
Why the tech press is ignoring Zulily's huge IPO - jmduke
http://finance.fortune.cnn.com/2013/11/14/why-the-tech-press-is-ignoring-zulily-ipo?f
======
replicatorblog
I'm a tech writer, with a child, and wouldn't write about this. It's a really
cool story and a neat company, but it's got a few things working against it:

\+ Small Audience — Most tech writers get paid by the pageview. The realistic
market of readers for this kind of story is probably in the hundreds, maybe
low thousands. My wife loves the site, but wouldn't give a fig about the
financials. There's a market for investors or competitive intelligence, but
it's a very different kind of business.

\+ Bad Timing — If this happened in the midst of the Groupon craze you'd be
reading all about it. Now that "Daily Deals" have become an elephant's
graveyard of broken dreams and wasted billions it's not that interesting in a
meta context.

\+ What's the Hook? — It's a big number, but a "boring" business. A company
called Wayfair in Boston is in a similar spot. They're a massive ecommerce
company dealing in home goods, but you've probably never heard of them. They
have nice offices, but not crazy ones. They use a logical, but unexciting tech
stack. Which would you rather read:

\- Seasoned entrepreneurs utilize proven business fundamentals to build niche
ecommerce website with steadily growing, but modest profits?

or:

\- 6 Unbelievable Tech Tricks these College Students Used to Get a $4B Buyout
Offer from Facebook in 18 months!

~~~
kaa2102
I met Reddit cofounder Alexis Ohanian at a book signing recently. Alexis
mentioned that Digg was all the rage in the press when Reddit was on the rise.
I understand you saying that this company has a small audience, bad timing,
and an insufficient hook. However, it seems that experts often make the same
mistake over and over again. As Nassim Taleb would say, tech journalists
appear to be Fooled by Randomness. They latch on to the Snapchats of the world
and refuse to explore the hidden gems because they don't fit into the trendy,
flashy mold.

~~~
AJ007
There is more US IPO activity going on right now than makes the headlines. You
really have to subscribe to an IPO specific news source or blog.

Take this with a grain of salt, I haven't read the S-1 and I don't know much
about Zulily.

However, they have shown up as a top US display advertisers going back a year
or more. Groupon was in the same spot, buying up massive quantities of
inventory to fuel their growth. Before buying in take a close look at how much
of their growth is purchased, along with the retention of those purchased
users.

Other recent IPOs, like Retailmenot, have even deeper issues (almost complete
dependency on free traffic from Google for trademark company names.)

~~~
prostoalex
Yep, Chegg is Valley-based tech-driven non-parent company, but coverage of the
IPO was pretty much amiss from the tech blogs.

------
thatthatis
I'm shocked this even made it on hacker news.

Here's a market selection tip: find a problem not experienced by mid 20s
single men in urban centers and your competition drops by about two orders of
magnitude.

~~~
josefresco
Competition may drop among tech startups, but you quickly enter the world of
heavyweight long-standing businesses who have the capital and marketshare to
stomp you out.

Not many startup 20-something CEO's are worried about competition when
launching a new mobile app hatched in a weekend bender but sell something more
traditional and essential like kids clothing and you'll spend sleepless nights
worrying about Wal-Mart and other established providers who could and (prob)
will squash you.

~~~
thatthatis
I'll take Walmart as a competitor over 20 20 something CEOs hacking on Ramen.
Walmart might have scale and cost advantages, but their advantages are bounded
by physical reality. 20 somehing ramen fueled work for zero, or possibly less
than zero if mom and dad are still helping out.

Against Walmart I can use judo business strategy. 20 something's use judo
against each other.

~~~
kcg
Judo business strategy...what? You're telling me that you that motivation is a
bigger asset to a few 20 year olds than all of the scale, capital and business
experience of Walmart, and therefore you'd rather compete against Walmart? Do
you think Walmart became the dominant business it is today by just sitting
around and not competing (and winning)?

Sorry, but I have to disagree. Capital, economies of scale, strong management,
etc. -- these things are very real advantages and matter to the viability of a
business. I'm not saying it's impossible to compete with entrenched
businesses, but don't think for a second they're not able to compete right
back because they don't have "judo business strategy."

~~~
thatthatis
[http://www.investopedia.com/terms/j/judo-business-
strategy.a...](http://www.investopedia.com/terms/j/judo-business-strategy.asp)

[http://judoinfo.com/pdf/business.pdf](http://judoinfo.com/pdf/business.pdf)

Judo strategy is when you go up against a larger opponent and use their size
to your advantage. It's an easy term to google.

Judo strategy is employed most famously when you price to capture a fraction
of the market such that their cost to win those customers back by lowering
their prices would have a higher cannibalization cost to existing customers
than the benefit of getting the lost customers back. Price is just one of the
ways to use a judo strategy, but it is the easiest to understand.

I'm telling you that 20 year olds often have zero opportunity cost, zero
holding cost, and zero living cost. Because they exist in a "pre-adult" state,
they are scary to compete against because they often can act irrationally for
long periods of time with no repercussions.

If there is an opportunity, I'd rather go up against a large multinational
company who will almost always act rationally but inefficiently than a field
of likely to be irrational opponents.

------
ChuckMcM
Simplistic answer, "They aren't hackers, they are business people."

I've noticed a strong inverse correlation between people building businesses
with expected business practice, and the "tech" press. What Zulily is doing is
not a disruptive technology, it is (potentially a disruptive business
practice).

It is easy to forget when reading inside the tech 'sphere' that there are lots
of things that have to get done everyday by businesses, and those processes
can be improved or made more efficient with technology. The closest one I've
seen here was 42floors which is trying to disrupt the commercial real estate
market, but it isn't a "tech" play, it is a business practices play.

Creating a way to share a moment in time, an instant, right now while
preserving that feeling of "instantness" _that_ is a tech play. Eventually,
perhaps after this second burst of activity, tech will be just as boring and
all the cool kids will be doing bio stuff or space or something.

~~~
charliehorse
> What Zulily is doing is not a disruptive technology, it is (potentially a
> disruptive business practice).

You can say the same for Uber, but they get the standard tech coverage, unlike
Zulily.

~~~
ChuckMcM
The key to Uber though was technology, a smart phone app that replaced both
the hailing of a cab and the paying of the cab. It wasn't "just another hire
car service".

As an example; If Zulily was using a web cam to snap pictures of your kid and
send the clothes back pre-fit? That would be a technology angle.

~~~
justincormack
No, its because people in SV use Uber.

~~~
fish2000
Uber’s go-to-market product incorporated a distributed brute-force attack
against one of the Traveling Salesman’s cousin problems – they’re a tech for
that reason alone.

------
doctorpangloss
Yes, the narrative around Zulily is a lot less theatrical, so it makes worse
news. A true story about the Blue Nile team capturing another retail niche is
great, but two 24 year olds turning down $3 billion for a thing that takes
temporary pictures? Better.

Do market fundamentals make good stories? Maybe. A lot of things grow and make
a profit. If growth, profit and speed qualified you for coverage, we'd be
reading about hedge funds, not retail firms (let alone social media software
firms).

The Blue Nile team isn't ignored because they're in Seattle or they're old
though. Valve is in Seattle and has plenty of old people, and they do exciting
things people write about all the time. The difference is maternity clothes
versus video games. Flash sales versus sexting.

Surely the fundamentals of what the company does can affect its coverage. So
forgive people for not finding clothing flash sales terribly exciting.

I still want to hear more about the Blue Nile founders' stories. Gilt (which
has a similar concept to Zulily) got tons of coverage as much for brand name
clothes as for being run by two brilliant women. Maybe they just need to get
out there. Or do nothing, because they got their IPO anyway.

~~~
DenisM
It's not the Zulily team who are missing out for lack of coverage, it's the
rest of us who are still trying to build profitable businesses.

------
ig1
What do these have in common: Criteo, Cvent, Benefitfocus, and Veeva Systems

They're all recent tech IPOs (last few weeks). They don't get a lot of
coverage in Techcrunch, etc. because that's not what they cover. If you want
more comprehensive coverage try something like VentureWire.

~~~
bostonpete
> What do these have in common: Criteo, Cvent, Benefitfocus, and Veeva Systems

You didn't give us enough time to answer! I was gonna guess it's that they all
look like typos.

------
mildtrepidation
While I wouldn't call mainstream reporting a whole lot _better_ than the tech
press, their biases are certainly _different._ Unfortunately, the goals are
the same.

CNN wants to pull in as many visitors/viewers as possible by reporting skewed
and sensationalist versions of all of the horrible, embarrassing, and
disastrous things that happen to everyone, everywhere. That this means
filtering out a whole lot of interesting but non-controversial things and
regurgitating news, lies, and exaggerations constantly really doesn't matter.

The tech press wants to pull in as many visitors/viewers as possible by
reporting skewed and sensationalist versions of all the hype, rumors, and
scandals that happen to anyone under 25 in stereotypical tech hubs. That this
means filtering out a whole lot of interesting but non-controversial things
and regurgitating news, lies, and exaggerations constantly really doesn't
matter.

It's easy to make fun of the other guy when you're doing exactly the same
thing in a different field. Personally, I find it efficient to largely ignore
both of them.

------
jsherry
Veeva Systems is another that flew under the radar. B2B Life Sciences software
company that raised $4M five years ago from Emergence Capital - a stake which
was worth $1.2B at the time of their IPO in October.(1)

Good on Dan Primack to shed some light on the "boring" side of VC.

(1) [http://www.bloomberg.com/news/2013-10-16/veeva-ipo-
generates...](http://www.bloomberg.com/news/2013-10-16/veeva-ipo-
generates-300-fold-return-for-emergence-capital-1-.html)

------
tootie
As a parent and old man, I still have no idea what value SnapChat or Twitter
have. Zulily is something I use regularly.

~~~
toomuchtodo
I'm 30, and was explaining what SnapChat is to my 33 year old co-worker while
our 22 year old co-worker was listening and chuckling.

It was then I realized we were old.

------
eranation
My theory on this has been for a while. Not just for coverage, but for the
lack of "Older people problems" startups. It's not just they don't get
coverage, it is a miracle they are being founded in the first place.

I think it's because young people try to solve (most of the times) young
people's problems (music, dating, photos, food delivery, code and technology
tools, movies, social activity, even taxi riding, most people with kids buy a
van and move to the suburbs). Young people also tend to have a slightly bit
more free time, and are more likely to share things they use and like. And I
don't mean only teens, I also include professional, smart, rich, educated 25
years old who work in a startup, or own a company, or sold one, or had stocks
in one and now are millionaires, and even become VCs, mentoring and helping
other startups.

There are billions of dollars on the table that "Old people" companies are
taking. Look at all the boring enterprise Java jobs out there, these people
are selling stuff. to other companies you haven't heard of, solving business
problems you haven't encountered and perhaps never will if you are a 25 years
old hacker, because you will never want to go work for these companies.

Older people work there, and even if they have a great idea for a startup they
are much less likely to do it.

1) health insurance - prime reason. older people tend to have kids, or in the
making. Unless they have some savings, they can't risk losing their health
insurance.

2) family, yes, there are successful founders with kids, but it is much easier
to start a company when you don't have any. how many people with families move
to SF for 3 months for YC and leave their kids and spouse at hime?

3) age bias. VCs look at older people like this - if you had what it takes,
why did you get a boring Java job for 10 years till you decided to jump into
the water?

4) Enterprise sales is hard. it takes sometimes 2 years of a sales cycle to
close a deal. but when you do it can be a 7 figure deal easily.

5) What the article said about young tech writers, I agree

~~~
rexreed
Exactly - Enterprise Software is still a largely untapped area of significant
opportunity precisely because it gets little attention from VC, startup folks,
and the tech press. That's where the opportunity is.

------
danso
Being based in Seattle shouldn't particularly hurt it, as Amazon is nearby.
But yes, I'll be one of the first to admit that I had never heard of it until
this morning when the NYT homepage had a very, very brief item on it. I hope
it really is the "old people" thing...those with experience and failures in
their past can still continue to reap up money while the young'uns try to fake
out the world.

It's probably a two-way-street kind of thing, though...perhaps it's not just
the press who ignores them because of the lack of Stanford-dropout-angle, but
the older entrepreneurs don't seek the press out as much, especially when
already making profits.

------
afterburner
Amusingly, searching for "zulily" on Google Finance gets no results. Even when
I go directly to "ZU" I can't seem to get a chart.

[https://www.google.ca/finance?q=NASDAQ%3AZU&ei=RWmGUrC8OqKCs...](https://www.google.ca/finance?q=NASDAQ%3AZU&ei=RWmGUrC8OqKCsgeY6QE)

~~~
clamprecht
Even more interesting, because Twitter (TWTR) was on Google Finance the night
BEFORE the IPO!

------
PeterisP
The more practical a startup, the less 'sexy' it is; and vice versa.

~~~
thecollins
Maybe it's that this is really hardly a startup -- it's a solid company that
just happens to have a web presence as its main outlet to customers?

~~~
integraton
Launched with a Series A in 2009, has taken 3 up rounds of funding in the
years since, now files for an IPO in 2013, exactly 4 years later. Not only is
this a textbook VC-funded startup, it's pretty much a perfect illustration of
the ideal trajectory and timeline for a VC-funded startup.

------
saidajigumi
The Seattle dig is just plain lazy. Aside from the obvious established tech
names, there are a ton of smaller tech firms, startups, etc.. and even some
immensely successful recent IPOs with solid tech-rag coverage. :-P

~~~
thinkalone
To be fair, the dig was on the tech press not focusing on Seattle and being
Silicon Valley-focused, not on a lack of tech in Seattle, which is certainly
not true :)

------
pbhjpbhj
Interesting, never heard of zulily before.

Found their register-to-view website off-putting. Removed the overlay and
discovered they have a UK site (no IP/geolocation sniffing?) .. UK site was
broken (none of the akamai resources loaded) and appears to be hosted on
tumblr (zulilyuk.tumblr.com)??

------
thinkalone
It's a daily deals / affiliate marketing / e-commerce site... why _would_ that
be tech news? Twitter's IPO was newsworthy for being the "second largest in
history for a US internet company."[1]

[1] [http://qz.com/145227/final-tally-twitters-ipo-was-bigger-
tha...](http://qz.com/145227/final-tally-twitters-ipo-was-bigger-than-googles-
raising-2-1-billion/)

~~~
nitinalabur
its not tech news. Its a link bait for techies.

------
codegeek
I personally had never heard of zulily (not that it means anything) but i just
decided to view their website and Horrors!! .They have this pop-up that wants
my email _before_ it will let me view the site. No sir, you cannot kill that
pop-up (at least as a everyday non-tech user) WTF. seriously ? Rant aside
though, I would consider zulily for my kid because we are always shopping for
kids as parents.

------
speeder
This makes me think about my own hard time attracting coverage.

My startup make educational games and applications for kids, that are actually
fun (instead of just educational and terribly boring, or entertaining but
teaches lots of bad stuff).

Yet... even when I want to tell a journalist to cover us, I don't find a
reason to do so... I mean, what we are doing is not sexy, also we don't have
famous VC with us, also we did not went to YC (and won't go, the CEO has wife
and very little kids and cannot move away for 3 months), we don't know in
person anyone famous, we had no crazy or surprising funding, our product
despite being novelty in the sense that everyone else go pure entertainment or
pure educational is still not much "disrupting", it is just something we found
a demand and no offer and decided to offer.

I even met recently the editor of the largest brazillian tech magazine... And
I had some small talk with her, but I found no reason whatsoever to give to
her to cover us, and it is not that we are unknown, because she uses our
products and love them, it is just that... :/

~~~
eth
If your product is for kids, you may decide there's no point in trying to get
"tech press" coverage anyway.

If you want users, go after mom bloggers. They are the ones that will buy your
product if it's good.

------
dpcheng2003
Snapchat: I just did what I do best. I took your little plan and I turned it
on itself.

Look what I did to the tech media with a few snaps and a Colbert Report
appearance? Hmmm? You know... You know what I've noticed? Nobody panics when
things go "according to plan."

Even if the plan is shareholder rewarding! If, tomorrow, I tell the press
that, like, a maternity clothing e-commerce site goes public, or IBM buys a
Blue Bell, PA based mobile device management company, nobody panics, because
it's all "part of the plan".

But when I say that a two-year old, non-profitable messaging company run by 23
year-olds is going to refuse a $3 billion offer from Facebook, well then
everyone loses their minds! [Snapchat hands HackerNews an upvote and points it
at himself]

Snapchat: Introduce a little disruption. Disrupt the established order, and
everything becomes chaos. I'm an agent of chaos. Oh, and you know the thing
about disruption? It's fair!

[http://vimeo.com/69674685](http://vimeo.com/69674685)

------
angersock
So...people got scooped by CNN? _CNN_?

Wow, goddamn folks.

~~~
mscarborough
A hastily thrown together blog post really doesn't count as a scoop. As much
as the author is patting his back over this story that the ESTABLISHMENT TECH
PRESS doesn't want you to know.

------
5avage
Does "e-commerce" even qualify as "tech" anymore? Seems to me in 2013 there's
nothing special about most e-commerce technology; it's more commerce/retail,
and I'd opine that's why the tech press ignores it for the most part.

~~~
PeterisP
In that case, does Snapchat qualify in any way whatsoever? There are at least
some technologically-interesting challenges in building large scale
e-commerce, but there's nothing special about limited-functionality mobile app
technology, in 2013 everyone knows how to do that and it's just more about
socialization habits than technology.

------
phaus
Well, maybe they haven't heard of it. I read HN daily and this is the first
time I've heard of it. Even if they have, its not exactly in the same league
as Twitter and Facebook (speaking solely in terms of popularity and brand
recognition.)

~~~
jacalata
Asking 'why doesn't the press cover x' is not really satisfactorily answered
by 'maybe they haven't heard of it'. It's their _job_ to hear of things.

~~~
phaus
Well if we're talking about what journalism's job is, there is a near-infinite
number of things that they could be covering that are way more important than
anyone's IPO.

------
minimaxir
It's worth noting that the tech press posted about the _filing_ of the IPO,
but not the IPO itself.

[http://techcrunch.com/2013/10/08/flash-sales-site-for-
moms-z...](http://techcrunch.com/2013/10/08/flash-sales-site-for-moms-zulily-
files-for-100m-ipo/)

[http://venturebeat.com/2013/10/08/flash-sales-for-moms-
site-...](http://venturebeat.com/2013/10/08/flash-sales-for-moms-site-zulily-
files-for-100m-ipo/)

~~~
lopanic
TechCrunch now has a mention of the IPO:
[http://techcrunch.com/2013/11/15/zulily-shares-
pop-82-above-...](http://techcrunch.com/2013/11/15/zulily-shares-pop-82-above-
ipo-price/)

------
aryastark
The tech press is a circus. In Hollywood, there are two films that ever
matter. The one that had the lowest budget made by kids. And the one that had
the largest budget. Anything else is not a story. Same with Silicon Valley.
You have to be a 2.0 change the world company by 20-somethings. It also helps
if you have no business plan, lots of eyeballs, and a massive valuation. Slow
growth, solving an actual need of a market, with rational actors all around?
Boring.

------
larrys
"Why the tech press is ignoring Zulily's huge IPO"

Separate issue is that one way to get pageviews after (or in this case before)
a story is by doing a story on why the press is doing the wrong thing.

The story about the story in other words.

Happens more often after some big event gets all played out in the media, the
milking is done, no more for the talking head on tv, then the media starts to
question the coverage of the big event and what was done wrong and why so much
attention was paid to it.

------
nitinalabur
Isn't this just an another Groupon for kid stuff?

Tech reporters may not have kids, but they certainly have their fingers burnt
after salivating about the Groupon IPO

~~~
nosequel
No, these aren't coupons you use somewhere else. Zulily sells the goods and
focuses on stuff for kids and mothers. Also, they seem to pick quality stuff,
not just anyone trying offload crap like some other flash sites. My wife uses
Zulily all the time and really likes it.

Hopefully this IPO will enable them to ship stuff quicker though, that's the
only major complaint about Zulily from everyone I know who uses it.

------
DenisM
It's nice to see fellow Seattleites growing a real business here. The more
success stories happen in Seattle, the more confident the new founders and
investors will be. Giving up is too easy when you think everyone else already
did.

On that note, I encourage everyone with startup aspirations to hang out in one
of the coworking spaces or incubators, like HUB or SURF (which I'm posting
from).

------
bmac27
Maybe writers are staying away because the efficacy of the business model at
scale is in question. I think some observers are still (justifiably or not)
self-aware of how they think the story ends with these kinds of companies.

On Twitter, Primack brought up Fab as an example of this kind of company
generating news. But the only news I've heard about Fab lately is bad news.

------
iridiumsnow
I have seen a few articles about the announcement of the IPO, but no mention
of it today. For what it's worth, I think Zulily is a great site and very
useful if you have kids. Maybe flash sale sites are just old news and this one
isn't breaking any new ground in that respect, so the company isn't as big of
a tech news story.

------
dsjoerg
This is the moment where "ecommerce" stopped being "tech". Just like using
electricity, or the telephone is no longer tech. Remember those fancy
companies that use the new running-water system? Me neither. That was once
tech, but not any more.

------
conductr
Ecommerce is not tech, it's retail. So ya, boring.

Amazon is a huge retailer who just happens to have very innovative tech
offerings. They also compete directly with big tech companies. That's the
difference.

------
applecore
Daily deals were really hot in 2009 and 2010.

By late 2011, the business model was considered "dying" and the tech press
moved on.

------
mscarborough
how is this better "tech press"?

only one intrepid reporter was brave enough to create a barely 6 paragraph
article long on opinion but short on facts.

yes, everyone who didn't throw up a blog post within an hour must believe
amazon is in palo alto, have never gone to seattle, and the seattle area does
not have a tech scene worth mentioning.

------
zobzu
"because news are entertainment, not news" news^H^H^H^H entertainment at 11.

Thought everyone knew that by now.

------
radley
It's classic, but boring, PR spin.

------
shaydoc
Is not terribly exciting,or innovative.... It's another incarnation of groupon
typed on a niche market. Sorry for being negative, but another shopping site,
yeehaa, just what the world needs.... :-(

~~~
ollysb
As opposed to another photo app?!

~~~
shaydoc
As opposed to something that advances humanity. Not another McMarketing
engine. How about innovative in a new way that transcends the current
freeze,that solves some serious issues that really need solved. Not willingly
signing up to be spammed, not overtly consumerist. Think Eudaimonia!

You did ask!

~~~
ollysb
I'm all for that, it's just that the tech press doesn't really cover companies
that fit that description.

