Top 5 Ways to Crash an Ecommerce Business

Sean Percival@percival

Venture Partner, 500 Startups

Passion Out Strips Experience1

Pro Tips

• Constantly be hiring smarter people than you• Know your arrogance is going to be expensive• Get some serious industry BFFs

Shipping Fails2

Customer Happiness Over Time

Order Placed

Week 1 Week 2 Week 3 Week 4

-

-- H

ap

pin

ess

---

Stoked

Concerned

Pissed

You Ruined Christmas

Happy

Out for blood

We both said things we didn’t mean

Pro Tips

• Go to a 3PL ASAP• Fight with your vendors more• Set good expectations with customers• It’s worth discounting when you screw up

Margins You Can’t Fix3

Pro Tips

• Test upfront (then test more) • Avoid discounting• Make the tough price switches early• Find secret unsexy revenue

Fundraising Screw Ups4

Pro Tips

• Ecom words to never use with a VC:• Subscription commerce (or the trend of the moment)!• Lifestyle brand!• Curated artisanal experience!• Celebrity endorsement!• It’s Pinterest for…..!

• Never go out in Q4• Know your numbers

You Suck at Marketing5

Pro Tips

• You have try 10 things to get 1 that works• Learn to ankle bite the big dogs• Assume 100% of sales come on a 2nd visit

Thank You