Serial entrepreneurs have an uncanny knack of seeing
success in things others may choose to ignore or perhaps be oblivious
of. That is why they are on a constant quest to look for opportunities
that others may not even think as possible. Take for example, Marc Lore,
the president and Chief Executive Officer of Walmart e-Commerce’s US,
who has for almost two decades both founded and spun off companies at a
whopping profit. Each venture that he put his hand on was a success for
him. Right from the first company that he founded to his recent
association with America’s biggest retailer Walmart – everything has
been ever-so-shrewd.
Very few have had that kind of almost
single-handed success with so many start-ups as Lore has. Starting off
as a banker and then taking up executive roles at some of the leading
financial institutions had helped shape his intrinsic fiber that leaned
heavily toward savings – something that struck a chord with dozens of
investors all along, who came in heaps to invest in almost every company
that he founded or co-founded.
That besides there was always
novelty in what he tried to accomplish – something that adversaries
seemed to have missed. Take for example his diapers.com for families,
and wag.com for pet owners. These were simple and unassuming businesses
that dealt with the day-to-day needs of families.
It is these
types of initiatives that have caught the eye of investors who saw a lot
of value unlocking if they invested his ventures.
Education and early jobs
Lore
had his education from the Bucknell University as well as The Wharton
School (University of Pennsylvania). From the Bucknell University he
earned a Bachelor of Arts degree in Business Management/Economics (cum
laude) while he is currently on leave from the Wharton School of the
University of Pennsylvania. He is also a CFA Charterholder.
He
then went on to do a few jobs that not only sharpened his
entrepreneurial skills but also bestowed him with the much needed
business perspectives that would serve him well when he became an
entrepreneur.
The various investment banking positions was with
Credit Suisse First Boston as the vice-president of the risk management
division of its emerging markets business and then he headed the risk
management division of the Sanwa International Bank (London).
The entrepreneur…
After
almost half-a-decade or so of working in various banking positions,
Lore now set about his entrepreneurial journey. He then co-founded The
Pit Inc.,an Internet market-making collectible company constructed that
was floated as an alternative to eBay. Lore sold The Pit Inc., to the
Topps Company in 2001, and what’s more, he also went on to become the
Chief Operating Officer of one of the Topps Company’s subsidiaries
called Wizkids, Inc.
After a few years he co-founded his next big
venture called the company called 1800DIAPERS. The inception of this
came about through his realization of his own family’s problem of
keeping baby-care goods in stock. Thus he joined hands with Vinit
Bharara to start this company that met the needs of such families. They
would bring few more family-needs oriented companiescalled as soap.com,
wag.com, act. that they ran under one parent company called Quidsi. In
no time the duo were successful in building a building a loyal customer
base for each of these companies. The customers would invariably be
young couples who found themselves missing a thing or two while managing
their toddlers, and for whom these were like handy and very convenient.
In
a period of seven years starting from 2005 when they had started
diapers.com upto 2012, Lore initiated a spate of measures that would
help the company gain the competitive edge – mainly through
cost-savings.In fact, Lore’s measures such as improving the economics of
shipping bulky and low-margin products like diapers to their customers
bysetting-up warehouses as close tothe urban areas as possible so as to
be in a position to take advantage of bare shipping rates besides also
brought in algorithms to minimize shipping cost, and topped it all by
conducting warehouse operations using robots (Kiva).
Competition to Amazon…?
While
it might sound a bit stretched to say that a start-up made of assorted
items specifically for young couples only could challenge the might of a
global behemoth, the Goliath – Amazon itself was weighing options to
buy off Quidsi. It could be partly because Quidsi companies may end up
threatening Amazon’s baby-care business and partly because Lore’s
companies had succeeded in building up a very good customer base.
So,
it would appear that Amazon did decide to acquire Quidsi (and of course
the companies under its stable) after much deliberation as there were
many aspects to it than just competition and the potential loss of
revenue. Quidsi brought in a whopping $550 million to Lore and its
share-holders.
Lore didn’t stop there. Like he had done with the
sale of The Pit Inc., to the Topps Company, he again assumed a position
of responsibility at Amazon and stayed there for a couple years.
Jet, set, go
As
is their wont, entrepreneurs are always on the look-out for new
business opportunities. It is even more prevalent with serial
entrepreneurs because these guys are an aggressive lot. And so it was
with Lore. After the Quidsi sale to Amazon was done and dusted and he
had a peek into the functioning of how the world’s largest online
retailer worked and of course not before adding so much value to its
operations, Lore felt it was time for yet another venture.
This
time he co-founded an e-commerce company called Jet.com. The other
co-founders were Nate Faust and Mike Hanrahan. Like before, this time
round as well there was much interest from investors in the venture to
be floated by Lore and company. The trio raised about $80 million and
started work on the platform.
The USP of the platform was
something unheard and unseen of. If its Lore, it could be expected that
he would come up with something like Jet.com – an e-commerce platform in
the face of so many others only if he had something up his sleeve that
was distinct enough to attract customers to its fold.
His plan was
to compensate or reward customers for word-of-mouth publicity with
stock options. This wasn’t heard of. Thus a campaign was launched under
which Jet.com offered stock options to users who generated word-of-mouth
for the company in advance of launch. It eventually became a shopping
club with an annual membership fee that would allow members to access
all products with the lowest prices – and that too on millions of items.
The membership fee was subsequently taken off (Oct 2015) to retain the
customer base.
Even as Jet.com was in the process of generating
the intended interest and bringing in membership and some sales, it had
done enough to set investors thinking about its potential. As a result,
Lore was successful in creating a huge valuation for a company that
hadn’t yet delivered on the scale to be able to command such a
valuation. So, all one can say it that such high valuation could be
attributed to the goodwill of the people behind it and the idea they
wanted to forward. Thus, we can see that it all boiled down to
brand-Lore to make such valuation possible.
Walmart e-Commerce U.S. beckoned
The
situation was fertile for both Lore and Walmart. The retail giant had
been struggling for some time to make it really count offline as well
having missed the early days of the e-commerce when it would have given
it a level-playing field with the others such as Amazon and eBay. But,
having missed that phase and now finding itself in a situation where it
was increasingly threatened by the online players, which had begun to
make a dent into its topline, Walmart was looking to add some net-savvy
force behind its e-commerce platform.
Who better than Marc Lore
could drive that forward? And yet again, for a straight third-time, Lore
was able to successfully sell one of his companies to a bigger giant
and take on a position of responsibility.
Walmart bought Jet.com
for a whopping $3 Billion and also made a deal which would see Lore
assuming the leadership of the company’s e-Commerce US operations and
make it good.
Lore and Doug McMillon – the CEO of Walmart – had
deep discussions as how to revamp the online presence of the company and
make it count. They have already set in motion many plans under the
guidance and leadership of the proven visionary, Marc Lore.
Marc
Lore has always tasted success with everything that he has done or was
involved in. Will he be successful yet again? Well one cannot really say
as this time round he is pitted against none other than Jeff Bezos – an
equally enterprising and proven visionary. While it may not actually be
a Goliath Vs David but Marc Lore and Walmart are really up against it.
Other Association:
| |
 | E&Y’s Entrepreneur of the Year regional winner |
| Named one of the “smartest people in technology” by Fortune |
Quotes
| |
| “We’ll need to take the offensive, swim upstream.” – referring to the challenge of making it good amid immense competition online retail. |
| “The model was absolutely viable. I think the market is massive, and even a small share of a trillion-dollar [retail industry] is a pretty big business.” About the business model of Walmart e-Commerce US. |
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