Jet.com Raises $350M, Expects $150M More | Hacker News Reader

Jet.com Raises $350M, Expects $150M More

recode.net

44 pointskawera47 comments

“Our philosophy at that point was, ‘Customers are never going to be easier or cheaper to acquire as they are today’ and we, as a small company and board, said we have to step on the accelerator to build this out,” “We literally bet the company and went through 12 months of runway in a couple of months because we thought that the time to own the market was right.”

I'll leave the googling as an exercise for the audience.

Interesting quote, but I'll save people the effort - it was Tige Savage from LivingSocial.

> http://www.nytimes.com/2015/11/22/technology/livingsocial-on...

I just visited jet.com for the first time and it welcomed me with an "attention required / Please complete the security check to access jet.com" captcha. Didn't bother to go further.

Amazon UX 1, jet UX 0.

That's Cloudflare

No. That's my user experience going on their website.

I think you meant:

  Yes agreed, that's Cloudflare. However, I personally feel
  that this gives a negative user experience.

No need to be so snarky. I was just pointing out what was causing it.

What I meant is that it is not cloudflare's fault. Cloudflare is only a 3rd party service provider. Jet is responsible for their own user experience.

Then they need to have a word with someone:

http://imgur.com/K8WmSqz

How does configuration of Cloudflare work? It happened to me too, so it doesn't sound like an isolated incident. I guess this affects thousands of people.

I haven't the foggiest idea. Maybe it's non-US IP addresses they're doing this to?

Edit: I did tweet my screenshot to @Jet and @Jetheads, I don't expect a reply any time soon, or ever, but worth a try.

This is very unsettling. Sounds like company changed its strategy in middle of funding rounds. I also see a lot of neutral to negative opinions about it.

Well, we will see, but I cannot say I am optimistic about "startup" rising so much money offering very little uniqueness. $20 mil funding and completely unique product - sure, but is this really that unique? Cant Amazon just adjust their offering within few weeks to kill anything that is unique about Jet?

Can't Jet just adjust their offering within a few weeks to match the tried and true practices that amazon.com - the $314.6 billion company - has developed over 21 years?

No.

> Lore defended the company’s aggressive advertising spending, saying the market opportunity is too huge to ignore. The e-commerce market is about $300 billion in the U.S., but it still only accounts for somewhere around 10 percent of all retail transactions, depending upon how you measure it.

Isn't this the exact phrase from the Livingsocial article from a few days ago?

Sure, if you are rushing to a new market (Uber, Airbnb, Ebay) you might get network externalities from being first.. but this?

Eh, for things like diapers where I am getting the same thing from them amazon, or elsewhere Jet does it cheaper and so they have been getting my $ the last few months. And the other day I ended up putting together a larger shopping cart of misc items and every single one was cheaper on jet than on amazon. I have noticed that in the last year I could find things just slightly cheaper elsewhere than Amazon, but when I factored in the convenience and shipping cost amazon usually won. So this cart full of stuff that was all cheaper than amazon was a bit surprising. For the pile of random stuff I seem to order every month or two I might just be looking to use Jet first in the future. They don't yet have the breadth of Amazon, but I was surprised at what they have which is what feels like a ton more than when I checked them out six months ago. For random disposable staples like diapers, batteries, super glue, pens, etc I don't have any real loyalty to any one retailer over another, but once I there I will probably keep re-ordering these for a while so as long as they are near the cheapest I'll stick around.

Oh and Jet's search works. I started writing up a comparison and grabbed quaker popped as my random selection choice and how amazon would have more, but honestly I couldn't get amazon's search to work to prove it so I was forced to conclude that maybe Jet's limited selection is just as good as Amazons. :| And if anyone from Jet is listening, can you add pepper flavor?

Do your orders who up in Amazon boxes? Mine didn't but after reading about that, I started to wonder how much of this is Value America 2.0.

Not yet, so far they have all showed up in Jet boxes.

If the uniqueness is 'being cheaper' than Amazon then this story is not going to end well. I believe that this is a terrible way to start a business. And I would bet that they do not have the efficiencies of Amazon's scale so they are probably riding on super thin margins - there's a lot of catch up to do. But again, maybe the market is big enough to sustain another player...

Amazon just seems to have let it's core business slide somewhat. Sure, they are focused on efficiency, but they are trying to let customers order 1 item at a time which means huge shipping costs. A large chunk of there selection is from re-sellers which means so-so customer support, and they have a lot of other products out there, kindle, fire, AWS, even a streaming service.

I think Amazon is also trying to pad their retail margins so customers don't really see the savings. Worse, they don't really have anything unique to support those margins other than a wide if somewhat padded selection. So, I doubt Jet is going to unseat them, but they are vulnerable.

"Being cheaper" worked out pretty well for Walmart. Amazon definitely has scale, and advantages of doing things in-house. Amazon's current problem though, they have spread themselves too thin, reporting losses a quarter ago, and AWS appears to be what is carrying them now. They could be ripe for an aggressive competitor to come in and cut their throat in retail. Do to Amazon what Amazon did to Borders.

However Jet is only cheaper because it's VC subsidized. Walmart was cheap because of their efficiency and vendor contracts (and abysmal employee conditions that followed). They were profitable from the beginning.

Jet will eventually have to IPO for the investors to liquidate. I feel as a pure ecommerce store, they're going to have to be profitable or wall street will tear them up.

Not exactly, here's my comment on why Jet is cheaper. https://news.ycombinator.com/item?id=10631311

Their website wants me to do a Captcha just to see page 1. They appear to be amateurs quite frankly. If you can't setup Cloudflare for a retail website then what else can't you setup?

> Jet shoppers bought more than $33 million in goods through Jet in October, up from around $10 million in August.[...] The company’s marketing head, Liza Landsman, said the company will spend, on average, $20 million to $25 million in marketing each month.

$33M in transactions is probably $5M in gross profit. Yet, they are spending $25M in marketing? These numbers don't add up at all. They are losing $200M a year because of marketing alone.

This screams Pets.com

I really like Jet's tech stack. I have shopped on jet.com for a while. Online retail still is not the biggest percentage of the total retail. Jet is in no shape or form dethroning AMZN. My guess would be they would like to be the obvious #2 in this space, Bing of Retail if you will and over a period as the share of Online retail increases in the over all pie, they get to have good valuation.

One thing Jet has to its advantage in trying to dethrone Amazon: They figured out how to defeat Amazon's Most-Favored Nation (MFN) clause, which requires sellers to NOT offer their products for lower prices on other venues.

It works like this: Jet buys the product from the merchant at the MFN price, then sells it to the customer for whatever price Jet chooses. Yes, the price could be higher, but probably will be lower than the merchant's (and therefore, Amazon's) price. They do this by sacrificing part of their commission the merchant pays Jet, and giving it to the customer instead.

They even have ways for the merchant to choose the same thing, for example, if the customer opts out of free returns, the merchant can pass a percentage along to the customer. Amazon can't get upset about that, because even though their MFN clause requires promotions to be consistent across platforms, there is a loophole in the case of Amazon tech stack not supporting the type of promotion being offered. Amazon has no way to rebate the customer for opting out of a free return.

Jet will deliver on its promise of lower cost shopping. Whether that substantially helps them unseat Amazon remains to be seen.

> They figured out how to defeat Amazon's Most-Favored Nation (MFN) clause, which requires sellers to NOT offer their products for lower prices on other venues.

Is that why some vendors won't let you see prices until you add it to your cart?

That's due to "Minimum Advertised Price" agreements with various manufacturers, not an Amazon-specific thing. Amazon has to do the same "add to cart to see price" thing when it's selling something for less than the MAP.

I'm curious what about their tech stack you like? I don't know much about it, other than pages are incredibly slow to load on both desktop and mobile, their checkout process is slow and buggy, and their customer service tools are wholly lacking.

The backend is a flashy real-time stream of billions of updates written in F# and running on Azure: http://hanselminutes.com/494/jetcom-scales-with-azure-f-and-...

The frontend is Node.js and Angular, according to their job postings: http://careers.stackoverflow.com/jobs/102502/front-end-devel...

Just visited Jet for the first time. Not sure what the distinguishing factor is. I guess they hope they can execute well enough to get bought by Amazon, or if not them, Walmart or someone?

Did you read the article?

> Jet’s founder Lore believes his company offers something different: A unique discounting structure that rewards shoppers when they put more items in their checkout basket. Orders that contain multiple items, ideally located in warehouses close to their delivery address, are more efficient and cost less to process. That allows Jet to pass along those savings to the customer.

That's hardly a moat. It sounds like a great example of FNAC - feature not a company.

I'm sure Amazon could implement that in about 15 minutes if they wanted to.

So we have one person complaining that they have no distinguishing factor, and when one is pointed out, we have another who says that differences aren't important... K.

Amazon already has implemented it both with Amazon Pantry and with Amazon subscribe and save. Each of them rewards you with discounts that increase as you add more stuff.

I use Amazon Pantry and subscribe & save. And honestly it's nice but not a killer feature.

The trickiest thing is estimating what subscription frequency to use. I barely even think about optimizing for % discount.

Right, I think thats why people are baffled at the heavy investment in jet.com. They pivoted to a neat feature but it is hardly an Amazon-killer type of feature.

The weird thing about subscribe and save is that the item's price fluctuates and you can end up paying more for something than you anticipated. For example, if you subscribe to some Diapers at $16 a box, and then the next shipment automagically charges you $25, I'd imagine you wouldn't be too happy.

Wow, I tried opening jets.com from Indian IP it doesn't open, using a US IP the site opens :D

I do not understand why jet.com says content not found, is the company's website down?

It's working for me.

In the future, check out http://downforeveryoneorjustme.com/jet.com

I am in India, and whenever I open jets.com it says NOT FOUND

jets.com is a different website to the one in discussion: jet.com :-)

Cloudflare captcha.

I can only imagine what the liquidation preference on a round like this must be...

Bring on the promo codes. :)

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