September 16th, 2024: What is going on with Bolt, Walmart and StockX partner up, Bankrate holiday consumer survey results, creating the perfect board presentation
—Today’s episode of The Watson Weekly Podcast is sponsored by Mirakl
It’s September 16, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
What Is Going On With Bolt?
Walmart and StockX Partner Up
Bankrate Holiday Consumer Survey Results
Creating the Perfect Board Presentation
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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[PAUSE]
BUT FIRST in our shopping cart full of news….
What Is Going On With Bolt?
Bolt CEO Moves from Founder Mode to Grift Mode
Not all founders are ethical, and I think this is a case in point here.
It's one thing to attract a new investor who is willing to put money in when the company is about to go out of business. That new investor will often "cram down" existing investors because - well - last money in is often the first money out in a term called "liquidation preferences." If this is truly the lender of last resort, the cap table and ownership shares structure can be reset as well.
But this is far beyond normal.
Even on a business level, we are not creating a checkout and identity network any longer. We are building a super app. Because why not? It's house money at this point.
First, how do you raise $250M in "marketing credits". Why not a billion? The value is unspecified. This sets the tone for the whole thing.
Second, the new investor thinks Bolt is bigger than Stripe? There's a sucker born every minute I suppose. We are going to find out this "new investor" is on the take from Breslow. Just wait.
Third, $28 M in revenue (which you have to bet is rapidly declining) on any valuation greater than $250M for this company is nonsense. I thought they signed Fanatics? At the top of Fanatics checkout is Paypal and no Bolt identity network. Likely this is not an accident. I question the $28M.
But this is not even the worst of it.
For all this, Breslow wants a $2M salary and a $1M bonus for coming back. Well, I want a pink unicorn but that doesn't make any sense either. 🦄
He wants a stock kicker if he can increase the ridiculous valuation even more.
He wants to increase the grift by partnering with some of his other companies like Love (dot) com.
All told, this is a ferriswheel of circus clowns and nonsense. But at least in this crazy world, we can get some entertainment out of it. 🎪
Almost sadly (which is the irony) our entertainment will be short-lived however because this "deal" is never going to close. And if it did, the number of lawsuits from existing investors would pile to the sky.
[References:]
Our Second Story
Walmart and StockX Partner Up
This last week Walmart and StockX announced a new distribution partnership where StockX's pre-vetted merchandise appears on Walmart's Marketplace.
Sounds like desperation on StockX's part. Did Manish take StockX to the cleaners? Is Manish at Walmart trying to recreate the Marc Lore empire at Walmart except with third-party brands?
Does Walmart envision a world where their assortment matches Amazon?
Perhaps all of these things can be true at the same time, but my bet is clear. It was not Walmart that approached StockX -- it was more likely the other way around.
StockX seems in trouble, and it seems to me that the final shoe has not yet dropped yet. eBay seems content to play the long game, or the tortoise -- either way the effect is clear: wait out the demise of StockX.
[References:]
Our Third Story
Bankrate Holiday Consumer Survey Results
It looks like the trade-down and cheap-out trend is not dissipating this holiday season. Does that mean the Grinch is ahead?
Here is the punchline from Bankrate. Only 1 in 4 consumers plan to spend more this year, while about one-third of consumers plan to spend less.
Now you have to take these self-reported surveys with a grain of salt. It’s like asking who ate the donut at the party, no one will take credit for it but the donut is gone just the same.
That said, what’s interesting in that Gen Z and Milennials top the list of generations looking to spend more. In particular, 40% of Gen Z expect to spend more this year than last year, that’s compared to only 15% of baby boomers expecting to spend more.
Finally, one last item. When will consumers begin holiday shopping? Almost half said before Halloween! Better get those specials out early this year. For consumers, it makes sense to shop as early as possible, right? That’s how you get the best deals.
[References:]
https://www.bankrate.com/credit-cards/news/early-holiday-shopping/#amid-inflation-only-around-1-in-4-holiday-shoppers-plan-to-spend-more-this-year
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And Our Last Story
Creating The Perfect Board Presentation
It seems to be Board presentation season across my client base, and so I thought I would take a moment to outline a few items that I use every time.
1 - Consider the true audience. You are not presenting to the entire Board. You are usually presenting to one person, and at most two people. If you don't know who your most important person in the room is, look at the first money in (likely very influential) or the biggest last money in (likely with the highest liquidation preferences). Let's call them types, however.
In general, these types of people are called "the visionary" and "the accountant".
As a CEO, the "visionary" was likely your first investor and still supports you through the ups and downs. The "accountant" just wants to see the returns. Don't bore me with operating. If the operating works, it will show up in cash flows.
2 - Big Headline and Business Case Up Front - In 1 One Slide. Don't bury the lede.
Nick Kaplan said I could have been a journalist. Here are my 3 rules for the first slide.
a: Make it clear your year 1 capital and/or resource ask. Don't forget new hires in this number. (table)
b: Revenue potential and/or TAM (3 year graph)
c: Operating income or cash flows (3 year graph)
d: Finally, Make your headline the reason it's a burning need to do this. If it sounds like it's a "nice to have", it will become a "never will."
Your goal is to have your visionary say on this slide "that doesn't sound like a huge ask." And for your accountant to lean in and look forward to more details.
3 - Customer Experience
Even if they are not experts on what you are presenting about, most people can imagine what the consumer will do. At least one slide on the consumer journey is useful. A pretty screenshot and a simple boxes and arrows flow diagram will work. Inspire someone!
4 - Timeline
Most people know the risks are made up or overly optimistic, but the timeline they will remember. Try to make it as accurate as you can.
5 - Pro Forma Over 3 Years
Gross -> Net Revenue -> Contribution -> Operating Income.
6 - Organization
What people investment commitments it will take to make this happen, and the roles and where they fit into the org. Or is it a new org?
7 - Change Management
How you will get from here to there. Who will be in charge of ensuring this happens? Does it require new ways of working? What are the top risks to this happening and how are you dealing with it?
I like to focus on values and process changes here. Often people just assume a little money and "more of the same" will make it happen. If it requires a shift in thinking, that must be captured somewhere.
If it does require a shift in thinking, it better have a dedicated leader or team.
8 - Technology
What new technologies are you putting in and why?
These are just a few of the top items I think about. Your goal is always to completely sell your best supporter in the first slide!
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Permira Raises Takeover Offer For Squarespace To $7.2B
Global investment firm Permira will offer $46.50 per share in cash to acquire and take Squarespace private for $7.2B. Squarespace has only lost 6.4% in stock price since listing in 2021. Why is this company being targeted by a buyout firm? Compared to other public companies that have shed more value since their IPOs, it makes no sense.
Second
Backcountry Acquired By CSC Generation Enterprise
Private equity firm CSC Generation Enterprise has acquired Backcountry and its family of brands, such as MotoSport, Competitive Cyclist, and Steep and Cheap, for an undisclosed amount. An outdoor company facing the squeeze of e-commerce sold to a roll-up company that acquires distressed retailers. What could go wrong?
Link: https://www.linkedin.com/posts/eoincomerford_outdoorindustry-activity-7238952674191101952-EVex
Third
OpenAI In Talks for Funding Valuing It Above $100B
OpenAI is in talks with investors to raise several billion dollars in a funding round that will value the company over $100B. Welcome to 2024, where AI startups are raising billions and investors are desperate not to miss the next big thing.
Link: https://www.wsj.com/tech/ai/openai-in-talks-for-funding-round-valuing-it-above-100-billion-4f0550c5
And finally
Avenue7Media Acquires Walmart-Focused Agency eCom Creative Team
E-commerce agency Avenue7Media has acquired eCom Creative Team for an undisclosed amount to offer marketplace sellers solutions for Amazon and Walmart. Are we seeing the beginning of consolidation in the agency sector focusing on marketplaces? Feels like it.
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And today’s word of the week is : SCHOOL. As in Back to School.
For those with kids headed back to school this week, my heart is out to you. If this is what it means to be trading down your purchases, your pocketbook sure doesn’t feel like that’s the case does it?
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Did you know that RMW Commerce has a brand new podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
Our production partner for the series is CitizenRacecar. The show is produced by Jose Baez; Production Manager, Gabriela Montequin.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.