Ask HN: How did employees do after the Jet.com acquisition?
As the title said-- I'm just curious how the rank and file employees and engineers fared with the acquisition.
[1] see the subtle language that suggests Lore will be working on walmart.com: http://fortune.com/2016/09/20/walmart-acquisition-jetcom/
Is this really true? Isn't the prototypical example of real world big data that Walmart learned to stock pop tarts before hurricanes? They also seem to have a wide range of tech related jobs at their job portal.
My take is that even a very seasoned technology team with a deep bench can occasionally miss the beginning of something important, and be forced to catch up. 1) Don't let that be you. 2) Admit it, someday it will be you, so don't be so arrogant that you can't start executing plan B.
Wal-Mart does use IT to improve the flow of inventory, but also to improve our interactions with shoppers, employees, and the communities that the stores are based in.
We recently just had an internal hackathon, of which there was everything from AI to complete redesigns of our business model. I guarantee that one of those will become a full project withing the walls.
Insane Ideas. Save Money. Live Better
Unsolicited, free-to-steal idea dept.: I think there's a non-zero market (in some markets) to charge/invite customers to shop outside NBH / even shutdown 24/7 store temporarily for the right $$$$. I, for one, hate shopping with huge, slow crowds... I'll go somewhere else and/or only go during low-traffic hours. Btw, Costco (and what was PriceClub) used to do this (eg early hours) for commercial and executive customers... (oddly, IDKW I haven't downgraded to Basic given there's almost no advantage to Executive these days.) Apple, although upmarket extreme, also does this for shopping and training.
Also, wish large chains would trial Amazon Go-style cashierless checkout, but perhaps adding a paper receipt for legacy interop/loss prevention/audit. All kinds of great, reusable data could be had with ML/CV with real-time, total product awareness. Lots-and-lots of cameras, networking and datacenter floorspace... but likely worth the investment. AI tallying up what was taken as-it-goes saves a great deal of human effort and customer time, basically an inevitable modality.
EDIT: Maybe in the future, we won't even need stores when/if drones can bring things around to try out/handle returns/prevent loss. Can picture drones from multiple vendors jostling to sell competing product, getting angry with each other and undercutting pricing of each other in real-time. Perhaps even drones carrying flowers / selling "Rolex'es" on a train.
The whole customer experience for Amazon so much better though. It's definitely not perfect, but we went through a lot of trouble to be as accurate and upfront about delivery expectations, prices, alternative products, accurate reviews, etc. Walmart still has a ways to catch up on the customer side.
Returns are even worse, they will not comply with the store policy they have clearly printed on the signage behind them (eg: Store credit for an airbed that was defective and brought back the same day).
That being said, Amazon is sitting much worse with me than Walmart right now, over the past year I've had issues with 1/3rd of the products I've ordered off Amazon (bad mouse, Evo+ card performing at 6MB/s when rated for 25MB/s), and I'd never shop at any of the Amazon brick & mortar stores going up in Ballard or other parts of the city due to this. Amazon would likely sell me e.coli covered veggies at their current success rate.
A deeper analysis showed that fathers where being tasked with the replenishing of the diapers stock on weekends, and made a stop by the beer section on the way.
Following this, Walmart put diapers and beer close the each other, and sales skyrocketed.
It's probably not the real story, but it was a memorable enough introduction to get a bunch of sleepy students to learn what normal forms were all about.
I've wondered about that too. My very speculative hypothesis: Walmart's tech and operations are designed for the 'wrong' model:
* Walmart: Regional warehouses (do they use them?). Inventory at and distribution to 10,000 retail stores. Brick-and-mortar retail sales operations (including store location, greeters, placement on shelves, etc.). Appropriate partnering and other arrangements such as rack jobbing.
* Amazon: Inventory at and distribution to a few massive regional warehouses. Web-based retail sales operations. Appropriate partnering arrangements such as web referrals, drop shipping, etc. Distribution one item at a time to customers' homes and businesses.
The tech that runs Walmart seems like it wouldn't work for Amazon. Think of just distribution and inventory: Walmart ships items in bulk to stores (i.e., essentially regional warehouses where the consumers come and pick from the shelves); Amazon ships items one at a time to consumers.
For that matter, Walmart certainly does ship in bulk (as in, whole trucks), but the contents of those trucks aren't measured only in whole pallets of items, but also smaller replacement inventory amounts (ie. when an item is rung up on the register, the system increments by one the amount going out on the next shipment to that store, which might be the next day, not to mention the amount being re-ordered from the supplier, etc.).
Not to mention that Walmart does handle a lot ofbretail e-commerce purchases that are shipped to individuals.
Oh, and Amazon at one point was poaching a lot of Walmart's top folks, so there was obviously something they wanted to learn: https://www.cnet.com/news/amazon-com-wal-mart-settle-lawsuit...
(Wow, has it really been 19 years? Damn.)
Anyway, the comparisons between the two companies are far from straightforward.
They were one of their first big enterprises to embrace node.js, contributing in open source, and leveraging it to handle Black Friday traffic.
IMO the online grocery shopping experience is better than Instacart (it's a matter of when, not if, they add home delivery to pickup)
I think the idea that they aren't a technology company is the result of cognitive dissonance between stores and the back-office, that WalMart is the culture that People of WalMart mocks, a bunch of redneck bumpkins from red states.
In fact, I think that Walmart had a lot to do with the standardization of UPC codes, which is a technological innovation for sure. Depending on your definition, everything could be a technology play, which makes for a far less useful term.
Wallmart has absolutely amazing tech as a 'core competency'. You don't deliver more goods than anyone on planet earth without this.
But it was ops-ish. Not 'e-commerce-ish'.
Also - there is no 'acquihire' for billions. Surely some people are worth a lot, but even if he was worth that much, it's not within Wallmart DNA to do that.
Jet.com is a 'working infrastructure of direct e-commerce' that Wallmart surely sees as the future, and what is missing from their tech.
Imagine if they could graft Jet ops, into the Wallmart beast - it would make them Wallmart + Amazon type thing.
Which makes sense, even at high valuations. Wallmart business is so massive, that if anything can help them push out into more e-commerce domain, it's worth it.
The surplus in valuation is due to strategic alignment, not so much some 'op knowledge' that will increment revenues by x%.
Amazon is an existential threat to Wallmart, and the 'game is on' to win people buying online, so this was a weapon they bought.
Jet.com had great technical execution and some interesting predictive capabilities: e.g., if a customer felt overserved and didn't want 2-day shipping or return option, then there were additional discounts that could be offered. If this could tool Walmart up to the point where it could be competitive online, then maybe it would be worth just under 1% of their almost $500BB annual revenues to buy this company.
The Resource-Process-Value framework could be a decent way to think about this[1]:
> Every time one company acquires another, it buys its resources, its
> processes and its values. Acquiring managers, therefore, need to begin by
> asking, “What is it that really made this company that I just bought so
> expensive? Did I justify the price because of its resources–its people,
> products, technology or market position? Or is a substantial portion of
> its worth created by its processes and values–its unique ways of working
> and decision making?”
3B is nothing when you are preventing competition.
But Jet can only help Walmart compete with Amazon if it has some virtues. And the point is, even if its people are great, they aren't worth $3B. If Jet's technology or brand or whatever are going to help Walmart compete with Amazon, then it's not an acquire-hire.
So Walmart spent $3 billion to acquire someone who can spend cash fast? What exactly did he prove with Jet, other than he can spend more money to acquire customers than they will pay?
I only know what I read about it from a few articles, so I don't know the specifics. But from a consumer perspective Jet was losing horribly to Amazon - I'd use their coupons when it was cheaper than Amazon and then go back to Amazon. I figured out ways to essentially get steep discounts for every order, and even then I still preferred to use Amazon because it had less friction.
Maybe I'll just never understand big business.
My understanding is that Marc is none too fond of Amazon for whatever reason and jet.com was created specifically to beat Amazon. Jet's group coupon and localized shipping discounts became to hard to figure out profitability and keep growing the business so it was keeping raising and fighting or go help do it with Wal-Mart's checkbook. I actually think it was a win-win.
http://allthingsd.com/20131010/how-jeff-bezos-crushed-diaper...
Of course, I don't know the logistics and how Walmart's acquisition could effect their burn rate and their revenue stream. My point was specifically that Jet was spending money to acquire customers, but the customers (in my anecdotal experience) always went back to Amazon.
There is more than one flavor of unprofitability. On one end, you have Pets.com-style "selling stuff for less than it costs to stock and ship", and on the other end you have Amazon-style "every penny of profit and funding goes into expanding infrastructure ahead of projected demand and leveraging current infrastructure to enter new markets."
So true.
- Did they prove the membership model would work for them? No.
- Did they prove their loyalty program / gamified shopping (discounts, opting out of returns, etc) would work. No.
- Did they prove they could use technology to minimize shipping costs? No. they acquired customers by essentially giving away money.
They were basically fulfilling from Walmart and others at a loss. I can't think of another company post dot-com bust that deserved to crash and burn more than Jet. And yet they got a nice exit. The pixie dust must be amazing. Or it's just blinding FOMO on Walmart's part.
Anyway - the part that's ignored in their gamified shopping is that saving money requires work from the consumer:
- Use a debit card to save credit card fees - little to no consumer credit protections, no rewards points, can't delay payment. People that want to use this option aren't going to be the penny pinchers.
- Watch for the tag icon so you can bundle items that can ship together and save money. Requires work to save compared to competitors. Not everyone is a stay at home coupon clipper.
- Forego the ability to return your item and save money. If they know it's not likely to be returned - they should just lower the price on their end so the consumer doesn't have to think. And if there's a chance they might return it - now the consumer has to gamble? Sore taste the first time you gamble and lose.
- Free shipping, but only over $35. Another thing to think about.
I find it hard to believe that even with Walmart's audience, the gamification will pay that $3B off. Jet's trying to compete with Amazon on price, but they added more work for the user to save. And because of inventory/reviews/value, Amazon is the first stop for consumers. I don't see how Jet's offering is compelling at all.
Frankly my experiences are limited to the Walmart Open API that came out of labs, so likely I'm just looking at a very small portion of what they're really doing (I'd guess most of which is for in house audiences).
Not saying this is what happened, and I greatly respect Walmart labs, especially the electrode project.
Disclaimer: I work there.
Not a huge number of them but at the time of the acquisition, the average tenure of an employee was under a year because of the fast growth rate.
Disclosure, I was and still am at Jet. I won't throw my numbers out but I will say it is bellow the million line but also under a year of time pre-acquisition.
Disclaimer: I'm in Bentonville.
That said no matter how you slice it, it was an impressive deal considering the company itself was burning cash like crazy and failing badly on their original mission of going head to head with Amazon. Well done to the team there. Only time will tell if saving Jet was ultimately a good move for WalMart.
Edit: The employee in this thread is still working so not FU money. Maybe "FU for a year while I travel the world" money.