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Patrick Byrne, CEO of Overstock.com gave the keynote address
at Internet Retailer today.
Byrne talked about his experience in working for Warren
Buffet, and how he went into the web business. When he started Overstock.com he
met with 85 different venture capitalists, who did not give him very much
money. Once the dot.com bust came along he was able to liquidate the assets of
those companies that were funded by the venture capitalists who turned him
down.
He built a system for paying third world artisans higher
margins, and selling those products cheaper in the United States. Overstock has
given over $35 million to those artisans.
Patrick suggests that internet retailers offer better value,
the way to get there is to measure everything. He looked at a number of stores
when he was working for Warren Buffet and discovered those stores that were
spending more on book made more profits. The business people were measuring
their marketing effectiveness, and that data helped them manage their business
wisely. As a result Byrne suggests investing in data warehouses.
When cutting payroll, don’t look at the low paid people,
look at mid-managers and ensure they are giving the ROI they need to pay for
themselves.
Patrick Byrne spent some time on selling his own company’s
services to the retailers. I found this a little inappropriate when giving a
keynote. I wanted valuable content not a sales pitch, however he quickly moved
on to his concerns about Wall Street. From 2005 he has been suggesting the
economy has been heading into a big crash on the scale of the 1930′s.
Byrne points to naked shorting as the culprit for the
current crash. He suggested it’s a conspiracy by investment raiders to
orchestrate a company stock tumble by a company, and make money by shorting the
company’s stock. I thought Byrne’s explanation was a slightly confusing, he
also gave several examples of reporters working with hedge fund managers to
beat up companies, if you want to learn more you can check out
htt://www.deepcature.com.
John Cass is a freelance writer available on WriterAccess, a marketplace where clients and expert writers connect for assignments. WriterAccess is powered by ideaLaunch, a full service content marketing agency serving hundreds of clients and thousands of writers since 2000.
