Lenny Rachitsky: belief

Transcript context

…Probably the biggest lesson, it's not really about the specifics of the business. The biggest lesson really is these things make you better. In some instances, actually, I think in both instances they became dominoes that opened doors for me in my own ambition and my own professional life that maybe just wouldn't have opened at all if I hadn't gone to those companies and learned those things and had those experiences. Frankly, even in the case of pets.com, even the high profile nature of it. I could have worked at one of a thousand E-commerce websites in 1999. When I went on to some subsequent job interview or something and talked about my experience, they were like, I never heard of the thing that you worked on. But everybody certainly heard about pets.com. It's a pretty funny example too, of how some struggles are timeless. That was 23, 24 years ago now. While as a leadership team, we made I'm sure all kinds of mistakes. One of the things that happened was that there were three overfunded pet E-commerce sites. We all raised in excess of $50 million, which is a tremendous amount of money now. It was a tremendous amount of money then. We all thought it was a zero-sum game. That as one player started to spend on promotion or to spend irrationally on national broadcast television advertising, we all did. It became this unwinnable arms race. There is, I think, a fundamental lesson about having an excess of investment can be its own albatross. Or lead you to make decisions that maybe would be unwise. Then of course, it's just like timing is really important. Chewy is a online pet store worth $9 billion today. They were a private company and bought by PetSmart and then spun back out. But when they were bought by PetSmart, they were acquired for three billion dollars. Biggest E-commerce acquisition of all time. Well, I think it's probably unfair to compare Chewy who executed exceptionally well over a decade, grew their business brick by brick and turned it into something really remarkable. To pets.com, which was in a very, very different moment in time and tried to go to market in a really different way. The critique that is often leveled at pets.com, or at least at the time, was like, this is just a stupid business. They're shipping dog food around. You could never make that work. That's just wrong. You absolutely can make it work. Probably can't make it work when 80% of the country on the internet is still on dial up. It was really, really early. I saw a stat, I think you shared somewhere, that you took pets.com from nothing to a public company to completely out of business in 19 months. Yeah, I think that's about right. The other thing that's forgotten in the tale is that we actually didn't go bankrupt. We shut the company down and returned the remaining balance to the investors, which no public company had ever done before. The leadership team just reached the conclusion that given the way market conditions had evolved, there was just no way we were going to be able to get more capital into the company. It was a company that required additional investment to get to profitability. It was better to wind down early, take the money that we had in the bank and get it back to investors than to just spend every last penny on what was a fruitless attempt to salvage it.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.