Look through an article about the dotcom bubble from the turn of the century and you will find a company called Pets.com high on the casualty list. Pets.com was an e-commerce business that sold pet food and other pet products online — something that doesn’t sound that remarkable now but was very forward-thinking at the time. Too forward thinking, as it turned out.
The concept for Pets.com was not a bad one. As Wired points out in an article written in 2014, it was just that its time had not yet come: “Even the Pets.com idea is looking mighty good. The basic notion that people wanted to buy pet food online and have it delivered to their homes turns out to be a sound one. Market research firm IBISWorld pegs it at a $3 billion market and a new generation of companies — Chewy.com, Petflow.com and Wag.com, to name a few — all making a go of it.”
Even Amazon is all-in on the pets market now. Amazon was one of the company’s biggest early investors, with a 30% stake in Pets.com. Fast-forward 18 or so years and Amazon, along with Walmart, is selling billions of dollars worth of pet food and products online to US consumers.
The person who wore a sizeable amount of the blame and ridicule for the demise of Pets.com was its CEO, Julie Wainwright. If having a female CEO is out of the norm now, it was even more of a rarity back then. Wainwright, however, is a true female pioneer of e-commerce and the tech business.
Her tenacity and resilience in the face of several setbacks over her career, including the collapse of Pets.com, is inspirational.
She started in the software business in 1983 and by 1994 had been appointed the CEO of Berkeley Systems, a computer gaming company that developed and marketed one of the most successful CD-ROM games of all time: You Don’t Know Jack. After leaving Berkeley Systems, she founded one of the first online movie sellers, Reel.com, which she sold for about $US100 million in 1998. She then stepped into the CEO role at Pets.com.
Early signs were good for the pet product seller as it attracted plenty of investment and interest. However, it went into a tailspin, along with most of the other startups associated with the dotcom boom at the time, and just nine months after its stock market float it went into liquidation. Its IPO price of $11 per share in February 2000 dived to $0.19 the day of its liquidation announcement on November 7.
In 2011, Wainwright reflected upon what went wrong to Business Insider: “Here is what the world looked like in 2000. There were no plug-and-play solutions for e-commerce/warehouse management and customer service that could scale, which means that we had to employ at least 40 engineers. Cloud computing did not exist, which means that we had to have a server farm and several IT people to ensure that the site did not go down. There were less than 250 million worldwide Internet consumers in 2000. Now there are five billion. Amazon has reported a loss of nearly $900M in 1999 … because, guess what, e-commerce is a business of scale. And, the internet bubble had burst, which meant that no one was getting funded.”
The end of Pets.com also signalled the end of her marriage. “My husband decided to call it quits the day before I announced to the employees and the public markets that I was shutting down Pets. It was a really bad week,” she wrote in an article about the lessons she had learnt from her Pets.com failure and how she had picked up the pieces of her career and life.
The aftermath of Pets.com had been brutal for Wainwright: “As the public CEO, I failed, and it was a very public failure. In fact, I was labelled one of the biggest failures ever. How bad was it? I had people laugh in my face when I introduced myself for years after the company closed.”
“It was a very dark, confusing time in my life. I kept pushing myself to get back to normal. That didn’t happen,” Wainwright said. By 2008, though, she was getting back into the game with a lifestyle and education website called SmartNow.com.
However, Wainwright has made her truly big comeback with The RealReal, an online luxury consignment site which she founded in 2011. The RealReal deals only in high-end luxury brands. Wainwright had identified a burgeoning secondhand market for these goods and could see that marketplaces like eBay weren’t cutting it.
With The RealReal, she concentrated on factors such as authentication of goods and personalised service to differentiate the site from others. “The premise was to create a company in the e-commerce or marketplace space that Amazon can’t replicate and that eBay can’t replicate,” she has said.
Moreover, it appears to be working, as the business has raised about $288 million from some of the most prominent VC firms in the US. The RealReal estimates it has sold about eight million items to date and has approximately 600 employees at several locations across the US. PitchBook has valued the company at approximately $450 million.
Wainwright has identified a unique market and has applied her vast e-commerce experience to create a marketplace business that is building a loyal base of customers and vendors. It’s almost two decades after the dotcom crash that saw Pets.com disappear and her life turned upside down, and she has emerged once more, in her 50s, stronger and smarter than ever before.
It’s a fantastic story and a testament to the power of a great idea, and also to the resilience of a woman who has shown remarkable grit in the face of some major setbacks over her career.