Tag Archives: E-commerce

Shopify’s Tobi Lutke on Layoffs and Building for the Long Term

Few people did better during the pandemic than Tobi Lutke. The Shopify founder signed merchants to his e-commerce platform at a record pace, doubling revenues in 2020.

It was all systems go. Lutke hired like crazy to meet demand and locked up every server he could.

Meanwhile, Shopify’s stock price more than quintipled, putting the company’s valuation at over $200 billion.

In an excellent episode of This Week in Startups, Lutke tells us what it was like to guide his company through these heady times.

Employees were so distracted that Lutke had to make a rule: anyone caught checking the stock price had to buy donuts for everyone. Tim Horton’s, if you please.

But as the pandemic receded and stores reopened, consumers retreated from e-commerce. This left Shopify overbuilt and overextended.

Lutke was in a position he’d never been in throughout Shopify’s heady expansion. He had to do layoffs.

Shopify laid off 10% of the company this summer. For Lutke, the decision was wrenching.

“They were some of our hardest days.”

Tobias Lutke

Because Shopify had expanded ahead of demand. When demand dropped, that left Lutke with no choice but to lay off workers.

However, many of those workers would’ve never had the job in the first place had Lutke not expanded aggressively. And as well-paid tech workers, they’re likely to land on their feet.

Shopify’s tough times show how even large businesses struggle. A company with a $200 billion market cap can see its stock crushed and be forced to do layoffs just months later!

Take heart, early stage founders! The big boys face huge challenges too, just like you.

In all, I think Shopify is well positioned for the long term. It focuses on providing amazing service and doesn’t copy merchants’ products like Amazon.

When your livelihood depends on a platform, you want someone you can trust. Shopify fulfills that role better than Amazon.

I also commend Lutke for building a more honest culture at Shopify than most companies. He calls Shopify a team, not a family.

We all know the “family” rhetoric is nonsense. I have to give Lutke credit for telling it like it is.

I think his employees will too!

What do you think of Lutke’s leadership during the pandemic? Leave a comment at the bottom and let me know!

More on tech:

When Are You Ready to Raise a Seed Round?

How to Avoid Scams, Find Investors, and Lead Like the Best

The Founders: The Story of PayPal

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order. 

Why Drone Delivery Will Be an Awesome Business

Drones are starting to deliver packages in some parts of America. But can drone deliveries be a viable business?


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Bloomberg is skeptical. From an editorial out this morning:

The biggest hurdle is that drones will be making point-to-point deliveries, which is the quickest but most inefficient way to take packages to homes or businesses.

Despite the hype in the e-commerce market, it’s unlikely the sky will be studded with packages coming in for a landing on doorsteps.

What Bloomberg is missing is drone delivery’s massive advantage in labor costs.

The average UPS driver makes $22 an hour and does about 120 deliveries a day. Even if he’s very efficient and can finish in 8 hours, that’s still $1.47/delivery in labor costs alone.

Compare that to a drone. This sleek model from DJI is a mere $300 on Amazon. If it could make even 1 delivery per hour, 8 hours a day for a year before it wears out, that’s just $0.10 a delivery.

And remember, you don’t have to buy a huge truck, fill a gas tank, or pay benefits to a driver!

Drones may be able to do far fewer deliveries each than a driver can. But drones cost so little, you can afford to buy a swarm of them and still save money.

What’s more, drone delivery makes the most sense where drivers are least efficient: suburban and rural areas. Here, it takes drivers much longer to get to the next stop than in dense cities.

But it’s a perfect environment for drones — lots of space to land!

In a world of ever cheaper hardware, labor costs overwhelm almost everything else. If you can cut out labor and still get the job done, it’s hard to lose.

I look forward to having packages land on my roof. I just hope the porch pirates don’t send their own drones to steal them!

What do you think of drone delivery? Leave a comment at the bottom and let me know!

More on tech:

Robot Pizzas and the Future of Fast Food

Adam Neumann Was Their Biggest Investor — Now He’s Their Biggest Competitor

The Last Fast Food Worker in California

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order. 

Photo: “Drone Delivery” by www.routexl.com is licensed under CC BY 2.0.

Why I Just Invested in Deft, the Best Way to Shop Online

We’re back!

Sorry I missed you guys Friday. I wasn’t feeling well.

Fortunately, it wasn’t COVID and I’m back to 100%. And I’m really excited about today’s company: Deft.


E-commerce search is broken.

Don’t believe me? Type in a simple search like “pet friendly sectional under $5000” on Google or Amazon.

The results are mostly irrelevant ads and sofa covers, not actual sofas. The brands are trusted names like HDCAXKJ.

That’s why Zach created Deft, the best way to shop online.

Type that search into Deft and you’ll see relevant results from top brands. This saves you time and money.

You can even hire a personal shopper through Deft for a small monthly fee! 

I knew people would pay for a personal shopper when I noticed they pay to skip the security line at the airport (through a company called Clear). Some people have more money than time. 

Deft is currently in beta. I encourage you to check it out!

One day, this will be the standard for e-commerce search and perhaps many other search categories as well. I’m delighted to be an investor!

Check out Zach on the This Week in Startups podcast!

More on tech:

Why You Should Never Raise a $100 Million Seed Round

How to Ace a 3 Minute Pitch

Why I Just Invested in Kippo, Where Gamers Find Love

Photo: “Online shopping” by Robbert Noordzij is licensed under CC BY 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been great so far.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.

Every fruit and vegetable is super fresh and packed with flavor.

I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. 

Why I Just Invested in Gauge, the Best Way to Sell Your Car

If you have a car to sell, you generally have 3 options:

1) Craigslist. You can get a good price, but buyers are flaky and the process takes forever. If you can sell it at all.

2) Dealer trade-in. Easy but the price is terrible.

3) Sell to a used car lot. See # 2

Now, there’s a much better option: sell your car with Gauge. Gauge is a Salt Lake City-based startup that gets you the highest price for your car, easily. When you list your car with Gauge, you get competing bids from multiple dealers. You pick the offer you’re happiest with, and that’s it!

Selling with Gauge avoids the hassles of shady Craigslist buyers, and the competitive process gets you a better price than taking the car to a dealer.

But what about Carvana?

What about them? Carvana buys your car itself, which means their incentive is to give you the lowest price possible. While Gauge does buy your car directly from you, it does so on behalf of dealers and buyers who want to bid on it. Gauge only makes money if you decide to sell your car on their platform. If you’re not happy with the bids you get, you’re free to sell your car elsewhere. So Gauge has every incentive to get you the best price possible.

This model is working so well they’ve earned a stellar 4.7 star average on Google. Sellers love the great customer service with no fees. Dealers love Gauge too, because they can get better quality cars than at most auctions. And not having to show up at an auction in person is a huge time savings, not to mention being safer.

Gauge is growing very fast, and I’m super excited to be an investor! They only list cars in the Salt Lake City area at the moment, but they’re expanding rapidly, with several new markets already in the works.

If you’re in the area with a car to sell, I don’t think you can do better!

More on tech:

WHY I JUST INVESTED IN CRAFTER, MAKER OF THE MOST BEAUTIFUL ARTS AND CRAFTS KITS IN THE WORLD

7 COMPANIES HAD 3 MINUTES EACH TO PITCH US. THIS IS WHAT HAPPENED.

INSIDE A STARTUP ACCELERATOR DEMO DAY

Photo: “Corvette Stingray” by pyntofmyld is licensed under CC BY 2.0

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Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

This 21 Year Old Makes Millions Selling Products He’s Never Seen

As a teenager, Kamil Sattar knew he wanted to work in business. But he dropped out of his college’s business program during his second year when he said he realized, “I wasn’t actually learning how to do business. I was learning how to work for someone else’s business and make them money.”

His online store has pulled in $1.7 million in revenue this year alone. Sattar sells products online that he sources from manufacturers. Another company holds and ships the actual items. This is called drop shipping.

Offshoring separated manufacturing from distribution and marketing. What drop shipping is doing is separating distribution and marketing. Sattar excels in promoting products and running the online store. With drop shipping, he can do just those functions and leave the manufacturing and distribution to specialists:

Drop shippers use wholesale marketplaces like AliExpress, which is owned by Alibaba, China’s largest e-commerce site. AliExpress sells every category of goods, from apparel to luggage and yoga mats, for shockingly cheap prices. Drop shippers then identify products they think will be of interest to consumers. Once they find a product, they advertise it on platforms like Facebook and Instagram with high-quality photos and video, and if a customer bites, they handle getting the product from the supplier to the customer.

This market is growing like a weed. Drop shippers clocked $102 billion in sales in 2018 and the growth rate through 2025 is projected at 29% a year, leaving physical retail in the dust.

This makes me wonder what other aspects of the retailing experience will be unbundled and done by specialists in the future. Perhaps one company does the online promotion while another focuses on maintaining a usable, scalable website?

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GameStop Has Failed to Modernize Before. This Is What Happened.

Many investors are excited about Chewy founder Ryan Cohen joining the GameStop Corp. board and helping the company transition to e-commerce. But what isn’t as widely known is that GameStop has tried this before, with abysmal results:

Wall Street and short sellers placed heavy bets against GameStop because of strategic missteps. The company, at one point, latched onto game downloads as well as another trend now gaining momentum known as cloud gaming, or the Netflix-like streaming of games. But products gained with two acquisitions made in 2011 of companies specializing in those areas were abandoned after about two years.

“A lot of the initiatives that we had brought to the table and invested in just died on the vine,” said Chris Petrovic, who joined GameStop in 2009 to spearhead the retailer’s digital ventures, in an interview this month.

The article is referring to the acquisitions of Impulse and Spawn Labs. GameStop bought them just one month a part in 2011. Impulse was a system to digitally download games, and Spawn Labs allowed people to stream games.

But rather than seize the future with these two acquisitions, GameStop wound up shuttering both within just 3 years. It replaced Impulse with its own download software and shut down Spawn Labs claiming that the customer wasn’t yet ready for cloud-based gaming.

How many millions of investor dollars did GameStop pay to buy these companies, only to shut them down shortly therafter? They also bought mobile phone retailer Spring Mobile to try to get into smartphones. That business drastically underperformed and GameStop sold it a few years later, having little but debt to show for it.

In all, each time GameStop has tried to reinvent itself, it has quickly failed and abandoned the program. Will this change under Mr. Cohen’s leadership? Perhaps. But I wouldn’t want to bet $195 a share on it.

For more on GameStop, check out these posts:

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Photo: “GameStop” by JeepersMedia is licensed under CC BY 2.0

Is GameStop the Next Blockbuster?

I came across an interesting article today. It drew a parallel between a dominant brick and mortar retailer of entertainment of today, GameStop, and one of yesteryear: Blockbuster:

It’s 100% obvious that over time all game software is going to be downloaded. This is the same or worse than with movies. Already, 100% of the game content on smartphones is downloaded, and the same will quickly happen to consoles and to PCs. It’s just more convenient to download something that’s 100% digital versus going out to a store to buy it.

It’s also nearly 100% obvious that the digital content channel will be controlled by specific parties. There are Apple (AAPL) and Google (GOOG) (NASDAQ:GOOGL) when it comes to smartphones, through the Apple Store and Google Play. There are the console makers when it comes to consoles. And then only in PC gaming is there something of an open market, where for now Steam is the leader, with individual publishers and Microsoft also trying to be in the running.

Given the above, GameStop’s slide into oblivion selling gaming software is a near certainty, much like Blockbuster’s was. Gaming hardware is generally amenable to being sold online (standardized, bought on price), too, and is lower margin than software. Used game trading ends with digital sales.

Hence, GameStop has this permabearish thesis on it, and this thesis is real. Even before COVID-19 hit, GameStop already was reporting near 30% declines in revenues.

More here.

So online, GameStop leads in no part of the market. One area where they do lead, re-sale of used games, is probably going away because the games will be 100% digital. Ouch.

If they want to muscle their way into the online market, they’ll have to contend with giants like Microsoft, Tencent, and Apple that can crush them for a tiny fraction of their massive profits.

Their e-commerce business is growing rapidly, but it’s hard to imagine such a financially strapped and marginal company taking on so many wealthy and digitally native competitors.

What’s more, I would expect Amazon and Netflix to make major pushes in this area to compete with Google and Apple. Both are big players in entertainment and are unlikely to neglect the vast video game market.

For more on GameStop, check out these posts:

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Photo: “Blockbuster Closing Store Front Sign Taken Down” by Dave Dugdale is licensed under CC BY-SA 2.0

The Sleep Hack I’m Loving

Yesterday, my wife gave me a gift that will keep on giving: a sleep mask. She recently started using one and noticed the quality of her sleep improved enormously. I observed her, intrigued.

Just before dinner, she presented me with a sleep mask of my very own! I took it for a, err, test drive, last night. I slept more deeply than I have in a long time, with less tossing and turning. I woke up an hour earlier than usual, dramatically more refreshed and energetic. My wife said she could easily tell I had much more energy than usual.

Sleep has an enormous impact on health. Lack of sleep demolishes the immune system, doubles cancer risk, and can cause Alzheimer’s, coronary artery disease, obesity and diabetes. The list of conditions lack of sleep can cause is enough to keep you up all night!

But for just a few dollars, you have a shot at really feeling rested in the morning. I don’t find the mask uncomfortable, and it’s very easy to put on. Anything that covers the eyes and is comfortable should work. The one I have is here.

Sweet dreams!

How I Improved My Sleep and Protected Myself from COVID for $34

Tell me why can’t this be love?

This fall, I bought what might be the strangest anti-COVID device yet…a humidifier.

Two, actually. I set them up in the living room and bed room and then went to work turning my dry apartment in the chilly New York area into a tropical paradise.

Indoor humidity tends to fall in winter. Air is drier to begin with, and then it’s brought indoors and heated, drying it further. This has a significant impact on how long viruses live and how your body responds to them. Our cilia, whose job it is to keep invaders out of our respiratory tract, don’t work as well in dry conditions.

Estimated virus half-life was more than 24 hours at 10 degrees C (50 degrees F) and 40 percent relative humidity, but only 90 minutes at 27 degrees C (80 degrees F) and 65 percent relative humidity.

Prof. Akiko Iwasaki, PhD, Yale School of Medicine

I got these to keep my wife and I safe from COVID, but I noticed a very pleasant side effect immediately: I was sleeping much better! My nasal passages would dry out overnight and my breathing would get more labored, causing me to wake. I mentioned the improved sleep to my wife, and she immediately agreed that my breathing sounded much nicer and I seemed to be waking less overnight.

My friend Jim* came over for New Year’s and happened to take the seat right next to the humidifier. He liked it so much, he immediately ordered the exact same one for himself, right there on his phone! I hope he’s enjoying it.

If you want to do the same, you can find it here. It was very easy to set up. I suggest one that warms the water, because it’s very pleasant. You want to avoid no-name manufacturers, because those humidifiers tend to leak. This one fits both criteria.

You can even put some essential oils or Vicks into the included medicine cup. I haven’t done it yet, but it’s on my list. Sounds like heaven!

You’ll also want hygrometers such as these to measure the humidity in your home. 40-60% is a good target. This way, you’ll know when you need to run the humidifiers and when you shouldn’t, to avoid mold growth.

Enjoy in good health!

*Not his real name

Why a Cloth Mask Isn’t Enough…Plus the Lowest Price I’ve Ever Seen on FDA Approved KN95’s

Above: Me, an FDA Approved KN95, and a snowman.

I am starting to see more and more people on the street wearing N95, KN95 and surgical masks, rather than cloth ones. That makes me really happy, because I know they’re a lot more effective. With a more contagious COVID variant from the UK spreading here, we need all the protection we can get. And with that in mind, I did a little Googling last night.

The eminent Dr. Eric Topol encourages us to use better masks, like N95/KN95, to confront the new UK variant of COVID.

My supply of KN95 masks, which filter much better than a cloth mask (and likely much better than most surgical ones also), was running low. I found an incredible deal on an FDA approved KN95 mask by Powecom at, of all places, Office Depot!

I ordered 100 last night and they should be here by Friday, with free shipping. $1/each is unheardof. The lowest I’ve paid before is about $1.35. I was very pleased!

You can see that these masks are FDA approved by going here. Go to Appendix A: Authorized Imported, Non-NIOSH Approved Respirators Manufactured in China (Updated: October 15, 2020). Then, see the manufacturer name, Guangzhou Powecom Labor Insurance Supplies Co. LTD, in the list.

Happy hunting! I suggest ordering a larger quantity because this price is unusual.