[jimmywanger]

He mentions that in the article.

I'll quote the relavant section at the end, but my when money is no object, you usually go by recommendation of friends. At that high of a premium, would you go to a team with good marketing copy, or somebody who has already moved your equally rich friend with superlative service?

FTA:

We considered our second option more seriously. High-end customers understood our value proposition, and we believe they would be willing to pay for it. But as we dug deeper, we realized turning Walnut into a premium service had too many challenges along the way.

The strategy would shrink the serviceable market, and we would also have to be excellent at finding a smaller customer base at the exact moment they’re looking for movers. Even if we solved the marketing challenges, our moving service would also have to meet new, higher expectations. Our concern was whether we could ever deliver enough value in this compulsory experience to justify the substantially higher price.

[jblow]

Hahahaha

So they wanted to claim to offer a high-quality product, but don't think they can actually do that.

Startup culture is so terrible.

[Illniyar]

As I understand it, they wanted to offer a high-quality product at high-quality product prices, however if they moved to service the very rich they'll need to offer a luxury product, which would obviously require luxury product price.

Consider it the difference between an iPhone and a 24 caret gold plated iPhone elite (which apparently exists)

[notyourday]

No, what they wanted to do is use a sharpie to fix the the defect on a Louis Vuitton bag from Canal St and offer it to an NYU student from Taiwan as a real thing without realizing that the said NYU student's family has hundreds of real bags.

[jimmywanger]

No, to continue your analogy, they wanted to be the Nordstrom of the moving world, not the Saks Fifth Avenue, not knowing that not enough people would use the high-end but not quite luxury service to make it worth their while.

[notyourday]

That's the problem: Saks Fifth Ave and Nordstrom are in the exactly same market. The upmarket is Bergdorf Goodman.

[jimmywanger]

I suppose that's the problem, which he alludes to in his article. Basically we go shopping a lot (well a lot of people do) that's why there's so much market differentiation. JC Penny and Macy's and Nordstrom and Saks and Bergdorf Goodman all offer a slightly different experience tailored to different budgets, and the stratification is very clear.

A truly upmarket experience is a concierge who knows your tastes and scours the stores to bring you what he think you'd like to wear. Just like any sort of suit you can buy in a store is orders less luxurious than a bespoke suit you get made for you on Saville Row.

[kgwgk]

FWIW, wikipedia lists Saks higher than Nordstrom: https://en.wikipedia.org/wiki/Department_store#Segmentation

[jimmywanger]

Well, as another poster already said, there's high-end, and then there's luxury.

Take a look at this article: https://www.nytimes.com/2017/06/03/business/economy/high-end...

So high-end medical care is like a really good health plan that covers a lot of procedures. It's good enough for most people, not like the US's public safety net. You pay a little more but the market is there.

The article above is an example of a LUXURY health care service. The consumers really don't care how much they spend, but every time they got the sniffles, they get tended to by the top specialists in the field.

Kudos to the Walnut founders to realize so quickly that they'd have to pivot into the luxury segment of moving, not just the high-end one, as the luxury segment is lucrative, and the high-end non-existent.