What If...

Why Startups Fear Amazon: The Price Cut Behind The Acquisition of Quidsi

The Amazon in the room

Here’s a little interesting history  for a slow news day. We were chatting with a well respected VC about the explosion of e-commerce companies in New York. On the list of IPO hopefuls at the recent Goldman Sachs conference in Las Vegas were a number of relatively young Silicon Alley companies: Birchbox, Warby Parker and One Kings Lane. A investor we spoke with recently was kicking himself for passing on Fab.com, which has hit more than 1.5 million users and a $50 million annual revenue run rate in the span of just six months.

The social infrastructure in place on the web today means e-commerce companies can scale up very quickly. One of the big success stories that people point to is Quidsi, the parent company of diapers.com, which was acquired by Amazon for in November of last year for $545 million. But while that purchase was heralded as a big win, it’s actually a cautionary tale. Read More

The Third Degree

Quidsi Co-Founder Marc Lore on What Happens After Amazon Buys Your Company and His New Site YoYo.com

Mr. Bharara and Mr. Lore (right) via NJ.com

If you’ve seen the ads for BeautyBar.com (cosmetics) and Wag.com (pet care). Soap.com sends you stuff you don’t have time to pick up from the drug store.

It’s e-commerce play in an app economy that may be more closely associated with the dotcom era, except, you know, with much better margins. Quidsi, launched by friends Marc Lore and Vinit Bharara, is also known for its Zappos-rivaling customer service and rapid-fire delivery times, a particular obsession of Mr. Lore’s. That might be why Amazon, which owns Zappos, purchased Quidsi for $545 million last November. Read More