David Rosenthal: evaluation

Transcript context

…You’re buying directly from them. You don't really know who the farmer is on the backend. It's your classic retail model of the retailer buys it from the wholesaler, keeps the inventory, has that tough business model—especially when the goods are spoiling—and then sells it to the consumers. I have to suspect they learned some lessons in the trickiness of holding inventory that would lead them to later embrace the market place. Yeah, totally. You hit the nail on the head there. They're a retailer in this model, which is interesting given Colin comes from an ecommerce background. That was probably what was natural to him. That's what his first company was, a retailer. That's why they thought to do it this way, but it turned out, there was a better way. Pinhaohuo is doing really well. They've raised venture capital. It's an exciting business. Clearly, they've hit a good wedge into the ecommerce market with produce and agriculture. Of course, their ambitions and [...] are much bigger than that. They started thinking about what other categories can we go into next and build on this foothold? Maybe we can start to compete with Alibaba and JD (eventually). Eventually being six months from now as we'll see. What did they do? He’s like, oh yeah. I got this gaming studio—an incubator that I have. Let's just have the team spin up some MVP type stuff in some other categories. Okay, great. What's the easiest way to do that? Being a retailer, we did this MVP with Pinhaohuo, but that was kind of hard. We built a bunch of infrastructure and it certainly requires cash. We're really just trying to learn here, let's just do it as a marketplace. We won't take inventory. We won't even really take much of a cut on the transaction. We'll make it super super small. Less than 1% of the transaction we'll take as a cut for our marketplace fee, which is different. I think Amazon takes—what does Amazon take? 30%.…

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