In what I can only describe as a refreshingly honest interview, Dot & Bo CEO Anthony Soohoo said that the reason his San Francisco-based, millennial-aimed online furniture retail outfit closed is because information technology just did not work every bit a business.
“I know in Silicon Valley y’all are always trying to look on the vivid side, and you lot tend to put your head in the sand when things don’t work out,” said Soohoo, the former caput of CBS Interactive’s entertainment division, in an interview with
this morning. “At the end of the mean solar day, Dot & Bo just failed.”
Indeed and then, sucking away $xx million in venture investment with information technology and wiping out its valuation of most $60 one thousand thousand completely. Dot & Bo backers included Trinity Ventures and Oak Investment Partners.
Dot & Bo put up a sudden notice on its site Friday afternoon that it was done, which read in role:
“It is with a heavy heart that we must share that Dot & Bo volition be ceasing all operations as of the terminate of the day Friday, September 23rd. Nosotros were in deep discussions to be acquired by a prominent public visitor, merely ultimately the partnership did not come up to fruition. Nosotros are humbled to accept had such loyal customers and are extremely proud of the impact nosotros fabricated on the home furnishings marketplace, but ultimately we were unable to discover backers with the necessary vision to help us achieve our mission.”
Thus ends the try to mesh media with e-commerce, with a splash of native advertizing, designed to prompt customers to buy based on engaging in stories around products. While it sure was cool-looking and slick, that was not enough to beat out the massive costs and upper-case letter outlays that a tight-margin furniture concern required.
“We were trying to build a media company on Mean solar day 1, simply wanted to get away from the ad model past selling things,” said Soohoo, who said he took inspiration from the inquiries he got from viewers who wanted to buy furnishings they saw on various CBS shows.
Sounds like a nifty idea in concept, offering a private-label line and using sites like Pinterest and Houzz to generate buyer interest. But getting shipping costs to be reasonable for larger and bulkier types of items — as well as developing a regular flow of buyers — proved tough. A recent effort to provide consulting to companies on their workspaces, which typically goes under the tiresome tech euphemism called a “pivot,” also did not gel.
Every bit one investor noted: “The capital letter requirements to fund the supply chain and working upper-case letter commitments proved to be greater than originally predictable, and more than the VC market had the ambition for, specially with the backdrop of how much out of favor e-commerce is at the moment.”
Yes, the dreaded winter in the due east-commerce market, highlighted past the high-profile endmost of habitation-decor flash sales company One King’s Lane, that sucked up $100 one thousand thousand when it went down in a auction of less than $30 million to Bed, Bathroom & Beyond. That awful issue chilled the Dot & Bo bidding process, even though the exits of Jet.com (to Walmart for $3.3 billion) and Dollar Shave Club (to Unilever for $1 billion) ended upwardly looking slap-up.
“At the end of the twenty-four hours, the market was frozen over and the sector was out of favor, which is why we went the M&A route,” said Soohoo, noting that Dot & Bo got to a alphabetic character of intent with a possible retail heir-apparent. “Unlike a lot of tech companies, these buyers wait at Silicon Valley eastward-commerce companies as a vendor, and not a way to attract digital talent into their concern.”
(Soohoo declined to name the possible purchaser, as it might buy the assets of the shuttered startup in the future, only I will add when I find out — and I volition! Sources tell me it was a large-box retailer.)
Soohoo added that while he thought Dot & Bo was a groovy attempt, at the end of the mean solar day, it would be “roped into the list of e-commerce companies that failed.”
Aye, indeed, because startups are hard. “Sometimes ignorance is bliss, but as you go into a business concern more, y’all realize that peradventure some of the challenges go pretty impossible,” said Soohoo. “So y’all experience like shit.”
This article originally appeared on Recode.net.