How Marc Lore built Diapers.com and Jet.com by making others leap with him

Executive overview

Most founders treat the entrepreneurial leap as a solo act. The harder skill is convincing co-founders, suppliers, customers, and even competitors to jump alongside you. Marc Lore has done this repeatedly — from a self-funded risk exam to two multi-billion-dollar exits.

The real asset isn't willingness to jump — it's the ability to make others jump with you.

Leaping before you have a product

• Lore's first venture: created a financial risk management exam before the exam existed; collected checks before writing a single question.
• Recognised a gap (no certification for a new profession), set a date and price, then built the product to meet demand.
• The exam now runs in 50 countries, 10,000 candidates per year — launched with zero product and one leap of faith.
• Key lesson: customers will pre-commit if the gap is real enough and you project credibility.

The diapers.com thesis

• Diapers were a commodity loss leader in physical retail; Lore saw that online you could offset losses by selling high-margin "long tail" products to the same customers.
• Procter & Gamble and Kimberly-Clark refused to supply direct — convinced the economics couldn't work.
• Response: buy stock from Costco at retail and sell at Costco prices, accepting deeper losses to prove the model.
• Simultaneously absorbed losses at sub-scale while building out adjacent verticals (wag, soap) to generate the margin to cover those losses at scale.
• Operated from a friend's garage, buying on credit, until the thesis was proven in the market.
• Result: QuidZee (parent company) acquired by Amazon in 2011 for $545 million.

Getting suppliers and competitors to leap

• Bring suppliers on board gradually — Lore's team proved traction before the manufacturers believed the model.
• Amazon noticed that even after slashing diaper prices to near-zero, diapers.com kept growing — demonstrating genuine brand loyalty, not just price competition.
• That brand strength is what prompted Amazon to acquire rather than simply crush.
• Poking the bear (publicly boasting of outselling Amazon 4:1) accelerated Amazon's attack; Lore advises against it unless you have a specific strategy and a quality edge.
• Richard Branson's Virgin Atlantic succeeded by poking BA because he had a clear service advantage; the same tactic failed with Virgin Cola because the product wasn't differentiated enough.

Jet.com and the referral leap

• Identified the next gap: no strong number-two player behind Amazon; logistics costs were opaque and wasteful.
• Core innovation: real-time pricing that rewarded customers for shopping in ways that reduced shipping costs.
• To acquire early customers, ran a competition — top referrers won equity; the eventual winner's stake was worth $1 million.
• Generated hundreds of thousands of referrals; sold to Walmart for $3 billion within two years.
• Walmart acquisition felt like a partnership, not a sell-out: Walmart offered capital and weight behind Lore's vision.

Turning around Walmart e-commerce

• Walmart's online sales growth had stalled when Lore joined as president and CEO of e-commerce in 2016.
• Counterintuitive move: dramatically increased marketing spend even when cost-per-acquisition exceeded lifetime value — the goal was momentum and press, not unit economics.
• Bought Bonobos (a premium brand) to signal that Walmart e-commerce was innovating; the buzz changed hiring dynamics.
• Within two years, e-commerce sales grew ~50%; within three years, nearly tripled.
• Key insight: bad unit economics can be the right call when you need to change a narrative before you can change the business.

The VCP framework for scaling

• Vision: write it down in 25 words; every executive must be able to recite the 10–20 year destination and the 3–5 strategic objectives.
• Capital: deploy it in service of the vision, not just standard financial metrics.
• People: hire a serious chief people officer early — not an HR generalist, potentially a general manager who thinks in terms of talent acquisition systems.
• Build org structure around strategy, not convention; non-traditional roles that report directly to the CEO are justified if those roles are critical to the strategy.
• Hire for passion, optimism, and grit — domain expertise can be brought in; those traits cannot be installed later.

Missionary vs mercenary

• On the day QuidZee sold to Amazon, Lore and co-founder Vinit Bharara did not celebrate — the mission was over even as the money arrived.
• Missionaries want the money but choose the mission when forced to pick; the sale felt depressing because the vision was cut short.
• Jet.com's sale to Walmart felt different because Walmart wanted to extend the vision, not park it.
• Founders should distinguish between selling (advancing the mission with new resources) and selling out (ending the mission for the payout).