Great post on a cool company! Feels like the hardest part of this business is the “quality control / sorting + processing” angle – other than that, the barriers to entry seem pretty limited, so very curious to hear more about the innovations you mentioned here. Also really interesting that some players (thredup, twice, tradesy) are going after the relatively “low end” of the market (Gap / BCBG / Zara etc.) while others (including TheRealReal, Poshmark) have mostly focused on the “high end” (Armani / Hermes etc.). I wonder if you have a perspective on which “volume vs. ASP” mix ultimately yields the better business model.
Fascinating company, really unique technology, and thoughtful post. I worry, though, if it’s too early to call this one – Planet Labs has raised a lot of money at sky-high valuations, but this is a capital intensive business in an increasingly competitive and crowded space – including Google’s SkyBox, which is larger and better funded. They have had a number of launch failures, which for me calls their model into question, and their business model is not yet proven. I’m still in ‘wait and watch’ on this one.
In a previous job, I had the opportunity to work with Nucor’s management team on an M&A deal and was really impressed with their understanding of the market and their investment discipline. I am a big fan of this business, and I think the way Nucor has maneuvered the current steel cycle is a testament to the power and flexibility of the low-cost operating model that you explained very well. What is also really amazing is the way they are taking the EAF process, which has historically been associated with lower-quality “construction” steel, and have used a series of operational improvements to begin producing high-end automotive steel. Also worth reading (if you haven’t already) is the chapter about Nucor in Jim Collins’ “Good to Great,” which hits on a lot of the themes you have talked about and how they stand in stark contrast to the approach taken by its competitors.