Tag Archives: Zulily

Something special every day: Foster students provide solutions to zulily

Zulily1
zulily, the darling e-commerce flash-sale company based in Seattle has had exceptional growth since emerging on the market in 2010. “zulily has grown substantially, exhibiting astronomical growth over the last five years. zulily reported fourth quarter and full year 2014 net sales at $1.2 billion, up a staggering 72 percent year-over-year.”¹

They have cornered the “mom” market by focusing on products for women and children with a focus on delighting their customers with short-term (3-days) sales on unique products from both boutique brands as well as name-brand fashion. In recent years, zulily has begun to expand into related categories – such as homewares. Encouraged by their powerful e-tailing platform and passionate customer base, zulily continues to focus on delivering an exceptional customer experience for all of its customers, each and every day. The Foster School of Business partnered with zulily to explore the critical question through the Strategy Development Case Competition: Where should zulily focus their growth and expansion?

Each quarter the Foster School partners with a Seattle-based company to develop a customized business case as part of a required capstone course (MGMT430) for all graduating seniors. The case, written by Sadie Raney, Foster MBA Alumna (’14) and overseen by the course coordinator, Rich McPherson presents an urgent business issue in a condensed format.

Nearly 60 teams of students presented their solutions to panels of
judges composed of alumni, friends of the business school and zulily leaders. Although the case challenge centered on expanding addressable markets, the winning team built a compelling argument for remaining true to the zulily brand and their core customer – mom by developing a rewards programs. The winning team highlighted that there are still opportunities to gain market share with moms throughout the United States. Their solution was backed by their business finding – 80% of future revenue comes from 20% of existing customers.

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The winning team hard at work at zulily’s headquarters

Members of the winning team were: Kevin Cruz, Kayla Jedele, Erinna O’Brien, Phi Pham, and Bryanna Woo, had the opportunity to present to the Customer Experience team at zulily headquarters a few days after the competition – and a few days before graduating! The general consensus of the senior leaders of the students’ “bloom” rewards program (featuring a flat membership fee to enable customers’ early access to specific daily sales and free shipping on a monthly basis) was that it is ‘simple, clean, and easily understood.’ Kayla Jedele “loved actually presenting to zulily employees both in the competition and during our office visit because it meant they cared about our work. They were just as excited and invested as we were which really enriched the whole experience.”

Erinna O’Brien said of the experience overall: “I had the most incredible experience at Foster doing this case competition with my team. The key to our success was trusting one another, not being afraid to speak up and capitalizing on our best skills.”

¹Brohan, Mark. “Zulily sales spike 72% in 2014.” www.internetretailer.com. 12 February 2015. Used content from earnings press release hosted on zulily: http://investor.zulily.com/releases.cfm

Zulily and Maveron: Building a successful company

Guest post by Emilia Griswold, Foster MBA 2014

Darrell Cavens, CEO of Zulily
Darrell Cavens, CEO of Zulily

Foster students were recently treated to a discussion of “What Makes a Successful Company” with Darrell Cavens, CEO of Zulily.com, and Dan Levitan, co-founder of venture capital firm Maveron. Maveron led the initial funding for Zulily, and this was a rare opportunity to see a founder and investor speak candidly about their partnership. Cavens and Levitan, along with moderator Emer Dooley of the Buerk Center for Entrepreneurship discussed start-ups, venture capital, and building high-performing teams.

The recent $1 billion valuation of Zulily prompted several questions about how a billion dollar company gets started. The answer, from both Cavens and Levitan, was hard work. Zulily was started by Cavens and former Blue Nile CEO Mark Vadon with little more than a spreadsheet and whiteboard. Although they didn’t have much of a business plan, Maveron believed in the team. The people, Levitan pointed out, are what a company is all about. With the Zulily team, Maveron saw leaders with the ability and vision to bring others along for the ride and a staunch dedication to constant improvement. Cavens and Levitan agreed that Zulily never thought of itself as a billion dollar company, but as a company focused on doing and growing. And fast.

By creating a culture with an “iterate and grow” mindset, they could run on Zulily Time: twice as fast as anyone would think is doable. To illustrate Zulily Time, Cavens told the story of getting the first fulfillment center up and running in 10 weeks—instead of the 7-12 months that was originally estimated. That lesson of maintaining focus and going after what everyone thinks is impossible certainly resonates with many students. And Levitan had more advice for those just starting out and lacking Cavens’ pedigree: be comfortable thinking on your feet, surround yourself with entrepreneurial people, and take time in school to figure out who you are, what you’re passionate about, and what you excel at.

Dan Levitan
Dan Levitan, Co-founder of Maveron

Cavens emphasized that part of developing yourself is developing a team that compliments your skills. When he was building the initial Zulily team, he looked for people that would not only add value, but also take risks and thrive in ambiguous situations. Cavens advised taking time to find investors with whom you really click, because they are also part of the team. Funders can add networks and resources as well as validation of your idea. Because Maveron knew Cavens and his capabilities, they were even willing to let Zulily write their own term sheet tied to a specific set of milestones. And unlike many start-ups, Cavens knew that if this idea didn’t work out he wasn’t going to pivot, he would just give the investment back and go do something else.

Ultimately, Levitan noted, it’s great entrepreneurs and their teams that build an amazing company—not venture capital firms. But no one, Zulily in particular, can deny the importance of money and resources to get a company off the ground. Zulily is proof that incredible things can happen when driven founders and the right investors come together.

This event was organized by Foster’s Entrepreneurship & Venture Capital Club.