Office Hours Podcast: Lessons Learned During Zulily’s Rocketship Rise
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
How tough is it to infuse a retail website with entirely new products every day? Very. But that's exactly what Zulily, an ecommerce site that sells unique retail brands primarily to women, did when it went live in 2010.
On this week's episode of "Office Hours," Spencer talks with Zulily founder and former CEO Darrell Cavens and Harvard Professor Jeffrey Rayport about Zulily's astonishing success and some granular lessons learned from a company that grew incredibly big incredibly fast.
The idea was the brainchild of Darrell and his cofounder Mark Vadon. Both had young children at the time and wanted to create a retail shop that offered good products at affordable prices — with a generous splash of entertainment. Consider this: When you go to a traditional retail website, the items featured will stay up for weeks or months. Zulily customers were taken in by the excitement of scrolling through fresh product daily that lasted on the site for a comparatively short 1-3 days.
Darrell describes his team as "kind of like the production people and editorial writers at a newspaper." He says Zulily headquarters had "55 photo studios that were taking photos. We had teams of writers. We had over 500 people in merchandising that were kind of telling stories with product every day."
Customers were loyal, buying around five times a year. Zulily soared in sales. And Darrell ran a smart ship. For example, Zulily might strike a 60-day term with a vendor. It collected customer cash upfront, so as the company grew, it was generating money. The company saves money on shipping costs by not delivering to customers quickly. Zulily waits until they can order the inventory from vendors in bulk. In 2015, just five years after it went live, Zulily sold for $2.4 billion.
It's a fascinating business story that includes some hard lessons, and one I watched unfold in real time as I served on Zulily's board of directors.
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Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
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