4 ms·

$3 billion is a lot to hire one person. They had to think the tech, relationships, or something there was valuable, it makes no sense as just an aquihire imo.

by ikeboy 10y ago

creaghpatr 10y ago
physical inventory, probably
wyc 10y ago
I think there's definitely truth in what you're saying, and that $3BB is surely a lot to hire an individual. However, a company is more than just its employees and cash on hand, and I think Walmart saw value in paying for a team that could enable it to execute successfully online. Jet.com had great technical execution and some interesting predictive capabilities: e.g., if a customer felt overserved and didn't want 2-day shipping or return option, then there were additional discounts that could be offered. If this could tool Walmart up to the point where it could be competitive online, then maybe it would be worth just under 1% of their almost $500BB annual revenues to buy this company. The Resource-Process-Value framework could be a decent way to think about this[1]: > Every time one company acquires another, it buys its resources, its > processes and its values. Acquiring managers, therefore, need to begin by > asking, “What is it that really made this company that I just bought so > expensive? Did I justify the price because of its resources–its people, > products, technology or market position? Or is a substantial portion of > its worth created by its processes and values–its unique ways of working > and decision making?” [1] https://www.forbes.com/2008/05/05/microsoft-yahoo-google-lead-clayton_in_cc_0505claytonchristensen_inl.html https://www.forbes.com/2008/05/05/microsoft-yahoo-google-lea...
ProAm 10y ago
> They had to think the tech, relationships, or something there was valuable, it makes no sense as just an aquihire imo. 3B is nothing when you are preventing competition.
- omarchowdhury 10y ago
  Competition that was on a cash burning trajectory that could have been picked for much, much cheaper later (or just died out)?
  - rgovind 10y ago
    If you go cheaper than that and wait, somebody else might snag them up!
  - KingMob 10y ago
    I think by "competition", they were referring to Amazon, not Jet. Buying Jet for 3 gigabucks could still be worth it, if it can help Wal-Mart vault into serious online competition with Amazon.
    - aetherson 10y ago
      Well, sure. But Jet can only help Walmart compete with Amazon if it has some virtues. And the point is, even if its people are great, they aren't worth $3B. If Jet's technology or brand or whatever are going to help Walmart compete with Amazon, then it's not an acquire-hire.
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$3 billion is a lot to hire one person. They had to think the tech, relationships, or something there was valuable, it makes no sense as just an aquihire imo.

by ikeboy 10y ago

$3 billion is a lot to hire one person. They had to think the tech, relationships, or something there was valuable, it makes no sense as just an aquihire imo.

creaghpatr 10y ago

physical inventory, probably

wyc 10y ago

I think there's definitely truth in what you're saying, and that $3BB is surely a lot to hire an individual. However, a company is more than just its employees and cash on hand, and I think Walmart saw value in paying for a team that could enable it to execute successfully online. Jet.com had great technical execution and some interesting predictive capabilities: e.g., if a customer felt overserved and didn't want 2-day shipping or return option, then there were additional discounts that could be offered. If this could tool Walmart up to the point where it could be competitive online, then maybe it would be worth just under 1% of their almost $500BB annual revenues to buy this company. The Resource-Process-Value framework could be a decent way to think about this[1]: > Every time one company acquires another, it buys its resources, its > processes and its values. Acquiring managers, therefore, need to begin by > asking, “What is it that really made this company that I just bought so > expensive? Did I justify the price because of its resources–its people, > products, technology or market position? Or is a substantial portion of > its worth created by its processes and values–its unique ways of working > and decision making?” [1] https://www.forbes.com/2008/05/05/microsoft-yahoo-google-lead-clayton_in_cc_0505claytonchristensen_inl.html https://www.forbes.com/2008/05/05/microsoft-yahoo-google-lea...

ProAm 10y ago

> They had to think the tech, relationships, or something there was valuable, it makes no sense as just an aquihire imo. 3B is nothing when you are preventing competition.

omarchowdhury 10y ago
Competition that was on a cash burning trajectory that could have been picked for much, much cheaper later (or just died out)?
- rgovind 10y ago
  If you go cheaper than that and wait, somebody else might snag them up!
- KingMob 10y ago
  I think by "competition", they were referring to Amazon, not Jet. Buying Jet for 3 gigabucks could still be worth it, if it can help Wal-Mart vault into serious online competition with Amazon.
  - aetherson 10y ago
    Well, sure. But Jet can only help Walmart compete with Amazon if it has some virtues. And the point is, even if its people are great, they aren't worth $3B. If Jet's technology or brand or whatever are going to help Walmart compete with Amazon, then it's not an acquire-hire.

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