My Dumb Luck #2: This Get-Rich-Quick Scheme turned This guy Into a Multi-Millionaire
The Item: 100,000 Shares for Jet.com
The Retail Value: ~ $20 million
The Purchase Price: $18,000
My Dumb Luck Discount: 99.91%
Believe it or not, I know this guy. His name is Eric Martin. And he went to the same elementary school, middle school, and high school that I went to. I don’t know if he knows me, but he knows my younger brother. They used to play video games together way back when their voices started cracking and arm pits started growing hair. I think they’d have Super Smash Brother Melee parties at his house, and get lit up on RC Cola. I’m not sure. But what I do know is that Eric Martin is now on the receiving end of one of the biggest My Dumb Luck stories.
If you’re not familiar with the Eric’s claim to millions, here’s an article with details:
But to summarize, back in March of 2015, Eric Martin won a contest. And the reward for winning that contest was 100,000 shares of the hot new start-up, ecommerce site called Jet.com. Keep in mind, that the website didn’t even exist when this contest started. The rules of the game required the winning person to sign up the most new members. And what Eric Martin did was take $18,000, and use it to get people to sign up through Swagbucks.com, GiftHulk, and Facebook ads. This $18,000 effort resulted in 8,100 new members for Jet.com. And these 8,100 new members secured Eric the victory.
Here’s a great article that details Eric’s dramatic fight to the top of Jet.com’s leaderboard, and all his sign-up strategies and flops.
So, 17 months later, In August of 2016, Walmart announces that they’re buying Jet.com for $3.3 Billion dollars, in an effort to catch up with Amazon. And what this essentially does is inflate Eric’s shares to the value of an estimated $20 million.
Now, when you read my summary, it’s easy to see how this would be such a smart play. If you had a chance to gain 100,000 shares of a popular ecommerce site, that’s pushing hard to dethrone Amazon, that’s claiming the lowest prices for everything on the internet, and claiming free shipping for a minimum order, and gaining lots of customers because of these perks, wouldn’t you buy those shares for $18,000? If I new that at the time, I would have dropped $30,000 for all those shares!
But not everything is as it seems, and hind sight is 20/20, and foresight is deftly blind. Because what Eric Martin did was a HUGE risk.
It was such an astronomical risk, that I would never have ever considered it. Nor would any risk-assessing, parsimonious patron. And here’s why:
- When Jet.com announced their contest in early 2015, they weren’t even a website yet. They were a myth. They were chitter and chatter. They were still a figment of someone’s imagination. The only credibility that they had going for them was their CEO, Marc Lore, whom had sold Diapers.com to Amazon back in 2011 for $545 million.
- There was no guarantee that 100,000 shares would be worth anything. The contest had stipulations, which stated that the winners could not sell their shares. And that they could only sell their shares if Jet.com went public, or if it was bought.
So basically, when Eric Martin committed his time and money to this contest, Jet.com was nothing but an idea, and that his shares that he eventually won, could never be sold, unless a very unlikely thing were to occur, the company be bought, or go public. Had the company failed in its David vs. Goliath mission to compete with Amazon, then those shares would have been worth nothing.
But lucky for Eric, that unlikely thing did occur when Walmart bought Jet.com for $3.3 billion.
And when you hear about the incredible ending, it sounds like a no-brainer. But if I had known about the contest back in February 2015, there’s not a shrapnel of doubt in my mind that I would have never considered it. And that’s because it was way too risky. $18,000 is a lot of money, and with as the sole-provider for a family, I couldn’t justify parting with that much cash for something that I don’t know would ever pan out.
And I don’t mean to be a wet diaper. I’m very happy for Eric and his family. His Dumb Luck scored his household enough wealth that there are many great options ahead, and much time that they can all spend together. And not only is it benefiting his household, but his new start up website is getting mentioned in nearly every top internet publication, generating tons of great backlinks for great SERPs. (And since you’re curious, his start-up website is Ideadash.com. It appears to be similar to Quirky.com – which filed for bankruptcy back in September 2015).
But again, if you’re able to look past the happy ending, and stop being seduced by the grandiose ideas of financial freedom, know that this was a huge risk. My wife thinks Eric knew something. But I keep telling her that there wasn’t enough to know, and that this was straight up gambling. Which is something I have no interest in.
So what do you think? Would you have dropped thousands into the contest, not knowing what the website looked like, not knowing if people were using it, not knowing anything about it, except that the winning shares couldn’t be useful until this unknown company was bought for billions? Or do you think 100,000 shares of any start-up, managed by Marc Lore is enough incentive to invest time and $18,000?
Tell us your thoughts!