competitor Jet.com, in what feels like a corporate midlife crisis and
$3.3 billion hair plugs. Walmart was frustrated they weren’t making
progress in online sales, and their frustration was justified. As Amazon
marched on, Walmart’s e-commerce sales growth had slowed, even
flattened.
Jet.com shows that the difference between a dot-bomb and a
unicorn is a huckster vs. a visionary, respectively.^77 How can you tell
the difference? One has had an exit/liquidity event. Marc Lore, Jet’s
founder, is that visionary/huckster. Mr. Lore is Jeff Bezos’s brother by
another mother. Or, if you’re a retail worker, they are the spawn of
Ayn Rand and Darwin, raised by Darth Maul. Lore is also a banker
who turned to e-commerce and chose a low-consideration category
that, even better than books, had replenishment built in: diapers.
In 2005, Lore started diapers.com and launched several other
categories for parents under the corporate umbrella Quidsi.^78 When
Bezos toured the firm, he must have felt at home, recognizing the
warehouses close to urban centers staffed by Kiva Robots standing
behind a site run by algorithms. Bezos fell hard and in 2011 paid $545
million for Quidsi.^79 For half a billion dollars Amazon bought
momentum in key categories, got some great human capital, and took
a competitor off the market. But Lore didn’t want to work for Jeff
Bezos. He wanted to be Jeff Bezos. Twenty-four months later he bolted
and, with his new wealth, started Jet.com. This must have felt like a
half-a-billion-dollar divorce settlement to your husband, who then
moves into the house next door and starts fucking your friends.
The ex is still pissed off. In April 2017 Bezos closed Quidsi and laid
off many of its employees. Hey, if you leave me, your brother needs to
move out of the basement. Maybe Quidsi should have been shut down.
But my bet is this was Jeff saying to Marc, “and fuck you too.” We
forget most of the world’s major organizations are run by humans,
middle-aged humans, who have enormous egos that ensure they, on a
regular basis, make an emotional/irrational decision.
Jet uses algorithms to encourage you to increase the size of your
basket by lowering the price based on cost of shipping and how
profitable the bundle is. It has an annual membership fee of $50,
similar to wholesale club Costco. This was the first company that had
the balls to take on Amazon head-to-head and in its first year raised a