Mike Cote's Business Editor's Notebook: PillPack shows how billion-dollar deals have maturedBy MIKE COTE
July 07. 2018 6:18PM
If I had a hundred million dollars, I'd buy you a fur coat factory. But not one that makes real fur coats. That's cruel.
With the news the two founders of PillPack would each bank $100 million from Amazon's $1 billion deal to buy the company, the old Barenaked Ladies hit "If I Had a Million Dollars" could use an update.
A million dollars doesn't sound like so much money any more. It can't even buy love. The two guys who wrote the 1992 hit stopped playing together almost a decade ago. (Singer Steven Page was sorely missing from the band's otherwise great set at the Bank of New Hampshire Pavilion in Gilford last weekend.)
Now when you're talking about a hundred millions dollars, that's serious loot, enough to make you nostalgic for the dot.com craze of the late '90s, when the internet frontier was ripe with crazy money chasing eyeballs. Back then, tech startups didn't even need to show a path to profit, just a great way to attract people to their web addresses.
That's the difference between PillPack and the first billion-dollar deal I covered as a business journalist. Different time, different state and a different economic climate - one about as deeply rooted in reality as the crypto-currency bubble.
Second-generation pharmacist TJ Parker, who grew up in Concord, and engineer Elliot Cohen founded PillPack in 2013, shortly after winning MIT's Hacking Medicine competition. They grew the company to 1,000 employees in five years, including 500 at the Waumbec Mill building in Manchestser.
While stock analysts could argue whether PillPack is worth $1 billion, no one would question whether the company provides a useful, money-making service. Pharmacists and technicians at PillPack's flagship mail-order pharmacy in the Millyard prepare and ship prescriptions to customers in convenient packages with labels designed to take the confusion out of when to take them.
In 1999, internet portal company Excite@Home said it would pay as much $1 billion - including $350 million in cash - for Bluemountain.com, an electronic greeting card company that produced little revenue. The website was a side venture for Blue Mountain Arts, a small Colorado company that publishes greeting cards and poetry.
Two years later, Excite@Home sold Bluemountain.com to American Greetings for $35 million. Less than a month later, Excite@Home filed for Chapter 11 bankruptcy. Its business model - attract advertising dollars to popular websites - failed.
It's hard to imagine Amazon holding a fire sale in a couple of years to dump PillPack. From its inception, the internet retail giant has focused on disrupting the delivery of consumer products, first books and then pretty much everything else. Amazon only now is starting to think about adding advertising to its revenue stream. Like its takeover a year ago of Whole Foods - from which it gained a huge foothold in the grocery industry - Amazon's acquisition of PillPack instantly makes it a pharmacy with a nationwide footprint.
For Amazon founder Jeff Bezos, the Barenaked Ladies would have to add a several zeros to their signature tune. His purchases in recent years include spending $250 million in 2013 for the Washington Post.
But that's pocket change. Bezos says he has been investing $1 billion a year from the sale of Amazon stock to fund his space technology company, Blue Origin. He envisions expanding civilization beyond the confines of Earth.
If Bezos had a trillion dollars, what would he buy?
Someday, we just might find out.
Contact Business Editor Mike Cote at 206-7724 or firstname.lastname@example.org.