The second wave of e-commerce is coming, buoyed by a flood of fresh cash. European flash-sales site operator Privalia, which offers short-term, steeply discounted fashion deals in Spain, Italy, Brazil, and Mexico, is expanding to Germany with a $280 million acquisition of rival Dress-For-Less.
The deal is funded in part by $123 million in fresh cash from General Atlantic, Highland Capital Partners, Index Ventures, and Insight Venture Partners, as well as debt and newly issued shares.
Those are big numbers, and they come on top of a $95 million round just last October from General Atlantic and Index.
Privalia is a private-sales site that offers members deep discounts on apparel and other items for a short period of time. Others in the flash-sales category include Rue La La, now owned by GSI Commerce; Gilt Groupe, which offers deals in apparel and travel; and One Kings Lane, a home-décor site. The limited time horizon for offers, combined with a curated array of merchandise and new social tools, serves to drive demand from consumers looking to buy something new.
That customer base — those who view shopping as entertainment and largely made up of women — is potentially much larger than the hardcore online shoppers who became loyal online shoppers a decade ago.
The first wave of e-commerce, transactional and efficient, did catalogs one better by offering a nearly limitless array of merchandise and selling it cheaply and quickly. It satisfied demand, rather than creating it.
Private-sales sites, daily deals purveyors like Groupon, and other new forms of e-commerce promise to do something much bigger and more difficult: create demand. Successful traditional retailers excel at this, turning their stores into showcases of consumer delight and convincing people to reach for their pocketbooks for something they had no intention of buying when they walked into the store.
Privalia seems to have an edge in fast-growing overseas markets. Gilt currently operates in the U.S. and Japan. GSI, which is publicly traded, spent $350 million acquiring Rue La La and could expand quickly. A lot of capital is flowing into the sector. But unlike earlier waves of e-commerce, which required building and stocking warehouses to guarantee the availability of those vast virtual shelves of merchandise, the new e-commerce tends to move products quickly, making it an appealing investment to venture capitalists who might shy away from plowing their capital into inventory.
Instead, the money in this second wave of e-commerce is going into customer acquisition, technology, and some financial maneuvers — like Privalia’s rollup of Dress-for-Less.
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Crossposted with TomDispatch.com
Talking about secretaries of defense...
Oh, we weren’t?
Well, let’s. After all, they’re in the news.
Take former Secretary of Defense Donald Rumsfeld who, on leaving government service -- and I hope you don’t mind if I mangle a quote from General Douglas MacArthur here -- refused to die, or even fade away. Instead, he penned Known and Unknown, a memoir almost as big as his ego and almost as long -- 832 pages -- as the occupation of Iraq, which promptly hit the bestseller lists (making the American reader a Known Unknown).
Now, Mr. Known Knowns, etc., is duking it out on Facebook, Sarah-Palin-style, with “the chief gossip-monger of the governing class,” the Washington Post’s Bob Woodward. Amusingly enough, Woodward has just savaged Rumsfeld for pulling a Woodward in his memoir by playing fast and loose with reality. He posted his review at the Best Defense (as in, you know, a good offense), the war fightin’ blog of former Washington Post reporter and bestselling author Tom Ricks. Small world down there in Washington!
It’s enough to make you nostalgic for... well, I have no idea what.
Meanwhile, present Secretary of Defense Robert Gates, officially preparing to fade away later this year, hit the news as well. His much-hinted-at retirement now seems like the Titanic looming on the military-industrial horizon. (Take note, New York publishers and literary agents: Gates wrote a memoir the last time he faded away as CIA Director. That was back in the Neolithic Age of the elder Bush. It came out in 1996 and was titled From the Shadows: The Ultimate Insider’s Story of Five Presidents and How They Won the Cold War. Still, chalk that effort up to another century and start preparing the contracts for Into the Shadows, The Ultimate Insider’s Story of Two More Presidents and How They Didn’t Win Much of Anything.)
To be exact, Gates made news by going to West Point to speak to the cadets in what was plugged as the first of a number of “farewell” addresses. (The second came a week later at the Air Force Academy.) In the process, he made the headlines for quoting -- somewhat oddly -- General Douglas (the original fader) MacArthur.
Now, give Gates credit. The man has superb speechwriters who channel both his obvious intelligence and his sometimes-mordant sense of humor. (Hint for Hillary: When he leaves the scene, you should grab any wordsmiths he lets loose. It would help if you laced some self-deprecating humor, however borrowed, into those statements of yours that blank [fill in the country, tyrant, or protest movement] must do what you say and then that you just repeat when whoever or whatever predictably doesn’t...)
Examined Heads
...Oh sorry, I dozed off. What was I saying?
Something about old soldiers?
Anyway, here was the eye-popping quote that everyone picked up and highlighted from Gates’s address: “But in my opinion, any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should ‘have his head examined,’ as General MacArthur so delicately put it.”
“Have his head examined”: strong words indeed, not to say strong advice for his successor! As quoted, it did sound like a late-in-term awakening on America’s wars. After all, the Secretary of Defense had to know that it would be the money paragraph, the one reporters would carry off, in a speech significantly about other matters.
Quoted by itself, it also had to seem like a mix of a mea culpa, a j’accuse aimed at his former boss, President George W. Bush, and his predecessor Rumsfeld, and a never-again statement about the wars in Iraq and Afghanistan he’s been overseeing since 2006 and, in the case of Afghanistan, expanding since 2008.
Those four words from MacArthur seem to tell the only tale worth telling. Supreme Commander, southwest Pacific area, during World War II, “emperor” of occupied Japan, and commander of United Nations forces in the Korean War until cashiered by President Harry Truman, MacArthur later urged President John F. Kennedy not to get involved in a “land war on mainland Asia” -- that is, in Vietnam.
As Christian Science Monitor reporter Brad Knickerbocker typically wrote, Gates’s “recollection of Gen. MacArthur’s famous warning -- given to President John F. Kennedy in 1961 as the U.S. buildup in Vietnam was beginning -- was a sober message for the young men and women about to become the next generation of U.S. military commanders.” Gates, in other words, was citing a “famous” example of how MacArthur used his hard-won experience in a terrible, stalemated war in Asia to try to stop another disastrous war a decade later. A flattering analogy, one might say.
There's only one problem: it just wasn’t so. MacArthur’s “famous warning” came not in 1961, but in 1950. As Michael D. Pearlman explains in his book Truman & MacArthur: Politics, Policy, and the Hunger for Honor and Renown, MacArthur made that comment soon after North Korean troops crossed the 38th parallel and invaded South Korea. He believed they were only conducting a “reconnaissance-in-force.” On June 26th, 1950, MacArthur, writes Pearlman, “was ‘astonished’ to receive directions to resist the invader. ‘I don’t believe it. I can’t understand it.’ John Foster Dulles, who favored a prompt military response, recorded him saying that anyone thinking of throwing American forces into the breech ‘ought to have his head examined.’”
MacArthur’s urge, then, was prospective, not retrospective -- a gut reaction that has, in the last decades, Gates’s decades, been notably absent in Washington. There’s no way of knowing whether this was clear to Gates or his speechwriter, but under the circumstances it was an odder phrase to quote than the reporters covering his address imagined, for it highlighted an essential problem with Gates and the rest of Washington’s global wrecking crew. For them, the idea of going in has seldom been an alien one. It’s going in the wrong way that bothers them -- and the problem (as Gates essentially admitted in his speech) is that you only know it’s the wrong way afterwards.
That striking quote of his, read in the context of his full speech, leaves a somewhat different taste behind. Even the assumed prohibition against future Iraq- and Afghan-style wars is more cryptic than you might imagine. The best Gates can do is this: “The odds of repeating another Afghanistan or Iraq -- invading, pacifying, and administering a large third world country -- may be low.” Low, but not evidently nil in a world where all options always remain “on the table.”
Of course, his real focus at West Point was on quite a different kind of conflict. He was there, in a sense, on a business trip to the future as the deliverer of prospective bad news to the future officers of the U.S. Army. Their leaders, he wanted to tell them, were about to lose an intra-service struggle for the fruits of the still-growing but increasingly embattled Pentagon budget in economically fierce times.
In terms of future funding, and so future war-fighting, their service, he was there to tell them, was not well positioned. “The Army,” he said, “also must confront the reality that the most plausible, high-end scenarios for the U.S. military are primarily naval and air engagements -- whether in Asia, the Persian Gulf, or elsewhere.”
(Note to journalists in a collapsing industry: it’s not often that a long-gone beat comes back, but that’s the case here. In the 1950s, the services fought bitterly for shares of a far more limited military budget. In fact, for a funds-starved Army in the early 1960s, Vietnam was, in budgetary terms, its breakout moment. Now, budgetary war in Washington, missing-in-action for decades, is back, so the Secretary of Defense insisted.)
At West Point, but not at the Air Force Academy, think of Gates, then, as the Grim Reaper of military careers, telling the cadets that their future wouldn’t be in giant, never-to-be-used tank forces and that he was worried about just how they would indeed be employed. As if to emphasize his point, on the very same day, another fading warrior, retiring Army Chief of Staff General George W. Casey, Jr., was in Fort Lauderdale, Florida, even though dreaming of a future “sipping Coronas [and] watching sunsets on the beach in Scituate [Massachusetts].” There, he was to give his own valedictory to the Association of the U.S. Army and the “Defense Industry,” while making a most un-Gatesian plea for that same pot of gold.
Wielding an infamous Vietnam-era phrase, the general worried that unnamed government types already “think they see the light at the end of the Afghanistan tunnel” and so were clamoring to cut the Army’s budget, even though the U.S. remains in an “era of persistent conflict.” He then issued this warning:
A Nation weary of war, struggling to get its domestic economy going again, looks to cash in on a ‘Peace Dividend’ and drastically cut back on defense. But, we've seen time and again that a ‘Peace Dividend’ is, at best, a mirage and, at worst, a danger to the long-term security of our Country, our allies and our interests... [W]e simply cannot afford to dismantle this incredible Army that we have so painstakingly built over the past decade.
“We Have Never Once Gotten It Right”
Let’s assume that, after so many years overseeing the Afghan War, Gates may, in fact, be a somewhat chastened man. Perhaps there is evidence of this in his carefully articulated reluctance (as well as that of Joint Chiefs Chairman Admiral Mike Mullen) to do the American thing and throw the U.S. military at any problem -- in this case, a no-fly-zone over Libya. It’s certainly evidence that General Casey and the Secretary of Defense agree on one thing: They are dealing with a “stressed and tired” force. After two wars in a single decade, with a Global War on Terror thrown in, the thought of launching yet another campaign “in another country in the Middle East” might well leave any Secretary of Defense feeling sour.
Of course, given the twin disasters of Iraq and Afghanistan, who on Earth would want to repeat them? Gates does seem, however provisionally, to be sidelining the recent Holy Grail of the U.S. Army and its key commander, General David Petraeus: counterinsurgency, or COIN. If there are to be no more major land wars in Asia, then evidently U.S. soldiers won’t be spending much time “protecting the people” and “nation-building” either.
However briefly, Gates offered the cadets a glimpse of a different war-fighting future (one that sounded eerily reminiscent of Donald Rumsfeld’s once bright and shiny vision of a faster-than-lightning, “net-centric” Army lite). “The strategic rationale for swift-moving expeditionary forces, be they Army or Marines, airborne infantry or special operations,” Gates said, “is self-evident given the likelihood of counterterrorism, rapid reaction, disaster response, or stability or security force assistance missions.”
In other words, instead of “shock and awe,” “regime change,” and long-term occupations, he now imagines “counterterror” as well as air force and naval operations against “terrorists, insurgents, militia groups, rogue states, or emerging powers” that would be so decisive and effective as to “to prevent festering problems from growing into full-blown crises which require costly -- and controversial -- large-scale American military intervention.”
It sounds brilliantly un-Afghan, doesn’t it?
In other words, Gates seems to have a better idea of how, in the future, to go in. What his speech lacked was any suggestion, no less analysis, of how to get out of the war that remains, for the months to come, his responsibility.
Recently, journalist Dexter Filkins wrote a review of Bing West’s new book, The Wrong War, in the New York Times. As much as anything else, it offered a devastating portrait of counterinsurgency (“a new kind of religion”) in Afghanistan as a failed faith. Filkins, who covered both Iraq and Afghanistan for the Times, concludes that counterinsurgency has failed big time in the Afghan context, creating only a “vast culture of dependency: Americans are fighting and dying, while the Afghans by and large stand by and do nothing to help them.” Gates may well agree.
Filkins also seems unconvinced that slipping more COINs in the Afghan slot machine will improve the situation significantly. (“[N]othing short of a miracle will give [Americans] much in return.”) For all we know, Gates may agree with this, too.
Here’s the catch: Nearly 10 years into our second Afghan War, Filkins simply can’t seem to imagine a way out of the failed effort, or much else but more of the same. It’s there that the discussion simply ends for him, as it does for the Secretary of Defense, as it does, generally speaking, for Washington.
Gates himself is now preparing to depart (some might say jump ship) with his war still at a boil. At West Point, he had advice galore for the next Secretary of Defense, and yet it’s striking that his speech avoided a serious look at Afghanistan and how to end his war. He was perfectly willing to offer the cadets a window into the future on a range of subjects -- on almost anything, in fact, but that war.
When it came to his primary responsibility, however, all he offered was this fragment of a sentence, a reference assumedly to American contingency-based drawdown plans to remove “combat troops,” but not tens of thousands of trainers and other forces by the end of 2014: “...after large U.S. combat units are substantially drawn down in Afghanistan...” (In his subsequent address to the Air Force Academy, he denied that anything he said at West Point was an attack on "the wisdom of our involvement in Afghanistan.")
The Secretary of Defense was clear on one thing: it's a joke to imagine that you can predict the future trajectory of war, American-style. “And I must tell you,” he said in his second most quotable set of lines, “when it comes to predicting the nature and location of our next military engagements, since Vietnam, our record has been perfect. We have never once gotten it right, from the Mayaguez to Grenada, Panama, Somalia, the Balkans, Haiti, Kuwait, Iraq, and more -- we had no idea a year before any of these missions that we would be so engaged.”
And yet he still dreams of those future “swift-moving expeditionary forces” heading towards places which will surely maintain that “perfect record.”
Of course, it’s worth remembering that not everybody got everything wrong. In response to most of those wars, there were antiwar movements, large or small, that said: wrong place, wrong time, wrong idea, get out. And not all of this happened retrospectively either. In the specific case of Iraq, for instance, an enormous antiwar movement preceded the war and offered this piece of clear advice in no uncertain terms: don’t do it!
That movement was right. The war-makers were wrong. Yet no one from that movement is taken seriously in the mainstream media or in Washington to this day.
Here’s something important to remember: Vietnam did not start out as “Vietnam,” nor Iraq as “Iraq,” nor Afghanistan as “Afghanistan.” The fabulous dreams of doing it right always precede the horrific wars and, time after time, those in power never seem to feel MacArthur’s urge not to do it. Somehow, they never imagine that, sooner or later, disaster and blowback will be in the offing, though based on recent history that’s the only reasonable prediction to make in such circumstances.
Almost a decade after we invaded Afghanistan and “triumphed,” our latest “wise men” -- in Washington and in the media -- are still at a loss. The inability to win or be reasonably successful over so many years has, by now, penetrated almost, but not quite, never quite, to the core, leaving them bereft of solutions, except for continuing without serious hope. And when it comes to this, too, for those who remember Vietnam, there’s nothing new under the sun.
Unexamined Heads
The problem isn’t that no one can predict the next war. It’s that so many heads in Washington go unexamined. As a result, our leaders are desperately behind the learning curve of Americans generally.
Perhaps this is the moment to offer a simple future lesson for the Secretary of Defense -- if not the one who will leave office in 2011 with the Afghan War still roaring along, then the next one -- and here it is: it doesn’t really matter whether you go in big with tanks and counterinsurgency-style nation-building on the brain or small with a counterterror-lite footprint backed by air power.
The issue Gates, like his peers, still focuses on is how to go in better. The issue that needs to be focused on isn’t the “how to” but the going in.
The lesson that Washington still seems incapable of drawing from its endless experience of such wars in the twentieth and twenty-first centuries is this: don’t go in, because the Age of Intervention is over.
It really doesn’t matter whether ours is “the finest military in the world,” as Gates assured the cadets, or "the finest fighting force that the world has ever known" as our presidents have taken to saying. It doesn’t matter that the U.S. Army is battle-hardened and that it has years of counterinsurgency experience under its belt. It doesn’t matter whether we favor the Navy and the Air Force over the Army in our future wars. What matters is going to war. What matters is the illusion that military power is our key problem-solver, our go-to position of choice.
It’s time, once and for all, to lock the gates. It’s time to use the U.S. military only in the genuine defense of this country.
It doesn’t seem like the hardest lesson in human history to grasp, but it has been: don’t go in. This isn’t a utopian’s recipe, but a realist’s. You just have to remind yourself that your intervention will never turn out the way you fantasize or plan, no matter what your fantasies or plans may be.
Let me say it one more time because I know no one’s listening: don’t do it.
Afterward, write your 832-page books, enjoy your honors, duke it out with journalists, but when you’re Secretary of Defense, your job is to defend America against the urge to intervene. Intervention doesn’t work. Not in the long run, often not in the short one either. Not these days. Not at all.
Your job is somehow, in a Washington that can’t imagine such a thing, to turn ever again into never again.
Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute's TomDispatch.com. His latest book is The American Way of War: How Bush’s Wars Became Obama’s (Haymarket Books). To listen to a TomCast audio version of this post, read by Ralph Pochoda, click here or download it to your iPod, here.
[Note of thanks to: Jim Peck for helping spark this one, Ralph Pochoda for reading the TomCast audio version so sonorously, and the indispensible Christopher Holmes for applying his remarkable proofreading eye not just to this piece but to every TomDispatch piece. A deep bow to all three. In addition, for those of you eager to keep up on American war and fast-moving events in the Middle East, be sure to check out three sites that I find invaluable and visit daily: Juan Cole’s Informed Comment website, Paul Woodward’s War in Context website, and of course Antiwar.com.]
Copyright 2011 Tom Engelhardt
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