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"rethink cost structures" - says the CEO. Well, don't be in manhattan. Go to Nebraska or Idaho or something.
by gdilla 10y ago
"rethink cost structures" - says the CEO. Well, don't be in manhattan. Go to Nebraska or Idaho or something.
- bkjelden 10y agoBulu Box[0] is a subscription box startup that did exactly that (headquartered in Lincoln, NE). [0]:http://www.bulubox.com/ http://www.bulubox.com/
- HelloImDumb 10y agoWow, you have a box subscription for snake oil and diet pills? Sign me up!
- sotojuan 10y agoIs there any precedent of a start up doing this? I'd imagine a lot of their engineer talent would be lost, but I'm happy to be proved wrong.
- throwawaysocks 10y agoThere's a difference between losing engineering talent and not being able to get engineering talent.
- pbreit 10y agoI don't think there'd be much trouble on the engineering side. Let's be honest, there's not much tech in box-o-the-month services. It's the business and marketing folks that benefit from being in the dynamic cities.
- DelaneyM 10y agoThe problem is the sales order flow and fulfillment / operations at scale (which is an engineering challenge). When you're in a growth period that's easy to discount, your challenge is (and should be!) top-line revenue. But in a crunch shaving 20-50% of order processing and fulfillment costs is mana from heaven, creating profit where one there was only red ink. That takes a hand-rolled system, and ops-eng is hard and requires very specialized knowledge.
- pbreit 10y agoMaybe in a conventional ecommerce company but monthly boxes are infinitely easier to manage ops-wise. You only have a dozen or so SKUs, know exactly how much you need weeks in advance and have months to plan everything out.
- morgante 10y agoActually, I believe birchbox does heavy customization and tailoring of boxes to individuals.
- DelaneyM 10y agotl;dr: so you haven't actually implemented a scale ops system, eh? A) Shipping pre-packed boxes is not substantially easier. Order assembly/fulfillment is not the hard part of ops. Sort of like HTML is not the hard part of web development. It's just the part laypeople experience first-hand. B) Birchbox is investing a lot in follow-on ecommerce sales of the same products they ship monthly anyways, so they don't get to make simplifying assumptions. C) Birchbox is substantially harder than a traditional pick&pack setup. It's unique enough that they have to build their own model, makeup is perishable (so skus aren't fungible!), they have hundreds of small providers by design, and their sku set cycles fully every month or two. Source: I built system & ops for a company with both a subscription business and substantial real-time eCommerce ops, which is comparable in size to Birchbox USA.
- princetontiger 10y agoI interviewed for a very senior finance role at a public company a few days ago. The entire group of analysts and managers is based in a southern US state, while the executive team resides in NYC. Pretty crazy, but makes sense from a business stand point.
- Scoundreller 10y agoThe question is: Could the exec team haved have lived in that state?
- pbreit 10y agocuz there's a lot of successful startups coming out of Nebraska and Idaho!