suing the "prime brokers" (the ones who handle most of the stock trades):

http://www.overstock.com/Patrick-Byrne/7371/static.html

Thus overstock has been under attack by Wall Street and has an incredible high short interest. 20% of the stock is reported to be sold short, although Patrick thinks, with the unreported naked short selling, that the number is much higher:

http://finance.yahoo.com/q/ks?s=OSTK

Re: Nice $40M ecommerce company – call me when it scales

#17

Post by JabavuAdams »

ericcholis wrote: post #15
Theodores wrote: post #7

$40 million is admirable. You could do that with a flat team where everyone knows everyone else and operate out the back of an established retail business. Scaling that up would mean having three tiers of management, scores of interns, nobody knowing the names of anyone in the warehouse, the product team not talking to the customer care team, whole departments dealing with accounts things, it just goes on. You could…

> product team not talking to the customer care team I couldn't agree more. Dare I say it, we've got an "open" floor plan for our customer care and product teams. It helps immensely when you can place a customer on hold and ask a product guy a question without emailing, chatting for calling.

How do you deal with phone calls disrupting product work? E.g. I've run in to few situations that kill production / craft-person style work faster than having someone on the phone, nearby.

Re: Nice $40M ecommerce company – call me when it scales

#18

Post by dustingetz »

keltex wrote: post #16

I think the comparison with Overstock may be a bit flawed. The president of Overstock, Patrick Byrne, has been at war with Wall Street for a number of years. He blames them for naked short selling (an illegal practice of selling stock short that you haven't borrowed) and is actually suing the "prime brokers" (the ones who handle most of the stock trades): http://www.overstock.com/Patrick-Byrne/7371/static.html Thus o…

Can you explain like I'm 5 why wall st's actions on the stock impacts overstock's day to day operations and margins?

Re: Nice $40M ecommerce company – call me when it scales

#19

Post by hownottowrite »

Suggested alternate title:

"Nice $40M ecommerce company - call me when it scales and I can profit obscenely while strapping you with loads of debt and/or other unwanted obligations/management advice so that you end up firing half of your staff after doing the thing I made you do because I now control the board."

From the "other" Fab:

http://betashop.com/post/72547337624/betashop-quarterly-volu...

On a personal level I took some justifiable hits in 2013. That goes with the territory when you raise money at $1B and then cut headcount and operating expenses as dramatically and swiftly as I did. I freely admit, when you grow revenue 500% year over year and become a media darling overnight, it’s hard to keep perspective. No doubt, we had lost perspective at Fab. We had started to dream in billions when we should have been focused on making one day simply better than the one before it.

Re: Nice $40M ecommerce company – call me when it scales

#20

Post by sutterbomb »

kansface wrote: post #11
allochthon wrote: post #10

I'm not that much of a fan of the VC infatuation with winning on a handful of "unicorns" and "super-unicorns." Perhaps better for everyone (but the VCs) would be a healthy ecosystem of thousands of companies on the order of 10-50M dollars, and more financial support for getting to this "stage." (I use quotes because I don't think every company should aim to grow as big as Google or Facebook, or even Twitter or Github…

If this were a viable model, I'd have to assume someone would be doing it. How would a VC even go about chasing ... everything but the fat tail? How would the VCs get a return if they did figure that out? 30$ million self sustaining businesses don't pay dividends, don't raise more money (unless they want to unicorn), and don't exit.

I believe the comment was saying it'd be better for everyone else, not that it'd be a viable model for VCs.

> Perhaps better for everyone (but the VCs)

In an abstract way this makes some sense - more competition, more niche & targeted companies to suit more needs, and an income distribution that's much flatter (naturally) across the board. In the real world, it only takes one person (e.g. Bezos) aiming for something bigger to keep this model from ever thriving.

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