Overview

In this episode of *How I Built This*, Guy Raz interviews Marc Lore, the founder behind Diapers.com and Jet.com, tracing his journey from a struggling student with a mercenary drive for money to a missionary entrepreneur who built and sold two e-commerce giants. The central thesis is that Lore's relentless competitive spirit, honed through a difficult childhood and a need to prove himself, allowed him to turn the impossible economics of selling diapers online into a $550 million exit to Amazon—and then, after a bitter defeat, to come back and build Jet.com, which Walmart acquired for $3.3 billion in the largest e-commerce startup acquisition in U.S. history at the time. The conversation has the feel of a candid, almost therapeutic reflection, with Lore openly discussing the psychological wounds that drove him, the depression he felt after selling to Amazon, and his eventual transformation from a "mercenary" obsessed with money to a "missionary" driven by purpose.

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10:04Early Life and the Competitive Spark

Marc Lore grew up in New Jersey with a father who ran a computer consulting business and a mother who was a bodybuilder and personal trainer—she could squat 350 pounds at 110 pounds body weight. His parents married very young (his father was 20, his mother 19) and had him less than a year later. The household was turbulent: his parents fought constantly, and his father was not fully present. Lore explains that the only way to get his father's attention was to "do something extraordinary," which programmed him from a young age to associate "doing big things with feeling loved." He acknowledges, with the benefit of therapy, that this drive "didn't come from a healthy place."

Academically, Lore was a disaster. He was the class clown, never did homework, and didn't even realize until his sophomore year of high school that you had to be *accepted* to college—he thought you just chose a school and paid. A wake-up call came when a biology teacher, Mr. Arminati, publicly announced the lowest test score in the class, which was Lore's 7 out of 100. Humiliated, he studied for the next exam and scored the highest in the class. This pattern—being challenged or embarrassed, then rising to dominate—became a defining feature of his life.

Despite poor grades, Lore was a gifted athlete and a state champion in track and field. This athletic ability got him into Bucknell University, but upon arrival, the track coach sat him down and told him he was on academic probation and would not have time to train for the decathlon. Lore made a bet: if he got straight A's his first semester, the coach would train him. The coach laughed and told the team about the bet. Lore got straight A's. He explains that he always knew he was smart—he just needed to "turn it on."

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14:21Wall Street, a Master Plan, and the U.S. Bobsled Team

After graduating in 1993, Lore went to work at Bankers Trust in New York City, drawn to derivatives trading because he had been reading books on derivatives since seventh grade. He describes himself as a "mercenary" at this stage, shaped by a household where everything revolved around making money—his father talked about it constantly, and his uncles went to Atlantic City to try to beat the house at blackjack. Lore put a sign on his cubicle that read: "Goal: six figures by 26, seven figures by 37, eight figures by 48." He worked obsessively, always the first in and last out, and rose rapidly. By age 28, he was Executive Vice President at Sanwa Bank, the youngest in the bank's history, making $500,000 a year.

But Lore also reveals a bizarre and almost cinematic detour. In 1996, while working as a banker, he was having lunch at the World Financial Center in New York and saw a bobsled promotion: push a sled, get timed, and the fastest time of the week gets invited to a training camp. Lore brought his sneakers the next day, pushed the sled, and recorded the fastest time. He got the call to go to Lake Placid. He asked his bank for a month off—and got it. He trained for 30 days, pushing cars around empty parking lots in New Jersey after work to build explosiveness. At the time trials to make the U.S. National Bobsled Team, 13 spots were available, and Lore finished 13th. He was invited to train full-time for the 1998 Olympics, but he declined. Bobsledding was not lucrative, and he was still a mercenary, driven by money. He chose banking over the Olympics.

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16:28The Pit: A Sports Stock Market and the Dot-Com Crash

Despite his success in finance, Lore hated the culture: "It wasn't very diverse. It was very condescending toward women. It was very harsh. There was no empathy, and kindness didn't play a role." He also felt unfulfilled. In 2000, with a newborn baby, he quit his $500,000-a-year job to start a company with his childhood friends Vinny (Vineet Bharara) and Lax (Lax Chandra), the same friends he had sold baseball cards with in high school.

The idea was called "The Pit"—a stock market for sports players. Customers would buy and sell shares in athletes, using baseball cards as proxies but never taking physical delivery. There was a ticker, market makers, bid-offer spreads, and people traded aggressively during games. Lore invested every dollar he had—$390,000—into the company. He says the angel investors saw that and thought, "Wow, this guy's got a lot to lose," which helped them commit their own $5 million. The business worked: in the first 10 months, it processed $10 million in transaction volume. But then the NASDAQ crashed in 2001. The funding environment became a ghost town. Lore sold the company to Topps, the baseball card company, for $5.7 million—enough for every investor to get their money back plus a small return. Lore, Vinny, and Lax became Topps employees. Lore was sent to Seattle to run Wizkids, a Topps subsidiary that made physical collectible miniature games (similar to Dungeons & Dragons).

Two years later, at age 32 or 33, Lore found himself sitting around with gamers at night, rolling a 20-sided die, and thinking: "What happened? I was on top of the world at 28, the fastest to EVP, making all this money. And here I am at 32 rolling the 20-sided die." He knew he had to start something new.

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27:44The Diapers Insight and the Impossible Economics

The idea for Diapers.com began with a strange research method. Lore would go on Google and search random words to see how many times they were searched per month. He searched "diapers" and found 200,000 monthly searches. At the time (2003–2004), you could not buy diapers online at a reasonable price—Amazon didn't sell them, and if you could find them, prices were "jacked to ridiculous levels." Lore went to Vinny and proposed selling diapers at Walmart prices with overnight delivery.

Everyone told them it was impossible. Diapers are a classic loss leader: brick-and-mortar retailers sell them below cost to get parents into the store, where they buy high-margin items like strollers, clothing, and pacifiers. Online, you have to pay for shipping and fulfillment, which makes the losses even worse. But Lore saw the flip side: online stores have unlimited shelf space. If you could use diapers to drive traffic, you could sell *everything* for babies—and eventually everything for parents and households—at much higher margins than a physical store could.

They launched as 1-800-Diapers because they couldn't afford the Diapers.com domain. Procter & Gamble (Pampers) and Kimberly-Clark (Huggies) refused to sell to them, saying the business would never work. So Lore and Vinny went to wholesale clubs—BJ's, Sam's Club, Costco—and bought diapers at full retail price. They then sold them on their website at the *same* price, losing money on every transaction because they also paid for shipping and credit card fees. As one investor put it, they were "selling a dollar for 90 cents." Within a year, they hit $11 million in revenue—but the more they sold, the more money they lost. Lore and Vinny financed the losses out of their own pockets.

To force P&G and Kimberly-Clark to sell to them directly, Lore used a guerrilla tactic. They had an arrangement with a wholesale club to leave some diapers for other customers in exchange for loading pallets onto their truck. One day, they took *all* the diapers. The club manager protested, and Lore said, "Please call your P&G and Kimberly-Clark rep and tell them to sell us direct, and then we're out of your hair." It worked. P&G called and said, "We're doing a favor for a very important customer. We don't believe in your business model, but we're going to sell you."

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35:29Efficiency, Boxam, and the Quidsi Empire

With direct supply secured, Lore and Vinny raised $4 million in venture funding in 2006 and bought the Diapers.com domain. They recruited Lev Borodovsky, a former colleague from finance who held a PhD in nuclear physics, to solve the shipping cost problem. Lev built a system called "Boxam" that optimized box sizes. The insight was that shipping costs are based on either weight or dimensional weight (the size of the box), whichever is higher. Most boxes had 60% empty space. By using 20–30 different box sizes and a software algorithm that determined the optimal box and packing configuration for every order, they dramatically reduced shipping costs. The marginal cost of adding an extra item to a box that was already being shipped was very low—sometimes 10 cents—so the margin on those incremental items was excellent.

This efficiency allowed them to expand aggressively. They launched Wag.com (pets), Soap.com (household supplies), BeautyBar.com (cosmetics), YoYo.com (toys), and Casa.com (home). The corporate parent was named Quidsi. All the sites shared a single shopping cart: a customer could shop on Diapers.com, click a tab to Wag.com, add pet supplies to the same cart, and check out once. By the end of 2010, Quidsi was on track to do $300 million in revenue with about 300 employees. They were still not profitable, but there was a clear path.

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45:53Amazon's Scorched Earth Strategy

Quidsi's success put it on Amazon's radar. In 2009, Amazon approached Lore informally, asking if he would consider selling. Not long after, Amazon slashed its own diaper prices by 30%. This was unprecedented: diapers were already a loss leader, and cutting prices another 30% was, in Lore's words, "unheard of in the history of retail." It slowed Quidsi's growth but did not shrink it—customer loyalty was strong, which surprised Amazon.

Lore tried to raise another $100 million to fight back, but investors were spooked. "Amazon's coming after you. That's too risky for us," they said. In September 2010, Amazon invited Lore and his team to Seattle. At the meeting, Amazon announced they were launching "Amazon Mom," a program designed to get mothers into their membership program, driven by diapers. Lore explains that if Diapers.com sold a case of Pampers for $45, Amazon would sell the same case for $30—$15 less. There was no competing with that.

Amazon made an acquisition offer. Lore received a competing offer from another company for $100 million more, but Amazon made it clear that if he took that offer, they would "do even more to harm the business." Lore describes it bluntly: "They said, 'You gotta accept this acquisition offer or else we're going to crush you. We're going to bury you.' They said they were going to take the price of diapers to zero." He calls it "a mob shakedown." Amazon bought Quidsi for $550 million. All investors did well, but Lore and Vinny were depressed. "We had a vision for what we wanted to create. We put our heart and soul into it, and then our dream was sort of done." They couldn't even celebrate.

Lore stayed at Amazon for three years, running Quidsi under the Amazon umbrella. Amazon told him to "keep doing what you're doing—just continue to keep competing with us." It was a miserable experience. He left feeling that there was "unfinished business."

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1:00:11Jet.com: The $3.3 Billion Comeback

Lore's next idea was Jet.com, a membership-based e-commerce site designed to compete directly with Amazon. The core insight was that Amazon's supply chain was inefficient: customers often bought one item at a time, shipped from different warehouses across the country. Jet built a real-time "smart pricing engine" that showed customers lower prices on items that could be shipped together from the same warehouse. If a customer was about to add a product that would ship from a distant location, the engine would offer a substitute from the same warehouse, saving $6 in shipping and giving $3 back to the customer. The idea was to encourage basket-building and warehouse consolidation, making the supply chain more efficient than Amazon's.

Lore told investors that Jet would lose $3 billion before becoming profitable. He raised $750 million in total, including a $618 million Series A—one of the largest in history at the time. The business launched in July 2015 and hit a $1 billion revenue run rate within 10 months, which Lore believes was unprecedented. They were burning $40 million a month.

Three months in, Lore dropped the $50 annual membership fee. He still believes the membership model would have worked, but investors wanted to see retention data before committing more capital, and Lore didn't have time to prove it out. He pivoted the business model so the math worked without membership fees.

Just one year after launch, Walmart CEO Doug McMillon made an offer. Lore says the conversation was completely different from the Amazon experience. McMillon drew on a whiteboard and shared a vision of combining Jet's technology and talent with Walmart's capital and stores to become a formidable competitor to Amazon. Walmart acquired Jet.com for $3.3 billion—the highest price ever paid for a U.S. e-commerce startup at the time. Lore emphasizes that this was "selling the company, not selling out." The mission was intact, and he felt empowered. "It was like we're fighting there with guns, and then all of a sudden you see the big tanks roll in. I want the tanks. I want the Air Force."

Lore stayed at Walmart for four and a half years, running its e-commerce division. He acquired Bonobos in 2017 as part of a strategy to change the narrative and attract top talent to Walmart. He stepped down feeling that he had accomplished his goals: changing the narrative, accelerating top-line sales, and creating an incubator for startups that could shape the future of retail.

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Conclusion

What stays with the listener is the emotional arc of Marc Lore's story: a man driven by a childhood need for approval, who turned that wound into an engine for building and rebuilding. The episode matters because it is not just a business case study—it is a psychological portrait of how a founder processes defeat. Lore's depression after selling to Amazon, his refusal to accept that as the end, and his willingness to raise $750 million to try again against the same opponent, all while transforming from a "mercenary" into a "missionary," is a rare and honest look at what resilience actually costs. The conversation also provides a vivid, insider account of Amazon's aggressive tactics—a story that has become legendary in Silicon Valley but is told here directly by the person who lived it. Ultimately, the episode is about the difference between selling out and selling the company, and about how values, when properly aligned, can create enormous value.

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Key takeaways

• Marc Lore's relentless drive came from a childhood where the only way to get his father's attention was to do something extraordinary, a pattern he only understood through therapy as an adult.
• Diapers are a classic loss leader in retail, but Lore saw that online's unlimited shelf space allowed him to use diapers to drive traffic to high-margin baby and household products, reversing the traditional economics.
• To force Procter & Gamble and Kimberly-Clark to sell to him directly, Lore bought all the diapers from a wholesale club, creating a shortage that made the club's reps demand the manufacturers sell to him.
• Amazon slashed diaper prices by 30%—an unprecedented move for a product already sold at a loss—and then threatened to take prices to zero if Lore did not accept their acquisition offer, which he describes as a "mob shakedown."
• Lore was depressed after selling Diapers.com to Amazon for $550 million, despite the financial windfall, because he felt his dream was "done" and the mission was cut short.
• Jet.com's core innovation was a real-time pricing engine that gave customers discounts for buying items that could ship together from the same warehouse, making the supply chain more efficient than Amazon's.
• Jet.com hit a $1 billion revenue run rate in 10 months, burned $40 million per month, and was acquired by Walmart for $3.3 billion just one year after launch—the largest e-commerce startup acquisition in U.S. history at the time.
• Lore attributes his success to a combination of hard work, smart strategy, and luck, but emphasizes that his refusal to accept failure—"like the Terminator"—kept him going until the luck turned his way.