Encouraged by its market share of my personal collection, I thought i'd write about Austin-based Four Hands, a great business grounded by a higher purpose. Inspired by their travels in India and Pakistan, Brett Hatton and his wife founded the stylistic furniture concern in 1996 with the notion of importing eastern designs to the west while maintaining each piece's unique history by touching each one with their "four hands". They either manufacture, finish, or hand pick all of the furniture that they sell. They visit with specific artisans that craft the items all over the world, built manufacturing sites in India and elsewhere, and have paid great attention to supporting the communities that they affect in a positive way.
By any definition, Four Hands has been a commercial success. I estimate their sales are approaching $100M given what i've read (although its hard to say since they are private) and they seem to have a deployed a sound strategy of distribution deals and acquisitions to fuel their growth. Just over the past several months, they announced two acquisitions (a lighting designer and a specialty distributor of Hondurian artisan crafted items) and a partnership with an eco-friendly furntiture designer. They started by selling pieces to the likes of Neiman and Crate & Barrell, but hit the trade shows in a very big way to diversify its customer base and add to its chicqeness. Whats more amazing is that for such a highly complex, capital-intensive business, it does not appear they've incurred any debt or equity offerings. I'm sure it will be difficult to keep their uniqueness while continuing to expand so rapidly.
What's more compelling is that English-born Hatton has taken it upon himself to better the areas, particularly India, where most of Four Hands' pieces originate. In addition to the international charities the company supports such as UNICEF, Hatton has co-founded Miracle Foundation, a non-profit that builds and supports children orphanages, and Learn to Live, which educates young women in India. They also try to cut out middlemen importers by going straight to artisans and the source of their products (although not sure how scalable this is as they continue to grow). Four Hands also been listed in Business Week's listings of top companies that promote job growth in inner city communities (South Austin). I think this attention to a somewhat loftier goal has propelled the company through its profitable first 15 years. Close attention to the details, including the environment in which you operate, I feel is a recipe for great success in business.
I like to see good companies with innovative offerings, solid business strategy, and a 'good heart' enjoy growth and success. Its sort of the win win that helps fill unmet consumer demand while enhancing society overall. So I raise my (two) hands in approval for the company that has taken prominence in my living room.
18 November 2010
02 November 2010
microfinance in macro economies
Microfinance works. But can it in the US?
First off, I've always felt business-based principles are the best way to solve the world's problems in the long-term, and certainly microfinance has done its part. Bangladeshi economist Muhummad Yunnis revolutioned how we alleviate poverty by bringing microfinance to the masses in 2006 with the launch of the Grameen Bank (and he won the Nobel Peace Prize too). He created a system that provided loans to the poorest of the poor who had no access to capital, built sustainable small businesses around the world, facilitated oppressed women to gain financial freedom, and allowed financial instititutions to at least break even if not turn a profit. The net impact has been a self-sustaining model that has lifted millions of people out of poverty through a free enterprise, non-entitlement based system. People pay interest, face default penalties, but more incredibly, actually pay their loans off at a higher rate than traditional borrowers.
Despite the negative things you hear (ie. last week's news that the Indian state Andhra Pradesh's government placed a moratorium on repayments), by and large it has worked. The biggest drawback has been its reach. In emerging countries like India or Brazil which are capitalistic-centric, politically stable, and possess a self-contained economy, it has worked quite well. India itself is on pace to see $4B this year in microloans. That is alot when you consider most loans are less than $200. Culturally, the concepts of loan repayments are not novel and small businesses are the norm not an exception. In other places, it has been harder and less effective. Particularly in Europe and the US where the economics have just not worked out on a large scale.
I was happy to see last week one of my favorite microfinance efforts Kiva, announce two new microfinance initiatives in the US. For those that dont know Kiva, it is the ebay of microfinance (founded by former paypal execs): it allows anyone to make a loan around the world via an easy online transaction, track an entrepreneur's progress, and offers more visibility than has ever been offered through its rating system and grass roots due diligence. Transparancy and ease, my two favorite pillars.
But can microfinance work in the US? Kiva and Accion are offering microloans to fisherman and others affected by the BP spill. Is big business too prevalant for it to work on a large scale? How is a small loan going to really help someone in the long-term (versus a simple charitable donation) ? Does the math of a $200 loan just not work in high cost of living jurisdictions? Do we need specialty microfinance institutions from abroad who have the expertise to make it work at home ? I'm not sure what the answer is - but surely if it can work in poor areas of Asia that we have enough creativity to make it work in poor areas of the US. With the US economy facing a prolonged downturn, perhaps what we need most is for small, innovative businesses to grow and thrive when government and corporations cannot fill the gaps.
First off, I've always felt business-based principles are the best way to solve the world's problems in the long-term, and certainly microfinance has done its part. Bangladeshi economist Muhummad Yunnis revolutioned how we alleviate poverty by bringing microfinance to the masses in 2006 with the launch of the Grameen Bank (and he won the Nobel Peace Prize too). He created a system that provided loans to the poorest of the poor who had no access to capital, built sustainable small businesses around the world, facilitated oppressed women to gain financial freedom, and allowed financial instititutions to at least break even if not turn a profit. The net impact has been a self-sustaining model that has lifted millions of people out of poverty through a free enterprise, non-entitlement based system. People pay interest, face default penalties, but more incredibly, actually pay their loans off at a higher rate than traditional borrowers.
Despite the negative things you hear (ie. last week's news that the Indian state Andhra Pradesh's government placed a moratorium on repayments), by and large it has worked. The biggest drawback has been its reach. In emerging countries like India or Brazil which are capitalistic-centric, politically stable, and possess a self-contained economy, it has worked quite well. India itself is on pace to see $4B this year in microloans. That is alot when you consider most loans are less than $200. Culturally, the concepts of loan repayments are not novel and small businesses are the norm not an exception. In other places, it has been harder and less effective. Particularly in Europe and the US where the economics have just not worked out on a large scale.
I was happy to see last week one of my favorite microfinance efforts Kiva, announce two new microfinance initiatives in the US. For those that dont know Kiva, it is the ebay of microfinance (founded by former paypal execs): it allows anyone to make a loan around the world via an easy online transaction, track an entrepreneur's progress, and offers more visibility than has ever been offered through its rating system and grass roots due diligence. Transparancy and ease, my two favorite pillars.
But can microfinance work in the US? Kiva and Accion are offering microloans to fisherman and others affected by the BP spill. Is big business too prevalant for it to work on a large scale? How is a small loan going to really help someone in the long-term (versus a simple charitable donation) ? Does the math of a $200 loan just not work in high cost of living jurisdictions? Do we need specialty microfinance institutions from abroad who have the expertise to make it work at home ? I'm not sure what the answer is - but surely if it can work in poor areas of Asia that we have enough creativity to make it work in poor areas of the US. With the US economy facing a prolonged downturn, perhaps what we need most is for small, innovative businesses to grow and thrive when government and corporations cannot fill the gaps.
20 October 2010
ted's talks and next gen education
I am definitely late to the TED party, but i think it's worth discussing since I think it seems to be a proxy of what our education will (or should) look like in the years to come.
Originally an annual technology conference, TED only recently came into the mainstream conversation when it began to post some of the best talks online. Hosted by the non-profit Sapling Foundation, TED hosts annual conferences where the best and brightest give presentations on innovation, science and technology, philosophy, and other trends that can make the world a better place ($100k prizes are given in a contest for entrepreneurs to launch ideas that can change the world) . The who's who in every major field of study has presented, and the site has been viewed almost 300M times since 2007. Major publications like Forbes opine that TED is more important than Harvard.
While I doubt i'll ever get invited to participate, I do enjoy its robust library. It's truly amazing the perspectives and content available from so many thought leaders for free. One talk that intrigued me was creativity expert Sir Ken Robinson's talk on how our current education system kills creativity. He discusses how we put kids in boxes based on what educators value today, the paradox of having such a rigid formal education system lasting 18 years when we cannot even fathom what the world will look like in five. It used to be a degree would insure a job; but thanks to technology and globalization, that's just not the case.
Alot of what Sir Robinson's diatrage makes sense. How can the static system of education address internet time? The bigger question is how is the system going to adapt to the new world? I'm not talking about Ipads for 10 year olds, rather how more fundamentally can we adapt our deeply rooted system into something that addresses what the future really holds. Literacy and basic math skills are just not going to be enough anymore. Creativity and cognitive thinking will prevail over memorization and standarized tests.
You already see glimpses of the change. Former hedge fund manager and MIT grad Salman Khan established Khan Academy in which he posts tutorials on basically everything kids learn (that he himself writes) in an easily digestable and available format. John Doerr and every VC has been chomping at the bit to invest in Khan Academy, but they've been limited to becoming donors (since its non-profit). By reviewing some of the lessons, its clear to me how textbooks will ultimately fade over time just as the bookhouses that sell them are today. Kids now learn in small doses and in different mediums. Goodbye Moby Dick, hello wikipedia.
Other less altruistic initiatives are also becoming more pervasive. Vocational schools, free or subsidized university offerings, for-profit education concerns, Kumon and other learning centers, and of course online degrees and education. These are all big business right now. Some, in my opinion, are just a fad; but others will continue to thrive.
The world is changing quickly and so should our education system if our children are to thrive. TED and Khan are great examples of education initiatives that the more fortunate can give to the masses. Their content is not just the plain "how to" stuff you find, but the type of content had been reserved to the elite and well educated in the past. It will take alot more these great ideas to help the next generation to compete, adapt, and of course, change the world.
soumia10.14.10
Originally an annual technology conference, TED only recently came into the mainstream conversation when it began to post some of the best talks online. Hosted by the non-profit Sapling Foundation, TED hosts annual conferences where the best and brightest give presentations on innovation, science and technology, philosophy, and other trends that can make the world a better place ($100k prizes are given in a contest for entrepreneurs to launch ideas that can change the world) . The who's who in every major field of study has presented, and the site has been viewed almost 300M times since 2007. Major publications like Forbes opine that TED is more important than Harvard.
While I doubt i'll ever get invited to participate, I do enjoy its robust library. It's truly amazing the perspectives and content available from so many thought leaders for free. One talk that intrigued me was creativity expert Sir Ken Robinson's talk on how our current education system kills creativity. He discusses how we put kids in boxes based on what educators value today, the paradox of having such a rigid formal education system lasting 18 years when we cannot even fathom what the world will look like in five. It used to be a degree would insure a job; but thanks to technology and globalization, that's just not the case.
Alot of what Sir Robinson's diatrage makes sense. How can the static system of education address internet time? The bigger question is how is the system going to adapt to the new world? I'm not talking about Ipads for 10 year olds, rather how more fundamentally can we adapt our deeply rooted system into something that addresses what the future really holds. Literacy and basic math skills are just not going to be enough anymore. Creativity and cognitive thinking will prevail over memorization and standarized tests.
You already see glimpses of the change. Former hedge fund manager and MIT grad Salman Khan established Khan Academy in which he posts tutorials on basically everything kids learn (that he himself writes) in an easily digestable and available format. John Doerr and every VC has been chomping at the bit to invest in Khan Academy, but they've been limited to becoming donors (since its non-profit). By reviewing some of the lessons, its clear to me how textbooks will ultimately fade over time just as the bookhouses that sell them are today. Kids now learn in small doses and in different mediums. Goodbye Moby Dick, hello wikipedia.
Other less altruistic initiatives are also becoming more pervasive. Vocational schools, free or subsidized university offerings, for-profit education concerns, Kumon and other learning centers, and of course online degrees and education. These are all big business right now. Some, in my opinion, are just a fad; but others will continue to thrive.
The world is changing quickly and so should our education system if our children are to thrive. TED and Khan are great examples of education initiatives that the more fortunate can give to the masses. Their content is not just the plain "how to" stuff you find, but the type of content had been reserved to the elite and well educated in the past. It will take alot more these great ideas to help the next generation to compete, adapt, and of course, change the world.
soumia10.14.10
07 October 2010
UPDATE: FB, Google, and monetization
A very interesting techcrunch article touches many of the questions I've raised here at atma. It debunks how Facebook will make gobs of money - a question I pondered in my new favorite business model post. It's very interesting - they hypothesize that it will primarily come out of the $60B advertisers spend on TV and not at the expense of google (another topic I discussed in my groupon post). They think brand advertisers will flock by the thousands since there is no good way to target demographic-based audiences online (text search by google is an agnostic algorithm at this point). Some good points they raise; I'm not sure if they are drinking the cool-aid after the new FB movie, or if in fact, the seismological shift from traditional media will happen as rapidly as they predict.
I think they are being a bit optimistic. Google basically came out of nowhere and swallowed billions of ad dollars. The market was not ready for search, particularly the quality of Google's engine. Do you think NBC doesn't know about Facebook? FB has been amassing over a half billion users over the years with more buzz than a reggae cafe. Don't get me wrong, I think they can win. There will be a lot more competition in its way which is why i think the shift will be far more gradual than the article predicts. I also don't think it will be the end of groupon or paypal the way they anticipate. Either way - FB just might be able to outmonetize its hype. And get an academy award while they are at it....
I think they are being a bit optimistic. Google basically came out of nowhere and swallowed billions of ad dollars. The market was not ready for search, particularly the quality of Google's engine. Do you think NBC doesn't know about Facebook? FB has been amassing over a half billion users over the years with more buzz than a reggae cafe. Don't get me wrong, I think they can win. There will be a lot more competition in its way which is why i think the shift will be far more gradual than the article predicts. I also don't think it will be the end of groupon or paypal the way they anticipate. Either way - FB just might be able to outmonetize its hype. And get an academy award while they are at it....
29 September 2010
Southwest's Expansion M&A
M&A can work, just not for the elephants in the room. This week, I intertwine two topics I've discussed before in light of major events announced last week in the airline industry.
First, the good. I like to write about admirable companies; those that are profitable, well run, culturally hip, and leave a positive footprint on society. I wrote about Starbucks in great detail; and certainly Southwest Airlines is one that tops my list.
I've always had a soft spot for Southwest Airlines. They are the only airliner that hasn't lost money, filed bankruptcy, or use that awful hub and spoke model. They've posted profit every year of their existence, never had a single layoff (they didn't use their employees as pawns during the 9/11 crisis as others did), and still let your bags fly for free. Sure they make you find your own seat and sing showtunes every now and then. But its their playbook, and it works well. And they've done right to all of us. Have you ever priced out fares in markets that Southwest is in versus ones they aren't?
Southwest announced last week its buying Airtran for $1.4B. Its the largest risk in the company's history. They plan on eliminating many of Airtran's ancillary fees, increase flight routes, and adding 2,000 jobs over the next two years. The merger is predicated on growth and achieving greater scale. I think its smart. It's not too big that it's unmanageable, they can pool their plane orders, and Airtran's cost structure is actually almost comparable to Southwest. Despite my skepticism of large scale M&A, I think Southwest is looking at this as expansion M&A. An area that has at least has a chance to succeed.
Now the bad. They are the legacy, inefficient companies that look at M&A differently. They do deals despite the pitfalls I outlined in a prior post mostly for defensive measures. In this case, I'm referring to the United and Continental's $3B merger closing announced last week.
These companies, on the other hand, use lots of red ink (lost a combined $7B in 2008 and 2009), filed for bankruptcy 3 times, offer a customer experience that rivals governmental agencies, and require a 10 page manual to decipher all their fees. With their merger, they plan to cut heads, rationalize routes (i.e. delete), and try to somehow squeak out a profit in an obvious business model that doesn't work. Eliminating peanuts was the answer to your financial woes? Really ?
Who will prevail in the airline wars? I believe that the faster, nimbler horse will stay on top. Southwest has a sustainable business model based on efficiency, giving customers what they want, and treating their employees better than their executives. Southwest is looking to grow while UA/Continental is looking to retrench. Cutting costs is not a gateway to success, building a sustainable business model is. The basic rationale behind a deal will generally dictate whether they will work or not; Ones that attempt to defend market share, generally don't. Ones that are more offensive minded have a shot, in my opinion, if executed by a quality company.
First, the good. I like to write about admirable companies; those that are profitable, well run, culturally hip, and leave a positive footprint on society. I wrote about Starbucks in great detail; and certainly Southwest Airlines is one that tops my list.
I've always had a soft spot for Southwest Airlines. They are the only airliner that hasn't lost money, filed bankruptcy, or use that awful hub and spoke model. They've posted profit every year of their existence, never had a single layoff (they didn't use their employees as pawns during the 9/11 crisis as others did), and still let your bags fly for free. Sure they make you find your own seat and sing showtunes every now and then. But its their playbook, and it works well. And they've done right to all of us. Have you ever priced out fares in markets that Southwest is in versus ones they aren't?
Southwest announced last week its buying Airtran for $1.4B. Its the largest risk in the company's history. They plan on eliminating many of Airtran's ancillary fees, increase flight routes, and adding 2,000 jobs over the next two years. The merger is predicated on growth and achieving greater scale. I think its smart. It's not too big that it's unmanageable, they can pool their plane orders, and Airtran's cost structure is actually almost comparable to Southwest. Despite my skepticism of large scale M&A, I think Southwest is looking at this as expansion M&A. An area that has at least has a chance to succeed.
Now the bad. They are the legacy, inefficient companies that look at M&A differently. They do deals despite the pitfalls I outlined in a prior post mostly for defensive measures. In this case, I'm referring to the United and Continental's $3B merger closing announced last week.
These companies, on the other hand, use lots of red ink (lost a combined $7B in 2008 and 2009), filed for bankruptcy 3 times, offer a customer experience that rivals governmental agencies, and require a 10 page manual to decipher all their fees. With their merger, they plan to cut heads, rationalize routes (i.e. delete), and try to somehow squeak out a profit in an obvious business model that doesn't work. Eliminating peanuts was the answer to your financial woes? Really ?
Who will prevail in the airline wars? I believe that the faster, nimbler horse will stay on top. Southwest has a sustainable business model based on efficiency, giving customers what they want, and treating their employees better than their executives. Southwest is looking to grow while UA/Continental is looking to retrench. Cutting costs is not a gateway to success, building a sustainable business model is. The basic rationale behind a deal will generally dictate whether they will work or not; Ones that attempt to defend market share, generally don't. Ones that are more offensive minded have a shot, in my opinion, if executed by a quality company.
21 September 2010
do VC's make the world go 'round ?
I've often wondered how much value VC's really create. Not for the few that are allowed in, but for society as a whole. Are they the innovation engines as advertised, or merely savvy investors that realize above average returns ? Day traders or world changers?
First, I am surprised at how young the industry is. The first VC's started in 1972 with the founding of 2 of the marquee names even today, Kleiner Perkins and Sequoia Capital. Institutional funding didn't come in until the late 70's. The first home runs were with Apple and Genentech's IPOs in 1980. So we're really talking only 30 or so years. The 80s were a bust for VC's, so now we're down to 20 years.
The industrial revolution brought America to dominance with the byproduct being new industries and jobs. Let's assume for a moment that the VC/internet era (ie. the last 20 years) has had that same kind of impact. The internet has changed everything everywhere and created a better way of life for most. More importantly, it kept us ahead of the competitiveness curve (many US jobs created out of the internet revolution). One would think that VC's played a significant part in that correct?
The goal of VCs is to bring new ideas, technologies and innovation to the masses (and get paid handsomely to do it). They partner with entrepreneurs (sometimes with only an idea in hand), take a significant equity stake, and help them grow towards an IPO or sale five years later. They only look for visionary companies because they have to pay for the 9 other investments in their fund that went bust and still yield a 25% return to their limited partners after fees. Most of us remember the mayhem of the Netscape IPO in 1995; almost every household tech company you can think of (google, amazon, ebay,etc..) have VC fingerprints all over them. At the surface, it seems like they've been the thought leaders they're supposed to be.
But are they? An article written by 2 insiders argues that VC funding actually thwarts innovation. They point to, among many factors, the short life cycle of funds (usually 5 years), aversion to unproven companies, and the fact that there are more MBA's (64%) than there are Master-level engineers (29%) at the top funds. Not the usual source of technological breakthroughs (present company excluded of course).
Just think about it. Ebay was not the first auction website, just the first successful one. Google came out of Stanford's lab, the internet roots were from the US military (and Al Gore). VC's didn't only invest in Google and Yahoo, they invested in 100s of search engines (don't get me started on my infoseek investment). How many biotech companies are they now investing in? How many will even survive much less cure diseases? They tend to invest in clusters; a sign of "me too" investing, not extreme innovation.
But they've monetized it. Have they ever. Sequoia turned $12M into almost $5B with Google. Not too bad, eh? But lets face it, without VC's, these emerging companies would not have reached the masses as quickly and deeply as they have. Google, and the many others, have brought information and commerce to the masses and completely changed the world for the better.
So mad scientists they are not. Mad capitalists they are. It's just too bad that my address is not on sand hill road.
First, I am surprised at how young the industry is. The first VC's started in 1972 with the founding of 2 of the marquee names even today, Kleiner Perkins and Sequoia Capital. Institutional funding didn't come in until the late 70's. The first home runs were with Apple and Genentech's IPOs in 1980. So we're really talking only 30 or so years. The 80s were a bust for VC's, so now we're down to 20 years.
The industrial revolution brought America to dominance with the byproduct being new industries and jobs. Let's assume for a moment that the VC/internet era (ie. the last 20 years) has had that same kind of impact. The internet has changed everything everywhere and created a better way of life for most. More importantly, it kept us ahead of the competitiveness curve (many US jobs created out of the internet revolution). One would think that VC's played a significant part in that correct?
The goal of VCs is to bring new ideas, technologies and innovation to the masses (and get paid handsomely to do it). They partner with entrepreneurs (sometimes with only an idea in hand), take a significant equity stake, and help them grow towards an IPO or sale five years later. They only look for visionary companies because they have to pay for the 9 other investments in their fund that went bust and still yield a 25% return to their limited partners after fees. Most of us remember the mayhem of the Netscape IPO in 1995; almost every household tech company you can think of (google, amazon, ebay,etc..) have VC fingerprints all over them. At the surface, it seems like they've been the thought leaders they're supposed to be.
But are they? An article written by 2 insiders argues that VC funding actually thwarts innovation. They point to, among many factors, the short life cycle of funds (usually 5 years), aversion to unproven companies, and the fact that there are more MBA's (64%) than there are Master-level engineers (29%) at the top funds. Not the usual source of technological breakthroughs (present company excluded of course).
Just think about it. Ebay was not the first auction website, just the first successful one. Google came out of Stanford's lab, the internet roots were from the US military (and Al Gore). VC's didn't only invest in Google and Yahoo, they invested in 100s of search engines (don't get me started on my infoseek investment). How many biotech companies are they now investing in? How many will even survive much less cure diseases? They tend to invest in clusters; a sign of "me too" investing, not extreme innovation.
But they've monetized it. Have they ever. Sequoia turned $12M into almost $5B with Google. Not too bad, eh? But lets face it, without VC's, these emerging companies would not have reached the masses as quickly and deeply as they have. Google, and the many others, have brought information and commerce to the masses and completely changed the world for the better.
So mad scientists they are not. Mad capitalists they are. It's just too bad that my address is not on sand hill road.
15 September 2010
woot and amazon
I dont usually comment on an individual news event unless it has a broader meaning, but i could not help to do so with the acquisition of woot by amazon a few months ago for a reported $110M. especially since we were on the grouponomics topic anyway.
For one - i love woot. I bought my first digital camera from them years ago ("you've seen the best, now try the rest" was the product description). They are a much hipper, quirkier, less sexy version of groupon that pioneered the deal of the day concept. If you have the time, you should read CEO Matt Rutledge's view on the Amazon purchase. Among other things they did the deal "every company that becomes a subsidiary gets two free downloads until the end of July" and that Woot's employees are partnering with Amazon, the "billion-dollar company that could buy and sell each and every one of you like you were office furniture." They headquarter a few miles my place (another plus), and mastered the art of selling junk and "over-witting" most other sites with their beat writing skills. Its too bad groupon built a better business model, but I don't expect the wooters to care too much. They expect to be profitabile in 2043.
But Amazon certainly will. It's early to tell, but i like Amazon's acquisition strategy so far. They are gobbling up highly unique companies with extremely loyal customers (they bought Zappos for $1B and Audible.com for $300M recently). Amazon has mastered the logistics of online commerce - I for one was a huge doubter when they spent hundreds of millions in the early 00s to build distribution centers. But it worked, they executed well. And I think they see the marriage between their operating excellence with great online sales models of the companies they are acquiring.
So i'll give Amazon a "woot" for their strategy - let's see how it plays out. As for woot fans like myself, don't fret about upcoming changes. The site will "continue to be an independently operated company full of horrible, useless products and an untalented jerkface writing staff, same as it ever was."
For one - i love woot. I bought my first digital camera from them years ago ("you've seen the best, now try the rest" was the product description). They are a much hipper, quirkier, less sexy version of groupon that pioneered the deal of the day concept. If you have the time, you should read CEO Matt Rutledge's view on the Amazon purchase. Among other things they did the deal "every company that becomes a subsidiary gets two free downloads until the end of July" and that Woot's employees are partnering with Amazon, the "billion-dollar company that could buy and sell each and every one of you like you were office furniture." They headquarter a few miles my place (another plus), and mastered the art of selling junk and "over-witting" most other sites with their beat writing skills. Its too bad groupon built a better business model, but I don't expect the wooters to care too much. They expect to be profitabile in 2043.
But Amazon certainly will. It's early to tell, but i like Amazon's acquisition strategy so far. They are gobbling up highly unique companies with extremely loyal customers (they bought Zappos for $1B and Audible.com for $300M recently). Amazon has mastered the logistics of online commerce - I for one was a huge doubter when they spent hundreds of millions in the early 00s to build distribution centers. But it worked, they executed well. And I think they see the marriage between their operating excellence with great online sales models of the companies they are acquiring.
So i'll give Amazon a "woot" for their strategy - let's see how it plays out. As for woot fans like myself, don't fret about upcoming changes. The site will "continue to be an independently operated company full of horrible, useless products and an untalented jerkface writing staff, same as it ever was."
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