The Ledger
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Zappos's most valuable customers also had the highest product return rates
“We then did this analysis and this is the type of analysis I really enjoy doing, like, let's take our best customers, and let's take our worst customers, and look at their return rates, and it turned out our best customers at the highest LTVs return the most”
Zappos reached $1.6 billion in sales on just $10 million in equity
“Tony invested ten million dollars of his own money, but most of it was financed through being very, very creative, figuring out how to get merchants that we ordered from to give us credit and to increase the credit line. We had a, eventually got a line of cred…”
Amazon leadership originally conceived AWS as a low-margin infrastructure business
“They didn't think this was a, this is a high margin business. They thought of it as like, ok, this will be a low margin business too, and we like low margin businesses.”
Lin: DoorDash proactively digitized merchant menus during COVID lockdowns
“They decided, like, these merchants are going to be hurting, and we need to help them, and so they proactively went out and uploaded menus from different merchants onto DoorDash and said, hey, I know you guys are hurting. The only thing you can do is delivery.…”
DoorDash used suburban market profits to fund its major city expansion
“There's the reason why small towns, there's a main street where everything happens, and so then you start realizing that the density problem is not as complicated as you might think, and they won because they were able to take the profits of the suburbs to go …”
Lin: Only Amazon and Zappos Solved Unbatched E-Commerce Operations
“The solution to pick back and ship in four hours was to solve a operations flow issue and not batch the operations, which I don't think anybody else figured out in e-commerce back then besides Amazon.”
Lin: Zappos pushed the retail industry from 30-day to 365-day return policies
“I think we changed the whole industry, and it originally was just a competitive response. We had a liberal return policy in 30 days, other people copy 30 days, then it was 90 days, other people copy 90 days, and then we made it three 65 days.”
Banks called Zappos's $60 million loan during the 2008 financial crisis
“At Zappos, it was, what do we do after nine-eleven when sales went to zero, what do we do during the financial crisis when credit became very, very difficult, and we were borrowing sixty million dollars, and we had sixty million dollars that we did nothing wro…”
Lin: Airbnb lost 80% of its revenue when the pandemic hit
“You have a business that went from a business that was growing 2030, 40% a year to a business that declines and you lose 80% of your revenue.”
Airbnb held $3 billion in cash against $4 billion in customer deposits
“We have three billion dollars of capital on the balance sheet at Airbnb, but we have three billion dollars or four billion dollars of customer deposits.”
Lin: DoorDash faced difficult Series C and D rounds before fixing unit economics
“They grew very fast, they probably grew too quickly their unit economics wasn't great, they had a few hard fundraising rounds for the C and D, they fixed the
The unit economics.
So in 2019 it was a walled oiled machine”
Startups building incremental AI refinements will become roadkill for Big Tech
“Other things that, you know, I'd say we try to avoid is things that are roadkill along the way of a company like OpenAI or Google or Amazon or Meta. So, small refinements into what the model doesn't do well today. That's just gonna be real cool along the way.”
Many AI startups see massive initial adoption but suffer terrible user churn
“Right now there's a different example where lots of, there's a lot of test revenue, but the churn is very high because people don't stick, so there are a lot of things where You see very, very fast adoption, but the churn rate is very, very poor.”
Lin: DoorDash expanded delivery market beyond Grubhub's existing-courier restaurant base
“The only restaurants that would be on Grubhub's website were all the companies that already had delivery staff available. So what DoorDash did was to expand the market. And by expanding the market, they were very focused on that problem.”
Microsoft acquired LinkExchange for $265 million on $15 million in revenue
“We had fifteen million dollars in revenue. You can kind of tell that we were in a bubble when someone would be willing to buy a company that had fifteen million dollars in revenue for two hundred and sixty-five million dollars. But also, you know, it was the t…”
Lin: 80% of Zappos's Daily Orders Came from Repeat Customers
“When we, on any given day, the orders that we had, 80% of it was from repeat customers, and we grew the business, some with marketing, but the majority was by providing great customer service, having high repeat rates, having high LTV, and having customers bas…”
Lin: LinkExchange degraded its culture by hiring for conventional fit without defined values
“Tony Hsieh had this experience at Link Exchange where we didn't define the values of the company. We started hiring people that were conventionally right for the positions in the job, and one day he woke up and realized the company that he had founded and buil…”
Tellme Networks burned $60 million a quarter before its enterprise pivot
“At tell me networks, when we're burning sixty million dollars a quarter, how do we get through that, and how do we pivot the company from a consumer business that wasn't working into an enterprise business?”