Lenny Rachitsky: evaluation

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 kind of dominoes that opened doors for me in my own ambition and my own sort of 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. And frankly, even in the case of Pets.com, like even the high profile nature of it, I could have worked at one of a thousand e-commerce websites in 1999. And when I went on to some subsequent job interview or something and talked about my experience, I had 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. And 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 kind of over-funded pet e-commerce sites, and we all raised in excess of $50 million, which is a tremendous amount of money now. It was a tremendous amount of money then, and we all thought it was a zero-sum game and that we as one player started to spend on promotion or to spend irrationally on national broadcast television advertising. We all did, and it became this kind of unwinnable arms race. So 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. And then of course, it's just like timing is really important. Chewy is a online pet store. It's 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 3 billion, biggest e-commerce acquisition of all time. And while 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, and 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's 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, 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. And 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. And it was a company that required additional investment to get to profitability. And so 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 sort of a fruitless attempt to salvage it.…

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