Rocket Internet, the Berlin-based incubator best known for German-language clones of US startups like Zappos and Groupon, now has big ambitions in the online furniture space according to information passed to TechCrunch Europe.
In a confidential email sent by Oliver Samwer which we have confirmed is genuine, the head (with his brothers Marc and Alexander) of European Founders Fund and the driving force behind Rocket, says their strategy is to become “number one” in the the ecommerce sector for furniture over the next year. But the language he uses – including the world “blitzkrieg” – indicates an aggressive and potentially insensitive management style which appears to be a ‘modus operadi’ of Rocket Internet culture.
In the email, Oliver Samwer tells his team at Rocket that “there are only 3 areas in ecommerce to build billion dollar business: amazon, zappos and furniture.”
“Never forget there are only 2 big areas in ecommerce: amazon and zappos. this is the last chance in your life! the chance for another billion dollar ecommerce company will never come again. This is over, after amazon there came only zappos, so we cannot lose this, because your grand children will ask why you why you did not become it,” he writes.
He then goes on to explain how they will achieve this: by being “German detail oriented”, being fast, being “aggressive” and “data driven”.
He also adds that managers he employed who did not do this lost him “a lot of money” in Russia and “the founders lost 50% of their equity” and had “no salary for 6 months.”
However the language used is quite surprising, to say the least. He tells his team: “You must assume everything [sic.] in your plan so that there are no surprises. i do not accept surprises. i want this planned confirmed [sic.] by all three of you: you must sign it with your blood.”
He adds: “i will only do a plan that you 100% believe in and that is signed with blood.”
Most controversially, especially for a high profile German businessman, he uses language more reminiscent of World War Two: “There are only 3 areas in ecommerce to build billion dollar business: amazon, zappos and furniture. the only thing is that the time for the blitzkrieg must be chosen wisely, so each country tells me with blood when it is time. i am ready – anytime!”
“Blitzkrieg” was of course a term used by the Nazis to describe their tactic of fast moving “lightning war”.
The well-placed source who passed us the email told us: “Samwer is known for using military terms as well as obscene language a lot, so that kind of ‘motivation’ is definitely “Olli Samwer style”. I don’t know a single other business person using such language.”
Everyone knows that in the realm of high-growth Internet companies people can sometimes get overly excited and perhaps over-step the mark. However the language used is less than tactful, to put it mildly.
Contacted by TechCrunch about the email Oliver Samwer confirmed it was genuine and responded on email with this statement:
“This was an email I sent to members of a project team back in October. In the midst of my enthusiasm and the idea of a fast roll-out I used the totally non-appropriate term Blitzkrieg. I am deeply sorry for this. I apologize to anyone who might have been offended by this word and the general tone of the email. It was really not my intention to hurt anyone’ s feelings. I am sending the same email of apology to the original recipients of this email. I know it was wrong and I will surely never articulate myself that way again.”
We reprint the email in full below.
From: Oliver SamwerSource: http://eu.techcrunch.com/2011/12/22/in-confidential-email-samwer-describes-online-furniture-strategy-as-a-blitzkrieg/
Subject: when is it time for blitzkrieg
To: [redacted]
Cc: [redacted]
Date: October, 2011
[Name], [Name] and the other founders globally in furniture, i need to know from you, when it is time to do the same in furniture, that means when it is time to take 100% of the market, full scale investment attack etc – as see below.
there are only 3 areas in ecommerce to build billion dollar business: amazon, zappos and furniture. the only thing is that the time for the blitzkrieg must be chosen wisely, so each country tells me with blood when it is time. i am ready – anytime!
Team in India, Turkey, Australia, South Africa, South East Asia,
I want you to change strategy and become the fastes, most aggressive and most succcessful company we ever built. You both face the same situation of coming late into market but sitting in the most interesting markets of the world and therefore I want you both to follow the same strategy. And do not tell me that you are following the strategy already, today from india to turkey, you have implemented 20% of this. Now it is time to either decide we will die to win or to give up.
So here is the important stuff for our strategy
Must:
1. We must be number one latest in the last month of next season. Full month, not a discount sales month.
Why ? Because only number one can raise unbelievable money at unbelievable valuations. I cannot raise money for number 2 etc and I have seen it how easy it is for me in Brazil and how difficult in Russia, because our team fucked up.
So to be clear, I will provide you with the money for the most aggressive plan of history. You must provide a plan and assume the following:
1. You achieve number 1. And you must achieve number in the categories that your competitors are active. So if your comeptitors are only in shoes, you must be number one in shoes. And then have clothes etc on top. But it will not that by not being number one in shoes you make up by selling in clothes. Leader in EVERY country that you have.
2. You must be in 2 seasons from now have at least 50% marketshare of the total online market in all your categories. A scenario where you have 35%, next 25%, next 20% will not give you the valuation that we need. we need an amazon valuation: seen as the 80% leader in the market.
3. You must assume that your competitors will raise huge amounts of money and will have revenues of 3x compared to this season.
4. i want all competitors with forecasts in your plan, so that it is clear what our position is.
5. i only care for net revenues, after returns and number of orders to prove that you are number one and have the required market share. no other currency. pls provide a business plan for 2012, not longer, not less.
6. in the last season month you need to be 100% bigger than biggest competitor in net revnues and order (both metrics)
7. assume that your competition will do crazy things: tv, groupons, selling below cogs, … you must assume eveything in your plan so that there are no surprises. i do not accept surprises. i want this planned confirmed by all three of you: you must sign it with your blood.
What you need and do not have (this is not criticism, this is oberservation):
1. You have not enough top buyers: you need to be number one in shoes, apparel, sports, jewelerey, whatever category makes sense. we can only get to 80% marketshare if we beat our competitors by aggressiveneess in each category, it must be a blitz-krieg-invasion. i think you should have 25 top buyers, top in each category, start looking now. you must OWN each category. australia mistake, not enough focus on shoes, instead apparel
and so they are losing out in shoes. the strategy is: own every country and if you have to sacrifice, focus on shoes as priority. best is if you can master all.
2. you need more top people. more mckinseys, goldman. find young talent, aggressive talent, smart detailed.
3. you need to ask much more brazil, russia and germany for their lessons, mistakes, improvements. russia did not do reports like germany and so they screwed up.
4. spend your money wisely. grow buying now, but it makes no sense to have 200 logistics people for 10 orders a day. so grow early, but wiseley.
5. control marketing, the key is in measurement. there is tons of lessons in russia mistakes and brazil there.
6. 2 of you should come some time for 2 days over one weekday and one weekend day to germany to get complete download.
7. find a top cto wizzard, build up a 30 people it team of top talent. amazon is it company, zalando 30% of value in it. it is always bottleneck.
Summary: i give you all the money to win, i give all the trust, but you come back with unmatched success. If i see that you are wasting my money, that you are not german detail oriented, that you are not fast, that you are not aggressive, that you are not data driven, that you are not doing logistics well, upload inventory fast, buying wrong inventory, then i get angry and do like in russia, where no people leading the company now and i lost a ton of money and the founders lost 50% of their equity and no salary for 6 months. we are in the same boat, everyone has to do his mission.
We are coming late, so we need to be the most aggressive, so aggressive that every competitor is surprised because he cannot imagine that we are SOO aggressive. to give you an example in brazil in groupon my competitor did 3m a month and had 80 sales people. i assumed in 4 months he would go to 300 salespeople and 6m so i told the team to have 500 salespeople in 4 months and 10m monthly revenues. we won. yes, there was some collateral damaage (it could have been done cheaper wiht more time), but i won and this it was matters so i could raise money and optimise all the missing parts.
Provide a plan over this weekend that includes all your recommendations, thinking because i can give you the money, the knowhow, the strategy, but i will only do a plan that you 100% believe in and that is signed with blood. this is not olis plan, this must be your plan, our plan.
Never forget there are only 2 big areas in ecommerce: amazon and zappos. this is the last chance in your life! the chance for another billion dollar ecommerce company will never come again. This is over, after amazon there came only zappos, so we cannot lose this, because your grand children will ask why you why you did not become it.
Surprise me with your aggressiveness, but smart and thought through aggressiveness – learn from the russian and japanese mistakes and the german and brazilian successes !
This is our last chance in ecommerce to build an Amazon company. After us, you can build an online games company, but no more in ecommerce. this is the LAST frontier in your life for ecommerce and I want you to rule this frontier. not 20%, not 30%, but 80% marketshare which is still possible in your countries.
I am the most aggressive guy on internet on the planet. I will die to win and i expect the same from you!
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