From Selling Shotguns to Designer Wear, but still burning $5.6 Billions in Last 16 Years, 132 Years of Pure American Legacy and more in a short 7 Mins

Here is what you'll gonna learn in the next 7 minutes or less!

1. Planning to Raise Capital and Focus on Scaling Your Startup?, here are 110+ Book Recommendations, curated especially for you!
2. How did Abercombie & Fitch Lose $5.6 Billion in 16 Years?
3. 5 Reasons Why Grubhub Lost a Whopping $6.67 Billion
4. 5 Strategies Airwallex Used to Scale to $3.1 Billion Business

Here are this Week's Giveaways!

Are You Planning to Raise Capital and Focus on Scaling Your Startup?, here are 110+ Books, decoding the best Strategies for You!

How did Abercombie & Fitch Lose $5.6 Billion in 16 Years?

Did you know that Abercrombie & Fitch used to sell shotguns with interchangeable barrels as well?

Founded in 1892 by David T. Abercombie, Abercombie & Fitch used to deal mostly in high-quality camping, hunting, and fishing gear. The Focus was mostly on high end clientele who used to have adventure as a hobby David was joined by Ezra Fitch, in 1900, Fitch was a successful Lawyer and invested in the company, which is when the company got rebranded to Abercombie & Fitch. The brand was built and grown on the idea of exclusivity and that extended to highly affluent social personalities as well like Emilia Earhart.

Did you know that the brand styled some of the most iconic figures of the 20th century, including the likes of Ernest Hemingway and President Theodore Roosevelt !!

Unique Value Proposition

• Premium Quality: Their products were made with the highest quality raw materials and meticulous attention to detail, catering to serious explorers and professionals.
• Personalised Customer Experience: Their flagship stores featured extraordinary amenities such as in-house shooting ranges, fishing pools, and extensive libraries on wilderness topics.
• Exclusivity Impression: Customers were drawn to the brand not just for the products but for the lifestyle and status it represented. Especially due to its association with prominent figures such as President Theodore Roosevelt, aviator Amelia Earhart, author Ernest Hemingway, and polar explorer Roald Amundsen.

Business Success and Social Relevance

• Brand saw phenomenal growth between 1920s- 1930s, also called the Fitch years where Ezra Fitch is credit with the success if the brand.
• The Brand pioneered mail-order catalogs, reaching customers nationwide
• In 1960s, they reported annual sales exceeding $50 million, which will be equivalent to over $400 million today.
• Abercrombie & Fitch went public on the New York Stock Exchange (NYSE) in 1996, almost 110+ years after it was founed.
• By 2000s, Launched subsidiary brands like Hollister Co., Abercrombie Kids, and Gilly Hicks, which have become successful in their own right.

Brand Identity Shift After its Acquisition

• Abercombie & Fitch was acquired by "The Limited Inc.", which is also the parent brand of "Victoria's Secret".
• This marked a repositioning in the brand's identity, its shifted from an Outdoor brand to a beacon of trendy, casual apparel targeting teenagers and young adults.
• This also showed in their marketing campaigns where shirtless male models and provocative advertising campaigns, became quite the norm.

Did you know the Abercombie only stayed in the company till 1907 but still the brand carries his name today even after he sold his entire share in the company?

This differentiated Abercombie & Fitch from competitors as it focussed more on Style & Exclusivity.

With New Fame, Came More Controversies

• Exclusionary Practices:Faced lawsuits alleging discriminatory hiring based on looks and ethnicity. In a 2006 interview, Jeffries stated that A&F was exclusionary, targeting "cool, good-looking people," which sparked public backlash.
• Cultural Insensitivity:Sold t-shirts with racially insensitive slogans, leading to boycotts and demands for apologies.Paid $40 million in 2004 to settle a class-action lawsuit over discriminatory practices.
• Brand Image:Criticised for hyper-sexualized marketing aimed at teenagers.Growing public disapproval affected brand perception and customer loyalty.
• Store ClosuresThe brand announced closures of over 100 stores due to poor sales and high operating costs. As a result, brand started to focus on e-commerce and revamping remaining physical stores.

Brand Resurrection Attempts

Post the exit of CEO Mike Jeffries in December 2014, Abercrombie & Fitch faced key challenge of rebuilding its brand image and reconnecting with a disgruntled customer base. The new leadership, led initially by Executive Chairman Arthur Martinez and later by CEO Fran Horowitz (appointed in 2017), implemented a comprehensive strategy to undo the damage from previous years and steer the company toward a sustainable future.

Some Key Positives here:

• Brand Image Overhaul
• Product Reinvention
• Digital Transformation
• Cultural Overhaul

5 Reasons Abercombie & Fitch Lost $5.6 Billion in 16 Years

1. Lack of Inclusivity: The company's previous focus on a narrow definition of "cool" excluded many consumers. Embracing inclusivity and diversity is crucial for building a broad customer base and fostering positive brand perception.
2. Resistance to Change: Provocative marketing became outdated as consumers gravitated toward authenticity and subtlety. Markets and consumer tastes evolve rapidly, hence the businesses must stay agile and responsive to remain relevant.
3. Ignoring Consumer Feedback: Abercombie & Fitch responded very late to changing consumer preferences and even took a longer time in acting on them. Prioritising customer experience and feedback should have been key from the beginning as it leads to stronger relationships and repeat business.
4. Toxic Leadership: New leadership acknowledged past missteps and actively worked to transform the company's culture and strategies. Its vital since Leadership sets the tone for company culture and strategic direction.
5. Adapting late to Digitalisation: Missing out for long, on investing in their online presence and social media, denied Abercrombie & Fitch to meet a large chunk of potential customers. Embracing e-commerce and digital marketing is vital for reaching today's consumers, who increasingly shop and engage with brands online.

5 Reasons Why Grubhub Lost a Whopping $6.67 Billion

Did you know that Grubhub once launched a "Free Lunch Promotion" in 2022, that resulted in 6000+ orders per minute, for 3 Hours, in New York City?

Founded in 2004 by a web developer, Matt Maloney & a Software Engineer, Mike Evans in Chicago, Grubhub was conceptualised by both the founders to solve the gap of a centralised platform for food delivery.

They created an online marketplace that connects hungry diners with local restaurants offering delivery and takeout options. Grubhub provided restaurants with an online presence to reach more customers without the need for their own delivery infrastructure.

Target Value Proposition:

• For ConsumersEase of Use: User-friendly website and mobile app to browse menus, place orders, and make payments.Variety and Choice: Access to a wide range of restaurants and cuisines.Transparency: Customer reviews, ratings, and estimated delivery times to inform decision-making.
• For RestaurantsIncreased Visibility: Exposure to a larger customer base without significant marketing investment.Order Management: Streamlined order processing through Grubhub's system.Analytics and Insights: Access to data on customer preferences and ordering patterns.

Financial Journey

• Grew from Chicago to other major cities like New York and San Francisco and reached over 1 million active diners by 2010.
• By 2013, processed over 3 million orders per month, active user count surpassed 5 million, growing this volume to 10 million by 2015.
• Grubhub in 2018, reported over $1 billion in annual revenue and surpassed 17.7 million users.
• In the same year, crossed approximately 34% of the U.S. food delivery market.

It was a Great Product but At the Wrong Time

• Loss of Market Share: By 2020, Grubhub's market share declined by more than half, to around 16%, overtaken by DoorDash and Uber Eats.
• Late Adoption of Technology:Initially relied on restaurants to handle deliveries, lagging behind competitors who built their own delivery fleets.
• Compliance Missteps: In 2019, Grubhub began adding restaurants to its app without their permission. This also led to a class-action lawsuit in 2020.

Did you know that Grubhub has been accused of charging restaurants for orders that were never orders at all?, they were just merely query calls from Grubhub's own bots.

Controversial Practices & a Lifeline

• It was alleged that Grubhub created websites for restaurants without consent to drive orders through their platform and collect commissions.
• Accused of charging restaurants for phone calls routed through Grubhub numbers, even if they didn't result in orders.
• Grubhub agreed to be acquired by Just Eat Takeaway, a European food delivery giant, for $7.3 billion, though this was a short-lived alliance.
• Just Eat Takeaway had to offload Grubhub this year in a short sale, with a loss of $6.67 Billion.

5 Lessons Startups Can Learn to Avoid Burning $6.67 Billion

1. Agility: Rapid adaptation is crucial in fast-evolving industries, Grubhub lagged in developing its own delivery network, allowing competitors to capture market share. Ideal Course: Startups must remain agile and responsive to industry shifts and competitor actions.
2. Prioritise User Experience: A seamless and user-friendly experience is vital for customer retention. We should avoid the mistake done by Grubhub founders who fell behind competitors with less intuitive app interfaces and user features. Ideal Course: Continuous investment in technology and UX can differentiate a brand in a crowded market.
3. Market Relations: Healthy relationships with partners are essential for sustainable growth. Grubhub's shadow practices were the biggest thorn in its partner relations. Ideal Course: Transparent and fair dealings with partners build trust and long-term collaboration.
4. Ethical Practices Ethical business practices are critical for brand reputation. Accusations of deceptive practices damaged its reputation among restaurants and consumers. Ideal Course: Upholding ethical standards fosters goodwill and mitigates legal risks,
5. Strategic GTM: Focused growth is often more sustainable than aggressive expansion without a solid foundation. Grubhub's team lost the plot there and tried expanding without adequately addressing core issues, which led to operational challenges. Ideal Course: Startups should balance growth ambitions with strategic planning and operational excellence.

5 Strategies Airwallex Used to Scale to $3.1 Billion Business

Did you know that Jack Zhang, one of the co-founders of Airwallex, used to work in a Lemon Factory? as a truck-loader before starting Airwallex!

Airwallex is a global financial and payments platform that helps businesses grow beyond borders.

It was founded by Jack Zhang (a former engineer), Max Li (ex-Cafe Owner), Lucy Liu (Former Investment banker) and Xijing Di (an expert in Technology and Big data), in 2015, in Melbourne.

The founders recognized the high costs and inefficiencies associated with international payments, especially for SMEs and Mid Market accounts. Conventional banking channels charged hefty fees and offered in-effective exchange rates, hindering businesses engaged in cross-border trade.

Therefore the founders wanted to create a digital platform that simplifies international payments, offers competitive exchange rates, and reduces transaction fees.

This started with Max Li, who struggled with the high costs of importing supplies for his café business. Sharing his frustrations with Jack Zhang, they envisioned a solution that would benefit not only themselves but millions of businesses worldwide.

Unique Selling Point:

• Reinventing Cross-Border Payments: Started with offering interbank exchange rates with minimal margins, saving businesses up to 90% compared to traditional banks.
• Comprehensive Financial Platform: Provides virtual global accounts in over 11 currencies. Also Offers robust APIs for seamless integration with existing business systems, enabling automation and customisation.

Ticket To Fame

1. Business Without Borders Campaign: Launched multi-channel campaigns featuring success stories of clients expanding internationally.
2. Partnership with Visa: Collaborated with Visa to launch Airwallex Borderless Cards, This Enhanced credibility and expanded customer base, it also provided customers with more flexible spending options.
3. Ecommerce Integration: Integrated with platforms like Shopify, Stripe, and PayPal, creating co-branded content and webinars to educate users on optimising international payments.

Did you know that Airwallex once got an acquisition offer of $1.15 billion offer from Stripe in 2018?, but rejected it at the last moment!

Financial Milestones:

• Has established presence in over 20 locations, including London, Hong Kong, Shanghai, San Francisco, and Bangalore.
• In 2017, crossed the benchmark of processing transactions worth $1 billion annually.
• Last funding round was $100 Million in 2022, taking valuation to 5.5 Billion.
• They are targeting a fresh round of $200 Million at $6 Billion Valuation.
• Airwallex processes $100 Billion in annual transactions volume.
• This is 73% YoY jump for the company in terms of just transaction volume.

Did you know that before Airwallex, Max Li was running a cafe in which Zhang was an investor?

5 Strategies Airwallex Used to Scale to $3.1 Billion Business

1. Figure out Right Problem: Addressing genuine pain points in the market creates value. What did Airwallex do right? How Airwallex did it: Identified the high cost and inefficiency in cross-border payments for businesses.
2. Leverage Strategic Partnerships: Collaborations can accelerate growth and enhance product, especially for a new comer in this Industry. How Airwallex did it: Partnered with Visa and integrated with major e-commerce platforms, thereby allowing Platform discovery and understanding of user behaviour.
3. Strategic Partnerships: Startups should Design products with a global audience in mind maximizes potentials, Think globally and plan for international expansion from the beginning. How Airwallex did it: Established international operations early and tailored services to local markets.
4. Technology Innovation: Robust technology infrastructure and regulatory compliance builds trust. How Airwallex did it: Airwallex built a proprietary financial infrastructure and obtained necessary licenses.
5. Customer-Centric Approach: The brand Understood that meeting customer needs , drives adoption and loyalty. This also keeps the customer at the core of your business decisions and innovations. How Airwallex did it: Airwallex started offering tailored solutions and dedicated support, leading to high customer satisfaction.