It’s Never Too Late to Catch Up
Starting a direct competitor to Amazon might sound like a fool's gamble in 2015, but Jet.com has succeeded in building momentum quickly. As the upstart proves, even late movers with tech initiatives can make up lost ground.
Here’s the hard part of creating something new in a saturated space: You have to catch up to the rest of the pack and somehow be better than them at the same time.
If your goal is to go big or go home, you need to figure out a way to go from last place to a competitive sweet spot within the first year or two.
Jet.com, somehow, managed to do that in just a month. The company decided on an audacious goal—beating Amazon at its own broadly focused online-shopping game. The company launched in July after months of preparation and is already said to be the fourth-largest online marketplace based on sheer sales numbers. That’s pretty impressive for a company that didn’t exist a year ago.
Jet’s strategy, masterminded by Diapers.com founder Marc Lore, has been the talk of the industry, and for good reason. Like Amazon, Jet sells basic goods at lower prices than you might find in a store, driving sales through the strength of a membership program. Unlike Amazon, Jet requires its users to be members—and in exchange, it offers lower prices than even Amazon does. Its secret is that it makes its money off that $50 a year fee and hands the extra revenue it would get from vendor partners directly back to the consumer in the form of lower prices.
Not a bad way to add something new to a model that’s been used by pretty much every online storefront over the past two decades.
Now, the approach hasn’t been 100 percent perfect: Jet got nicked by some retailers for its Jet Anywhere program, which takes advantage of the affiliate revenue driven by other online stores to offer discounts at its own. The strategy is a clever way to build customer loyalty off of other brands, but the other brands didn’t like it and many disassociated from the e-commerce store.
And on top of that, you’ll likely see some gaps in the store. Looking to buy a MacBook Air at Jet? Sorry, you’re out of luck.
But there’s a lot to like about Jet from a business model standpoint. The company even earned notice for its radio-heavy PR strategy.
Entering Late? Enter Strong.
But sometimes, you’re stuck competing in a niche where everyone’s already got a piece of the pie, and the only way you can earn any attention at all is by sheer strength of force. In movie terms, you’re Rocky Balboa, going after the heavyweight title. You may be a long shot, but with the right strategy and momentum, you might have a chance.
Another example: You might imagine that starting a broadly focused big-name online publication these days would be a nonstarter, simply because so many publications already cover this market. But Vox Media started three hit publications in three years—tech publication The Verge, gaming site Polygon, and news site Vox—in each case covering subject matter that’s only slightly different from what its competition does.
In all cases, it was a matter of combining the right people at the forefront with forward-thinking technology and design. Vox Media builds its own technology (its custom-made Chorus CMS), gives it to very talented people in each space (respectively, tech editor Nilay Patel, game journalist Christopher Grant, and former Washington Post scribe Ezra Klein), and lets them do what they do best. The results speak for themselves: Each of these publications helps set the conversation for its space, despite Vox Media having to make up years of ground in a matter of months.
Strategy Breeds Tech
A strong strategy is the atlas for your technology. The technology that support the final product will eventually drive the path you’re looking to set, but the atlas will show you a lot of directions you can take to reach your destination—including some that your competition hasn’t even considered yet.
Jet.com, thus far, has done a great job making new roads in spaces where well-tread paths already existed. Vox Media, likewise, has found new variations on common themes.
Just because there’s already a community where your members interact, or another association taking a similar road on social media, doesn’t mean you can’t catch up. It just means you have to cut your own path.
Online shopping upstart Jet.com has its eyes on Amazon—and is catching up fast. (Handout photo)