Why Carvana was destined to fail from day one.

I could take this opportunity to talk about Ed Garcia's history but the Lord knows, I'm lucky I got a second chance and I don't think that is the main reason the concept failed.

Ed had dreams of being the Amazon of the car business. He saw the demand from consumers and wanted to take advantage of the opportunity. He had the resources and connections to make it happen and he got his swing at bat.

The problem is, Ed is a car dealer, and Jeff Bezos is a software developer. Two completely different personalities. Being the car dealer that Ed is, he wanted to capitalize on every part of the car deal. He wanted to replace the dealers, sales people, finance people, shippers, pretty much everything. I've been a vendor for a long time and this is just how car dealers think. They are constantly focused on gross profit.

Jeff Bezos took a different approach. He used the already existing infrastructure and built software that facilitated an easier transaction between the buyer and seller. He found sellers that needed buyers and he found buyers that wanted an easier way of buying. He made small amounts on each transaction and those small amounts added up.

Amazon has become increasingly more dominate as of lately, selling and housing their own products etc and directly competing with the people that helped them get started. But they didn't start that way. They started as a facilitator.

Fundamentally, at its core, is was destined to fail, purely because of the way Ed thinks. He isn't a software person focused on solving the problem, he is a car dealer focused on driving revenue to continue receiving investments. Combined with an ego that wants to replace the entire car business, it was just a recipe for disaster and I honestly don't know how investors didn't see it coming. Guess everyone wanted a new car buying experience so bad they looked past the obvious signs?

I do believe there is a path to giving the customers what they demand. We can not ignore the obvious demand that is there. That path is going to have to include car dealers, OEMs, Sales People, Finance People and the software that ties them all together with a streamlined process that doesn't feel like a sales pitch to the customer.

It is a monumental task but with the cash that Ed burned through, I could fix that in the car business and probably 40 other industries. It's not impossible. It just takes massive communication and networking to bring all parties involved to the table to find the best way to do it.