September 9th, 2024: Walmart Marketplace expands services for sellers, a few notes on planning, Paul Graham’s “Founder Mode” essay, and Temu starting to recruit US brands
Today’s episode of The Watson Weekly Podcast is sponsored by Mirakl
It’s September 9, 2024 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Walmart Marketplace Expands Services for Sellers
A Few Notes On Planning
Paul Graham’s Founder Mode Essay
Temu Starting to Recruit US Brands
- 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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BUT FIRST in our shopping cart full of news….
Walmart Marketplace Expands Services for Sellers
Walmart continues to build on the growth and success of its marketplace with a few new services, as reported by the outlet PYMNTS. Here’s what they released:
Added the Premium Beauty category with brands like Victoria’s Secret Beauty.
Added a pre-owned category called Resold at Walmart.
A collector shop focused on action figures and trading cards.
New Walmart Fulfillment Services options include an omnichannel fulfillment service similar to what Amazon has tried to offer with its supply chain arm MCF or multi-channel fulfillment.
A Walmart Cross-Border import service which will help you import items from overseas.
My take?
First, Oh Victoria’s Secret, how far have you fallen?
Second, it’s harder to think to break into the collectibles category. By definition, the collector stuff you want is unique and so it’s hard to get sellers to list it in multiple places.
As far as fulfillment, the Amazon copying routine continues. They aren’t even being shy about it now. I wonder if you could detect code from one website to the other.
As far as the other offerings, it is clear that Walmart continues to try and go up-market and so far it appears to be working. The reason is simple - even supposed rich shoppers in this economy are looking to save a dollar.
[References:]
Our Second Story
A Few Notes on Planning
Eisenhower was Right: Plans are Nothing, Planning is Everything
One of the most common questions in eCommerce is "Why Has Our Business Stopped Growing?" Implicit in this question is a qualifier - stopped growing "relative to our expectations".
This question usually asks about revenue. Of course, we can jump right into what's going on with your business, but this skips over a lot of assumptions.
In particular: often it's not a website problem, it's a people and process problem at the root cause of things.
Before you jump right into understanding what might be broken on your website, do you have clear answers to these questions?
1 - What is the plan?
2 - Who owns the plan?
You'll be surprised at how many organizations fail these simple tests.
3 - If the plan needs to be changed, who does it?
4 - Are team members aware of the plan?
This is usually the next breaking point. Even if there is a plan, if everyone isn't on the same page, it's almost as good as not having a plan.
5 - When was the last time the plan was updated?
6 - What are the assumptions underlying the plan?
Another breaking point. A stale plan based on outdated, incorrect, or unrealistic assumptions is as good as no plan.
We often jump to high-tech answers to questions. The big challenge with this is simple -- sometimes the problem is "low tech" - i.e. people and process. I find that we have assumed every problem has a technology or product solution in our lives, when really the problem is the people! Wrong people, or doing the wrong things in the wrong way.
Diagnosing the right growth problem starts with taking control of the plan itself.
[References:]
Our Third Story
Paul Graham’s Founder Mode Essay
Founder Mode Contains Wisdom and Nonsense in Equal Measure
If you haven't heard, the YCombinator speech by Brian Chesky is making the rounds this week, coupled by Paul Graham (who I love) article called Founder Mode.
Here are the principles:
* Brian Chesky failed until he tried to emulate Steve Jobs management style.
* Founders have always been told as a company scaled you should switch to "manager mode".
* Since they aren't professional managers, the professional managers they do hire end up running their companies into the ground.
* Key to this is how much a founder should get into things personally versus delegate. Don't engage just via "directs".
The advice has a few important points to it:
* It encourages founders to go with their gut which they can sometimes distrust.
* Delegation doesn't solve all your problems, especially if it matters how or why something is done, not just that it gets done.
* Founder-led companies are special. Indeed many founder-led companies scaled to huge heights - Apple, Amazon, Microsoft, Shopify....etc.
* Brian Chesky didn't unlock free cash flow margin at AirBNB until he realized his founder-mode powers.
There is a flip side to the story, however:
* Most startups are meant to fail. The ideas just suck, you just don't know it yet.
* Most - though not all - VCs would prefer founders to fail real big than hang on half-alive. Except when the world changes according to their whims/gut - which is another way of saying the "average of the last 5 future LPs they pitched."
* As far as delegation, no guidance is offered on how or when to delegate or not.
I believe the truth is somewhere in the middle:
* The piece advises founders have special powers other mere mortal managers do not, which you know... reinforces the YC mystique. And any good cult needs some measure of echo-chamber induced importance. Founders are people with flaws just like you and me.
* Somewhere in the journey founders can get lazy or not understand how or where to apply their talents. This resonates.
* No one can teach you this, which is hard.... because you can enter a new phase of growth or danger without realizing it. This is missing from the guidance.
* While Brian Chesky, the founder of AirBnB found free cash flow, ... not the founder of Amazon, Andy Jassy, also found free cash flow.
What's left unsaid in all this: you can't copy someone else to succeed, least of all Steve Jobs. None of us have a Steve Jobs on our shoulder, and thinking of ourselves as Steve Jobs doesn't make ourselves a better leader.
What advice does this give the introverted techies that found companies? Must they be marketing genius extroverts?
My advice is simple: use your founder instincts, listen to smart people around you, and then go with your gut. My best advice for managers comes from Bill Gurley.
Good judgment comes from experience.
Experience comes from mistakes.
Mistakes comes from bad judgment.
Learn fast before you perish.
[References:]
https://www.linkedin.com/feed/update/urn:li:activity:7237053499534905344/
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And Our Last Story
Temu Starting to Recruit US Brands
Based on MarketplacePulse data and my own experience, it appears that Temu is starting to recruit US brands. While I don’t think that many US brands will truly want to participate, it’s also possible that a few will try it out just to see what will materialize.
Wish previously tried to recruit Amazon sellers, and Shein has tried for the last year or so. Neither have been very successful. In my experience it takes about 10 years of concerted effort for a public marketplace with traffic to get to a scale worth bothering about. Even Walmart took at least this long to become large enough to be taken seriously by the average Amazon or eBay seller.
As much as Temu wants you to shop like a billionaire, most people are still shopping for no-name products to solve a problem and are not looking for brands. On the other hand, if you are a no-name brand looking to break out, there is no shortage of manufacturers in this bucket trying to become the next Anker. Only this time, looking to get their break on Temu instead of Amazon.
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Amazon Aggregator Branded Plans To Acquire Heyday
Amazon aggregator Branded plans to acquire Heyday in exchange for $521M in equity in a new company called Essor. Are investors such as BlackRock and others driving the consolidation in this sector to lessen their downside exposure?
Second
Carro Raises $14M Series B1 Funding
Dropshipping platform Carro has raised a $14M Series funding round that will be invested to expand its platform. This sector seems to be like the neverending story as a new entrant raises capital after others were acquired in the preceding year.
Link: https://www.axios.com/pro/retail-deals/2024/08/22/carro-raises-14m-series-b1-round
Third
Pitney Bowes’ E-commerce Logistics Unit Shutting Down
Pitney Bowes sold the majority interest of its Global E-commerce unit to Hilco Global, which will liquidate and wind down the business via Chapter 11 bankruptcy, expected to conclude in early 2025. It is a sad state of affairs for a company that worked with many e-commerce businesses.
Fourth
Urban Revivo Fashion Is Said To Consider Hong Kong IPO
Chinese fast-fashion company Urban Revivo Fashion is considering a Hong Kong initial public offering (IPO) to raise at least $100M. The company has stores in China, Singapore, Thailand, and the Philippines. Wait, is Urban Revivo Fashion another Zara competitor?
AND FINALLY …
Sneaker Maker Golden Goose Postpones IPO Amid Market Turmoil
Luxury Italian sneaker maker Golden Goose has postponed a potential Initial public offering (IPO) due to the current financial climate. Luxury companies are in a challenging environment and will likely re-investigate IPOs in 2025.
Today’s final word for the week of Denial: I think a lot of brands and software companies out there are in denial. Denial that this is not how the economy is going to be for some time. Let me be as clear as possible. Even if interest rates start going down, we have still have entered a new era of efficiency. One that is not just dependent on growth to raise money. Unless you can show how you are going to get a return on investor’s cash, then maybe someone else deserves to have it? Perhaps dust off your old copy of Jim Collins’ Good to Great to remind you what a real business model looks like.
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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.