Jimmy McMillan had a point. Just one. The rent is too damn high.
McMillan founded the Rent Is Too Damn High party and ran for mayor of New York City in 2005 and 2009 and governor of New York state in 2010. While his bids were unsuccessful — McMillan never won more than 1% of the vote — he succeeded in going viral, spawning memes and even a music video.
McMillan retired from politics in December 2015, so he’s probably never seen Peloton’s income statement. If he did, he’d have a second point:
Mark Zuckerberg is an empire builder. Facebook gobbles up online advertising dollars like Joey Chestnut eats hotdogs. Every month, nearly 2.9 billion people use one of its apps. In some parts of the world, Facebook is synonymous with the internet. Yet despite a net worth in the billions and impressive hydrofoil surfing and boar hunting skills, I get the impression that Zuckerberg doesn’t sleep very well.
There are a few reasons to be anxious. First, Facebook doesn’t own a mobile operating system, so it’s at the mercy of Apple and Google. That’s why 20% of Facebook’s engineers are working on…
E-commerce seems inevitable in retrospect, but its initial prospects were fraught. According to the Pew Research Center, in 1995 only 8% of Americans were comfortable buying something online with a credit card. eBay is the great grandmother of US e-commerce, creating a market and blazing a trail for companies that would come after like Airbnb, Carvana, and Etsy. This is the second part of a deep dive into eBay, based on Adam Cohen’s book, The Perfect Store: Inside eBay (here’s part one).
eBay was the rarest type of startup: profitable. …
E-commerce seems inevitable in retrospect, but its initial prospects were fraught. According to the Pew Research Center, in 1995 only 8% of Americans were comfortable buying something online with a credit card. eBay is the great grandmother of US e-commerce, creating a market and blazing a trail for companies that would come after like Airbnb, Carvana, and Etsy. This is the first part of a deep dive into eBay, based on Adam Cohen’s book, The Perfect Store: Inside eBay.
Before the internet, the perfect market was an economics textbook pipedream. A perfect market would have plenty of buyers and sellers…
There’s always a reason why a subway car is empty during rush hour. Always.
New York City has many rites of passage, like finding out the hard way the difference between an express and local train or falling asleep on the F and waking up in Coney Island. For the nocturnal set, another is waiting in line outside a club, only to find out that it’s empty when you finally get in. Which brings us to Clubhouse.
The day you stop changing is the day you die. Nike built its business off a strong wholesale distribution network. In 2016, this channel accounted for 74% of its sales. In 2017, Nike’s distribution network was over 30,000 strong, ranging from independent shoe stores and skate shops to scale players like Amazon and Foot Locker. But the world doesn’t stand still. Winning means skating to where the puck is going, not where it is. The secular shift to e-commerce meant consumer behavior was changing, so Nike changed too.
In 2017, the company replaced its wholesale distribution playbook with Consumer Direct…
For online businesses, improving conversion is a superpower. Below, a look at conversion rates, what Bill Gurley, a general partner at Benchmark, calls the most important metric of all. Thanks for reading.
Conversion is the holy grail of online business. Improving conversion is a force multiplier producing outsized financial results and driving competitive advantage. No wonder Gurley sees conversion as the most important metric:
This is the art of conversion: improve your site’s conversion and you simultaneously increase operating leverage AND increase competitive differentiation — a truly powerful combination.
Bill Gurley is a general partner at Benchmark with deep expertise in online marketplaces. His blog, Above the Crowd, chronicles the rise and fall and rise again of tech over the past two decades. It’s a great resource for learning about online business models.
This week, a look at the uses and abuses of the lifetime value formula, a frequent topic for Gurley.
Thanks for reading.
The value of a business is the present value of its customers’ future cash flows. Businesses grow by acquiring new customers, retaining existing customers, and improving monetization (getting customers to pay more). The consumer…
When businesses decide how to allocate their capital, they essentially have four options: reinvest, return capital to shareholders through dividends or repurchases, take on mergers and acquisitions, or build the balance sheet. Historically, tech companies have favored reinvesting: hiring more engineers, entering new markets, and building new products. But as tech profits and cash flow has grown, companies are increasingly turning to M&A and capital returns. One tech company that has fueled its expansion through M&A in the last few years is the e-commerce marketplace Etsy, that was founded in 2005 and went public in 2015.
When Josh Silverman and…
People love free stuff. In the summer of 2007, I interned on a Wall Street trading floor. Times were good. Housing prices and bonuses could only go up . At lunchtime, I was struck seeing traders in Ferragamo ties jostling for free Chinese food. As a college student, there was a lot I’d do for a free meal: attend guest lectures, film screenings, club info sessions, you name it. It turns out a trading floor wasn’t that different, except for all the Gucci loafers.
On June 22nd, Peloton launched Corporate Wellness. The program’s economics should make the company as happy…