He’s a “recovering lawyer, seven years clean.”
Jonathan Johnson, chair of the board at Overstock.com and a J. Reuben Clark Law School grad, revealed business secrets to BYU students Jan. 30.
In his remarks, titled “The Overstock.com Story: Pivoting to Success,” Johnson said businesses succeed when they work to solve problems. Johnson said today’s businesses have adopted a “disruptive innovation” take, but Overstock applies the “pivot” principle, which takes strong areas and turns them only 10–15 degrees for a growing increase of natural strength.
“We started with a model that was liquidation,” Johnson said. “When I look at our business today, very little of the product we sell is liquidation goods, overstock. We’ve made changes all the time, trying to move into areas where we’ve already had some core competency and expanding on that.”
Overstock began in 1999 with only 18 employees. Johnson, who clerked at the Utah Supreme Court and practiced law for two large firms in Los Angeles, joined Overstock in 2002 shortly after it went public. He has filled several roles at Overstock. He was the president for five years and then acting CEO before joining the board. Now he is more involved in the company’s business strategy rather than day-to-day operations.
Overstock today competes with “anyone that’s online,” priding itself as an early-adopting company that removes friction in e-commerce.
The company’s models base themselves around “win-win” business interactions. This is a far cry from the world model, where someone will win and another will lose. Johnson believes being a fair partner is a universally applicable principle.
“Overstock’s really tried to apply that principle,” he said. “If our vendors aren’t making money, and we’re not making money, it’s not a good deal. If our customers aren’t getting a good price, and we’re not making money, it’s not a good deal.”
Overstock’s “win-win” innovations include the creation of Worldstock Fair Trade, the largest fair trade program in the United States, which includes artisans in 92 countries that use Overstock to sell their goods — more than $120 million of goods in 12 years. Main St. Revolution is the U.S.-based artisan market that is specifically for building businesses. Overstock began as a liquidation company, but today only 20 percent of what it sells is liquidated goods. It has expanded to include artisan markets, geolocation and even connections for pet adoptions.
Johnson said the innovative success has been part of the learning process. Students, he said, are often eager to hurry and finish the “learning stage” to get to “earning stage.”
“I’m glad I’ve hit some earning years, but I hope never to stop those learning years,” Johnson said. “You can only pivot to success if you’re always learning.”
This will make all the difference for BYU students, Johnson explained — learning and being flexible in a constantly changing world. “When I was an undergrad, and even a law student at BYU, the industry that I’m in didn’t even exist,” Johnson said. “There was really no Internet; there was no e-commerce. The best thing to do is to prepare with skills that are going to translate across other businesses … and those are the kind of things that make a big difference.”
Johnson is busily engaged at Overstock as it moves away from being simply a retailer to providing third-party logistics, “an exciting place for the company to grow,” in his mind. He also remains involved in politics as he works on legislation that he hopes will pass in the current session of legislature in Utah. His political activity centers on attempting to balance the conflicts that arise between First and 14th Amendment rights.