New Brunswick, NJ — James Barrood, CEO of the New Jersey Tech Council, wrote in NJBIZ the following opinion piece on August 16:
Many in the New Jersey tech community greeted the recent sale of Hoboken's Jet.com to Walmart with mixed feelings. Sure, we were thrilled to hear that Jet.com had successfully executed a highly profitable exit. Walmart paid $3.3 billion, even more than some observers expected.
But Jet.com was growing fast, adding some 400,000 customers a month. It recently moved into a very cool new space in Hoboken. We loved its culture, admired what it had already accomplished, and deeply respected Jet.com CEO Marc Lore's long-time commitment to our community (we just honored the company at last November's Awards Celebration).
Some of us may have been nursing visions of our own Amazon.com: an independent e-commerce company that might have grown into a $50 billion mammoth right here in our Garden State. That wasn't to be. But there's plenty of good news associated with Jet.com's buyout.
First, Jet.com found a great U.S. buyer. In many ways, Walmart is a technology leader: You merely need to look at the amazing things it has done (and continues to do) on the supply chain side of its business. And it does seem that Walmart is looking east to New Jersey, both for a big shot of entrepreneurial spirit and for access to the extraordinary team that Jet.com brought together.
Many in the New Jersey tech community greeted the recent sale of Hoboken's Jet.com to Walmart with mixed feelings. Sure, we were thrilled to hear that Jet.com had successfully executed a highly profitable exit. Walmart paid $3.3 billion, even more than some observers expected.
But Jet.com was growing fast, adding some 400,000 customers a month. It recently moved into a very cool new space in Hoboken. We loved its culture, admired what it had already accomplished, and deeply respected Jet.com CEO Marc Lore's long-time commitment to our community (we just honored the company at last November's Awards Celebration).
Some of us may have been nursing visions of our own Amazon.com: an independent e-commerce company that might have grown into a $50 billion mammoth right here in our Garden State. That wasn't to be. But there's plenty of good news associated with Jet.com's buyout.
First, Jet.com found a great U.S. buyer. In many ways, Walmart is a technology leader: You merely need to look at the amazing things it has done (and continues to do) on the supply chain side of its business. And it does seem that Walmart is looking east to New Jersey, both for a big shot of entrepreneurial spirit and for access to the extraordinary team that Jet.com brought together.
This is clearly a strategic acquisition for Walmart, which hasn't been satisfied with its own growth online. For now, at least, Lore will be running both Jet.com and the homegrown Walmart.com operation, and Walmart's CEO promised to be “thoughtful” about how it merges these. In the short term, the stated plan is to build both brands.
I'm hopeful Jet.com will ultimately become Walmart's East Coast hub for technology innovation, drawing talent from throughout New Jersey — and into New Jersey from the entire East Coast. I'm also hopeful that Walmart will learn lessons from other successful buyouts, where successful companies have been permitted to keep their culture and operate as independently as possible, while still offering compelling synergies with the parent company.
One example immediately comes to mind: the way Walmart's key competitor, Amazon, purchased Audible — and then empowered it to transform the audiobook industry from its home right here in Newark.
Even if all goes well for Jet.com within Walmart, it's likely that some of Jet.com's extraordinary team will gradually move on to new ventures. That's the way of the world, and that, too, can only be good news for the New Jersey technology ecosystem. We've certainly seen this virtuous cycle before. Marc Lore did it himself, first selling Diapers.com and its parent company Quidsi to Amazon.com, years before launching Jet.com.
Think about the groups of "alumni" emanating from organizations like PayPal after it was sold for $1.5 billion to eBay in 2002. They are referred to commonly as the PayPal Mafia, and they have taken all they've learned into new ventures, including Tesla, LinkedIn, YouTube, Yelp, SpaceX and others.
Now imagine that happening again here in New Jersey, as Jet.com "graduates" leverage everything they've learned on Lore's team, creating new startups that build our technological ecosystem and contribute to our communities, just as Jet.com has.
At the New Jersey Tech Council, I see these positive dynamics playing out firsthand and close up. We work closely with new and fast-growing ventures like Jet.com to help them make the most of New Jersey's remarkable technological, business and research resources.
We see every new generation of buyouts and mergers spawning another new generation of startups. We meet these emerging companies at our venture conferences and networking events; they're the companies we're constantly connecting to partners, funders (including our Jumpstart Angels Network and Venture Fund) and customers.
We see pioneers like Greg Olsen, who sold Sensors Unlimited and with the proceeds invested in and advised many local entrepreneurs over the years. More recently, Navneet Puri, who sold Innopharma to Pfizer and is now growing his new venture, Nevakar. Or Francois Nader, who sold NPS Pharma to Shire and is now investing in new ventures and mentoring/advising both startups and growth companies. Or Gerard Adams, who sold his Elite Daily millennial site to The Daily Mail and is now working to catalyze entrepreneurship in Newark and beyond. These are just a few.
This is how it's supposed to work — and in New Jersey, this is how it does work. Even if we were dreaming of big things for Jet.com as an independent company, we can now dream of even bigger things for Jet.com and its mob of enriched and experienced alumni — both inside and outside Walmart.
I'm hopeful Jet.com will ultimately become Walmart's East Coast hub for technology innovation, drawing talent from throughout New Jersey — and into New Jersey from the entire East Coast. I'm also hopeful that Walmart will learn lessons from other successful buyouts, where successful companies have been permitted to keep their culture and operate as independently as possible, while still offering compelling synergies with the parent company.
One example immediately comes to mind: the way Walmart's key competitor, Amazon, purchased Audible — and then empowered it to transform the audiobook industry from its home right here in Newark.
Even if all goes well for Jet.com within Walmart, it's likely that some of Jet.com's extraordinary team will gradually move on to new ventures. That's the way of the world, and that, too, can only be good news for the New Jersey technology ecosystem. We've certainly seen this virtuous cycle before. Marc Lore did it himself, first selling Diapers.com and its parent company Quidsi to Amazon.com, years before launching Jet.com.
Think about the groups of "alumni" emanating from organizations like PayPal after it was sold for $1.5 billion to eBay in 2002. They are referred to commonly as the PayPal Mafia, and they have taken all they've learned into new ventures, including Tesla, LinkedIn, YouTube, Yelp, SpaceX and others.
Now imagine that happening again here in New Jersey, as Jet.com "graduates" leverage everything they've learned on Lore's team, creating new startups that build our technological ecosystem and contribute to our communities, just as Jet.com has.
At the New Jersey Tech Council, I see these positive dynamics playing out firsthand and close up. We work closely with new and fast-growing ventures like Jet.com to help them make the most of New Jersey's remarkable technological, business and research resources.
We see every new generation of buyouts and mergers spawning another new generation of startups. We meet these emerging companies at our venture conferences and networking events; they're the companies we're constantly connecting to partners, funders (including our Jumpstart Angels Network and Venture Fund) and customers.
We see pioneers like Greg Olsen, who sold Sensors Unlimited and with the proceeds invested in and advised many local entrepreneurs over the years. More recently, Navneet Puri, who sold Innopharma to Pfizer and is now growing his new venture, Nevakar. Or Francois Nader, who sold NPS Pharma to Shire and is now investing in new ventures and mentoring/advising both startups and growth companies. Or Gerard Adams, who sold his Elite Daily millennial site to The Daily Mail and is now working to catalyze entrepreneurship in Newark and beyond. These are just a few.
This is how it's supposed to work — and in New Jersey, this is how it does work. Even if we were dreaming of big things for Jet.com as an independent company, we can now dream of even bigger things for Jet.com and its mob of enriched and experienced alumni — both inside and outside Walmart.
