Comment by ktamura | Hacker News Reader

Comment by ktamura | Hacker News Reader

This buyout is based on FUD, and FUD-based investment is a recipe for disaster.

From the OP:

>But for both Jet and Wal-Mart, Amazon’s frenzy of warehouse construction and fast delivery—as quickly as one-hour—have proved formidable. The retailer has logged three straight quarters of record profit while locking in an estimated 60 million members to its $99-per-year Prime service, cultivating a loyal customer base and giving consumers fewer reasons to shop at traditional stores.

The answer is not buying a unicorn startup with seemingly no fundamental advantage over Amazon. If I were Wal-Mart, I would take the $3B and try to build a great technology organization and/or fund Wal-Mart Labs more. So much of what makes Amazon better is the data accrued over the last 18 years and the insight mined from them by their super-talented team.

And Jet.com is definitely not going to give that to Wal-Mart overnight. If I were them, I'd focus on long-term viability, not a short-term hack to placate shareholders.

Upper management is filled with cargo cult thinking around technology. I see it even in software companies.

Someone advocating a rational, realistic way forward (like you) would be pushed out in favor of people who "get it" and want to "move things forwards dramatically"

Yeah, I can see the stupid arguments already. We don't want to make 'incremental improvements', we need a game changing leap forward!

Business in general is filled with cargo cult thinking in my experience.

Isn't that what the culture of a business is? A bunch of people who think similar things. If you take a bunch of similar people and apply the same rewards, behavior would tend to be similar.

partially why consultants can come in and clean up shop. They don't care about following the conventions.

people in general have this tendency, i think.

Walmart has already spent close to $12B funding walmart.com/labs and not made a dent in catching Amazon.

Jet has a super smart team looking at ways to gain margins in areas amazon is ignoring. short term their investors won't appreciate this buy.

12B sounds like an incredible number for labs. Is there a source?

I think it's 12Bn of investment in eCommerce, which includes but isn't solely Labs.

> Jet has a super smart team looking at ways to gain margins in areas amazon is ignoring

So does Walmart Labs, though. What makes Jet a better buy? Even if they've proven successful as their own company I'm super-skeptical of any startup merging with a larger organisation and retaining anywhere near 100% efficiency.

One of the way forward I see is that, Walmart will let Jet be Jet but will the major source of the products etc. Mostly growing from the back-end of it. Enabling things like same day delivery in certain instances. I would actually let Walmart groom Jet as a separate brand.

> Jet has a super smart team

They might be smart but they haven't been successful. They almost immediately abandoned their original value proposition-- make money on the subscriptions like Costco and break even on sales.

If pivoting means you're not smart, HN would be the stupidest place on the internet.

I think the point was the lack of success, not smarts.

And the response was clearly questioning the argument put in favor of that point, thus making the point itself questionable.

It's a strange world when a startup that was just founded 2 years ago and is steadily growing [0][1][2], is considered a failure because they haven't already wiped out a 22-year-old goliath that has had a long history of struggling to break even, and operates in several other markets (AWS, Streaming Video, Devices, etc) that aren't this startup's main focus.

[0] https://www.snapagency.com/blog/jet-com-vs-amazon-mean-ecomm...

[1] https://www.internetretailer.com/2016/04/15/jetcom-predicts-...

[2] http://time.com/money/4337044/jet-com-lowest-prices-amazon-w...

My question, though, is whether Jet is "losing money on every sale but making it up in volume." That is, your articles mention how jet aims to be about 5% cheaper than Amazon, but they say nothing about the long term cost structure that would let them sell at these cheaper prices and still be profitable.

The may be smart, but the business model seems to be failing. Not clear how this helps WalMart much.

This super smart team didn't even know how to configure Cloudflare. Non-US access got blocked with a captcha. This same company disabled downloading their app if you weren't in the US. And then the site would plaster big scary banners telling you a ZIP code was mandatory and if you weren't in the US, beware! Who comes up with this stuff?

Somehow, with all that money raised, they failed to realise there'd be some customers using freight forwarders.

When I went to purchase, the site stopped working, just providing some sort of generic error page. I called them up. A lady told me they were "performing maintenance" (middle of day). The website provided zero indication; just appeared broken.

Shipping took a while.

I'm certain they have smart people. But my anecdotal experience was that things were a bit clueless and not even remotely close to the level of taking on Amazon in any way.

>Non-US access got blocked with a captcha

Walmart.com blocks the VPN I use with a generic 403 Forbidden.

You seem to forget its a startup and not a well oiled industry giant that has been around for ~20 years.

Maintenance to fix a security critical bug in the middle of the day to remain in compliance for credit card processing could have been a reason for this nuisance. Lots of factors and variables.

I'm not sure I understand, or rather I don't think you understand their business model...

I think they set up their CloudFlare 100% correctly.

Jet does not sell outside the U.S., they have no plans to ever sell outside they U.S. Most of the cyber attacks against them are from outside the U.S. Their entire business plan is cutting cost out of the supply chain inside the U.S. By bundling items together in the same box and saving the consumer in the U.S. Money.

The entire point is to reduce the risk footprint, when most startups are being hacked left and right jet is being very smart by throwing captchas and saying to everyone outside the U.S. we don't want your scammy business.

They do sell to people that are outside of the US. They just sell via freight forwarders. In Central America (and probably all over) there are many businesses that exist entirely to service customers. The biggest bank in the country I'm in now (Guatemala) gives people credit cards and a Miami address specifically marketed to buy stuff off Amazon.

You'd think with all that money spent, they'd have recognized this. FWIW, they eventually fixed it, a week or two (or so) after several poorly-written emails I sent them. So I think it is more likely to be the result of bad thinking, or just being unaware of the situation.

Furthermore, if their anti-hacking defense relies on a captcha or not being able to easily download their app, they're beyond screwed. I don't think they are that incompetent, it might have been, at best, oversight.

Probably the fault is at least partially on Cloudflare, though. Trump's read-only campaign website throws up a captcha at least to Guatemala. And GT isn't known as a centre of any hackers, to say the least. So if they have high profile sites like that which are misconfigured, perhaps they don't do enough review or customer education.

The captchas serve to stop bot nets and DDoS attackers who are all over the world. It is why many sites throw those up. It is not a miss configuration. It is a smart move.

It is 100% the wrong thing to do. On a static page like Trump's website, it is absolutely unacceptable that it ever shows a captcha to obtain readonly information. They are already handling the TCP connection, they are sending back the static assets (custom error page). They just don't send the main content.

Unless it's under a current attack, and even then it should go by IP or something. Visiting from an IP never used before should now throw up a captcha. Nor should it continue to do so on repeated visits.

It's broken, full stop.

Edit: I mention Trump's site because it's a reasonably high profile, static, site that I've seen CF blocking on. Also, FWIW, after I sent several emails to Jet, they seemed to reverse course and their app and site are available. Seems like an oversight/not knowing to me. CF's defaults are not very good so they probably didn't change them. CF should review their customers and suggest better defaults, at least to high end clients.

Just to clarify, given the highly defensive yet also authoritative sounding posts this account has made since being created apparently specifically to respond here: do you _work_ for Jet, fowlerpower?

Where did you get the 12bn number for Walmart Labs from? It seems quite high.

my guess is that the IT department for the whole organization for x years totals $12B. Some IT manager probably mentioned to someone near the c-suite that they were working on some cool internet commerce stuff. And then after the story has been passed on and on it gets reduced down to "$12B spent on labs"

Jet, based on its promotional content is heavy into the home products category. Walmart would love to knock them out to absorb that competition to getting delivery and even subscription delivery of home products.

So it may be the price Walmart is willing to pay to ensure nobody is making Jet their new source for houseware products and avoiding the WalMart Brand. We also don't know what else Jet has in the pipeline, negotiating with them and through their research may be revealing more to WalMart.

all said, I hope Walmart doesn't buy Jet. I want Jet to exist on its own. Competition is the way forward in shopping, if not against Walmart, definitely against Amazon.

What surprises me is that in many European countries, you can now order ALL of your groceries delivered.

You place an order, and someone physically walks around a local supermarket, picks up stuff, they put on a van, and it is delivered to your home. It is actually very inexpensive (and free if you spend enough).

Yet nobody in the US does that (well nobody outside of big cities). Walmart right now today has a HUGE advantage, they can deliver products impossible to Amazon like fresh fruit and veg, meats, and all kinds of things.

But yet, do they? No. Walmart already has "warehouses" in every state, city, location. They're called stores. But instead of double dipping on that advantage, they keep using them as traditional retailers while Amazon rules the home delivery advantage.

Amazon are currently moving into an area Walmart already has an advantage in (being local) but because Walmart under utilises their advantage to such a large degree, Amazon is left alone to do so.

> What surprises me is that in many European countries, you can now order ALL of your groceries delivered.

You can do it in much of the US, too; a number of brick-and-mortar grocery chains offer online ordering home-delivery services, even before considering third-party or online-only grocers.

I've lived in multiple states in the past 5-ish years. Nowhere I've lived has had this.

Omaha has had it for a few years now, not sure which cities you've been in, but we aren't known for being ahead of the curve here.

Walmart's brand in the UK - ASDA - provides online shopping with both collection and home delivery services. Not really sure why they don't do it in the US.

Recently went on vacation and used grocery pickup at a Maine grocery store and picked up groceries for the entire week.

Awesome service but I asked the lady how many pick ups they did this Sunday and she said 35. and I said what's the most and she said 65 - 70.

Grocery pick-up has not caught on yet and grocery delivery I would imagine is even less than that

I live in Maine, I bet it's Hannaford that you did this with. I use it all the time, in fact I almost never actually into the store anymore if I can avoid it. Not sure I could live with out it any more! :)

I have three young kids and it's very difficult to go shopping with them. If they're not causing problems, they're taking up space in the cart. Sometimes when my wife and I go together with the kids, we push one cart with the kids piled in and one cart for the actual groceries.

Being able to order our groceries online and have them delivered or picking them up in some kind of drive-through lane is a huge quality of life improvement for families like mine.

> What surprises me is that in many European countries, you can now order ALL of your groceries delivered.

In the US my local grocery (Harris Teeter) has a service where you order online and go through a drive through to pick up. The cost was $4.95/order or $99/year. They have recently added full delivery for $14.95/order (not sure on the yearly fee).

I live in a medium sized city.

HyVee (Midwest), is free for orders over a $100. Everyone I know without a family just ordered $101.

This is fairly common in the US as well.

Man, I must seriously have been unlucky in the places I've lived so far. Seriously never even heard of this being a thing until reading articles about Instacart and then Amazon Fresh, and thought "wow, wonder why nobody has done this before". Until this thread I still thought those were practically the only ones, and then only in like one or two cities.

Grocery.walmart.com

For packaged things sure, but who wants someone else picking out potentially crummy vegetables/fruit/meats? Do you inspect them while they arrive, and then what about rejecting them? Looking through produce and meats is part of the market shopping process.

> Yet nobody in the US does that (well nobody outside of big cities).

Because outside of the big cities, you don't give up a minimum of 2 hours of your daily life just driving to and from work. It wouldn't make sense to have someone take of tasks like that.

one or more shops near me in the U.S. suburbs has delivery. It's inexpensive but to keep it efficient the product range is more narrow. So they wont be getting your particular favorites, the essentials are covered. as somebody else pointed out though inspecting produce for delectability isn't going to be their concern.

Could the same have been said for Dollar Shave Club?

Maybe a good time to join a CPG/e-commerce startup :)

It's definitely a good time to join or start one: Verticalized Consumer Packaged Goods startups with solid software infrastructure (hence the ability to power logistics/distribution/etc. with software) can undercut incumbents while maintaining a healthy margin.

I think the key phrase here is _verticalized_. Go-to-market as well as scaling operations is much easier when you can focus on a single product category.

Reply on news.ycombinator.com