Posted by Joseph Phillips, Jr. on Friday, October 19, 2012 at 5:14 PM PDT
The Albers Executive Speaker Series kicked off the 2012-13 year with Mark Vadon, co-founder of two successful Internet startups - Blue Nile and zulily. Mark co-founded Blue Nile in 1999 and zulily in 2009. Blue Nile sells diamonds and fine jewelry. Zulily offers daily deals on clothing and accessories for moms and children. Both companies were inspired by Mark's experience as a consumer - trying to buy an engagement ring sparked the idea for Blue Nile. Having to gear up for his first child led to applying the flash sale concept to children's clothing.
In discussing Blue Nile, Mark took us back to the Internet frenzy of the late 1990's. Jewelry was one of the few verticals that someone was not trying to dominate, but the experts were saying that jewelry would not work on the Internet because price points were high and people needed to touch the product. Despite the Internet crash with the resulting hit to capital access and the steep drop in consumer demand after 9-11, Blue Nile was able to survive and ultimately thrive.
Zulily has been a big success and is growing rapidly. The company just moved into the British market and has plans to expand to other global markets. At one point, Mark did a "compare and contrast" of the two businesses. Blue Nile is focused on male customers, zulily is focused on females. Blue Nile does not lend itself to impulse shopping, zulily does. Broad market advertising such as display ads do not make sense for Blue Nile - targeted advertising such as paid search works better for finding the customer about to get engaged. Zulily can cast a wide net because there are so many more potential customers out there - moms with young children!
What are some lessons Mark has learned in founding Blue Nile and zulily? Get something out there and up and running. Don't take three years to plan it. Start collecting data and see what is working and not working and respond accordingly. Execution is critical for success, so do not underestimate that. Surround yourself with good people, and make sure they are not like you. They need different skills and a different perspective.
Mark recently joined the board of Home Depot and was asked how that fit with his interests and experience. He responded that Internet sales are increasingly important to Home Depot and he brings his experience and understanding of Internet retail to the board. He noted that both his businesses and Home Depot are customer focused, and he has spent his time competing against brick and mortar retail, so being on the board allows him to see the market from that side. He is also amazed at the number of zeros in the financial report - he is used to seeing smaller numbers!
Mark noted that mobile devices are creating a sea change in commerce and how customers shop. Retailers now must be ready to serve customers across multiple platforms, with desktops, tablets, and phones all requiring something different. Mobile is a plus for impulse shopping (think zulily), but not so much for more deliberative purchases (think Blue Nile).
Mark Vadon provided a great start to the Speaker Series for 2012-13. He spoke candidly and gave our students excellent advice, while also providing many keen insights on web-based commerce. Thanks, Mark!