Local Companies Hitting Home Runs as Fast as Red Sox
Three local companies were in the national news last week. They are great examples of how local innovators create jobs, opportunity and wealth. By applying new ideas in mature industries, they created two billionaires, revived an old retailer, and established a brand new billion dollar company. I am talking about Wayfair, BJ’s and PillPack.
Wayfair conquers online home furnishings market
Steve Conine, co-founder of Wayfair, is well known by now. He and Niraj Shah started Wayfair in 2002 as one of many companies they invested all their sweat equity in. Steve, a colorful 45-year-old multi-billionaire, recently spoke to the MIT Angels, holding the Wayfair Copley Square office room rapt with funny and true stories.
Like most success stories, Steve’s had plenty of twists and turns. After college, he turned down an offer to enter the family business. He and Niraj originally found success selling speaker stands online. Lots of them. They had 250 companies selling “things for your home you can’t easily get” for at least five years. Eventually, they settled on Wayfair (a made up name), took in $351 million of local venture capital and went public. They now offer 5 million furnishings online! Last week Wayfair stock hit a new high of $118 per share with a market cap over $10 billion.
It’s Steve’s hope that there will be many Wayfair alumni who start their own big successful local companies. Afterward, I privately asked him what the family business was that he turned down. “Selling furniture,” of course.
Frustrated pharmacist reinvents distribution
Last week Amazon bought Somerville-based PillPack for one billion dollars in cash. Cofounders TJ Park, who went to pharmacy school, and Elliot Cohen won the MIT Hackathon in 2012 with their idea of rapid delivery of sorted, labeled medications. Along the way, they raised $118m in venture capital. That’s a 9x average return in five years for all the venture capitalists, and much, much more for earlier investors.
BJ’s Wholesale Club is public again
BJ’s of Westborough is now a public company, seven years after it was acquired by a private equity firm. The IPO soared 29% on the first day, making it a $3 billion company. BJ’s is a survivor, having been founded in 1984. Despite the very challenging retail environment, BJ’s is doing very well again, and so are its shareholders and 26,000 employees.
Fourteen billion in total
If you add up the value of Wayfair, BJ’s and PillPack it is over $14 billion dollars. One of these companies didn’t exist seven years ago. The other two are not that old for their size. The point is simply that Boston and environs remain a place where businesses can be established and grow to be quite large, quite quickly. We’re thankful to be part of this exciting business community.
PS – too late for details, but SimpliSafe was acquired for $1Billion last Friday. It was founded in 2006 by husband and wife HBS grads at a Downtown Crossing location.
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